CANADA: INNOVATION IS DRIVING GLOBAL INVESTMENTS Canada’s energy sector is transitioning to a low-carbon future A look at innovative technologies and processes within progressive companies Focus on British Columbia, Alberta, Saskatchewan and Newfoundland and Labrador SPECIAL SUPPLEMENT TO PUBLISHED MARCH 2020 CANADA: CANADA. SWEEPING FORESTS, CASCADING MOUNTAINS, EXPANSIVE PRAIRIES, ROCKY COASTLINES—AND THE POWER TO TRANSFORM HIGH-CARBON ECONOMIES AROUND THE WORLD. The energy sector is at the heart of Canada’s environmental, economic and social agendas. Through hard work, ingenuity and collaboration, Canada is positioning itself as a leader in a world that is increasingly looking for the most sustainably sourced products. INNOVATING FOR A LOW CARBON FUTURE The country’s vast natural resources have GREATER MODERNIZATION MEANS helped to define Canada as a nation and GREATER OPPORTUNITY CANADIAN ENERGY shape us as a people, as a dynamic and Canada’s oil and gas industry adheres to some of the most stringent environmental AT A GLANCE innovative leader and as a global supplier and regulatory review processes on the of choice. planet. And through regulatory moderniza- tion we now have a space where industry Now, as the urgency for climate action and environmental leaders can work to- becomes the global challenge and necessity gether to drive down GHG emissions. of our time, Canada is undergoing a gen- erational transformation that is critical to Canada stands with Norway as the only two major oil-producing nations with carbon its success in attracting investors in this price systems in place. Canada is also century of clean growth. working with its provincial partners to cap % emissions from major development pro- 11 GLOBAL STRENGTH IN OIL AND GAS jects. And the Government of Canada’s of GDP Canada is the world’s fourth largest natural Oceans Protection Plan makes Canada a gas producer. It is home to the world’s largest world leader in marine safety and ensuring oil reserves open to private investment. responsible commercial shipping. And boasts one of the cleanest electricity These relatively recent measures build on grids. We also have a highly skilled work- 832K a foundation of progress. Over the past de- force that is bringing innovation and change Direct and cade, Canada has cut oil sands emissions indirect Jobs to Canada’s oil and gas industries. by 21% per barrel. New technologies could cut emissions further, by one-quarter in Canada is the only G7 country to have free the next decade alone. Electrification of trade agreements concluded with all other Canada’s gas and LNG operations using hydroelectricity will produce the world’s 165 G7 nations, giving us access to vast mar- cleanest LNG. Countries kets in North America, Asia, and Europe, trade energy with Canada making us the envy of the world. Add to CUTTING EMISSIONS, BOOSTING that a unique relationship with the United COMPETITIVENESS INDUSTRY HIGHLIGHTS States, tied together in part by over 30 Work is underway to put Canada on a Crude oil activities in Canada’s energy sector include exploration, drilling transmission lines and 70 pipelines. trajectory to have the world’s cleanest production, field processing, storing petroleum sector. Producers are spending and transporting oil. According to the International Energy billions on innovation, by themselves and Agency’s sustainable development scenario, through organizations like Canada’s Oil Globally, Canada is ranked: Sands Innovation Alliance and the Clean demand for petroleum products will exist for Resource Innovation Network. These efforts RD decades to come as global emissions must will develop new clean technologies to 3 largest oil reserves in the world decline. This opens a new world of oppor- mitigate environmental impacts on our air, TH tunity for leadership in cleaner production. land and water. 4 largest producer of oil in the world TH 4 largest producer of natural gas in the world TH in Cleantech Innovation The following pages tell a story about Canada’s innovation and environmental pledge. 4 They feature compelling reasons why investing in Canadian energy is the right choice, right now. Source: Natural Resources Canada 3 REDUCING EMISSIONS FROM HEAVY OIL EXTRACTION With heavy oil reserves shared by both provinces, LESS STEAM, LESS HEAT, FEWER GHG EMISSIONS Saskatchewan and Alberta have been leading research Innovation is characteristic of Canadian oil sands com- and development for decades into heavy oil extraction panies: less energy-intensive extraction technologies are technologies. constantly under development, with a recent emphasis on production that uses less steam. The heat required Progressive cavity pumps, which allowed for sand along to create steam in a process like SAGD, for example, has with heavy oil to be produced in heavy oil wells, and historically been achieved through the burning of natural steam assisted gravity drainage (SAGD) are both gas or other hydrocarbons and is the primary source of technologies that were developed and deployed in upstream GHG emissions. Western Canada. One approach has been to explore the use