2013 Cenovus Corporate Responsibility Report

Environmental performance

We do our utmost to live up to the responsibility that goes with being a developer of one of Canada’s most valuable resources.

Like any industry, we have environmental challenges. Ensuring our operations don't affect nearby lakes and streams. Reducing the greenhouse gas (GHG) intensity of our production. Reducing the amount of land we need to build each oil sands project. And striving to prevent impacts on wildlife in our operating areas.

That’s why we integrate environmental considerations into our business. They help enable us to minimize risks and increase efficiencies: from how we design our oil sands projects, to the way we operate, to the care we take in establishing detailed reclamation plans.

We're proud of our environmental record and even prouder of the many ways we’ve improved how we develop the oil sands. Our employees, many of whom live near our operations, are personally committed to making sure we keep finding better processes, methods and technologies to get this resource out of the ground safely and responsibly.

Our Environmental Commitments reflect our approach and the collective actions we take to create business value through environmental performance.

Integrating environmental
considerations into our business

We have a formal process to align environmental actions with environmental and business priorities so that our programs and efforts are focused on the most important areas. This process also integrates environmental considerations into our business strategy, similar to the process we use to plan our capital requirements and production growth.

Having the information at hand to guide us on the actions to take today to continually improve our environmental performance can also help reduce project costs later by avoiding the need for expensive redesign or additional mitigation measures.

Improving environmental performance has been a business focus for us since Cenovus became a company. Our environmental planning process, shown below, involves:

1. Sharing overall strategy and environmental expectations across the company
4. Providing direction to employees on key environmental risks, opportunities and priorities
2. Assessing emerging environmental issues and trends
5. Working with our teams to help incorporate environmental priorities and actions into their business planning and performance initiatives
3. Reviewing and evaluating our environmental priorities with leadership and management
6. Reviewing our progress and planning process for continuous improvement

Managing cumulative impacts

With a number of companies working in northern Alberta to develop the oil sands, the impacts of our industry add up over time. These cumulative impacts on the environment are an issue that we, as an industry, are working to address.

See our SkyStrat™drilling rig in action. This scaled-down version of a stratigraphic test well drilling rig is a Cenovus innovation that allows us to drill year-round in remote locations while minimizing environmental impacts. [Time:1:15]

Canada's Oil Sands Innovation Alliance (COSIA). Formed in 2012, COSIA is all about collaboration – oil sands producers finding solutions to improve environmental performance by focusing on areas such as water, land and GHG emissions. Each member company is expected to contribute technologies for the other members to use, as well as work collaboratively on new innovations with other members. Two examples of technologies we’ve contributed include innovations associated with our award-winning SkyStrat™ drilling rig, and our LiDea pilot project, which is under way to help protect and restore wildlife habitat, including the habitat of the Alberta woodland caribou, in northern Alberta. We continue to evaluate the many opportunities presented by other COSIA members to determine which ones we want to implement.

Alberta Environmental Monitoring, Evaluation and Reporting Agency (AEMERA). Through AEMERA, we are working with the Province of Alberta to take a ‘cumulative effects’ approach to monitoring and managing environmental performance for the province. AEMERA also oversees the Canada-Alberta Implementation Plan for Joint Oil Sands Monitoring initiative. This initiative monitors the effects of oil sands development to ensure the oil sands are developed in a responsible way.

Cenovus provides funding to the Joint Oil Sands Monitoring initiative. We also perform specific monitoring as detailed in the conditions of our approvals.


Assessing impacts long before a project begins

In March 2014, we received approval from the Alberta Energy Regulator for Grand Rapids, our fourth oil sands drilling project. Getting an oil sands project approved is a multi-year process due to the level of scrutiny that goes into the approval – from the provincial government, stakeholders and community members. And rightly so, because all kinds of operational and environmental implications need to be considered along with the project’s benefits.

The project approval process includes conducting a mandatory environmental impact assessment, where we consult with the community and key stakeholders, monitor environmental conditions, collect seasonal information about vegetation and wildlife, and model potential environmental impacts over the lifetime of the project. We also consider the cumulative impacts of regional oil sands development on air, water, land and wildlife, and estimate what our specific contribution to those impacts will be throughout the entire project lifecycle. All of this information is given to the regulator to review so they can make an informed decision on whether we receive approval to proceed.

This rigorous process helps clarify how we should develop our projects for long-term sustainability and helps us do the right things from the planning stage through to final reclamation.


Environmental performance: air

Managing our GHG emissions

We know that our overall GHG emissions will increase with the planned expansions of our oil sands operations. We’re tackling this challenge head on by focusing on reducing and mitigating our GHG emissions intensity – the amount of GHG emissions emitted per barrel of oil produced – through:

  • The development of technologies that will reduce energy use
  • Energy efficiency improvements
  • Offsetting our growing emissions through GHG credits

An important part of managing our GHG emissions is the work we do with government, industry leaders and academics to develop and prepare for emerging GHG emissions regulations. We recognize there’s a lot of uncertainty in emerging regulations, so we seek to mitigate our risk by developing forecasts and incorporating carbon pricing scenarios as part of our business planning.

