Energize Alberta November/December 2011

November/December 2011

Water Watch: Special section pages 7 to 10

H2O

where energy, the economy, and the environment intersect

Cultural collaboration helps U of C solar team shine Student-designed solar home places well in prestigious competition

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Modern touch to traditional living Team spokesman Alex Ste-Marie told Energize Alberta that TRTL, which is an acronym for technological residence traditional living and which is pronounced “turtle,” stood out for its mandate of attempting to address critical issues in aboriginal housing in Canada. He says the home was designed in collaboration with Treaty 7 First Nations in southern Alberta and that the aboriginal involvement in the project was a key component in the design and development of the U of C solar-powered home.

“When we first started on this project we decided to consult with the Treaty 7 people…and by consulting with them we came up with the TRTL concept. It’s a house that’s completely sustainable and it’s based on the traditional wisdom of the First Nations,” Ste-Marie, who is the team’s communications leader, says.

“The project itself has been multidisciplinary, as we’ve had people from engineering, architecture, business, communications and environmental science coming together.

Photo: Al Jaugelis

n innovative mindset, a desire to effect change and the embracement of aboriginal knowledge, culture and spirituality helped a dedicated team of University of Calgary students harness the sun’s energy and shine bright during the recent 2011 Solar Decathlon.

The event, held September 23 to October 2 in Washington, D.C., and hosted by the U.S. Department of Energy and the National Renewable Energy Laboratory, saw the U of C contingent place tenth in the juried competition, which challenges student teams from around the world to design, construct and operate energy-efficient solar-powered homes.

The U of C–designed home, called the Cenovus TRTL, was the lone Canadian entry in the competition, which featured a select group of 19 teams that were invited to participate in the event from an initial application list of more than 40. The teams designed and built their entries on their home turf, disassembled them and then shipped them to Washington where they were then reassembled and displayed on that city’s National Mall.

A unique aerial perspective of the Cenovus TRTL and several team members.

As well, by working in conjunction with the Treaty 7 partners, we were able to create a home that is culturally appropriate, but also respectful of Mother Nature and one that would be able to solve some of the problems occurring in First Nations communities, such as fire concerns, mould and overcrowding.”

For U of C team member Chris Fry, the Cenovus TRTL home brings together two important areas of his research: culture and the environment. A student in the interdisciplinary Master of Science in Sustainable Energy Development program and member of the Kwanlin Dün First Nation (Whitehorse, Yukon), Fry believes his program and the solar home project reflect a new appreciation of traditional knowledge for contemporary sustainable applications.

Fry first got involved with the project as co-chair of the cultural advisory group, consulting on aspects of partnering with First Nations communities and bringing together

community members to provide culturally relevant input to the home design. He ultimately found himself helping with construction, cooking a First Nations–themed feast in Washington and leading public tours of the home at the Solar Decathlon.

“We wanted to share Canadian First Nations culture internationally and we did that,” he says. “We created an efficient home that is affordable and raises awareness of effectiveness of renewable energy. We definitely achieved our objectives.”

A holistic approach From a technological perspective, Ste-Marie says the green building materials and renewable energy technologies used in construction result in a house that is healthy, safe, durable and affordable. From a traditional perspective, the design is guided by a holistic view of the home as a living part of a greater natural order. ❯❯ continued on page 3

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A shock to some Controversial Heartland project gets green light

Every drop counts The province’s two largest cities reducing water use

Untapped potential Study suggests Alberta’s groundwater resource larger than thought www.energizealberta.com

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November/December 2011 • Energize Alberta

Homeowners could one day seize the power

Check out energizealberta.com for additional stories, polls, a link to the Energy IQ quiz and a searchable archive of past editions. You can also comment on our stories and forward them to friends. In addition, the site houses a directory of key players on the energy literacy stage.

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Photos: University of Calgary’s Schulich School of Engineering

Backyard wind turbines and solar panels the focus of new renewable energy research chair Jennifer Sowa Energize Alberta

magine your backyard transformed into a mini power station with your very own wind turbine and every house on your street equipped with solar panels. In late September, the University of Calgary announced the new NSERC/ENMAX industrial research chair in renewable energy at the Schulich School of Engineering to explore ways to implement renewable energy solutions at the household level.

“Through this collaboration, we have a top engineering expert working with a prominent energy provider to develop renewable energy sources that Calgarians can use in their own homes,” says Elizabeth Cannon, president of the University of Calgary.

“Exploring sustainable ways to meet our future energy needs is the type of relevant and high-quality research that makes the University of Calgary such a proud partner in this city.”

David Wood, professor in the department of mechanical and manufacturing engineering, will explore the potential of using small wind turbines by measuring wind speeds at various heights in Calgary, using a 50-metre mast that was erected earlier this month near the University of Calgary’s Spy Hill site. This type of study is unique because wind measurements are normally gathered outside city limits for projects such as massive wind farms.

Research chair David Wood and his graduate student Xavier Ortiz discuss their project inside a wind tunnel with a model of a solar photovoltaic panel. The wind tunnel is used to analyze wind loads on the panels to try to come up with the most efficient and effective configurations.

“People are generally interested in renewable energy technologies, but it’s a big step going from being interested to actually investing in the equipment,” says Wood, NSERC/ ENMAX industrial research chair in renewable energy. “Through this research, we hope to provide more information about the advantages of having wind turbines and solar panels at the household level.”

Wood’s research also involves using a wind tunnel to study the effects of wind loads on solar photovoltaic panels to help reduce installation costs and determine the most efficient panel configurations.

He is also involved with monitoring the performance of the solar thermal system at the Southland Leisure Centre in Calgary. Earlier this year, 150 solar panels were installed on the roof of the recreation centre to provide heat for pools and showers.

“This industrial research chair underscores the importance and value to Canada of research collaborations,” says Suzanne Fortier, president of the

These wind-measuring instruments will be attached to a 50-metre tall mast. The instrumentation includes various sensors and recording equipment to record the speed and direction of wind in Calgary.

This data will be used to help develop small wind turbines as well as to determine how wind loads in Calgary affect solar panels, information that will help researchers develop the most efficient configurations for use in the city.

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Natural Sciences and Engineering Research Council of Canada (NSERC).

“The work of David Wood and his colleagues will help the renewable energy industry to evolve and prosper, while providing students with the knowledge and expertise they will need to achieve excellent, productive careers in industry and academia.”

This research position is part of a plan by ENMAX Corporation to encourage homeowners to adopt renewable energy technologies.

“Advancing research in renewable energy technologies is key to popularizing the adoption of home-based generation,” notes Terry Tyler, executive vice-president, chief technology officer and chief information officer for ENMAX. “Through our Generate Choice program, homeowners can now produce a portion of their own electricity and our funding of this industrial research chair for renewable energy will bring even more efficient and cost-effective solutions and practices to light.”

Small-scale power generation such as backyard wind turbines is part of the bigger picture of creating distributed generation systems, a concept that is catching on around the world.

“Instead of your electricity grid being fed by one or two large power stations, there are a lot of smaller generators scattered throughout the grid,” explains Wood. “That has a lot of advantages in terms of optimizing power capacity, and you can avoid building new coal-fired power stations, which increase greenhouse gas emissions.”

The total funding for the research chair is $2.25 million over five years, including $750,000 from the Schulich School of Engineering, $750,000 from NSERC and $750,000 from ENMAX.

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Energize Alberta • November/December 2011 Continued from page 1

Canada’s team in front of their solar home— the Cenovus TRTL—at the 2011 Solar Decathlon in Washington, D.C.

Cultural collaboration

The U of C team incorporated innovative technologies into the 986-square-foot, two-bedroom house, including a highly effective air-to-water heat pump used for space conditioning and hot water production. As well, the photovoltaic system operates at 93 per cent of its optimal efficiency and has a rounded form that responds to the cultural desires of the client, while a sophisticated control system allows for monitoring and long-term optimization.

Photo: Canada’s Solar Decathlon team

“The shape of the house itself is based on the traditional shape of the teepee, or what’s sometimes called the long house. That’s why it has a circular nature to it. If you look at the floor plan, there’s some sort of circular flow happening and it all ties in together—there’s no corners in the house, per se, and it really fosters positive energy,” he says.

“Also, the main entrance is east-facing and that means a lot to the native people. The entrance to a traditional teepee would always be east-facing.”

Innovative and Efficient TRTL extends beyond its Treaty 7 partners to address issues faced by many native groups in Canada. Its features include: • Materials and colour palettes that reflect customary art and the natural environment; • Magnesium oxide–based structural insulated panels that are highly resistant to fire and mould; and • An 8.3-kilowatt photovoltaic system engineered for high performance in Alberta’s harsh winter climate.

