AND CANADA’S NATURAL GAS

GREENHOUSE GAS EMISSIONS

AND OIL INDUSTRY

ONGOING REDUCTIONS, IN
METHODOLOGY DEMONSTRABLE
SITU OIL IMPROVEMENT
MINED OIL NATURAL GAS OFFSHORE TECHNOLOGY RESEARCH
 Canada’s Natural Gas and Oil Emissions:
Ongoing Reductions, Demonstrable Improvement

Contents
Emissions:
Ongoing Reductions, Demonstrable Improvement . . . . . . . . E3
Industry Overview. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E5
Technology Overview:
The Path to Emissions Reduction. . . . . . . . . . . . . . . . E7
Technology Performance to Date. . . . . . . . . . . . . . . . E9
Near-Term / Potential Technologies. . . . . . . . . . . . . . E22
Ongoing Collaboration and Research . . . . . . . . . . . . E26

Emissions Intensity Performance Data. . . . . . . . . . . . . . . . . . . E29

Natural Gas, Natural Gas Liquids and Condensate. . . . . E30
Oil Sands In Situ. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E31
Oil Sands Mining. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E32
Offshore. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . E33

Comparable Emissions Performance and Data Quality. . . . . E34

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 Emissions:
Ongoing Reductions,
Demonstrable
Improvement

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 O
il and natural gas will continue to be an important part
of the world’s energy mix for the foreseeable future.
Supplying affordable, reliable and cleaner energy to a Supplying affordable,
growing global population will continue to be the goal
of Canada’s upstream energy industry. reliable and cleaner
Climate change is a global challenge that requires global energy to a growing
perspectives and solutions. Advancing greenhouse gas (GHG)
emissions reduction is critical to realizing the vision for Canada global population will
to be a global natural gas and oil supplier of choice. continue to be the goal
Emissions reduction performance, including emission intensity,
is increasingly the basis for policies such as low-carbon
of Canada’s upstream
fuel regulations, carbon pricing, specific reduction targets energy industry.
and emission caps. It’s used to inform funding decisions by
governments, funding agencies and investors.

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INDUSTRY OVERVIEW
Canada has the world’s third-largest oil reserves. Of the
168 billion barrels of Canadian oil that can be recovered
economically with today’s technology, 162.5 billion barrels are
in the oil sands. In 2020, Canada’s oil production averaged
4 million barrels per day (b/d), of which 94% came from
producing areas in Western Canada. Currently 99% of Canada’s
oil exports go to the U.S. but with improved market access and
infrastructure Canada can increase global market share.

2020 OIL 2020 NATURAL

PRODUCTION: GAS PRODUCTION:

4
MILLION B/D
16
BILLION CF/D

Canada has vast reserves of natural gas, particularly in B.C. and

Alberta. In 2020, natural gas production averaged 16 billion
cubic feet per day (Bcf/d). Canada has enough natural gas to
meet domestic needs for 300 years, with enough remaining for
export. The export of natural gas as liquefied natural gas (LNG)
will enable Canada to access markets in Asia.

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 CANADA’S
TOP EXPORT

The natural gas and oil industry is active

across the country, either through exploration,
development and production or through its
multi-billion dollar supply chain.
19%
OF EXPORTS ARE
CRUDE OIL,
In 2019, exported oil, natural gas and
petroleum products earned $112.6 billion,
NATURAL GAS
Canada’s top export by value. AND OTHER
More information on Canada’s upstream
PETROLEUM
petroleum industry is available at PRODUCTS.
www.capp.ca
VA L U E =
$
112.6
BILLION

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 Technology Overview:
The Path to Emissions
Reduction

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 I
nnovative technologies and process efficiency improvements
are the main keys to reducing emissions across Canada’s
natural gas and oil industry. Many producing companies are
researching, developing and deploying technologies, and
the industry also has a significant commitment to collaboration
and knowledge sharing, aimed at improving performance across
Technological advances
the sector and contributing to Canada’s international climate are not aspirational, they
change commitments. Also, many technologies developed in
the industry are transferable to other industries and to other are actual: the industry is
producing jurisdictions internationally.
taking serious, substantial
The industry has a broad portfolio of innovative solutions to
deliver emissions reductions. Technological advances are not steps to reducing
aspirational, they are actual: the industry is taking serious,
substantial steps to reducing emissions intensity. The natural gas emissions intensity.
and oil industry accounts for 37% of environmental protection
spending by industry, according to data from Statistics Canada.

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 Technology
Performance to Date
Across the upstream industry,
proven technologies have
been developed and deployed,
resulting in significant
emissions reductions.

