IBP1401_12 SUSTAINABLE WATER MANAGEMENT IN ’S 2 3 Bill Byers1, Gord Lambert , Prit Kotecha , 4 5 Robyn Usher , Andrea Roach

Copyright 2012, Brazilian , Gas and Biofuels Institute - IBP This Technical Paper was prepared for presentation at the Rio Oi & Gas Expo and Conference 2012, held between September, 17- 20, 2012, in Rio de Janeiro. This Technical Paper was selected for presentation by the Technical Committee of the event according to the information contained in the final paper submitted by the author(s). The organizers are not supposed to translate or correct the submitted papers. The material as it is presented, does not necessarily represent Brazilian Petroleum, Gas and Biofuels Institute’ opinion, or that of its Members or Representatives. Authors consent to the publication of this Technical Paper in the Rio Oil & Gas Expo and Conference 2012 Proceedings.

Abstract The Canadian Association of Petroleum Producers forecast published in 2011 predicts that oil production from oil sands will increase by 50% in the next 3 years and double by 2020. This rate of growth will result in significant pressure on water resources; water use per barrel of oil sands production is comparable to other energy resources— about 2.5 barrels of fresh water per barrel of oil produced are used by mining operations and 0.5 barrels by in-situ operations.

Suncor Energy Inc. (Suncor) was the first company to develop the oil sands in northern Alberta and holds one of the largest oil sands positions in . In 2010, Suncor announced plans to increase production to more than 1 million barrels of oil equivalent per day by 2020, which it plans to achieve through oil sands production growth of approximately 10% per year.

Because water supply and potential impacts to water quality are critical to its future growth, in 2010-2011 Suncor conducted a risk assessment to identify water-related business risks related to its northern Alberta operations. The assessment identified more than 20 high level business risks in strategic water risk areas including water supply, water reuse, stormwater management, groundwater, waste management and river water return.

The risk assessment results prompted development of a strategic roadmap to guide water stewardship across Suncor’s regional operations. The roadmap describes goals, objectives, and specific activities for each of six key water risk areas, and informs prioritization and selection of prospective water management activities.

Suncor is not only exploring water within its own boundaries, but is also collaborating with other oil sands producers to explore ways of integrating its water systems through industry consortia; Suncor is a member of the Oil Sands Leadership Initiative and of the recently formed Canadian Oil Sands Innovation Alliance, among others.

1. Background

The Alberta oil sands resource is estimated to contain as much as 1.7 trillion barrels of bitumen. The reserves—the amount that can be recovered economically with existing technology—are estimated to be 170 billion barrels of recoverable bitumen—enough to produce 3 million barrels per day for over 150 years (Alberta Government, 2012b).

The oil sands are located in three areas of northern Alberta which, combined, are similar in size to the state of New York or twice the size of New Brunswick. Oil is extracted in two ways:

Surface mining – can be used when oil sands are close to the surface. Mined oil sands are transported to a processing facility where hot water is used to separate the bitumen from the sands. About 2 tonnes of oil sands must be dug up, moved and processed to produce 1 barrel of oil.

______1 P.E.; Bachelor of Science, Chemical Engineering; Master Business Administration – CH2M HILL 2 Honours Bachelor of Science, Biological Sciences – Suncor 3 P.Eng.; Bachelor of Chemical Engineering, Masters of Environmental Engineering – Suncor 4 P.Biol.; Bachelor of Science, Geology; Master of Science, Biology – CH2M HILL 5 P.Eng.; Bachelor of Applied Science, Chemical Engineering – CH2M HILL Rio Oil & Gas Expo and Conference 2012

Surface mining is viable in only 4,800 km2 within the , the largest of the three regional deposits. About 20% of the oil sands are shallow enough to be recoverable through surface mining and then only in an area north of Fort McMurray along the Athabasca River Valley—an area similar in size to the state of Rhode Island or smaller than the size of the Greater Toronto Area.

In-Situ Technology – The remaining 80% of oil sands are recoverable through in-situ technology. In-situ production recovers deposits that are deeper underground, using techniques that are similar to conventional oil production. The first commercial in-situ extraction method was cyclic steam stimulation (CSS) in which the same wellbore is used for both steam injection and bitumen recovery.