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A key goal of the project team members was to keep the cost of the home relatively modest with an eye toward one day making it commercially viable. Ste-Marie says the prototype displayed in Washington cost about $282,000 and with further research, “We’re really hopeful that the cost will go down.”

He says the home will soon be back in Calgary and will be set up on the U of C campus with the reconstruction expected to be completed within a few months.

“This first home is obviously a prototype and is not ready for mass commercialization just yet,” Ste-Marie says. “The house will return back to campus shortly and it should act as a hub for future research, and hopefully we will be able to learn and maybe come up with a better solution, a better project. Hopefully, in the future, we will be able to mass market this home.”

Earlier this year, Cenovus Energy Inc. announced a $600,000 donation to the project, becoming its title sponsor.

“We are looking at new technologies and new ideas in innovation and sustainability,” says Vicki Reid, manager of community affairs at Cenovus. “We’re thinking long term about sustainability and health of the province so we can do good business.”

Ste-Marie called the corporate donation “instrumental” in allowing the project to come to fruition. “[Cenovus] was helpful on the money side, but also on the technical expertise side. This was definitely a student-led project as all the architecture, engineering, design—all that stuff—was done by students,” he says.

“However, Cenovus did bring a lot of help as far as communications and media relations to make this project more public and help raise awareness.”

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November/December 2011 • Energize Alberta

In the shadows Despite tremendous potential, Alberta lags when it comes to embracing solar power potential Bromley Chamberlain Energize Alberta

H

arnessing solar energy is not a new invention— it has been used for hundreds of years.

Documentation of humans harnessing the sun’s rays goes back to the seventh century when a magnifying glass was used to start a fire. Settlers would build their houses to face the sun in the winter, which heated the homes during the day.

Today, solar energy is a little more advanced, using panels to collect the sunlight and turn it into electricity.

Rob Harlan, the executive director at the Solar Energy Society of Alberta, says solar energy is going to become a more pronounced part of the province’s energy mix when it reaches grid parity.

“Grid parity means the cost of generating electricity from solar energy is equivalent to the cost of generating it from the least-cost alternative, which at this point is coal,” he explains. “Until then, there is an increasing interest in using solar for both electrical generation in people’s homes and for generating hot water for homes and businesses, and for heating homes and businesses.”

Although the winters in Alberta are long, cold and receive less sunlight than other parts of the world, the cold temperature helps solar panels generate more energy.

“The nature of the PV [photovoltaic] effect is that it is more efficient as temperatures drop. In our environment, in the winter you put a PV module on your roof and it operates at a much colder temperature than it would in Florida,” Harlan says. “It actually produces more for the same amount of sunlight than it would in a warmer climate. That’s an advantage we have that a lot of people don’t know about.”

Slow on solar In Canada, Alberta has the most potential for solar energy. But while it may have the most potential, the provincial government does not currently financially fund it.

“There hasn’t been the interest among the provincial government to help nurture this industry,” Harlan says. “In Ontario, it’s been quite different. They are just exploding in their solar installations there.”

Ontario is booming with solar farms popping up all over the

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province. Alberta has yet to build a farm, but Harlan sees it in the future.

“Utilities and large corporations can get into this. We’d like to see a mix of utilities and small power producers,” he notes. “We’ve had a number of inquires as far as people who would like to do that. I think we are really close to having that come about. The economics aren’t quite there yet, but we are very close.”

Once solar energy becomes popular, Alberta will be behind other provinces because development of

: A ndrew

Brien

Illustration

the energy source has been slow in Wild Rose country.

“Unless we develop the expertise and the labour force here in the province, we’re going to be getting on the train at a very late date,” Harlan says. “What that means is that we will be importing equipment from other countries rather than making it ourselves. We’ll be importing workforces from other areas rather than developing our own jobs, and we’ll be importing expertise.”

Even playing field needed Harlan wants to see the government supporting solar energy to help develop it as a resource in preparation of its important role in the energy industry. He notes that oil and

gas companies in Alberta receive tax breaks and incentives, but solar is falling behind because it is not included.

“If you were to strip away the subsidies that exist for the fossil fuel industry, solar would compete immediately, economically quite well unless it remains expensive,” he says. “We are entering into a time when utility rates will be going up in price and the cost of solar equipment will continue to go down in price.”

When solar power reaches grid parity in the next five to 10 years, it will be more affordable.

“You have to consider that in the last 24 months, the cost of PV modules has dropped 70 per cent.

There will be a continued drop in price as it gets adopted more freely,” Harlan explains.

Promising Future Competing with the oil and gas industry is putting a damper on the boom of solar energy, but finite sources will become more expensive in the future while solar energy will still be a strong provider.

“The fact is [solar is] competing with finite resources, which are coal, oil and natural gas,” Harlan says. “When you’re dealing with finite resources, as they become less available, the price automatically goes up.”

Until finite resources become less available, people are adapting the technology to harness solar energy more effectively. For example, the process of harnessing solar energy, selling it during the day and buying it at night has been in existence for the last 30 years.

“It’s becoming more and more popular in Alberta. You can have small businesses, you can have farmers, you can have homeowners all generating their own electricity,” he says. “This is what Germany is doing. It’s gotten to the point where Germany meets 3.5 per cent of its total electrical generation through these types of systems.”

Germany generates 16 per cent of its electricity through renewable sources.

“For example, the solar resource here for generating electricity is substantially better than what Germany has,” Harlan says. “There is tremendous potential here.”

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advisory board

Members of Energize Alberta’s advisory board come from many energy “walks of life.” This group, with its collective insight and expertise, works closely with the editorial team to suggest areas of coverage that will engage and educate all Albertans about our energy future.

Alice Murray Stakeholder/Community Affairs Coordinator Stakeholder/Shell Brian Murphy Western Canada Policy Manager Canadian Wind Energy Association (CanWEA) Bruce Edgelow VP, Energy Group Alberta Treasury Branch Carol Howes Media Relations, Corporate Communications Encana Cindy Sorensen Manager, Economic Analysis Canadian Association of Oilwell Drilling Contractors (CAODC) Evelyn Ferchuk Manager, Oil Sands Communications Canadian Association of Petroleum Producers (CAPP) Gail Poon Senior Manager, Corporate Communications EPCOR Gary Redmond Executive Director Synergy Alberta Greg Gilbertson Operations Leader Energy Resources Conservation Board (ERCB) Ian Todd VP, Government & Media Relations ENMAX Corporation Kelly Morrison Communications & Stakeholder Relations Petroleum Services Association of Canada (PSAC)

Mike Dawson President Canadian Society for Unconventional Resources (CSUR) Mike Doyle President Canadian Association of Geophysical Contractors (CAGC) Mike Finn VP, Exploration Trident Exploration Corp.

Natika Sunstrum Manager, Corporate Communications ENMAX Corporation Nicole Collard Public Affairs Specialist Penn West Energy Patricia Poulton Community & Aboriginal Relations Advisor TransCanada Patty Richards Senior Communications Representative, Onshore Gas, Foothills—Americas Shell Canada Limited Paul Paynter Business Development Manager, Energy Calgary Economic Development Scott Schreiner Director, Consultation & Communications AltaLink Stacey Ballash Executive Assistant to the President & CEO Trident Exploration Corp.

Tracy Grills Past President Canadian Heavy Oil Association (CHOA)

Kym Fawcett Manager, HSE, Regulatory & Stakeholder Relations Enerplus Resources

Tracy Heebner Associate Director Economic Development Alliance of Southeast Alberta

Lisa Nicole Senior Communications Advisor Canadian Society for Unconventional Resources (CSUR)

Travis Davies Public Affairs Advisor, Media Relations Canadian Association of Petroleum Producers (CAPP)

Matthew Burns Acting Director, University Relations Calgary University of Alberta Michelle Chidley Event & Communications Director Small Explorers & Producers Association of Canada (SEPAC)

Trevor Williams Chair, Energy & Utilities Sector Relations Olds College – School of Business Ulrike Kucera Media Relations Officer Canadian Wind Energy Association (CanWEA)

The bounty below

Energize Alberta • November/December 2011

How it works: Enhanced geothermal system

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W

hile Canada sits on top of vast geothermal energy resources that could supply the country with a renewable and clean source of power going forward, the potential energy source remains virtually untapped and has failed to gain a foothold in the discussion about renewable alternatives to fossil fuels.