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 METHANE REDUCTION
In the oil and natural gas industry, methane is released when
natural gas is flared or vented. Methane is also released in small
leaks, called fugitive emissions, from valves and other equipment Among the world’s top
used in drilling and production. Canada has mandated a
reduction in methane emissions of 45% below 2012 levels by
10 petroleum exporters,
2025. Among the world’s top 10 petroleum exporters, currently
Canada alone has a methane reduction target.
currently Canada alone has
The upstream oil and natural gas industry is actively working to
a methane reduction target.
achieve this target. Reduction efforts are focused on tank vents,
pneumatics, pumps and similar fugitive emissions sources, plus
further reductions in venting and flaring.

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 Examples of methane reduction activity:
• Alberta Methane Field Challenge is a collaborative venture
between industry, the Alberta government and the Alberta
Energy Regulator to field-test new methane detection
technologies including hand-held and fixed sensors, plus
sensors mounted on drones and trucks.

• Many operators, especially in the natural gas and

conventional oil sectors, are exchanging dated equipment
for newer equipment to eliminate methane leaks and small
venting. For example, by the end of 2019 Cenovus had
changed more than 1,000 high-bleed instruments and
continues to advance this program.

• NuVista Energy Ltd has been working hard to eliminate

methane emissions, including using compressed air to drive
pneumatic instruments and pumps instead of pressurized
natural gas, thus eliminating routine methane venting.
NuVista is also incorporating compressed air pipelines
(from facilities to well pads) into the ongoing build out of
their new Pipestone field. New wells at the Pipestone field
have no routine methane venting.

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 CARBON CAPTURE,
UTILIZATION AND STORAGE
Carbon capture, utilization and storage (CCUS) includes
several advanced technologies that capture emissions from
large industrial facilities before they reach the atmosphere.
Captured carbon dioxide (CO2) can be permanently stored
underground in stable geological formations, used to
enhance oil production from mature reservoirs, or used to
create value-added products.

Carbon capture unit at the Alberta

Carbon Conversion Technology Centre.

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Examples of CCUS:

• The Quest CCS facility captures and stores CO2 emissions

from the Shell-operated Scotford Upgrader near Fort
Saskatchewan, Alberta. The CO2 is safely captured and
stored in an underground geological formation. Since it
began operation in 2015, Quest has captured more than 6
million tonnes of CO2, approximately equal to the annual
emissions from 1.5 million cars.

• The Alberta Carbon Trunk Line (ACTL) system began

operation in 2020. Operated by Wolf Midstream, the system
captures CO2 from industrial sources near Edmonton and
transports it to central Alberta where it’s injected into
mature reservoirs for enhanced oil recovery and permanent
storage by Enhance Energy. About 1.3 million tonnes of
CO2 per year is currently captured from the North West
Redwater Sturgeon Refinery and 300,000 tonnes from
Agrium’s Redwater fertilizer plant.

• Suncor and Cenovus have acquired an equity financing

agreement with Vancouver-based Svante, a Canadian
cleantech startup, to accelerate the commercialization of
Svante’s CO2 capture technology. The pilot started in 2019
at Cenovus’ operations in Saskatchewan.
Carbon capture demo plant. Photo courtesy Svante.

Based on the 2021 budget,

the federal government’s CCUS
target is to reduce emissions
by at least 15 megatonnes of
CO2 annually.

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 In June 2021, oil sands operators
In March 2021, Alberta and Ottawa jointly Canadian Natural Resources Limited,
launched a new working group to advance Cenovus Energy, Imperial Oil Limited,
CCUS technology and deployment. The MEG Energy Corp and Suncor Energy
group is advised by representatives from announced formation of the Oil Sands
key Alberta industries including the natural Pathways to Net Zero Initiative.
gas and oil sector, and other experts.
The goal of this alliance is to work
Additionally, the federal budget announced
in April 2021 proposed to introduce an
collectively with the federal and
investment tax credit for capital invested Alberta governments to achieve
in CCUS projects along with other financial net zero emissions from oil sands
tools, with the goal of reducing emissions operations by 2050. The pathway is
by at least 15 megatonnes of CO2 annually. anchored by a major CCUS project to
This measure will come into effect in 2022. enable multi-sector ‘tie-in’ projects for
expanded emissions reductions.

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FUEL GAS / • Waste heat recovery units (WHRU) use an energy recovery
heat exchanger that transfers heat from high-temperature
ENERGY EFFICIENCY process outputs to another part of the process, offsetting
the need to burn more fuel for heat or power generation.

- A WHRU can reduce emissions by 2,500 to 3,000 tCO2e

Emissions reductions can be achieved per well per year, or 30,000 to 78,000 tCO2e per plant
through fuel switching (primarily from per year for a gas-processing plant capacity 90 million
cubic feet per day (MMcf/d).
diesel to natural gas) and improved
efficiency in equipment and processes at • Diesel displacement for drilling, well completions and
natural gas processing facilities, such as using mobile
facilities of all sizes, across all upstream natural gas power generating / energy storage units for
operations. Technologies include: existing electricity-powered drilling rigs.

