Troubled Waters, Troubling Trends Technology and Policy Options to Reduce Water Use in Oil and Oil Sands Development in Alberta May 2006 REPORT Mary Griffiths Amy Taylor • Dan Woynillowicz Sustainable Energy Solutions Troubled Waters, Troubling Trends Technology and Policy Options to Reduce Water Use in Oil and Oil Sands Development in Alberta 1st Edition Mary Griffiths Amy Taylor • Dan Woynillowicz May, 2006 Troubled Waters, Troubling Trends The Pembina Institute Troubled Waters, Troubling Trends: Technology and Policy Options to Reduce Water Use in Oil and Oil Sands Development in Alberta 1st Edition, published May 2006 Printed in Canada Editor: Randee Holmes Layout: Roberta Franchuk Cover photos: Syncrude Canada’s oil sands extraction and upgrading facilities and tailings pond (foreground). Photo: David Dodge, The Pembina Institute. Inset aerial photo and back cover aerial photos are reproduced with permission of Alberta Sustainable Resource Development, Air Photo Distribution, Phone: 780-427-3520. Aerial photos © Alberta Government. The pictures show a cyclical steam stimulation operation in the Cold Lake area. ©2006 The Pembina Institute ISBN 0-921719-91-4 The Pembina Institute Box 7558 Drayton Valley, Alberta T7A 1S7 Canada Phone: 780.542.6272 E-mail: [email protected] Additional copies of this publication may be downloaded from our website: http://www.pembina.org. About the Pembina Institute The Pembina Institute creates sustainable energy solutions through research, education, consulting and advocacy. It promotes environmental, social and economic sustainability in the public interest by developing practical solutions for communities, individuals, governments and businesses. The Pembina Institute provides policy research leadership and education on climate change, energy issues, green economics, energy efficiency and conservation, renewable energy, and environmental governance. More information about the Pembina Institute is available at http://www.pembina.org or by contacting [email protected] ii - Troubled Waters, Troubling Trends The Pembina Institute “It is rare indeed to find thinking people in any large producing area of the world putting fresh water down a hole to force out oil.” The Honourable Nick Taylor, P. Geol., retired Canadian Senator and former Member of the Alberta Legislature Troubled Waters, Troubling Trends - iii The Pembina Institute Acknowledgements and Disclaimer Information about various companies and projects is provided in this report. We appreciate the help of many people in providing and checking the data. In certain instances, a specific project or process is used within the report as an illustrative example. This use of such examples does not suggest that these companies, projects or processes are unique in terms of the problems associated with them or the solutions being employed. We recognize the openness of several companies in acknowledging and identifying challenges and their efforts to address them. We hope that our report will encourage all involved in the management and use of water for oil recovery to find ways to reduce their impact on the environment. The authors would like to acknowledge a number of individuals, organizations and government bodies that have made this report possible: • Walter and Duncan Gordon Foundation, for a grant that enabled us to write this report • Environment Canada, for a grant that enabled us to expand the report • Alberta Environment • Alberta Energy and Utilities Board and Alberta Geological Survey • Bruce Peachey, New Paradigm Engineering Ltd. • Individuals and companies that provided data and, in some cases, reviewed the report: Canadian Natural Resources Limited; Peter Koning, ConocoPhillips Canada; Devon Canada Corporation; Don Sutherland and Dan Hausmann, Husky Energy; Dr. Stuart Lunn and Glynis Carling, Imperial Oil Resources; Jos Lussenburg, Japan Canada Oil Sands; Doug Bertsch, North West Upgrading; Michael Burt, OPTI Canada Inc.; Donna Yaskiw and Dennis Kohlman, Petro-Canada; Meera Nathwani, Tim Crowe and Ken Zaitsoff, Shell Canada Limited; Barry Noble, Whitesands Insitu Ltd.; and those working for companies that do not wish to be specifically named. • External reviewers and others who provided advice: Steven Renzetti, Professor, Department of Economics, Brock University; Mike Wenig, Canadian Institute of Resources Law; Karen Wilkie, Canada West Foundation; William Donahue, Freshwater Research Ltd., Sally Ulfsten, Stop and Tell Our Politicians Society; Edo Nyland, Professor Emeritus, University of Alberta; Arlene Kwasniak, Faculty of Law, University of Calgary. • Carol Adkisson kindly checked the hyperlinks. • Lori Chamberland, David Dodge, Chris Severson-Baker, Mark Winfield and other Pembina staff, including Mike Preston who helped with early research while he was with the