According to a report recently released by the Geological Survey of Canada and compiled by a team of 12 leading scientists in the field of geothermal energy, Canada’s in-place geothermal power exceeds one million times the nation’s current electrical consumption, although only a fraction of this can likely be produced as much of the resource lies beyond current drilling technology, outside of areas served by high-capacity transmission lines and at some distance from load centres.

“Nonetheless, the available high-grade geothermal resource is considerable. High temperature hydrothermal systems can be brought online with proven technology,” says report co-author Michal Moore, professor and director of the Energy and Environment Program at the University of Calgary’s School of Public Policy.

“However, many of the tools required to bring geothermal energy to full realization are not commercially proven to date and require further research and technology development. We can expect a strong learning curve and price response as geothermal energy is developed while other energy sources, such as coal and nuclear, will begin to see fleet and capacity retirements.”

The report notes that heat is closest to the surface in large areas of British Columbia, Alberta, the Yukon and the Northwest Territories, but adds that geothermal energy opportunities exist across Canada.

As few as 100 projects could meet a significant portion of Canada’s baseload energy needs, the report says. It also stresses that the high-capacity factor of

geothermal power makes it particularly attractive as a renewable base-load energy supply. Currently, Canada has no geothermal electrical production.

The report confirms that “geothermal energy, as a renewable energy source, not only provides a clean and renewable option for electricity generation around the clock, but also efficient and competitive heating options for Canadians all over Canada,” says Alexander Richter, director of the Canadian Geothermal Energy Association (CanGEA).

No respect Moore admits to being baffled as to why geothermal energy has fallen under the radar.

“That’s always been very mysterious to me—why isn’t it in the discussion more?

My guess is that it’s a variant of ‘out of sight, out of mind.’ In other words, it’s hard for people to imagine this huge potential energy source just lying below the surface,” Moore says.

“The other thing is it’s probably hard for people to imagine tapping heat value and then converting that to something without the more traditional point of view of burning something. People understand that you combust natural gas or coal and you get heat that you transform, as that’s an event you can visualize. When you talk about something that’s a little less conventional like geothermal, it’s hard to conceive of it.”

According to CanGEA, geothermal energy uses the escaping heat from the earth’s core as a means to heat water and produce electricity. By drilling deep into the earth’s interior, it’s possible to find temperatures suitably high to produce electricity.

Deep drills can also sometimes access hot water where the rock is porous (has space for fluids). In this case, that water can be extracted and, through specialized equipment, used to produce electricity. If there is no water, but the rocks are very hot, it is possible to inject water to create an enhanced geothermal system (EGS) and introduce hot water where it did not exist before. ❯❯ continued on page 6

An injection well is drilled into hot basement rock that has limited permeability and fluid content. All of this activity occurs considerably below water tables and at depths greater than 1.5 kilometres. This particular type of geothermal reservoir represents an enormous potential energy resource.

Water Caprock

Potential reservoir

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Water is injected at sufficient pressure to ensure fracturing or open existing fractures within the developing reservoir and hot basement rock.

Water Caprock

Canada has vast geothermal potential Paul Wells Energize Alberta

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Developing reservoir

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Pumping of water is continued to extend fractures and reopen old fractures some distance from the injection wellbore and throughout the developing reservoir and hot basement rock. This is a crucial step in the enhanced geothermal system process.

Water Caprock Developing reservoir

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A production well is drilled with the intent to intersect the stimulated fracture system created in the previous step and circulate water to extract the heat from the basement rock with improved permeability.

Injection well

Production well

Caprock Reservoir

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Additional production wells are drilled to extract heat from large volumes of hot basement rock to meet power generation requirements. Now a previously unused but large energy resource is available for clean, geothermal power generation.

Production wells

Production wells Caprock Injection well

Reservoir

Source: Office of Energy Efficiency and Renewable Energy (EERE), U.S. Department of Energy

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November/December 2011 • Energize Alberta

Continued from page 5

Bounty below “Canada has significant potential for EGS development,” Moore says.

CanGEA says that by using the earth’s thermal energy to heat water instead of processes like coal and nuclear, geothermal energy can produce clean, reliable electricity as long as heat continues to seep from the earth’s interior (as it has for 4.5 billion years). Further, it is sustainable power because once the thermal energy from the water or steam has been extracted, it can be continuously re-injected deep underground to obtain more geothermal heat.

Aside from producing power, hot geothermal water can also be used for things like district heating and agriculture. This is called direct-use geothermal because the heat is used directly from the water to serve a function.

Moore believes the potential of geothermal is too large to ignore any longer.

“It is just silly not to take advantage of a heat source like this,” he says.

“The heat value as a continuum from surface to something below surface is vast, and it’s attractive for a lot of different uses.

There’s a lot of [geothermal potential] out there. It’s inconsistently distributed in terms of depth and accessibility, but we have great potential.”

In its infancy While Canada has yet to plug into geothermal electricity, there are several small

projects on the drawing board in western and northern Canada. However, those projects just scratch the surface of the vast potential of the resource. In British Columbia, Alberta and the Yukon alone the report estimates there are at least 5,000 megawatts of geothermal electricity available.

Moore notes that northern Alberta is among the regions with the greatest potential for tapping the earth’s heat and creating electricity through geothermal

Map: Geological Survey of Canada

This map shows examples of in-place geothermal energy at a depth of six to seven kilometres across western Canada. Similar in-place energy is found at shallower and deeper levels.

technology. Much of Alberta is described in the report as a “warm sedimentary basin” as opposed to the “hot sedimentary basin” areas of the Northwest Territories and the Yukon, or the hot mountain zones of British Columbia.

The most efficient electrical production is done with geothermal heat of 150 degrees Celsius or hotter, says the report.

In the hot zones like the B.C. mountains, it says heat of 150 degrees and higher can be reached at 3.5 kilometres depth; in the warm sediment of northern Alberta, the drilling may have to go deeper, but the potential is still there.

“Up in the northwest corner of Alberta we’ve certainly got resource that would be comparable to B.C. Elsewhere, as you come down closer to the oilsands, we think that there is at least potential to get above-80degrees-Celsius fluids circulating and that we might be able to divert some of that,” Moore says.

“In other words, we wouldn’t need to bring those fluids to the surface, but we could keep them underground and divert them and use them to pre-heat some of the oilsands deposits and save a lot of natural gas.”

A key economic constraint for the advancement of geothermal projects is the high risk of exploration due to costs of deep drilling. However, Moore says the cost of delivered geothermal power is projected to decline and be competitive with coal-fired production within the next 15 years, given current levels of technology.

“If we continue to invest in site development—that is demonstration and

research—in 15 years this is going to be very competitive with the best coal and certainly the best nuclear technology that can be provided,” Moore says.

Governments have a role to play Peggy Holroyd, a director with the Pembina Institute, says there is a large role for provincial, territorial and the federal governments in helping to develop geothermal resources in Canada.

“There are many approaches, both fiscal and non-fiscal, that have proven successful in catalyzing Canadian industries, including clear regulations, research grants, renewable energy targets and more,” she says.

“A full national geothermal resource assessment is needed to help identify the best opportunities for geothermal energy projects in Canada. Similar resource assessments, which have been conducted in United States and Australia, can be used as a basis for regional or national planning exercises to identify the areas for potential development, the economic and environmental impacts of potential projects, and the highest-priority areas for development.”

Holroyd adds that “on paper, you’d think geothermal energy would be a nobrainer” for Canada.

“The resource exists, the environmental benefits are significant, the costs can be low, it works in remote locations and geothermal energy plays well with new clean-energy grids,” she says. “Now is the time to turn up the heat on geothermal energy development in Canada.”

Page 06 516465-38 …to all of us. We take pride in our reputation and for being good neighbours in your community because our families live Penn West Petroleum Ltd. here too.

Stronger communities are built by the strength of their members and by our ability to communicate with one another. half-page horizontal That’s why we established our “Community Matters” program which encourages people to come together to exchange

ideas and information about the things we all care about—the safety and well being of our friends and family, stewardship of the land, and having respect for our neighbours.

If you have questions or concerns about operations in your community, or would like more information about Penn West, we invite you to contact us at 1-877-454-8844. To learn more about us, please visit our website at www.pennwest.com.

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Looming in the aquifers In situ producers must pay careful attention to coming new groundwater management rules

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ilsands operators need to be prepared for the Alberta government’s upcoming new groundwater rules, which will constrain all previously approved and future water withdrawals within the Lower Athabasca region, says an environmental lawyer.

Currently, all oilsands operators with tailings ponds have groundwater monitoring in place. Observation will become more widespread when the Lower Athabasca Regional Plan (LARP) receives final approval by cabinet. Under the new groundwater management framework, all operators, regardless of having tailings ponds or not, will require groundwater management plans.