of solvent Meeting the technological challenges for oil sands pro- injection technologies. Solvents such as propane, butane, duction has resulted in some of the highest recovery methane and, significantly, CO2 have been trialed in rates in the world, with in situ methods ranging from heavy oil operations. Such solvents lower the viscosity 40-60% of oil-in-place, while open-pit mining typically of oil, allowing for more recovery with fewer emissions, exceeds 90%. For comparison, the average conventional since they require less or even no heat. well in Alberta yields 8%, while shale oil averages less than 10%. TALKING JIVE: REDUCING EMISSIONS USING SOLVENT INJECTION The Joint Implementation of Vapour Extraction (JIVE) program did field trials of solvent injection technologies in both Alberta and Saskatchewan between 2005 and 2011. Husky, Nexen and CNRL each tested different solvents and injection configurations. Those trials, and a concurrent research and optimization program managed by the Petroleum Technology Research Centre (PTRC), demon- strated that solvent extraction is technically viable and improves oil recovery while significantly reducing CO2 emissions. In cases where captured CO2 is used as the solvent, emissions are also reduced from affiliated indus- trial processes. Photo: NEXEN Plover Pilot Plant for solvent injection. Husky Energy has moved on to commercial deployment of CO2 solvent injection at its Edam, Mervin and Lashburn operations, with injected carbon dioxide captured from its nearby Lloydminster upgrader. 4 CANADA: INNOVATION AND OPPORTUNITY COAST-TO-COAST YUKON ESTABLISHED PRODUCTION AND TRANSPORTATION INFRASTRUCTURE Newfoundland and Labrador’s offshore STRINGENT ENVIRONMENTAL STANDARDS estimates: 52.2 billion barrels of oil and 200 GHG emissions per barrel of oil produced in the oilsands trillion cubic feet of gas. have fallen 21% over the last decade, notably as a result of technological and efficiency improvements. Significant work With an integrated system of coast-to-coast rail is underway to further reduce emissions in the sector. lines, a 760,000 km-long pipeline system and several expansion proposals, Canadian oil, gas and overall energy production is well connected NORTHWEST to domestic and export markets. TERRITORIES NUNAVUT BRITISH COLUMBIA ALBERTA ACCESS TO CAPITAL NEWFOUNDLAND When it comes to energy & LABRADOR listings, the Toronto Stock Exchange (TSX) ranks SASKATCHEWAN first among all exchanges globally, with 22% of the QUEBEC world’s public oil and gas MANITOBA PRINCE EDWARD companies listed in Canada. ISLAND ONTARIO UNITED STATES OF AMERICA NOVA SCOTIA NEW BRUNSWICK PROXIMITY TO MARKETS Canada is the largest supplier of crude oil and refined petroleum products to the United States and has active development in infrastructure for delivering crude oil and natural gas supplies to Asian and European markets. Liquefied natural gas (LNG) transportation OFFSHORE NOVA SCOTIA IS A PROVEN OIL AND GAS RICH REGION, from western Canada to east Asia is 14 days faster has been successfully producing natural gas for nearly 20 years. With a than from the U.S. Gulf Coast. potential for 120 trillion cubic feet of natural gas and 8 billion barrels of oil in its offshore area, the region is attracting investment interest from global companies. Its attractive shipping distances to world markets, deep tide water ports and pre-zoned industrial lands means Nova Scotia is also well positioned to become a contender for LNG export to international markets. (Source: Nova Scotia Department of Energy and Mines) 5 FOCUS ON: BRITISH COLUMBIA LEVERAGING CLEAN POWER TO PRODUCE THE LOWEST EMISSION LNG IN THE WORLD Traditionally known for its breathtaking natural beauty below most LNG-producing countries. This reduces the and abundant natural resources, British Columbia’s amount of energy required to cool the natural gas to proximity to Liquefied Natural Gas (LNG) customers, minus 260 degrees Fahrenheit, providing another plentiful natural gas and cool climate make it ideal for significant cost advantage. LNG investment. BRITISH COLUMBIA HAS SEEN MANY DECADES OF Located on the Pacific Ocean with more than 16,000 miles SUCCESSFUL LNG INVESTMENT of coastline, British Columbia is within ten days’ shipping Experienced LNG producers such as Shell, Chevron and distance to Japan and China, compared to 24 days from FortisBC have been operating in Canada for decades. the U.S. Gulf Coast. Without Panama Canal shipping FortisBC’s Tilbury facility has been producing LNG in costs, moving LNG to customers from British Columbia Delta, British Columbia since 1971. Shell and Chevron offers a distinct financial advantage. have successfully operated both oil and natural gas development and have headed the under-construction HYDROELECTRIC POWER CONTRIBUTES TO THE LNG Canada and proposed Kitimat LNG facilities, bringing WORLD’S LOWEST EMISSION LNG their decades of global LNG experience to these projects. The province also has abundant, clean hydroelectric power, thanks to many rivers, lakes, streams and considerable LNG projects in British Columbia have also focused rainfall.