“We take the concern surrounding our growing GHG emissions very seriously and are constantly looking to improve our energy efficiency and work collaboratively to develop longer-term technology solutions,” says Anamika Mukherjee, Specialist, Environment & Regulatory at Cenovus.

 

Developing ways to improve air quality

Our oil sands projects emit pollutants like sulphur dioxide (SO2) and nitrogen oxides (NOx) into the air as a result of burning natural gas in our steam generators. We address this challenge in a number of ways:

  • Improving how we collect data. More accurate data helps us to determine ways to reduce our impact even further
  • Using flue gas recirculation to reduce NOx emissions below regulatory requirements
  • Installing a scavenger unit for sulphur recovery to maintain SO2 emissions well below the limits set out in our Alberta Environmental Protection and Enhancement Act approval, based on the province’s requirements for sulphur recovery

Some of the things we did in 2013 to improve our energy efficiency include:

  • Designing our Narrows Lake project to use a solvent aided process as an addition to traditional Steam-Assisted Gravity Drainage (SAGD). As a result of the reduced steam required per barrel of oil produced, GHG emissions intensity for production at Narrows Lake is expected to be approximately 30 percent lower compared to traditional SAGD
  • Converting drilling rigs and boilers from diesel to natural gas at our Foster Creek oil sands project and at our Pelican Lake heavy oil project
  • Improving engine combustion efficiency at our southern Alberta conventional assets by using upgraded chambered spark plugs
  • Installing five compressors and hydraulic drivers to recover vented natural gas to use as fuel and reduce the amount of propane used at our southern Alberta conventional operations
  • Upgrading to more efficient LED lights at our Pelican Lake heavy oil project
  • Investing in Skyonic Corporation, which transforms industrial CO2 emissions into commercial products
  • Supporting renewable electricity generation in southern Alberta through our first purchase of carbon offsets (wind-powered electricity credits), which will be used towards achieving GHG compliance at our Caribou North natural gas facility
  • Consolidating two of our facilities from our conventional assets in southern Alberta to minimize the equipment needed

Across all our oil and natural gas operations, we emitted about 4.95 million tonnes of carbon dioxide (CO2) equivalent in 2013. The increase in company-wide direct GHG emissions was mostly due to a 14 percent increase in oil sands production.

With a 14 percent increase in oil sands production in 2013, we were still able to keep our GHG emissions intensity (the amount of GHG emissions we emit per barrel of production) at relatively steady levels. This is a result of our energy efficiency initiatives, the quality of our reservoirs, and our drive to maintain industry-leading steam to oil ratio performance.

Based on data from the Canadian Association of Petroleum Producers Responsible Canadian Energy 2013 Progress Report, our company-wide direct GHG emissions intensity is about 38 percent below the industry average for oil sands and Western Canada oil and gas production. Our oil sands direct GHG emissions intensity is 43 percent lower than the industry average.

In 2013, our overall energy use increased by 19 percent from 2012 levels. That's because we've increased our oil sands production and used more natural gas in our operations. Natural gas is used to create steam for oil sands production and to run compressors at our conventional assets.

In 2013, our overall energy intensity increased by approximately 15 percent from 2012 levels. That's because we increased our oil sands production and used more natural gas in our operations.

In 2013, we injected almost two million tonnes of additional carbon dioxide (CO2) at our enhanced oil recovery project in Weyburn, Saskatchewan. To date, we have safely stored about 22 million tonnes of CO2 deep underground. That's about 40 percent of our company's total direct GHG emissions.

On average, it takes just over two barrels of steam to produce one barrel of oil at our oil sands operations – well below the industry average of 3.1. Less steam means using less water. It also means less natural gas is needed to create steam for SAGD, which results in fewer emissions.

NOx is a by-product of the fuel combustion process. Our NOx emissions decrease reflects the shift of our total production towards oil sands, which is less NOx intensive than our conventional oil and natural gas operations.

Our company-wide NOx emissions intensity is 51 percent lower than the Canadian Association of Petroleum Producers' Responsible Canadian Energy 2013 Progress Report industry average for oil sands and Western Canada oil and gas production.

NOx emissions from our steam generators are already much lower than current regulations. In fact, we’ve reduced our NOx emissions by about 40 percent since 2006, but are always looking for ways to go beyond regulatory requirements. One of the ways we do this is by using a technology called flue gas recirculation to reduce NOx emissions from our steam generators. This system recycles exhaust gas from the stack of a steam generator into the front of the burner. As a result, less NOx is formed, which lowers overall NOx emissions. We anticipate that using flue gas recirculation in our steam generators will further reduce our NOx emissions by at least 50 percent.