Better monitoring could lessen public criticism of the oilsands industry, says Dufferin Harper, partner in the Calgary office of Blakes, Cassels and Graydon LLP and head of the firm’s environmental group.

“If we can have a situation where specific targets are implemented, threshold levels are there and we’re compliant with those, coupled with an open, transparent system, that’s the defensibility of the industry,” Harper told delegates at the recent Managing Water Resources in Oil Sands In Situ Production conference. “That’s how we can show the world cold hard facts that we have a science-based approach to address operations. That we’re meeting those requirements and we’re not going to shy away from that, we’re proud of that.”

Groundwater is particularly vital to in situ operations. Producers need water to generate steam to heat the reservoir to extract the resource, and an increasing number of operators and operations use non-potable or saline groundwater that is unsuitable for drinking, livestock or irrigation. The Energy Resources Conservation Board currently has a draft directive on water measurement, reporting and use for thermal in situ oilsands schemes, which seeks to limit the use of both fresh and brackish water resources by maximizing produced water recycle.

Mike Rogers, president of water consultancy Alberta Technology and Science Inc., says that one of the key parts of this draft directive would limit the amount of makeup water a plant could use on an annual basis to 10 per cent for fresh water and 25 per cent (minus fresh water makeup) for brackish water. Rogers says that makeup requirements at many existing plants exceed this figure.

While Alberta Environment and Water develops its groundwater management framework, it is also in the process of completing similar plans for air quality and surface-water quality as part of the development of the LARP. This system is a new approach as part of the Government of Alberta’s shift to cumulative effects management.

Work on the LARP began in 2008, following development of Alberta’s Land-use Framework as a new mechanism to manage the province’s land and natural resources. An updated draft of the LARP was released in late August, after two years of stakeholder, public, aboriginal peoples and municipal government consultations that involved an estimated 10,000 Albertans.

Harper advises that any and all frameworks should be reviewed very carefully because they can and will impact both existing and future operations. Producers must

Photo: Aaron Parker

Lynda Harrison Energize Alberta

Water quality monitoring has always been a priority in the oilsands region, and new provincial rules are expected to enhance protection of the vital resource. ensure that projects are not negatively impacted by future decreases to allowable water withdrawals, so the restrictions and requirements of the frameworks need to be understood in detail. Some projects may even be restricted in part by their neighbours’ water withdrawals, he said.

The groundwater management plan will include regional thresholds.

“These will represent the maximum allowable impacts in the region. Development will need to be managed such that these thresholds are not exceeded,” explains Harper.

The ultimate goal is to ensure that groundwater (and surface water by its connection to groundwater) is protected from the potential effects of development activity.

The process will consist of initial project site framing (including source, pathway and receptor inventory), monitoring network development, indicator parameter selection, monitoring frequency and schedule, a data evaluation process, an investigative process and reporting.

Operators will need to evaluate their site-specific triggers and limits and compare them to the regional groundwater triggers and limits. If these prove to be different from each other, operators will need to conduct an investigation and provide scientific evidence explaining why they are different. Alberta Environment says it recognizes there is potential for natural anomalies.

Margaret Klebek, senior hydrogeologist and groundwater policy specialist with Alberta Environment, says the framework is predicated on the intimate connection between modelling, monitoring and management, and includes an assessment of aquifer vulnerability, future development and overall associated risk.

The guiding principles are cumulative effects analysis and verification of environmental impact assessments, along with pollution prevention and avoidance.

Alberta Water Allocation: 2009 Agriculture & irrigation 44% Commercial 30% Oil & gas 2% Oilsands 7% Municipal 11% Other 6% SOURCE: ALBERTA ENVIRONMENT

In 2009, total annual water allocation for oilsands in Alberta was 672.8 million cubic metres, or 6.8 per cent of Alberta’s total water allocation. Actual water use is less than one-third of the allocated amount.

“It is important to ensure a credible monitoring system is in place so Albertans have confidence that the groundwater resource is being managed properly.”

— Travis Davies, spokesman, Canadian Association of Petroleum Producers Klebek says that considerable work has already been done to establish regional groundwater monitoring in Alberta’s oilsands regions. This year and next, the province will implement the groundwater management framework with defined goals, targets and limits, and develop a groundwater working group to administer, network and regularly communicate results. It will also add more observation locations.

Currently, 69 wells are being monitored by government at 21 sites within the Athabasca region. From this network, groundwater samples are collected and water level measurements taken. As well, in situ data loggers have been installed within some monitoring wells to collect daily water-level readings for longer-term assessment.

Groundwater conditions are monitored in two ways: the depth-to-water is measured and an understanding of the groundwater flow system is developed, and samples are collected to assess the groundwater quality to determine suitability for potable water or assess impacts of development. The depth-to-water is measured using a tape, measured from a known datum. Groundwater samples are collected using a variety of methods depending on the depth, formation and types of analysis to be conducted, but are generally collected via a pump inserted into a well.

Klebek says the Government of Alberta is not seeing any trends of increasing contaminants of concern. According to Alberta Environment, analysis of Alberta’s large aquifers does not indicate declines in groundwater levels.

According to the Canadian Association of Petroleum Producers, industry supports the move to more aggressive environmental monitoring. “It is important to ensure a credible monitoring system is in place so Albertans have confidence that the groundwater resource is being managed properly,” says spokesman Travis Davies.

www.energizealberta.com

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November/December 2011 • Energize Alberta

Water wise

H2O

Provincial strategy ‘reaffirms’ province’s commitment to managing a valuable resource Jim Bentein Energize Alberta

W

ith the oilsands in the international spotlight and with growing public skepticism about the environmental performance of the energy industry as a whole, Alberta’s regulatory and monitoring mechanisms surrounding water are closely scrutinized.

As a result, the province must manage its water resources in a responsible manner as the world watches how it deals with climate change and other environmental issues, says the senior provincial bureaucrat overseeing its Water for Life plan.

Andy Ridge, director of Alberta Environment and Water’s water policy branch and former head of the climate change secretariat, says the “external focus” on the province’s environmental performance was one of the forces that led to the creation of the water management program in 2003.

“There’s an international commentary on the state of Alberta’s environment. People are interested in the issue of carbon dioxide emissions [as a consequence of energy industry expansion] and water has taken a step into that world,” he says.

Ridge notes that the provincial and federal governments, municipalities, industry and others were not asleep at the switch prior to the creation of the strategy. “We’ve been managing water for 100 years and it is continuing to evolve,” he says, adding that the Water for Life plan “reaffirms our focus” on water management.

The strategy has three main goals: ensuring Albertans have safe and secure drinking water, that the province’s aquatic ecosystems remain healthy, and that it continues to have reliable and quality water supplies for a sustainable economy.

The government has taken a number of steps towards accomplishing each of these goals:

• To protect Alberta’s drinking water, it conducted a province-wide assessment of water facilities and has spent over $400 million on regional drinking water facilities; • To support aquatic ecosystems, it has completed recommendations by the Alberta Water Council, which evolved from Water for Life, to institute one of Canada’s most comprehensive wetland policy implementation plans; • To help protect water supplies for a sustainable economy, it recommended an end to new water licence approvals from the South Saskatchewan River, which was implemented by the government; • To increase knowledge and research into water issues, it invested $30 million to create the new Alberta Water Research Institute; and • It created a series of partnerships with 1,000 varying bodies involved in water management, including the Alberta Water Council, several watershed planning and advisory councils and watershed stewardship groups, which has led to the creation of eight watershed management plans, 10 state-of-the-watershed reports and three local water management plans.

Ridge says the government’s understanding of the province’s surface water resource and the management of that resource is comprehensive, “although we don’t know with 100 per cent certainty” about surface water issues. And that’s why government officials continue to work with local partners and further study surface water issues.

In partnership with the federal government, the province has 525 recording stations that measure stream flow and lake levels. As well, Alberta Environment operates 250 shortterm lake level stations and 124 short-term stream flow stations.

It also monitors water quality monthly at 13 river and four lake sites in the province.

Ridge says the major gap in the province’s understanding of its water resources centres around groundwater, as scientists studying the issue have said.

But he believes Water for Life has helped bring attention to the issue of the province’s groundwater potential. Aside from studies being done by the Alberta Geological Survey and Alberta Innovates, his department has launched a study that will develop an inventory of Alberta’s groundwater.

“This takes time and is somewhat unprecedented. We’ve

started mapping groundwater in the Edmonton-Calgary corridor and then we’ll do the south,” he says, adding that it could take five to 10 years to develop a map of all of Alberta’s groundwater resources.