More recently, steam-assisted gravity drainage (SAGD) has gained popularity and is the most common method used in new in-situ projects. SAGD uses parallel horizontal wells, one above the other. Steam is injected into the upper well to heat and release the bitumen so that it can flow to the lower well and then be pumped up to the surface.

Water use per barrel of oil sands production is comparable to other energy resources; about 2.5 barrels of fresh water per barrel of oil produced is used by mining operations and 0.5 barrels for in-situ operations. (Alberta Government, 2012a) This compares with 2 to 5 barrels of water to produce a barrel of US conventional crude oil. (Wu, 2009)

2. About Suncor

Suncor is an integrated energy company strategically focused on developing one of the world’s largest petroleum resource basins—Canada’s Athabasca oil sands. Suncor was the first company to develop the oil sands, successfully commercializing oil sands production in 1967 and creating an industry that is now a key contributor to Canada’s prosperity.

Suncor’s oil sands operations are the focus of its business, and today the company holds one of the largest positions in the oil sands. In 2010, Suncor announced its plans to increase production to more than 1 million barrels of oil equivalent per day by 2020, which it plans to achieve through oil sands production growth of approximately 10% per year and company-wide production growth of approximately 8% per year.

3. Water Uses in Oil Sands Operations

Water is an essential part of Suncor’s operations as shown in Figure 1, Interactions of Suncor’s Oil Sands Operations with the Hydrologic Cycle.

Figure 1. Interactions of Suncor’s Oil Sands Operations with the Hydrologic Cycle

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Some of the major ways Suncor’s oil sands operations use and recycle water include:

 Mining and Extraction operations use water repeatedly to slurry the ore and to separate the bitumen from the tailings. Tailings from extraction are disposed of in tailings ponds in which the heavier solids settle to the bottom of the pond. Approximately 75% of the water used by mining operations is recycled tailings water. The primary source for the rest is the Athabasca River, one of Alberta’s largest river basins.

 Oil Sands In-situ operations reach oil sands deposits buried too deep to be mined (about 80% of the proven oil sands reserves are in this category). High-pressure steam is injected underground to heat and mobilize bitumen, allowing it to flow to the surface. Produced water is separated from the bitumen and is treated to reuse 90 to 95% of the produced water for use in steam production. Makeup water for these operations is provided variously from groundwater wells and from reuse water provided by Energy/Utilities. Brines produced in in-situ operations are injected into deep wells or evaporated in Zero Liquid Discharge units to produce distilled water for reuse and salt that is disposed in landfills.

 Upgrading and Energy Services operations use water to produce steam for heating and to provide cooling water. Fresh water is withdrawn from the river to provide makeup to these systems. Low quality reuse water streams are used to sluice ash from boilers and deliver the ash to ash ponds and as makeup to flue gas desulphurization (FGD) scrubbers from which blowdown slurries are disposed to FGD ponds. A portion of the water used in Upgrading and Energy Services operations is separated from solids and delivered to a treated water pond from which it is returned to the river.

 Rainwater and snow melt produce stormwater that must be managed at all operations. Average precipitation in Fort McMurray is 445 mm (range 242 to 676 mm), according to provincial records.

 Evaporation of water is an important part of the water system in each operation, contributing to the effectiveness of cooling systems through the use of cooling towers and to drying of solids disposed of in slurries contributing to the effectiveness of pond closures. Annual average evaporation from water surfaces in the Fort McMurray area is reported to be approximately 550-600 mm. (Alberta Government, 2011)

4. Suncor’s History of Water Stewardship

Although oil sands mining represents Suncor’s biggest draw on fresh water resources, the company has made significant progress in reducing its water demand in recent years. Suncor’s gross fresh water withdrawal from the Athabasca River has declined by 36% since 2004 and water withdrawal is below 1998 levels, even though bitumen production has nearly tripled. In 2010 alone, Suncor’s fresh water withdrawal from the Athabasca River decreased 12% from 2009. Figure 2a shows Suncor’s water withdrawal and water consumption during 2006 through 2010; Figure 2b shows Suncor’s net production rates for comparison.