Institute. Finally, we thank Randee Holmes, for her attention to detail in editing the report, and Roberta Franchuk, for her skill in formatting and layout. The contents of this report are entirely the responsibility of the Pembina Institute and do not necessarily reflect the views or opinions of those acknowledged above. We have made every effort to ensure the accuracy of the information contained in this report at the time of writing. However, the authors advise that they cannot guarantee that the information provided is complete or accurate and that any person relying on this publication does so at their own risk. iv - Troubled Waters, Troubling Trends The Pembina Institute About the Authors MARY GRIFFITHS is a Senior Policy Analyst with the Pembina Institute, which she joined in 2000. She has written several books including “When the Oilpatch Comes to Your Backyard: A Citizens’ Guide,” including a completely revised second edition published in November 2004. In 2003 she was the lead author of both “Oil and Troubled Waters” and “Unconventional Gas: The Environmental Challenges of Coalbed Methane Development in Alberta.” Mary has served on several government advisory committees, including as the co-chair of Alberta Environment’s Advisory Committee on Water Use Practice and Policy. Mary obtained her doctorate at the University of Exeter, UK (1969), where she taught geography. AMY TAYLOR is the Pembina Institute’s Director of Ecological Fiscal Reform. Since joining the Pembina Institute in 2000, Amy has co-organized and ran an international conference on environmental taxation and has worked with resource sector leaders to advance environmental tax shifting policy in Canada. She has completed several international surveys of environmental policies including surveys related to hydrogen and fuel cells, and bio-energy production and consumption for Industry Canada. Amy has also completed several projects on tax and subsidy reform. Amy holds an honours undergraduate degree in Environmental Science and Economics from Trent University and a Master in Resource Environmental Management degree from Simon Fraser University. DAN WOYNILLOWICZ joined the Pembina Institute in 2001 and is now a Senior Policy Analyst. He has worked on a variety of energy issues including oil sands, water use by oil and gas industries, coalbed methane and energy development in Northern Canada. Since 2003, he has led the Institute’s engagement in the review of proposed oil sands projects, as well as its participation in the numerous multistakeholder initiatives surrounding regional environmental management and monitoring in the Athabasca Oil Sands. He is the lead author of “Oil Sands Fever: The Environmental Implications of Canada’s Oil Sands Rush,” released in 2005, co-author of “Oil and Troubled Waters” published in 2003 and contributor to numerous other publications. Dan holds a Bachelor of Science in Environmental Science degree, and is currently completing a Master of Arts in Environment and Management degree at Royal Roads University. Troubled Waters, Troubling Trends - v The Pembina Institute Troubled Waters, Troubling Trends Technology and Policy Options to Reduce Water Use in Oil and Oil Sands Development in Alberta Table of Contents Executive summary ................................................................................................................. 1 1. The challenge......................................................................................................................................... 1 2. Water allocation and use....................................................................................................................... 2 3. Environmental impacts .......................................................................................................................... 3 4. Technologies to reduce water use........................................................................................................ 4 5. Policies to reduce water use ................................................................................................................. 5 6. The way forward .................................................................................................................................... 6 1. The challenge ................................................................................................................. 11 1.1 Introduction ......................................................................................................................................11 1.2 Balancing water supply and demand.............................................................................................12 1.3 Alberta’s Water for Life strategy.....................................................................................................14