Ridge dismisses criticism that Alberta Environment is being too arbitrary by forcing the oil and gas industry to turn to saline groundwater, which must be recovered and treated, often at considerable cost, while there appears to be adequate nonsaline groundwater available, particularly in northern Alberta.

“We have a broad policy of pushing for the use of saline groundwater,” he says. “I hope what is not being claimed is that we’re forcing people [oil and gas companies] to use a source that is uneconomic. I don’t think there are any particular cases of that.”

Ridge adds that the department may advocate more “flexibility” regarding groundwater use by the energy industry as part of a new groundwater framework being produced that is part of the Lower Athabasca Regional Plan. That plan will outline monitoring, evaluation and reporting to determine the cumulative effects of oilsands development on the Fort McMurray, Alta., region (a final draft of the plan was released in August).

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Energize Alberta • November/December 2011

Alex Denonville Energize Alberta

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ecently announced funding from the provincial government will help with Athabasca University’s ongoing efforts to expand knowledge through the Athabasca River Basin Research Institute (ARBRI).

Alberta’s ministry of advanced education and technology announced a $500,000-peryear pledge for two research chairs at the school in the academic fields of hydroecology and environmental health, and computational sustainability and environmental analytics, part of the ministry’s broader effort to attract the best and brightest to the province’s post-secondary institutions.

The funding—which will be annual over a period of seven years—falls under the new Campus Alberta Innovates Program (CAIP), which will fund 16 chair positions at four of Alberta’s researchintensive schools: Athabasca University and the universities of Alberta, Calgary and Lethbridge.

CAIP identifies four priority areas in which the province will benefit from investing in, one being water, which is where the university and ARBRI come in.

A good fit Lisa Carter, dean of the school’s faculty of science and technology and interim

director of ARBRI, explains that the two new chairs will fit well within a faculty already brimming with knowledge about the ecosystem tied to Alberta’s longest undammed river, which flows west to east from Jasper, eventually heading north to Lake Athabasca.

“This will be a wonderful way of building capacity within the faculty,” she says, adding that the new hires will fulfill professorial duties alongside their research goal of increasing understanding of one of the most important waterways in the world.

The hydroecology position puts specific emphasis on ecological impacts and risks of the upper and lower Athabasca regions, with focus on the effects of contaminants in communities and the natural environment.

Carter says the researcher may look at such issues as the environmental impact of ongoing oilsands development, a hot topic given the federal environment commissioner Scott Vaughan’s recent slamming of the federal government over the unknown environmental and community impacts of northern Alberta’s largest industry.

Carter adds that the oilsands is only one piece of the Athabasca Basin puzzle and the direction of research depends on which path the successful applicant chooses to take.

The other chair, in the field of computational sustainability and environmental analytics, will use computer algorithms and models to attempt to predict the

Water skills required Jim Bentein Energize Alberta

C

H2O

ompanies involved in the fast-growing in situ sector of the oilsands industry need workers who understand how to manage the intermingled tasks of water treatment and oil production, which makes it curious that there has been no course existing in Canada specifically to train water treatment plant operators.

Until now.

Enter the Calgarybased Oil Sands Leadership Initiative (OSLI), a collaborative network of five major oilsands producers aimed at “demonstrating and communicating the industry’s environmental, social and economic performance.” Arguably, training

water treatment operators addresses all three of these goals. Environmentally and economically, better-equipped plant operators will manage this precious resource more efficiently. Socially, it could provide recognized and desired careers as industry faces a significant worker shortage.

“A lot of a SAGD [steam assisted gravity drainage] plant’s operation is about water treatment,” says OSLI executive director Vincent Saubestre, who was formerly manager of technology and research development with OSLI firm Total E&P Canada Ltd. The group also includes ConocoPhillips Canada, Nexen Inc., Statoil Canada Ltd. and Suncor Energy Inc. “We felt there was a need to improve that area.

The ultimate answer is to

have better operators running plants.”

Saubestre, who spent more than 20 years with Total and helped establish its Calgary Research Centre, says the work towards the creation of the new water treatment plant operator course began about two years ago, with the creation of OSLI’s Water Management Working Group.

At the same time, OSLI retained the services of Alberta WaterSMART, a non-profit society dedicated to the improvement of water management awareness, technologies and practices in the province.

A number of tradesoriented colleges in Alberta, including Calgary’s Southern Alberta Institute of Technology (SAIT) Polytechnic and the Northern Alberta Institute

H2O

Photo: Town & Country

Researchers to expand understanding of Athabasca River

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Lisa Carter is grateful for new provincial government funding that will allow Athabasca University to bring in two new research chairs. impact of various events within the basin, Carter explains.

She notes that the modelling could go on to assist Albertans in preparing for any number of occurrences along the waterway and its surrounding ecosystem.

“It’s a good way to predict future impact of insults to the environment, as well as trying to understand how best to make sure the environment is sustainable,” she says.

The search is on Currently, Athabasca University’s search committee panel, which Carter is leading, is working on its search strategy, which should be enacted by the end of the year.

She says the process will involve researchers from across the country and around the world applying for the positions.

“The applicants will have a broad of Technology in Edmonton, offer power engineering and steam operator programs. Most water treatment plant operators now working in the industry came from those backgrounds, with a boost from in-house training.

“We have steam operator training programs, but there was nothing for water operators,” explains Saubestre, adding that there is knowledge specific to water operations that is an essential part of the SAGD sector.

“Water plant operators need to understand the regulatory environment, which is evolving quickly.

They also need a notion of water chemistry and how that affects the process.”

The Canadian Association of Petroleum Producers recently forecasted that in situ plant production will grow to 793,000 barrrels per day this year, up from 756,000 barrels per day last year.

academic background when they apply for the position; they will then describe how their expertise will be able to inform the broader research environment, but also to inform community at large, government bodies and anybody interested in stewardship,” Carter says.

She hopes that the new chairs will be in place for the New Year.

Five of the 16 research chairs funded through CAIP fall under the water theme, with the remaining 11 split between energy and environment, food and nutrition, and neuroscience.

After the prescribed seven years of funding, the researchers’ salaries may be transferred to the institution’s operating budget to stay on staff and continue research.

— Courtesy Town & Country, a Great West publication

That number includes all in situ bitumen including cold production, but steam-based technologies like SAGD are expected to contribute increasingly significant volumes going forward.

Alberta’s Energy Resources Conservation Board estimates in situ production will increase by 9.7 per cent per year until 2019.

Saubestre says this growth in production will drive the need for hundreds of new water plant operators in the next decade.

“OSLI companies have said that over the next 10 years, 35­–50 operators a year should take this course.”

In 2010, OSLI issued a request for proposals to develop and host the course. It selected SAIT’s MacPhail School of Energy.

“SAIT has a good, solid track record in starting programs and, as a result, they have the resources in place—project management, quality control and

curriculum development,” explains Duane Kichton, OSLI’s project lead for the water treatment operator program in a statement on OSLI’s website. “We see course development as a 12-month process. We want a quality program, so we have to take the time to develop a good product.”

The new course is targeted for launch in 2012.

The curriculum—developed

by SAIT with input from OSLI member companies— includes units in communications, industrial safety, environmental regulations, general chemistry, water chemistry, lab techniques, process control, process analysis, mechanical equipment and unit operations.

There will be a webbased component that can be taken by operators now working in the industry, with SAIT and OSLI now working on courses that will be available for those entering the industry.

www.energizealberta.com

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November/December 2011 • Energize Alberta

Up to the challenge H2O

Environmental scientists relish the opportunity to effect significant change in the oilsands Jim Bentein Energize Alberta

Photo: Suncor Energy inc.

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767680-62 EPCOR Alberta 1/4 page vertical asked to be in the “water focus”

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it would be impossible to reproduce areas like that because it took thousands of years for them to develop.… But we’ve developed fen wetlands from scratch.”

— Christine Daly, wetland reclamation research coordinator, Suncor Energy Inc. That summer, she was involved in developing aquatic ecosystems using oilsands mine waste products and found the work to be much more fulfilling than she had expected.

“I didn’t come to Fort McMurray [Alta.] for the money. I thought I could have a positive impact on reducing the environmental footprint of our operations,” Daly says. “In June of 2007, I was hired

by Suncor as its wetland reclamation research coordinator.”

About 50 per cent of Suncor’s lease area was wetland before being disturbed by mining, most of it being fen wetlands featuring muskeg and trees such as black spruce.

“Most people thought it would be impossible to reproduce areas like that because it took thousands of years for them to develop,” says Daly.