Figure 2a.Water Withdrawal and Figure 2b. Net Production, 2006-2010 Consumption, 2006-2010

A key of progress is the amount of water consumed for each barrel of oil produced—or water consumption intensity. Water consumed is the quantity of water used and not returned to its proximate source or no longer available for use. In 2010, Suncor’s oil sands mining operations consumed 2.04 cubic meters of river water and groundwater to produce 1 cubic meter of oil—40% reduction in water consumption intensity since 2003. Suncor’s water consumption intensity in 2010 was 11% lower than in 2009.

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5. Development of Suncor’s Water Strategy

Suncor knows there is room and reason for continued water conservation and associated reduction of fresh water withdrawals. In 2009 Suncor initiated a 10-year Oil Sands Water Management Plan aimed at making it one of the lowest net water intensity users in the oil sands mining business. The plan has proceeded along a path similar to the two-phase model outlined in Figure 3, Proactive Approach to Corporate Water Strategy. Phase 1, including assessing water-related risks and developing strategic water goals occurred between 2009 and 2011. The plan is now well into its implementation phase.

Figure 3. Proactive Approach to Corporate Water Strategy (BSR, 2007)

6. Phase 1. Establish Baseline and Set Goals

Phase 1 of the process described in Figure 3 includes a) conducting a water footprint assessment, b) identifying and evaluating water-related risks, followed by c) prioritizing issues and charting a course. Suncor was fortunate to enter the process with a multi-year record of water withdrawals and had a well-documented record of reducing its water footprint. As a result of this background record, Suncor was able to start Phase 1 by conducting a risk assessment and followed by developing a strategic road map that served to prioritize its water-related issues and charted a course for the future. The outcomes of the risk assessment and the strategic road mapping activities are described in the sections that follow.

6.1 Risk Assessment

The risk assessment was accomplished by bringing together subject matter experts from Suncor and from CH2M HILL to identify and assess levels of risk in water use categories that span aspects of water supply, water disposal, and water recycling. Risks for each category were identified and assessed for each of Suncor’s eight oil-sands-related business units. The assessment was conducted using Suncor’s standard method for assessing business risks. As shown in Figure 4, more than half of the business units were found to present at least one risk that was assessed at the highest level (shown in red) in Suncor’s risk assessment model and most business groups were found to present risks at next-lower levels (gold and amber.)

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Figure 4. Suncor’s Risk Assessment Results in 6 categories of Water Supply, Disposal, and Recycling

6.2 Strategic Roadmap

Using the risk assessment as a starting point, goals, objectives and tactics were developed for each of six major water use categories to define a road map for implementation. These goals, objectives and tactics provided Suncor with a roadmap to guide the prioritization and selection of prospective activities to continue Suncor’s continued progress toward sustainable water usage in the region.

The six water use categories that were indentified include:

1. Water withdrawal

2. Water Reuse

3. Stormwater Management

4. Groundwater

5. Waste Management

6. River Water Return

The sections that follow provide goals, objectives and tactics that were developed for each of these six major aspects of the strategic road map.

6.2.1 Water Withdrawal

Suncor’s reductions in water intake have created some current excess capacity, but growth plans will require additional improvements in water use intensity. Therefore, Suncor has established a goal to make optimal use of fresh water supply, and an objective of promoting a conservation ethic and operational excellence to minimize the environmental impact of water withdrawals. The strategy developed for this category includes three tactics:

1. Study the impact of river water withdrawals on the environment – collaborate with other industries that rely on the Athabasca watershed to understand the impact of river withdrawals on the environment.

2. Understand the limits of water usage – develop an in-depth understanding of the water requirements of individual plants and how the requirements can be reduced without impairing operating capacity and flexibility.

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3. Diversify water supply sources – Increase the reliability of water supplies and reduce reliance on water withdrawals from the Athabasca River; understand the available quantities and qualities of other potential alternative natural resources.

6.2.2 Water Reuse

Suncor reuses many of its internally generated water streams, which reduces the need to discharge used water in one place and draw fresh water from the environment in another place. A “cascading” concept is employed to reuse water as many times as possible. In addition to internal activities that support water reuse, Suncor is involved in industry collaborative activities related to water reuse. The strategy developed for this category includes three tactics:

1. Optimize use of internal water streams – fulfill the requirements of water users with water streams of the most closely suitable water quantity and quality

2. Segregate streams – avoid mixing higher quality and lower quality streams when the mixed stream is less valuable than the initial higher quality stream

3. Treat internal streams where appropriate – where feasible, upgrade internal streams near the point of origin, as opposed to comingling streams for treatment at “end of pipe.”