• Offshore flare recovery systems significantly reduce flaring

of natural gas. Recovered gas can be collected and used
for compression, injection / re-injection and enhanced
oil recovery.

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 Project lead Jason McGillivray helped design zero-bleed
well-pad equipment at Groundbirch. Photo by Jason Dziver.

Examples of fuel gas/energy efficiency:

• Tourmaline Oil Corp., Canada’s largest natural gas producer, • Throughout its operations, Cenovus is exploring advanced data
achieved an emissions intensity reduction of 46% between 2013 analytics for continued optimization opportunities. By using
and 2018 and is targeting further methane and overall emissions data analytics and artificial intelligence to improve operational
reductions. Eliminating the use of diesel in its field operations is efficiency, there is a significant opportunity to potentially improve
among the technologies employed to achieve environmental performance. Cenovus is optimistic these efforts
this reduction. could eventually contribute to meaningful reductions in
GHG emissions.

• In B.C., Shell Canada successfully brought the first ‘Generation

4’ multi-well pad on stream in January 2018 at Groundbirch. • Since 2018, NuVista Energy Ltd has been installing WHRUs at all
This advanced well pad design utilizes zero-bleed electric valve major operated Montney facilities. These units recover waste heat
actuators (the mechanism that opens and closes a valve) to from compressor exhaust and use it to offset fuel use in other
eliminate methane emissions that typically come from natural plant processes. NuVista’s 10 WHRUs now avoid approximately
gas-driven actuators. This new pad design reduces emissions by at 15,000 tonnes of CO2e per year.
least 90%, the equivalent of taking more than 40 cars off the road
for every well using this technology.

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COGENERATION
Upstream producers can use waste heat to generate
electricity, thus reducing emissions by avoiding additional
fuel combustion for electricity generation. The largest
opportunity exists in the oil sands sector, where both
mining and in situ operations use hot water or steam to
extract bitumen. Heating the water requires combustion
of natural gas or petroleum coke, but only a portion of the
heat generated is used in extraction. Operators can capture
waste heat through cogeneration to generate both heat
and electricity at the same time from the same fuel source.
Excess electricity not required for facility operation is sold to
the Alberta power grid. Cogeneration currently supplies 34%
of the province’s electricity.

Cogeneration offers a significant opportunity to reduce

emissions, through currently installed cogeneration and
potential new installations. In 2019, Alberta’s grid factor value
(GHG emissions per megawatt hour of electricity produced)
was 0.670 t/MWh compared to a grid factor of 0.25 to 0.30
t/MWh for cogenerated electricity. These cogeneration
systems reduce GHG emissions associated with electricity
production and steam generation by 30 to 40% compared to
electricity purchased from the Alberta grid and stand-alone
steam generation.

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 Examples of cogeneration:

• Suncor Energy has a cogeneration unit under construction • Existing cogeneration projects in Alberta have a combined
at the company’s Base Plant that will replace coke- capacity of over 3,000 megawatts (MW):
fired generation with lower-emitting natural gas-fired - Kearl and Cold Lake (Imperial Oil)
generation. In addition to providing the facility with steam
needed for operations and reducing direct GHG emissions, - Fort Hills, Firebag, and Mackay River (Suncor)
the cogeneration units will export 800 megawatts (MW) of - Horizon, Primrose, Muskeg River, and Scotford
electricity to the provincial grid, equivalent to roughly 7% (Canadian Natural)
of Alberta’s current electricity demand. The GHG intensity
- Long Lake (CNOOC International)
of the power produced from these cogeneration units is
approximately 75% lower than coal-fired power generation, - Christina Lake and Foster Creek (Cenovus)
reducing GHG emissions by approximately 5.1 megatonnes - Syncrude
(MT) per year in Alberta. This is equivalent to displacing
more than 1,000,000 cars from the road. - Other projects (not CAPP members) include
Christina Lake (MEG), Lindbergh (Cona Resources),
and Harmattan (Altagas).

Cogeneration facility at Fort Hills. Photo courtesy Suncor.

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UPSTREAM ELECTRICITY -
LOW OR NON-EMITTING
SOURCES
Where upstream production projects are in close proximity
to low-emission electricity sources such as hydro, that
electricity can be used to power part or all of a facility,
thus avoiding combustion of other fuels. Renewable power
generation at existing facilities, especially wind or solar
generation, is another option.

Using hydroelectricity to operate upstream natural

gas production in northeastern B.C. offers significant
opportunities to reduce overall emissions for production of
liquefied natural gas (LNG).