“No one has ever done this research before. But we’ve developed fen wetlands from scratch.”

The work is complex since all the pieces need to be designed as if nature had done so, including the crucial intersection between the groundwater system and the wetlands, all along relying on a base of mining waste products.

There are six professionals in Daly’s group, including a social scientist, a wildlife biologist and a forester.

“We all come from different parts of Canada, but we all share a passion for the environment. We all see a lot of hope in the resilience of Mother Nature.”

The department works with experts from universities throughout North America who Daly says have developed a respect for Suncor’s commitment to the environment. She admits that she once had doubts about the company’s sincerity.

“I was a skeptic. When you’re in university you think you can’t work for industry because they’re the bad people. But my mind has definitely changed.”

Mark Berrett, an environmental compliance officer with Cenovus Energy Inc., which has launched an ambitious plan to ramp up in situ production to net rates north of 350,000 barrels per day by 2019,

Mark Berrett

Photo: Cenovus Energy Inc.

Christine Daly

C

hristine Daly never expected to be working for Suncor Energy Inc.—or any oilsands company, for that matter. The 31-year-old, who holds a bachelor’s degree in environmental science and a master’s degree in biological sciences from the University of Windsor, was raised in Tecumseh, Ont. Her expectation was to conduct research on the Great Lakes for most of her life, but a summer working for Suncor changed her path, leading her to embrace an opportunity to effect change from inside industry.

“After I completed my bachelor’s degree, I had the option of taking a summer job doing Great Lakes research or doing oilsands reclamation and wetlands work,” Daly explains. “That was in the summer of 2004. I had never heard of the oilsands before that.”

“Most people thought

took a circuitous route to end up in the environmental field with an oil and gas company. Berrett first attended SAIT Polytechnic, receiving a two-year diploma in television production.

While the 27-year-old enjoyed the program, he wasn’t able to find a job in the field. That led to him finding work at a natural gas processing plant in southeastern Saskatchewan, where he worked for a year and a half.

Berrett was hooked by the oil and gas business and decided to go to Olds College where he took a diploma in land reclamation.

“I liked working in the field, so I thought that would be a good move,” he says, adding that there is a family connection to the energy sector. “My dad is involved in joint ventures in the oil and gas industry.”

Berrett has worked for Cenovus and predecessor company Encana Corporation for the last four years and is now assigned to the Christina Lake steam assisted gravity drainage project.

“[Christina Lake] was producing 5,000 barrels per day when I started, is now producing 18,500 barrels daily and is going to eventually be producing 200,000 barrels per day.”

Berrett, who lives in Medicine Hat, Alta., commutes to the plant site, where he lives in a camp and works four days a week. His daily job involves surface water management, emissions testing, tracking wildlife and monitoring waste streams.

“It’s meaningful work. We have a good group of people and we’re building a good foundation. We have a great opportunity to influence a lot of change.”

Berrett says that he has no moral qualms about working for Cenovus.

“We [the environmental team] are not seen as a liability. We’re a key part of the operation.”

Energize Alberta • November/December 2011

Community groups find synergy Jim Bentein Energize Alberta

T

he premise is simple—it’s better for those being affected by oil and gas development to talk to the companies responsible for it.

To that end, Synergy Alberta has taken a ragtag group of community groups and helped coordinate their efforts by offering ongoing tips and information on how to organize an annual conference that gives them a sense of community and opportunities to learn and network.

“Some of the groups are kitchen-table type organizations that meet infrequently, while others have full-time staffs and budget,” explains Gary Redmond, executive director of the Edmonton-based non-profit organization.

“They all have something in common, which is dealing with the pressures and opportunities from energy development.”

Aside from oil and gas development, synergy groups are also now dealing with issues around power transmission, gravel pits and other encroachments on land, mostly in rural Alberta.

Often, those encroachments centre on groundwater and surface water, as is the case with the Butte Action Committee (BAC), which was formed in 1999 by about 40

local landowners in the Caroline, Alta., area, about 100 kilometres northwest of Calgary.

At the time, ranchers and farmers in the area were up in arms over the plans by Corsair Exploration Inc. (taken over in 2002 by Northrock Resources Ltd.) to pump as much as one million litres of fresh water a day from the North Saskatchewan River for a waterflood project to produce more oil from a depleted reservoir in the area.

Judy Winter, still the secretary of the BAC and a founder of the group—as well as a board member of Synergy Alberta—says the simple act of meeting with Corsair at that time, and subsequently with other oil and gas companies active in the area, led to those companies responding to the concerns of landowners in the area.

“They [Corsair and subsequent developers] ended up taking water from the Clearwater River and recycling it,” says Winter, whose family farms near Caroline.

The industry has responded so well to community concerns, she says, that the dozen or so BAC members now only meet infrequently.

The BAC was contacted by other landowner groups in Alberta after its success in dealing with the industry, Winter says, explaining that most of those groups have also found that meeting with industry representatives eventually led to the companies altering their water-use plans.

“It was important to have these meetings because it’s about the water cycle and that goes on forever,” she says.

To her surprise, industry representatives weren’t the elephants in the room.

“Those companies were frightened to be sitting down with a lot of people in a community hall,” Winter says.

“We had never thought of it that way.”

Communication is key Winter notes that the eventual creation of Synergy Alberta, which she played a role in helping to found, emerged from an acceptance by rural Albertans that they must learn to live with the industry.

11

“We can’t tell the oil companies to go away,” she says.

“We told them that we’d rather talk with them than talk about them.”

Formed in 2006, Synergy now has 28 member groups from throughout Alberta with another one soon to join.

Redmond says Synergy lives up to its name, helping local groups find non-combative ways to deal with the impacts of industrial development on their communities.

“There was a feeling in the past that there was an adversarial relationship between communities and the oil and gas industry,” he says. “We focus on a consultative process that involves sharing information and communicating.”

Another one of the founding groups of Synergy Alberta is the Sundre Petroleum Operators Group (SPOG), located in the Sundre area, about 130 kilometres northwest of Calgary.

SPOG was formed in 1992 by energy industry groups active in the area. To a degree, the formation of SPOG came out of necessity, since the provincial government requires that pipeline companies and energy producers provide information about their planned activities that might have an impact on landowners within a certain distance of those activities.

“But SPOG grew beyond that to become a one-stop shop about all industry-related activity in the area,” says Redmond.

Unlike the BAC, SPOG has an office and full-time staff.

Similarly, in the Cold Lake–Bonnyville area of northeastern Alberta, there’s a group called the Lakeland Industry & Community Association (LICA), which has a permanent staff and an office in Bonnyville. LICA deals with ongoing water issues and air quality issues in that region, where there is intensive oilsands activity.

Funding for Synergy Alberta, to the tune of a little over $170,000 a year, comes from the oil industry organization the Canadian Association of Petroleum Producers, the provincial Energy Resources Conservation Board and from Alberta Agriculture. The annual conferences also receive support from a number of oil and gas companies.

DID YOU KNOW? Existing rules and regulations which protect ground and surface water sources from conventional oil and gas activity also apply to unconventional developments such as Shale Gas Natural gas produced from unconventional shale wells is no different than the gas produced from conventional gas reservoirs There are four primary sources of water usually considered for oil and gas operations: • Surface (rivers, lakes and run-off) • Shallow aquifers (containing potable, or fresh, water) • Deep aquifers (generally containing saline, or salt, water) • Recycled/Reused water from fracturing fluid flowback, produced formation water or other industrial sources

www.csur.com

The oil and gas industry is increasingly relying on reuse and recycling of fluids to: • Reduce consumption of fresh water • Reduce environmental impacts • Minimize costs

www.energizealberta.com

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November/December 2011 • Energize Alberta Photos: Keephills 3 power plant/TransAlta; coal/Krzysztof Zablocki/Photos.com

Coal conundrum Critics say province is trying to skirt new coal-fired power plant rules

T Lindsey Wallis Energize Alberta

he Alberta government is asking for the federal government to make significant changes to proposed regulations on coal-fired power plant emissions. Alberta joins Nova Scotia in presenting a formal submission to the federal government during the 60-day review period asking for changes to the regulations, which are slated to come into effect in 2015.

Tim Weis, director of renewable energy and efficiency policy at the Pembina Institute, says he understands why Nova Scotia, which has emissions legislation of its own that is stricter than that proposed by Ottawa, is unhappy with the regulations.

But he questions the impetus behind Alberta’s submission.

“It’s hard to be sympathetic to Alberta’s case with so little information,” Weis says. “This throws a significant question mark into how these regulations play out.”