6.2.3 Stormwater Management

Precipitation that falls as either snow or rainfall in the vicinity of Suncor’s operations represents a vital asset to the built and natural environment within which Suncor operates. Suncor acknowledges its responsibility to operate in ways that are protective of the asset value of these important water resources. Therefore, Suncor has established a goal to employ stormwater management practices that are protective of the watershed, and an objective of establishing stormwater management practices prevents or mitigates foreseeable impacts on health and integrity of ecosystems within the watershed. The strategy developed for this category includes three tactics:

1. Avoid run-on – minimize the quantity of water that is contaminated by Suncor’s sites.

2. Manage on-site precipitation – through stormwater planning, assure proper stewardship of precipitation that impinges on Suncor’s sites, including measures to assure that runoff water is of acceptable quality for return to the environment.

3. Employ scenario planning – Consider foreseeable effects of changing climate, changing catchment area hydrology, air quality, and cumulative effects within the watershed, and will incorporate these effects into stormwater management planning.

6.2.4 Groundwater

Suncor commits to being proactive with respect to protection of groundwater resources in the region. There is potential for Suncor’s operations, unless well modeled, managed and monitored, to interact with groundwater in ways that could cause harm to the resource. Therefore, Suncor has established a goal to prevent harmful migration of contamination into groundwater, and an objective of understanding and preventing migration of contaminants into groundwater. The strategy developed for this category includes three tactics:

1. Model regional groundwater behavior – Participate in development of coordinated groundwater databases and models to provide a more complete understanding of regional groundwater behavior.

2. Intercept and contain potentially harmful migration – Be proactive in implementing measures to prevent potentially harmful migration where models and/or monitoring indicate this potential exists.

3. Verify the effectiveness of models and barriers – Through effective monitoring activities, verify that no harmful migration is occurring that may cause harm to groundwater resources.

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6.2.5 Waste Management

Many wastes are produced as by-products in the forms of slurries and brines at Suncor’s various operations. Each of these wastes has potential for impact on water quality. Suncor will also look at waste management with a region-wide perspective to evaluate the potential benefits of managing selected wastes on a regional or industry-wide basis as opposed to local management near the point of generation. Suncor has established a goal to institutionalize waste management practices that are protective of water resources, and an objective of managing storage and disposal of brines, slurries, and solid waste minimize potential on water resources. The strategy developed for this category includes two tactics:

1. Minimize solid waste impact on water resources – Suncor will manage the ponds and landfills that contain solid wastes to prevent migration of contaminants through either overflow or leakage into the environment.

2. Manage brine efficiently – Suncor will manage its brine through a combination of deep well injection and ZLD treatment to cost-effectively minimize the potential for environmental impact.

6.2.6 River Water Return

Suncor is one of the few oil sands operations permitted to return water directly to the Athabasca river. Return flow is helpful in maintaining total flow in the river, provided the quality of the returned water does not cause detrimental impacts on the aquatic environment. Suncor recognizes its responsibility to monitor the quality of its water return flow and to report its monitoring results.

Suncor participates in industry-sponsored programs that monitor the quality of water in the river, with the goal of detecting and responding to impacts to the aquatic environment that may be attributable to industrial operations within the watershed. Suncor has established a goal to ensure that water returned to the river does not harm the aquatic environment, and an objective of preventing harmful impacts to human health and the aquatic environment resulting from water Suncor returns to the river. The strategy developed for this category includes two tactics:

1. Assure return water quality – Suncor will provide adequate wastewater treatment, monitoring and retention to assure water that is returned to the river is of suitable quality.

2. Study impacts of water return –Suncor will participate in water quality monitoring studies on the Athabasca River, and will respond to any findings of significant impacts related to its return flows to the river.

7. Phase 2. – Strategy Implementation

7.1 Corporate Strategy Implementation

Suncor is now well into implementation of its strategic road map and has committed more than CN$500 million in capital to water-related projects in completion of its 10-year Oil Sands Water Management Plan. At present, Suncor is focusing on high priority projects. Two example projects are shown on Figure 5 and described in brief in the text that follows.