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 Examples of upstream electrification:

• ARC Resources designed and built its Dawson Creek

natural gas processing facility to produce fewer emissions.
From 2010 to 2018, the plant reduced emissions by 539,743
tonnes of CO2e using technologies including electric-driven
compressors, and an instrument-air system instead of
instrument-gas that eliminates the need for venting. The
entire facility is linked to the B.C. hydroelectric grid. In 2018,
ARC electrified its Parkland and Sunrise facilities, reducing
emissions by approximately 85% or more than 100,000
tonnes of CO2e.

• Shell Canada designed its B.C. Saturn natural gas

processing plant to operate on hydroelectricity instead of
natural gas. As a result, direct emissions from the plant are
about 90% lower than if the plant operated on natural gas,
representing a reduction of 150,000 tonnes of CO2 per year.

• LNG Canada – with increased electrification of source

natural gas production, and partial electrification of the
LNG facility itself (under construction near Kitimat, B.C.),
GHG emissions from LNG Canada will be lower than any
facility currently operating anywhere in the world. LNG
Canada estimates its facility will be 35% lower than the
world’s best-performing facilities and 60% lower than the
global weighted average.

• Hydroelectricity powers the majority of Ovintiv’s gas

processing in the Montney area of northeastern B.C.
Its Saturn, Sunrise, and Tower processing plants can avoid
up to 860,000 tonnes of CO2e emissions annually versus
gas-driven facilities, comparable to the emissions from
184,000 vehicles per year. Electrification has the added
benefit of reducing operational noise compared to non-
electric facilities.

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 PARAFFINIC FROTH
TREATMENT TECHNOLOGY
Froth treatment uses hydrocarbon-based gravity separation
to remove water and fine solids from bitumen froth produced
in the oil sands mining extraction process. For more than
30 years, naphthenic froth treatment (NFT) was the only
technology available to dilute bitumen froth. Paraffinic froth
treatment (PFT) uses a much lighter diluent. As asphaltenes
precipitate, water and fine solids become bound to the
asphaltene, resulting in a bitumen product that meets
pipeline specifications and can be sold directly to a high-
conversion refinery without the need for further upgrading,
thus reducing overall emissions.

PFT has been deployed at Fort Hills (Suncor), Kearl (Imperial)

and Athabasca Oil Sands Project (Canadian Natural) and is
likely to be deployed at all new oil sands mining operations.
This is a proven technology that is substantially reducing
overall emissions, allowing operators to extract carbon from
produced oil and bringing full life cycle emissions in line
with the average U.S. production emissions (see page 37).
According to IHS Markit (2020), the ramp-up of the Fort Hills
oil sands project alone accounted for nearly three-quarters
Imperial’s Kearl oil sands mine uses paraffinic froth of the 2017-2018 overall oil sands emissions reduction
treatment to lower emissions. Photo courtesy Imperial. (see page 32).

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 Near-term /
Potential Technologies
In the oil sands sector, a number of
processes and technologies aimed
at further reducing emissions by
reducing or eliminating the need
to generate steam for bitumen
recovery are being tested at lab
and field scales.

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 Foster Creek oil sands. Photo courtesy Cenovus.

SOLVENT AND
SOLVENT-ASSISTED Examples:

EXTRACTION PROCESSES • At its Cold Lake project, Imperial is reducing GHG

emissions intensity with its Liquid Addition to Steam for
Increasingly, in situ oil sands projects are using solvent Enhancing Recovery (LASER) technology. In 2021 Imperial
alone, or combinations of solvents and steam processes, to expanded commercial application to the Makheses field at
reduce the steam-to-oil ratios (SOR) and to improve bitumen Cold Lake.
recovery. In this context, ‘solvents’ are light hydrocarbons
• At its Foster Creek and Christina Lake projects, Cenovus
such as propane that are injected into the bitumen reservoir
is testing solvent-aided processes using a range of natural
to reduce bitumen viscosity, allowing the mixture to be
gas liquids to improve oil recovery, reduce emissions
pumped to the surface. Solvents are recovered and re-used.
and water use, and lower operating costs. The company
The addition of solvents also has the benefit of lowering
expects a minimum one-third emissions reduction benefit
water treatment requirements, and increasing plant capacity
from solvent use with the potential for much
by reducing or replacing steam generation requirements,
greater reductions.
thereby lowering overall emissions. The use of solvents
reduces and may potentially eliminate the need for energy- • Canadian Natural has been piloting the use of solvents at
intensive steam production for in situ extraction. its Kirby SAGD facility, with up to 45% reduction in SOR.
Based on these results, in 2021 the pilot will be expanded
Advanced field pilots have been completed by Imperial,
to the company’s Primrose cyclic steam stimulation project
Cenovus and ConocoPhillips, and successfully demonstrated
near Cold Lake, Alberta.
meaningful increases in productivity, as well as decreases in
SOR and water use. Several others are in various stages of
testing similar applications.