Chris Bordeau, a spokesman for Alberta Environment, could not give any specifics as to what changes Alberta will be asking the feds to make, but says that the submission concentrates on four main points: increasing flexibility of the regulations for industry, aligning the regulations with those of the United States, ensuring Alberta consumers are not unfairly impacted and ensuring regulations do not hamper efforts to develop carbon capture and storage.

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“We agree on the outcome of reducing emissions in the coal sector,” Bordeau says. “We are asking for more flexibility so we can achieve the same objective, but maybe get there a different way.”

Not a shocker Madeline Wilson, conservation specialist for the Alberta Wilderness Association, is not surprised Alberta is trying to get in the way of this legislation. “It shows that even when the federal government takes steps to protect the environment, the provincial government will undermine that,” she says.

Milner Expansion project on the site of its existing 150-megawatt H.R. Milner Generating Station near Grande Cache, Alta.

According to the company, the expansion project will utilize state-of-the-art, supercritical, pulverized coal technology, making it the “cleanest and most fuel-efficient coal-fired power plant in Canada.”

Subject to satisfactory commercial and financing arrangements, construction activities are targeted to commence in the summer of 2012.

Maxim anticipates the project will be fully commissioned

the federal environment minister that it could avoid being subject to the new regulations if it could get its plant operational by July 1, 2015—a deadline that it could only meet if the AUC approved the expansion by June 30.

Skepticism remains In recent weeks, after public backlash, current federal Environment Minister Peter Kent signalled that he would uphold the promises of a year ago, but Wilson is skeptical. “Maxim had been told what to do to escape the legislation,” she says. “As soon as there is the first test of this

“We agree on the outcome of reducing emissions in the coal sector. We are asking for more flexibility so we can achieve the same objective, but maybe get there a different way.”

— Chris Bordeau, spokesman, Alberta Environment The implementation of the regulations is entirely at the discretion of the federal environment minister and Wilson is concerned that, with the government’s past record of failures in protecting Canada’s environment, this will be another lost opportunity.

“There is a lack of commitment to any legislation and the legislation itself has so many loopholes,” says Wilson.

Alberta’s submission comes after Maxim Power Corp. received approval from the Alberta Utilities Commission (AUC) in June to construct and operate the 500-megawatt H.R.

approximately three years after the start of construction.

Critics argue that Maxim has the explicit intention of having the plant up and running by 2015 to escape the federal regulations, which will not apply to existing plants.

At first, the federal government seemed complicit in this approval, despite promises made a year ago by former environment minister Jim Prentice that new plants would not be allowed to be pushed through before 2015 in an effort to escape the regulations. A document submitted by Maxim to the AUC stated that it had received assurances from

legislation, we see [the federal government] not following through.”

Not only will the new Maxim plant not meet the incoming federal regulations, but Weis calls the approval a step backward for Alberta—the last two plants approved by Alberta, the Genesse plant and the Keephills plant, had much more stringent regulations and were only approved after extensive public hearings. “[The approval] was a bit of a surprise,” Weis says. “It was a strange move for the AUC, especially knowing the federal regulations were coming through.”

Geoff Scotton, the senior communications advisor for the AUC,

explains that EPCOR Utilities Inc. and TransAlta Corporation, which owned the plants at the time, volunteered for more stringent standards than the province requires. “The [Maxim plant] meets and exceeds provincial and federal standards,” Scotton says.

He also points out that when the successor to EPCOR and TransAlta, Capital Power Corporation, sought to be released from the more stringent regulations, the AUC turned it down, a move that was applauded by Pembina.

The Pembina Institute and Ecojustice have taken the AUC to court over the Maxim approval, which they say should never have occurred without a public hearing. Ecojustice states in a press release: “We intend to prove that the AUC made a decision that affects the public interest without reviewing all the evidence.

We will also show that the AUC was wrong in its decision that skirting pending federal regulations is in the public interest.”

Scotton would not comment on the approval since it is before the courts, except to say, “We followed our usual process and no parties with standing opposed the approval.”

But, according to Wilson, it is virtually impossible to be granted standing. “You have to be living within two kilometres of the project and prove that you are directly and adversely affected,” she says. “But something as big as this is not something that just affects those people within two kilometres and it limits the way in which NGOs [non-governmental organizations] can get involved.”

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November/December 2011 • Energize Alberta Illustration: Andrew Brien

Manure to help power up grid

Oilsands growth, shift away from coal means new electricity infrastructure will be required Jim Bentein Energize Alberta

T

he projected dramatic economic growth in the oilsands is also causing the Alberta Electric System Operator (AESO) to look at future transmission line needs in northeastern Alberta.

Thanks to the development of several cogeneration facilities by oilsands operators, electricity now tends to move from the Fort McMurray and Cold Lake areas south.

However, based on the forecasts of dramatic growth in that region going forward, AESO is planning for the development of two transmission lines that could move power from the south to the north, says AESO’s director, project delivery north, Greg Retzer. AESO is also looking at opening up bidding to build those lines beyond AltaLink Management Ltd., ATCO Ltd. and other firms, which provide most of Alberta’s transmission.

Aside from coping with industrial growth, AESO also has to plan for a shift in Alberta’s generation away from coal-fired power to cleaner-burning alternatives, such as gas-fired generation, and renewables, such as wind.

The federal government has said existing legacy coalfired plants will have to be retired and any new coal-fired plants will have to produce the same net emissions as gas-fired generation.

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Mining and Upgrading

Mining

Upgrading

In situ Graph: AESO and Canadian Association of Petroleum Producers

Power surge

some money in manure handling and applications,” he explains.

With 10 years on the drawing board, the final needed element was a major equity partner, says Hurlburt. That is now in place, in the form of PlanET Biogas Solutions Inc., based in St. Catherine’s, Ont. The company has built five or six biogas plants in Canada and brings expertise to the project.

Grants from the Alberta government and from the Climate Change and Emissions Management Corporation are also part of the project, Hurlburt says. He anticipates a 6.5 year payback on the plant, expected to be ready in December 2012, although that depends largely on fluctuating Alberta electrical rates.

Though an initial 2.85 megawatt output is planned, the plant has been approved to produce 4.2 megawatts. Hurlburt says he hopes that output can be achieved by 2016.

For now, he’s happy that construction is finally underway.

“It’s still a little surreal. One of these days, the ‘sur’ is going to drop off the ‘real,’ and it’s just going to be real.”

25,000

(GWh equals one billion watt hours)

L

ethbridge, Alta.—Construction is underway on a $30-million biogas plant that will use manure from Lethbridge-area hog, dairy and vegetable farms to produce electricity.

In August, Lethbridge Biogas LP broke ground on the project, which has been in the making for about 10 years.

Located on the eastern outskirts of the city within the County of Lethbridge, the plant is designed to initially produce 2.85 megawatts of electricity using biogas from manure, animal byproducts and organic waste from vegetable and crop production.

Thane Hurlburt, president of Lethbridge Biogas, says the plant will use dairy and hog manure as its base feedstock because of their fresh and near-liquid state. Other organic waste will also be used.

About 90 per cent of the material needed to operate the plant will come from within 15 kilometres, and he isn’t worried about quantity.

“There’s enough probably for 10 plants within 10 kilometres,” he says.

One of the biggest innovations is a thermal hydrolysis process that Hurlburt said will destroy prions thought to cause bovine spongiform encephalopathy (BSE), commonly known as mad-cow disease.

That means the plant will be able to

Energy in gigawatt hours

Barb Glen Energize Alberta

process specified risk material, the animal parts removed at slaughter, because they are most likely to harbour BSE-causing prions.

“We will be able to accept specified risk material, yes, and it’s 100 per cent destruction technology, not a containment technology, so that’s nice,” Hurlburt says.

Electrical output from the plant will go into the Alberta energy grid. Hurlburt estimates the plant will use 10 to 15 per cent of the electricity it produces.

Fertilizer is the other output. The plant will produce pelletted product and nutrient water. The former will be sold and the latter will be returned to producers who provided the original source material.

Hurlburt notes the nutrient water will still contain nitrogen, phosphorus and potassium after going through the plant, but odour will be reduced.

“The whole idea behind it was to make that product a little more user-friendly for the farmer, so he could handle it for a lot less money, handle it with a lot less complaints from neighbours, for example, so it’s not costing the farmer anything and the bottom line, it’s going to save him

20,000

Oilsands Energy Demand Forecast 15,000

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The introduction of wind energy, which is an intermittent form of power, creates just another of the challenges AESO will face in the future, Retzer says. It’s a future Source: AESO and Canadian Association of Petroleum Producers certain to be watched

by Albertans as the province expeNote: historical data for mining and upgrading is combined riences the most dramatic transformation to its power figure 3.3-2: Oilsands Energy Forecast Future Demand and Energy Outlook (2009 - 2029) system in decades.