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Figure 5. Current Focus of Water Strategy Implementation

Upgrading and Energy Services Wastewater Treatment for Recycle and Discharge – Suncor is developing a plan for a treatment system that will improve the recycle and discharge of water that supports Suncor’s Upgrading and Energy Services business units. Water withdrawn from the Athabasca River to support these operations will be treated for reuse within these processes. The net result will be to reduce the amount of water withdrawn from the river and greater control of the quality of water that is returned to the river.

Tailings Pond Water (Process Water and Reclamation Water) Treatment for Recycle and Discharge – Since the start of oil sands mining, industry practice has been to store a mixture of mine tailings and water in ponds to allow time for settling of clay particles from the water. Suncor currently has eight oil sands tailings ponds covering a total of 2,689 hectares. Most are close to 46 meters in depth. With the development of its TRO™ process for accelerating the pace of tailings pond closure, Suncor has begun to reverse the process of adding ponds to store additional tailings. This has allowed the closure of one tailings pond and cancelling the construction of five additional ponds. Over the next few years, Suncor plans to spend more than CN$1 billion to implement the TRO technology across its operations.

Suncor is also committed to making gainful use of the large volume of water stored in its tailings ponds. Through industry collaboration, technologies have been tested at pilot scale for treating tailings pond water to produce water suitable for reuse in its processes. Based upon success of the pilot testing, Suncor has initiated a project for delivering tailings pond water to one of its in-situ operations for use as makeup to its steam generation system and another project that would construct a treatment plant to produce makeup water for its energy and utilities processes.

7.2 Suncor’s Strategic Emphasis on Industry Collaboration

Suncor has been a leader in developing and participating in industry collaborative organizations that contribute to improving the sustainability of developing the oil sands resource. As shown in Figure 6, the Alberta oil sands industry is set to double its 2010 production by 2020 and by 2025 to increase production by 150% over 2010 levels. Suncor recognizes that collaboration offers substantial value. Achieving this rate of growth will require breakthrough technologies to make the needed improvements in water use intensity. By collaborating rather than competing in development of water use improvements, the industry maximizes it’s potential to bring forward these needed technologies.

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Canadian Crude Oil Production

million b/d 2010 2015 2020 2025 Total Canadian 2.8 3.5 4.2 4.7 (including oil sands)

Oil Sands 1.5 2.2 3.0 3.7

Oil Sands (Operating 1.5 2.1 2.3 2.2 & In Constructions only)

Overall, total Canadian oil production is expected to grow from 2.8 million b/d in 2010 to 4.7 million b/d in 2025.

Figure 6. Forecasted Canadian Crude Oil Production through 2025 (CAPP, 2011)

One key collaboration in which Suncor is involved is the Oil Sands Leadership Initiative (OSLI), a partnership among Suncor and five other oil sands operators: ConocoPhillips Canada, Nexen, Shell, Statoil and Total. OSLI has four focus areas: Land, Water, Technology and Community. One of the Water focus area’s key projects has been its Regional Water Management Solutions (RWMS) project. In this project, the member companies have looked at three levels of water solutions for the industry. As shown in Figure 7, the levels include 1) solutions for each individual operation, 2) solutions that reuse water between operations within subregions, and 3) solutions that reuse water between operations throughout the entire oil sands region. OSLI members initiated the RWMS project with the expectation that they will find the most optimal solution if they consider regional solutions rather than individual or sub-regional solutions.

Figure 7. OSLI Members Favor Regional Water Management Solution Over Individual or Sub-Regional Solutions

The biggest opportunity that the RWMS identified is recycling water from oil sands surface mining operations (i.e., tailings pond water) to reduce groundwater currently used as make-up water to generate steam at most in-situ operations. Tailings water is becoming available at mining operations due to the development of advanced tailings technologies like TRO™ and consolidated tailings (CT).

To determine the feasibility of using tailings water to generate steam at in-situ facilities, OSLI conducted screening tests over a 6-month period in 2010-2011 at its Tailings Water Treatment Pilot Plant, constructed near Fort McMurray. Tests were conducted on water treatment processes used by other industries, as well as leading-edge technologies, including: filtration, membrane, biological and oxidation technologies.