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 ELECTROMAGNETIC (EM)
HEATING PROCESSES
Similar in concept to a household microwave oven, EM
waves from long antennae drilled into a deep oil sands
deposit excite water molecules in the deposit. This generates
frictional heat, which raises temperatures within the reservoir
and lowers the bitumen’s viscosity, allowing it to be pumped
to the surface. Solvents (light hydrocarbons) are commonly
injected into the reservoir to further dilute the bitumen.
Solvents are recovered and re-used. The EM process
eliminates the need for steam generation, thus reducing
emissions that would be associated with burning natural gas
to create steam.

Example:

• Together with a consortium of partners and financial

support from Alberta Innovates, Suncor Energy is field-
piloting Enhanced Solvent Extraction Incorporating
Electromagnetic Heating (ESEIEH®) at its Dover oil sands
development. This process uses EM heating and solvent
injection to recover bitumen without the need for steam
generation and injection. Pilot results are expected in 2022.

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HAUL TRUCKS AND PARTIAL UPGRADING
MATERIALS HANDLING Partial upgrading produces bitumen of pipeline quality
without the need for diluent, which reduces the energy
New haul truck technology or fuel alternatives such as required to upgrade the bitumen and results in an estimated
electric or trolley assist, and alternative modes of material reduction of well-to-refinery emissions up to 12%.
transport to shorten haul distance, are being piloted at
several oil sands mining sites. Timing of deployment and
technology type depends on individual mines, but the
potential for substantial emissions reductions appears
high. Imperial, Canadian Natural and Syncrude have pilot
projects underway, while Suncor has fully deployed the use
of automated haul trucks at its North Steepbank and Fort
Hills mines - the company continues to assess the impact on
emissions reduction.

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 Ongoing Collaboration
and Research
Research and development of new
technologies across the natural
gas and oil industry is active and
continually evolving.
Canada’s upstream industry has created a unique
innovation environment aimed at improving
environmental performance across the industry,
though collaboration-based organizations such as
Canada’s Oil Sands Innovation Alliance (COSIA),
Petroleum Technology Alliance Canada (PTAC),
Clean Resource Innovation Network (CRIN), Natural
Gas Innovation Fund (NGIF), Petroleum Research
Newfoundland and Labrador (PRNL), funded
independent partnership organizations such as
Evok Innovations, plus government-based initiatives
such as Alberta Innovates and Emissions Reduction
Alberta, in addition to post-secondary institutions and
companies’ own internal research.

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DIRECT CONTACT
STEAM GENERATION
The direct contact steam generation (DCSG) process
involves steam generation from combustion of fuel gas with
oxygen in direct contact with feed water in a high-pressure,
high-temperature combustor. This creates a mixture of steam
and CO2 that replaces steam required for in situ injection,
generated using conventional boiler technology. DCSG has
OFFSHORE WIND-SOURCED
the potential to reduce emissions because a significant
portion of the CO2 can be sequestered underground. DCSG
ELECTRIFICATION
also recycles 90% of the water used, requiring 10% of A scoping study to electrify offshore production facilities
additional water that could be sourced from existing tailings via development and installation of offshore wind farms
ponds. Suncor and Canadian Natural are researching and is underway. This research includes recommendations
testing this process. for specific equipment and design criteria that could be
implemented in different contexts including brownfield and
greenfield developments.

BLUE HYDROGEN
Hydrogen is an energy-dense fuel that can be used in many
ways, from industrial applications to heating, producing
electricity and more. When combusted, hydrogen produces
no CO2 or other GHG emissions — the only byproduct is
water. ‘Blue’ hydrogen is derived from natural gas, with
produced CO2 captured and injected into deep rock or
saline formations for permanent storage. Understanding
and piloting the technology to support the commercial
advancement of blue hydrogen production is ongoing. The
ELECTRIFICATION Alberta government’s Natural Gas Vision and Strategy
OF FPSO VESSELS includes provisions for blue hydrogen technology.

Offshore installations are not connected to existing power

grids so must generate their own electricity, which is a
leading source of emissions. Preliminary research of the
DIRECT AIR CAPTURE
potential for electrifying greenfield floating production, Direct air capture is a technology that captures CO2 directly
supply and offloading (FPSO) vessels using power from from the air with an engineered, mechanical system. The CO2
shore is ongoing. Preliminary results demonstrate that can be permanently stored in deep geological formations or
electrification is possible, though not economically feasible used in the production of fuels, chemicals, building materials
based on current offshore activity levels. and other products.

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 OTHER OFFSHORE INITIATIVES Examples:

• During maintenance programs, operators look at methods

Canada’s offshore industry has invested over $600 million to improve efficiency of operation for power generation
in research and development, education and training, units and other key equipment, subsequently reducing
including research focused on generating knowledge about emissions.
environmental conditions and reducing existing and potential
environmental risks. • Supply vessels use fuel management and monitoring
systems to ensure vessels are operating as efficiently as
possible and continue to consider new technology as it
becomes available.

