Canadian Natural on a pathway to oilsands crude with GHGs lower than global average: Laut

Canadian Natural executive vice-chairman Steve Laut. Image: CP Images

Canada’s second largest oilsands producer says it is on a pathway to produce oil with GHG emissions intensity that rivals that of light crude oil in North America and around the world.

Achieving this would be a big win for a sector that is facing delays building new pipelines for its growing production, in large part because of higher GHGs compared to other sources and concerns over the GHG reduction commitments that have been made by Canadian governments.

A 2014 study by IHS Markit found that oilsands crudes consumed in the U.S. had GHG emissions that ranged from 1 percent higher to 19 percent higher than the average. IHS Markit also found that in 2012, 45 percent of U.S. oil supply was within the same GHG intensity range as oilsands, such as imports from Latin America, Africa, the Middle East and parts of the U.S. itself.

Canadian Natural, which produces from the Primrose, Kirby, Horizon and AOSP oilsands projects, doesn’t just want to be equivalent to the average crude on GHGs, says executive vice-chairman Steve Laut – it plans to do better.

“If you look at where we are today at Horizon itself, taking our carbon capture and storage activities, we’re about five percent off the global average GHG emissions intensity for all crude oil,” Laut told JWN.

“We see many improvements in the use of technology to leverage that. We’re running pilots, [and] depending on the success of those pilots and the iterations we take we see a pathway where we could actually be below the global average oil greenhouse gas emissions intensity.”

The company’s 2016 Report to Stakeholders describes a decrease in company-wide GHG emissions intensity of 16 percent over the previous five years, although this does not include intensity reductions at the Horizon mine and upgrader.

Carbon capture and storage (CCS) operations are a key piece of Canadian Natural’s GHG reduction strategy. With its $12.74-billion buy into the AOSP in 2017, the company became majority owner of the Quest CCS project located at the Scotford Upgrader. Added to its own CCS activities at Horizon, Canadian Natural estimates it has approximately 1.5 million tonnes of CCS capacity, which will jump to 2.7 million tonnes of CO2 annually once the CCS-equipped Sturgeon Refinery is fully operational this year.

Laut said that Horizon CCS activities also have benefits around water use and physical facility footprint.

“One of the things we’re using right now is a thickened tailings process where we sequester the CO2. That does a number of things: we get the water back right from the time it’s warm, so that means you need less heat to heat it back up to temperature, which means less greenhouse gases; it also means you get the water back at the plant rather than going into the tailings pond, and it means tailings pond sizes get smaller and your freshwater usage gets lower. There’s multiple wins on the environment here just by leveraging a technology,” Laut said.

“We’re [also] piloting an in-pit extraction process that would significantly reduce costs and greenhouse gas emissions. That’s a pilot, so we’ll have to see how it works but if it does work it could make a step change.”

While Canadian Natural is optimistic about the technology “pathway” to lower-than-average GHG intensity, Laut was cautious not to call it a “line of sight.”

“When you use technology, you never know how it’s going to go. Sometimes things happen a lot faster than you think and sometimes take more iterations,” he said.

“The timing is hard to say, but I think that’s one thing that has been underestimated is the Canadian industry’s ability to innovate and leverage technology to reduce our environmental footprint, and that’s all players in the Canadian oil and gas industry.”

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