Meanwhile, industry consultancy firm Ziff Energy Group expects natural gas consumption in the Alberta oilsands will grow to about three billion cubic feet a day in 2020 from about 1.1 billion cubic feet a day currently, says vice-president, gas services, Bill Gwozd.

He says Ziff gas analyst Julia Sagidova analyzed more than 60 existing, under-construction, approved and proposed oilsands developments. Ziff Energy used this information to forecast growth in gas demand by major oilsands operators through this decade.

“Gas demand for the oilsands sector will account for four per cent of the total North America gas demand in 2020,” Sagidova says. That would be up from an estimate of roughly 1.5 per cent of North America’s average gas demand today.

Gwozd expects bitumen output from the province’s oilsands regions will reach between 3.5 million and four million barrels a day by 2020, up from 1.4 million to 1.5 million barrels a day now.

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He is confident bitumen output can rise to this level by 2020—even though many of the reservoirs in question haven’t been developed yet. He says the forecast assumes some proposed projects won’t proceed by 2020, others won’t reach their design capacity and production will sometimes be interrupted by events such as fires.

But if all announced projects proceeded and reached design capacity, the oilsands sector would need more than seven billion cubic feet of gas a day by 2020, according to Ziff’s tally.

“However, in our realistic case, we think it’s closer to three billion cubic feet [a day] by 2020,” Gwozd says of Ziff’s forecast for oilsands gas needs. But if the industry is aggressive “and the stars align, you could actually have a lot more gas requirement for the oilsands,” he notes.

With the transportation cost of shipping western Canadian gas east expected to rise, growing gas demand in the oilsands sector is “fantastic” news for the region’s gas producers, Gwozd adds.

“As it gets more expensive to [ship gas east], they can find markets here in Alberta—a made-in-Alberta solution,” he says.

— With notes from Pat Roche

36

Energize Alberta • November/December 2011

Snare the flare Power plant to run on flared gas Each edition of Energize Alberta contains a listing of 10 topical energy stories—key trends, events and initiatives—that are shaping the province’s energy future.

Sales Oil photo: Joey Podlubny; Alison Redford photo: Government of Alberta; flare photo: Joey Podlubny; gas meter photo: Noel Baebler/ Photos.com; pipeline valve photo: George Doyle/Photos.com; oil price concept: Alexandr Mitiuc/Photos.com; piles of wood photo: gianluca pretto/Photos.com; railcar graphic: Andrew Brien

1

And stay out Proposed fuel guidelines may keep oilsands out of Europe

The European Commission has recommended that the oilsands be ranked as a higher polluter than other oil sources when the European Union finalizes its fuel-quality directive. According to the proposed guidelines, the oilsands would be given a greenhouse gas value of 107 grams per megajoule of fuel, compared to 87.5 grams for conventional crude oil.

Why it matters: The federal government has come out swinging against the proposed directive, with Natural Resources Minister Joe Oliver saying the government would consider taking the matter to the World Trade Organization. That might seem like a severe response considering the European Union doesn’t currently import much Canadian oil, but the proposal is a major blow to the international reputation of the oilsands. It could also serve as a policy model for other countries if it passes into law.

Redford rallies

2

Candidate comes from behind to become new Alberta premier

Alison Redford edged out her competitors with 51 per cent of the vote to become leader of the Progressive Conservatives and Alberta’s new premier. Neither Redford nor fellow contenders Gary Mar and Doug Horner were able to take a majority in the first round of voting, which meant third-place finisher Horner was dropped from the ballot and the second choice of his voters tallied.

On the strength of those votes, Redford squeezed ahead of frontrunner Mar. Why it matters: It remains to be seen how Redford’s new cabinet will handle Alberta’s energy industry, but a shift in tone seems likely.

Ron Liepert is moving from energy to finance, while former finance minister and leadership candidate Ted Morton is taking over the energy portfolio. The environment department, now led by Diana McQueen, has been renamed the ministry of environment and water, suggesting a renewed emphasis on provincial water issues.

Natural gas flared from a Husky Energy Inc. oil battery near Peace River, Alta., will soon become fuel for a threemegawatt plant owned and operated by Genalta Power Inc. The $9-million plant will help power the site, with any additional electricity sold back into the provincial power grid. The project should be completed by June 2012.

Why it matters: Because the area lacks pipelines for shipping natural gas to market, Husky says it is forced to flare between 750,000 and one million cubic feet of gas per day—and it’s not alone.

According to the Energy Resources Conservation Board, 21 billion cubic feet of gas was flared in 2009 in Alberta. Genalta’s project offers an economical and conservation-minded alternative to companies looking to tap into that wasted resource.

4

Oil takes a tumble Prices unsettled by economic uncertainty Rattled by the unstable European and American economies, oil prices took a sudden dive to below $78 per barrel in early October. Prices have since climbed back up to around $86 per barrel, but uncertainty remains. Speaking in the Calgary Herald, John Stephenson, an analyst with First Asset Fund Inc., says, “It’s kind of ugly out there and until we see the bottom out of Europe, which probably isn’t any time yet, you’re probably going to see oil maybe trade to the low $70s, maybe to the $60s.”

Why it matters: Any prolonged decline in oil prices could play havoc with the province’s finances. That’s because Alberta’s budget for the 2011-12 fiscal period forecasted oil prices would average $89.40.

If prices stay below that mark, it could lead to belt-tightening measures to compensate for the drop in resource revenues.

7

Keeping connected New utility rules help vulnerable Albertans avoid disconnection

Just in time for winter, the Alberta Utilities Commission has announced new procedures aimed at protecting customers from utility disconnection. Utility providers will be expected to make multiple attempts to reach customers via phone and in person before disconnecting the gas.

In addition, processes will be put in place to help identify vulnerable customers—such as those suffering from physical or mental difficulties— who may need help from government agencies.

Why it matters: The new procedures came out of a review prompted by the death of John Davis in 2006. The man froze to death in his own apartment, despite the fact that his mother had paid his overdue utility bill and reconnection fee. The new regulations now include procedures that make it easier for a friend or family member to assist someone facing disconnection.

5

Out on the Mainline

Companies argue over tolls on half-empty gas pipeline

A fight is brewing between natural gas companies and TransCanada Corporation over its Mainline, with the National Energy Board (NEB) serving as referee.

Weak gas prices and declining production have left the pipeline half-empty in recent times, prompting TransCanada to raise tolls by 50 per cent. Now the company’s customers are fighting back and demanding the NEB look at marking down the pipeline’s value and possibly even shutting down sections, either temporarily or permanently.

Why it matters: TransCanada has countered by offering to decrease Mainline tolls and shift the cost to its pipeline networks in Ontario and Alberta. Still, the solution is of little comfort to Albertan companies, which are suggesting the change could increase the cost of transporting gas in Alberta by 40 per cent. With gas prices still low and expected to remain so in the near future, any increase in costs will be deeply felt by an already struggling industry.

15

Holding their liquor

Federal program encourages pulp mills to harness black liquor

The Canadian government has provided a boost to the ongoing greening of the country’s forestry industry with $41.9 million in funding. As part of the government’s pulp and paper green transformation program, 15 projects at mills across the country were chosen to receive support.

Why it matters: Among the recipients was the West Fraser Mills plant in Slave Lake, Alta., which will receive $5.1 million in order to help generate energy from black liquor, one of the waste byproducts of the pulping process. The substance has long been used as a fuel source in the pulp and paper industry, but new subsidies like this one are encouraging mills to upgrade to more energy-efficient methods.

8

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Taking the first train out of Oklahoma Rail offers new alternative to congested oil hub Cushing, Okla., may be overrun with oil, but relief is on the way for the major supply hub. Several rail projects are in the works that will divert shale oil heading to the region, including North Dakota projects like the 100,000-barrelper-day loading terminal near Dickinson that is expected to come online in November. Enbridge Inc. is also currently looking at building a rail terminal at Cushing to ship oil to the Gulf Coast and expects to make a decision on the project by year-end.

Why it matters: Canada’s oil industry has long been frustrated by the supply glut at Cushing, which has been driving down prices for North American crude. Any plan to relieve congestion at the oil hub is likely to benefit Canadian producers by decreasing storage supplies and therefore bringing up prices.

Top 10 continued online…

For the remainder of this issue’s Top 10 listings, visit energizealberta.com www.energizealberta.com

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