• Operators are implementing fugitive emissions monitoring

systems that use optical gas imaging cameras, facilitating
rapid leak detection and repair.

• Work is underway internationally in the marine

transportation industry to use alternative low-carbon fuels.

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 Emissions Intensity
Performance Data
The following data demonstrates the industry’s emissions intensity
reduction performance to date. With ongoing development and
deployment of technologies and initiatives described in Technology
Overview, additional significant reductions can be expected. The
industry takes a collaborative, solutions-oriented approach to achieving
more reductions and the industry’s climate objectives are compatible
with provincial and federal objectives. The sector is committed to
playing a pivotal role in helping Canada meet its stated emissions
reduction goals, while maintaining a strong economic focus that
includes nationwide employment, government revenue generation, and
supporting quality of life with fuels and products Canadians depend on.

To clearly demonstrate the ongoing emission intensity reductions across

the natural gas and oil industry arising from advanced technologies and
process efficiencies, CAPP developed trend graphs using a bottom-
up analysis for oil sands and offshore sectors that utilizes individual
facilities’ emissions data to create an overview of the sector’s total
emissions. The analysis includes both direct (Scope 1) and indirect
(Scope 2) emissions. For natural gas emissions, CAPP used a top-down
analysis whereby the sector is evaluated holistically. For comparison,
graphs also show ‘leading’ performance for Canadian oil sands and
natural gas production.

Within the oil sands sector, the biggest driver of direct emissions is
natural gas combustion for steam or hot water generation, while the
largest sources of indirect emissions are from diluent, land use, and
imported electricity from the Alberta power grid (which currently uses
mostly coal and natural gas-fired generation).

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 NATURAL GAS,
NATURAL GAS LIQUIDS
(NGLS), AND CONDENSATE Data on this graph represents emissions intensity from
natural gas extraction and processing, NGLs, and condensate
Production and Greenhouse Gas Intensity
MINING OS GHG INTENSITY
production. From 2011 to 2019, emissions intensity decreased
by 33% in this sector. During the same period, natural gas
1,600 100 production in B.C. doubled and there was an increase in
1,400
90 liquids-rich natural gas production in both B.C. and Alberta.
80
The leading performance lines are estimated from a new

GHG Intensity kgCO2e/bbl

1,200 design gas-driven facility for both sour and sweet gas inlets.
70
Production (boe)

1,000
60 Another noteworthy performance indicator (not shown
Millions

in the graph) is emissions intensity per kilowatt-hour

800 50
(kWh) of electricity consumed for natural gas producing
40 and processing. In Alberta, over the period 2010 to 2019,
600
30 emissions per kWh declined from 1,100 grams of CO2
400 equivalent (CO2e) per kWh to 670 g CO2e / kWh.
20
200
10 Improved emissions management, particularly actions aimed
– 0 at achieving methane emissions reduction targets and multi-
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
well drilling pad approaches, are key drivers in emissions
Annual Production (boe) Sector GHG Intensity (kgs CO2e/bbls) intensity reduction in this sector.

Leading Design Sweet GHGI Leading Design Sour GHGI

Source: Environment and Climate Change Canada (2021 NIR Report), CER,
Report Envirotech Engineering.

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OIL SANDS IN SITU
INSitu
Oil Sands In SITUProduction
OIL SANDSand
PRODUCTION AND
Emissions Intensity Data on the graph includes both steam-assisted gravity
GREENHOUSE GAS INTENSITY drainage (SAGD) and cyclic steam stimulation (CSS)
600 100 production, Scope 1 and 2 emissions. Data indicates an
emissions intensity reduction of 8% between 2013 and 2019
90
500
while production increased 66%. Production curtailment,
Production (bitumen barrels)

80 mandated by the provincial government in response to very

GHG Intensity kgCO2e/bbl

70 wide price differentials between Western Canada Select

400
60
crude oil produced in Alberta and West Texas Intermediate
crude, affected in situ emissions intensity in 2019. A wildfire
Millions

300 50
in 2016 resulted in the temporary shutdown of many in situ
40 oil sands projects.
200
30
The optimization of SAGD projects has substantially
100
20 contributed to emission intensity reductions. The use of
10 electric submersible pumps (ESPs) has enabled better
well control and more efficient operations. Wedge or infill
– 0
2013 2014 2015 2016 2017 2018 2019 wells optimize production from already-heated reservoirs,
Total Production
capitalizing on previous combustion and steam injection, and
Sector Production Weighted Average GHGI
have been widely deployed. Steam generation efficiency is
Leading Perfomance GHGI (Lowest Intesity) also a key determinant for reducing emissions intensity for in
situ projects.
Source: Alberta Environment and Parks Alberta Oil Sands Greenhouse Gas
Intensity Analysis, AER ST53, NIR 2021 Part 3. GHGI PWA = greenhouse gas
intensity production weighted average.

