Responsible Development - Canadian Association of Petroleum ...

Canada’s Oil Sands:Responsible DevelopmentJohn Elliott, Imperial Oil January 29, 2013 Oil Sands 101, Calgary

Cautionary StatementThis presentation may contain forward-lookinginformation on future production, project start-upsand future capital spending. Actual results coulddiffer materially due to changes in project schedules,operating performance, demand for oil and gas,commercial negotiations or other technical andeconomic factors.

What I’d like to discuss todayEnergy outlookOil sands industry overview, including extraction techniquesOil sands challenges and solutions

Imperial Oil: an integrated operationExplorationWe’re unlocking Canada’s energy resourcesDevelopment and productionWith world-class research and advancedtechnologyMarketingDelivering fuels and products across CanadaRefining and petrochemicalsProducing fuels and products thatCanadians need

million barrels per day of oil equivalentEnergy demand is increasing…Most energy will continue to come from oil & gasWind, solar & biofuelsBiomass, Hydro & GeoNuclearCoalGasOil

Canada’s oil sands are enormous• Canada has thirdlargest reserves inthe world• Over 97% associatedwith oil sandsSource: U.S. Energy Information Administration• Canada has theopportunity to fillimportant globalenergy supply gaps

Where are the oil sands?• Three areas in northernAlbertaPEACERIVERATHABASCA• Largest: AthabascaEdmontonCOLD LAKECalgary100 mile125 km

Economic benefits across CanadaHigh-quality employment and economic benefitsfor Canadians from coast to coastMap courtesy of the CanadianAssociation of Petroleum Producers25%$28 billionBritish Columbia4%$5 billionSaskatchewan3%$4 billionManitoba 52%$63 billionOntario13%$14 billionQuebec25 year forecast$30 billionin annualgovernment revenues126,000 jobswill be created outside Alberta$2.1 trillion inGDP over 25 years(CERI 2011)

What are “oil sands”?• Sand saturated with very heavy oil (bitumen)• Bitumen is thick• Heat and water used to produce it

Depth of resourcedetermines recovery methodCloser to surface:Mining(20% of the oil sands)

Depth of resourcedetermines recovery methodDeeper below surface: In-situ (in place)

Understanding the issues• Continue to reduceenvironmental impacts‣ GHG emissions‣ Water use‣ Reclamation‣ Tailings• Challenges can be managed• Research and technologyleadership is our strength

GHG emissionsIssue:Oil sands development results in higher greenhousegas (GHG) emissions than conventional production6%more GHG emissionsfrom oil sands than UScrude supply average6.5%of Canada's GHGemissions are fromoil sands

GHG emissionsIssue:Oil sands development results in higher greenhousegas (GHG) emissions than conventional production6%more GHG emissionsfrom oil sands than UScrude supply average6.5%of Canada's GHGemissions are fromoil sandsSummary of greenhouse gas emissions

Life cycle greenhouse gas emissionsSource: IHS CERA 2012Kilograms of CO2 equivalent per barrel of refined products

Water useIssue:Oil sands operations require large amountsof water for processingThrough more than 40 years oftechnical innovation, Imperial haspioneered state-of-the-art waterrecycling technologyWe are steadily reducing theamount of water we need~3%of the Athabasca Riverflow is allocated; lessthan half used>90%of produced waterrecycled at Cold Lake88%of water recycled atSyncrude

Water useIssue:Oil sands operations require large amountsof water for processingThrough more than 40 years oftechnical innovation, Imperial haspioneered state-of-the-art waterrecycling technologyWe are steadily reducing theamount of water we needCyclic Solvent Process technology~3%of the Athabasca Riverflow is allocated; lessthan half used>90%of produced waterrecycled at Cold Lake• Non thermalprocess• Reducedenergy88%of water recycled atSyncrude

TailingsIssue:Oil sands mining operations produce tailingsponds

Reducing our footprintIssue:Oil sands operations disturb the borealforest during developmentIn more than 40 years of oil sands mining, less than 0.02 %of Canada's boreal forest has been disturbed for development.1 million treesplanted at Cold Lake5 million treesplanted at Syncrude

Reducing our footprintIssue:Oil sands operations disturb the borealforest during developmentIn more than 40 years of oil sands mining, less than 0.02 %of Canada's boreal forest has been disturbed for development.Before: Lease 17 (Gateway Hill)After:Lease 17 (Gateway Hill)1 million treesplanted at Cold Lake104 hectares permanentlyreclaimed at Syncrude in 2008(certified by government)5 million treesplanted at Syncrude

ResearchLASERCSPIssue:Issue:SA-SAGDSteam andSolventSolventWaterHeatSolventandBitumen• Solvents aid recovery• Reduce or eliminate water use• 25-90% GHG intensity reduction

Emerging technologiesNon Aqueous ExtractionBitumenOil Sands“Dry” Tailings• 90% fresh water reduction• No wet tailings ponds• Progressive reclamation• High bitumen recovery

A few final thoughtsThe oil sands are a significant engine ofeconomic growth for Canada.Research and development activities arefocused on improving environmentalperformance through:- reducing GHG emissions- continued reduction of water use- minimizing our footprint

Thank you.

Questions

Kearl oil sands project

Canadian Oil Sands Industry Alliance• 13 oil sands producers working together on environmental issues– Tailings, water, land, and greenhouse gas emissions– Accelerate the pace and scope of environmental innovation• Build on the successes achieved byearlier collaborative groups‒ Canadian Oil Sands Network for Researchand Development (CONRAD)‒ Oil Sands Leadership Initiative (OSLI)‒ Oil Sands Tailings Consortium (OSTC)