The RWMS team is currently looking at including other oil sands operators in the collaborative project so costs and impacts can be adjusted accordingly. (OSLI, 2012)

OSLI’s Water Management Working Group also collaborated in 2010 on Canada’s first Water Treatment Operator training program aimed at improving industry-wide expertise in water treatment and management at Steam Assisted Gravity Drainage (SAGD) operations. The plan is to work with a post-secondary institutional partner to deliver a new curriculum for people interested in careers in SAGD water systems with the objective of creating an industry standard that will eventually see all water treatment operators holding similar and appropriate training, experience and certification credentials. (OSLI, 2012)

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The group is also planning the construction of a Water Technology Development Center. To be located at one of Suncor’s in-situ operations, the center is intended to accelerate the development and commercialization of technologies that will improve water treatment and recycling at the industries in-situ operations without environmental burden shifting. The dedicated center would allow OSLI companies to “test drive” more technologies than could be evaluated by each company individually while collaboratively managing the risks and costs. It would also shorten the current 8-year time frame required to field test technologies and move them to commercial application, leading to an accelerated return on investment. (OSLI, 2012)

Suncor is also a participant in Canadian Oil Sands Network for Research and Development (CONRAD), a network of companies, universities and government agencies organized to facilitate collaborative research in science and technology for Alberta Oil Sands. The vision of CONRAD’s Water Focus Group is to collaborate on the understanding of water use and its impacts in surface operations (extraction and upgrading) and final reclamation. In existence for more than a decade, this group has developed a database of industry best practices and technologies for water treatment, sponsored a project on treatment water quality targets for discharges to the Athabasca River based on multiple industry point discharges, held five workshops that have grown to 350 attendees with worldwide participants and other important accomplishments.

In March, 2012, senior executives from twelve oil sands operating companies announced the formation of the Canadian Oil Sands Innovation Alliance (COSIA). Collaborating companies include BP Canada Energy Company, Canadian Natural Resources Limited, Inc., ConocoPhillips Canada Resources Corp., Devon Canada Corporation, Limited, Nexen Inc., Shell Canada Energy, Statoil Canada Ltd., Suncor Energy Inc., Limited and Total E&P Canada Ltd.

This new collaborative organized is described as the next step in the accelerated evolution of a number of collaborative organizations that have been working to improve the sector’s performance. COSIA will focus on four areas: tailings, greenhouse gases, land and water. By the end of 2012, the projects underway through OSLI and CONRAD will be continued under the umbrella of the COSIA organization. (COSIA, 2012)

8. Conclusion

The oil sands resource is an important component of the world’s . While water challenges certainly exist in production of the resource, the industry has achieved water usage rates that are consistent with water use in petroleum production in other regions. Suncor and its counterparts in the oil sands industry are committed to collaborative efforts to expand production rates while sustainably managing their use of water within the region.

9. Acknowledgment

The authors acknowledge the support of Brian Doucette, Director of Environmental Excellence, Suncor Energy.

10. References Alberta Government, http://www3.gov.ab.ca/env/water/GWSW/quantity/learn/What/CLM_Climate/ CLM_PDF/CLM1_evap_lake.pdf downloaded on June 5, 2011 Alberta Government, Alberta’s Oil Sands - Water, http://www.oilsands.alberta.ca/water.html, accessed May 1, 2012a. Alberta Government, Environmental Management of Alberta’s Oil Sands, downloaded from http://environment.gov.ab.ca/info/library/8042.pdf, downloaded May 1, 2012b. Business for Social Responsibility (BSR) & Pacific Institute, At the Crest of a Wave, A Proactive Approach to Water Strategy, September, 2007 Canadian Association of Oil Producers (CAPP), Crude Oil Forecast, Markets and Pipelines, June, 2011. COSIA web site, http://www.cosia.ca, accessed May 1, 2012. OSLI web site, http://www.osli.ca/projects/water, accessed May 1, 2012. Wu, M., et. al., Consumptive Water Use in the Production of Ethanol and Petroleum , Argonne National Laboratory, January, 2009, downloaded from http://www.transportation.anl.gov/pdfs/AF/557.pdf, May 1, 2012.

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