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 OIL SANDS MINING
MINING OS and
Oil Sands Mining Production GHGEmissions
INTENSITYIntensity

600 100

90
500
Production (bitumen barrels)

80

GHG Intensity kgCO2e/bbl

70
400
60
Millions

300 50

40
200
30

20
100
10

– 0
2013 2014 2015 2016 2017 2018 2019

Total Production
Sector Production Weighted Average GHGI
Leading Perfomance GHGI (Lowest Intensity)

Source: Alberta Environment and Parks Alberta Oil Sands Greenhouse

Gas Intensity Analysis, AER ST 39. GHGI PWA = Greenhouse Gas Intensity
Production Weighted Average.

For the oil sands mining sector, data indicates an emissions

intensity reduction of 14% between 2013 and 2019 while
production increased 59%. There was a substantial emissions
intensity decrease in 2017-2018 after Suncor Energy’s Fort
Hills mining project started operation in 2017, as this is a
PFT mine with a lower emission intensity than past projects.
Wildfires in 2016 affected oil sands mining production and
emissions intensity.

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32
 Canada’s offshore industry currently consists of four major
projects: Hibernia, Terra Nova, White Rose and Hebron.
OFFSHORE
Emissions related to offshore production in NL represent
Offshore Production and Emissions Intensity 14% of the province’s total emissions. The most significant
emissions sources in the offshore include:
120 100
• The need to generate electricity for each offshore
90 installation, requiring natural gas combustion (no
100
80 opportunity to utilize onshore electricity infrastructure).
GHG Intensity kgCO2e/bbl
70 • Flaring - offshore operators have reduced flaring
80
Production (boe)

60
significantly through the Global Gas Flaring
Reduction Partnership.
Millions

60 50
• Operators are working to manage and reduce emissions
40
40
through operational efficiencies and preventative
30 maintenance, which in turn reduces energy consumption.
20
20 Overall emissions volumes from Canada’s offshore operations
10 are low. Factors affecting emissions intensity include:
– 0
2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019
• A field’s age and ongoing production causes decreasing
reservoir pressure, requiring additional solution gas
Annual Production Sector Intensity management and higher gas injection volumes into the
reservoir, which results in higher emissions intensity.

Source: Environment and Climate Change Canada, Canada-Newfoundland and

• New offshore facilities generally have higher emissions
Labrador Offshore Petroleum Board intensity for the first few years of production before
achieving steady state when emissions intensity stabilizes.

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 Comparable
Emissions
Performance and
Data Quality

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34
Comparing Canada’s emission intensity performance with
other producing nations and regions provides context for
Canada’s efforts and success to date. However, due to
challenges concerning data quality and availability from
other producing jurisdictions, direct comparisons are Canada is a world
problematic. Many data sets and comparison tools are based
on inaccurate assumptions and incomplete data, so don’t leader in transparent
offer a robust, factual overview of emissions from other
jurisdictions. For example, some data sets do not include data collection, and the
methane emissions although methane is a much more potent
greenhouse gas than CO2. Canadian oil and natural
This poses a strong risk that the investment community may gas industry has among
make important decisions on potentially faulty data. It is vital
to ensure proper comparison of data between jurisdictions
the strongest public data
to ensure an accurate picture, which in turn will help the
investment community to make decisions based on the best
in the world.
possible data and performance. Canada is a world leader in
transparent data collection, and the Canadian oil and natural
gas industry has among the strongest public data in
the world.

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 OIL
Currently, two groups are progressing global emission
comparisons that CAPP believes are robust and credible:

• The Oil-Climate Index (OCI) – a tool created by Carnegie-

Mellon University in collaboration with Stanford University
and the University of Calgary to estimate and compare
total lifecycle emissions of individual crude oil types,
from upstream production through midstream refining
to downstream end use. Imperial, Canadian Natural
and several other oil sands producers are continuing to
engage with OCI authors to review and update Canadian
benchmarks and explore the impacts of new technologies
on Canada’s production lifecycle emissions intensity. The
OCI currently includes more than 75 crudes from various
global sources and aggregates three emission estimation
models, including the Oil Production Greenhouse Gas
Emissions Estimator (OPGEE).

• IHS The Right Measure – a report by IHS Markit expected

to be released in 2021 that will review other estimates
and create a methodology to quantify and qualify
emissions estimates to facilitate their interpretation and
comparability. Funded in part by the Alberta government,
this study seeks to develop a shared understanding of
which emissions should be included in the analysis, increase
the transparency around estimate quality, and create
benchmarks for crude refined in the U.S.

Alberta Innovates Study

A study led by Stanford University, the University of Calgary

and the University of Toronto in collaboration with Alberta
Innovates and published in the Journal of Cleaner Production,
concluded that when Alberta-specific data is used in OPGEE,
upstream GHG intensity numbers of oil sands production
pathways are as much as 35% lower than previously
published, making them comparable to other crudes.
The study also demonstrated that current use of PFT
technology is producing crude with intensities lower
than the global average.

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36
 Emissions Intensity – Canada, U.S., Venezuela Crudes
Based on the findings of the Alberta
Innovates study, a re-evaluation of OCI 250

values demonstrates a decrease in oil

200

kg CO2 eq./barrel crude

sands emissions intensity. Deployment
of additional technologies, such as SA- 150
SAGD (solvent-assisted SAGD, using light
hydrocarbons instead of steam to recover 100

bitumen), offers further opportunities to

50
reduce emissions intensity even more,
such that the oil sands industry could –
outperform comparable crudes.
O

it

it

ge

O
e

op

ar
el
ilb

ilb
SC

SC

SC
ns
rid

Fi

Fl
D

Sl
Su
C

a
el

on

n
SS

th

ac
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-H

ke
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ay
G

gt

or
C

m
ca

FC

h
SA

ak
w
n
ut

ha
ke
as

hi

id

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a

a
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as
ab

a
c

sk

.S
as

l
as

ue
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a

a
th

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la
d

ni
ab

ni
ab
ol

.A

ez
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ke
or

or
C
th

th

en
a

.S
if

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if
ad

a
A

al

al

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ad

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SCO = synthetic crude oil

C
a

a
an

C
da
ad

an
an

.
C

.S
a

.S
si
an

an

U
DC = delayed coker

ui
C

Lo
FC+HC = fluid coker + hydroconversion system

.
.S
U
CSS = cyclic steam stimulation Orginal OCI Estimate Adjusted to reflect Alberta context (AI study)
SAGD = steam-assisted gravity drainage
Source: Oil Climate Initiative

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 NATURAL GAS
Highest Natural Gas Flaring Countries vs. Canada (Bcf)

800

Analysis by BMO Capital Markets indicates that as a result

700
of flaring practices, Canada is among the lowest-intensity
600 natural gas producers globally. According to research by the
Canadian Energy Centre (CEC) — which in 2020 released
500
an analysis of flaring and emissions data from the World
400
Bank, the U.S. Energy Information Administration and the
International Energy Agency — Canada’s emissions from
300 flaring decreased by 38% while production increased by
22% between 2014 and 2018. The CEC’s analysis confirmed
200 work released in 2018 by Stanford University, which
estimated that if Canada’s flaring regulations were adopted
100
by other energy-producing nations, global emissions from oil
and natural gas production could be lowered by up to 23%.
–
a

ia

la

ia

an

a
yp
18
si

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si

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19

er

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20

ex

ng

ra

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0

an
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lg

ig
ez

O
.2
R

iA

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do
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en

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.S

.S

ud

In
V
U

Sa

Flaring Intensity by Major Oil Producing Country (mcf/bbl)

If Canada’s flaring
0.60
regulations were adopted
0.55
by other energy-producing
nations, global emissions
0.50

0.45

0.40

0.35
from oil and natural gas
0.30 production could be
0.25

0.20
lowered by up to 23%
0.15

0.10

0.05

–
la

ia

ld

E)

an

ar

na

it

a
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by

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Ira

ua
A
ue

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at

ra
19

hi
us

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ng

hs

an
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ig

K
Q
W
ez

B
C
20
R
M

ak
N

C
en

.(

az
.S
V

K
U

Source: BMO Capital Markets

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38
OFFSHORE
Offshore Project OFFSHORE
Upstream Emissions
GHG INTENSITY Intensity

100

90
KG CO2 EQ./BARREL CRUDE

80

70

60

50

40

30

20

10

0
Norway Canada Mexico Norway UK Forties Norway
Ekofisk Hibernia Cantarell Skarv Blend Oseberg

JURISDICTION AND PROJECT

Source: Oil Climate Index

This graph represents upstream data sourced from OCI for

Canada’s offshore, with Hibernia being the only Canadian
project for which data is available to OCI. Canadian offshore
(Hibernia) emissions intensity compares favourably with
other offshore producers in part because the oil itself is
The offshore industry is part
sweeter (lower sulphur content). of the solution to a lower
Offshore oil and natural gas operators in Newfoundland and
Labrador (NL) are committed to working with policy makers
carbon energy future and to
and other stakeholders to address climate change and are the long-term diversification
working with and supporting governments in achieving
governments’ net zero goals. The offshore industry is part of of NL’s economy.
the solution to a lower carbon energy future and to the long-
term diversification of NL’s economy.

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 C A P P.C A

2021-0016 - JULY, 2021