In 2013, our SO2 emissions increased by 17 percent. This was primarily due to an increase in flaring, which is a controlled burning of natural gas, as a result of unforeseen operational issues at our Weyburn CO2 enhanced oil recovery operation. While our SO2 emissions intensity increased in 2013, it remains about 84 percent below the Canadian Association of Petroleum Producers Responsible Canadian Energy 2013 Progress Report industry average for oil sands and Western Canada oil and gas production.

Flaring is a controlled burning of natural gas. The 22 percent increase in 2013 is because of higher flaring volumes due to unforeseen operational issues at our Weyburn enhanced oil recovery operation.

Venting is used to describe natural gas that's released. Both flaring and venting release GHG emissions into the atmosphere. The 32 percent decrease in 2013 is primarily due to the sale of the Lower Shaunavon assets in July 2013. Reductions also occurred at our conventional oil and natural gas operations in Alberta and our heavy oil operation in Pelican Lake.


Environmental performance: water

Since we use SAGD technology that relies on steam to get the oil from our oil sands projects out of the ground, the success of our operations depends on our ability to access and use water efficiently.

In our SAGD steam production process, the majority of the water we use to generate steam is recycled. When steam is injected into the ground to heat the oil, it condenses and eventually this water, called produced water, is brought to the surface with the oil. The oil and produced water mix is sent to our processing plant to be separated. The oil is processed and transported to be refined. The produced water is treated, so it can be reused over and over again in the SAGD steam production process. We use saline water in the steam production process, which is too salty for human or animal consumption, or for watering plants. We get this water from deep underground aquifer sources. To a small extent, we use fresh groundwater in the steam production process, which also comes from underground aquifer sources.

Of the water that was used in steam production at our Foster Creek and Christina Lake SAGD operations in 2013, over 81 percent came from recycled produced water, 17 percent from saline groundwater and two percent from fresh groundwater.

We’re constantly assessing ways to both reduce the amount of water we need and improve the efficiency of how we use it. This involves developing new technologies and processes to handle water, finding ways to recycle and reuse more water, and identifying ways to replace fresh water use with saline water use.

Managing water efficiently and responsibly

We’re putting our Environmental Commitments into action by identifying ways to reduce our water consumption and protect ground and surface water through a number of innovative initiatives:

  • Recycling more water for steam generation at our oil sands operations through our patented blowdown boiler technology
  • Using saline water whenever possible in our operations, rather than withdrawing from aquifers, lakes, streams or rivers
  • Completing a dewatering pilot at our Telephone Lake project, which successfully tested the removal and displacement of an underground layer of non-potable water sitting on top of the oil sands deposit, replacing it with air. Proving the dewatering to be successful means that we can maximize recovery of oil at Telephone Lake with a lower steam to oil ratio, resulting in lower GHG emissions and having a minimal impact on groundwater quality.
  • Reusing our camps’ waste water after it’s been treated and approved for release to build ice roads, to use in dust suppression and in our drilling activities
  • Participating in the CDP’s Water Disclosure, a voluntary program that allows companies to share information about water management and governance, water-related risks and opportunities and water accounting. CDP is an international, not-for-profit organization that provides a system for companies and cities to measure, disclose, manage and share vital environmental information.

In our operations, fresh water from surface and groundwater sources is used in production, dewatering, ice road construction, facility maintenance, camps, drilling, and dust control. In 2013, we used about 31 million barrels of fresh water across all our oil sands, conventional oil and natural gas operations. Our fresh water use increased by 53 percent compared to 2012, mainly due to the dewatering pilot at our Telephone Lake project and an increase in oil production.

The majority of the water we use in our operations – about 70 percent of our total water use – is saline water from underground aquifers. In 2013, we used about 71 million barrels of saline water across all our oil sands, conventional oil and natural gas operations. When both saline and fresh water use are combined, our total water use was 102 million barrels, which is about 19 percent more water than we used in 2012.

In 2013, across all our oil sands, conventional oil and natural gas operations, we required approximately 0.23 barrels of fresh water to produce one barrel of oil equivalent. Per barrel of oil produced from our oil sands operations, we used approximately 0.27 barrels of fresh water – about the same amount it would take to fill a typical single kitchen sink with 15-18 cm of water. That amount represents all the fresh water we used from surface and groundwater sources for production, dewatering, ice road construction, facility maintenance, camps, drilling, and dust control.

Increasing fresh water intensity in our oil sands operations in part reflects the increased fresh water used for the dewatering pilot at Telephone Lake, which had no related oil production. Despite that increase, our oil sands fresh water use intensity was 23 percent less than the Canadian Association of Petroleum Producers' Responsible Canadian Energy 2013 Progress Report industry average for oil sands in-situ operations.


Environmental performance: Spills

Working to reduce spills

Spills of any type – whether produced water, drilling fluids, chemicals, gasoline or oil – are not acceptable. But they can and do happen despite having engineering and process safety procedures in place.

In 2013, we experienced a slight increase in the number of reportable spills, as well as an increase in the volume released. "We know we need to improve our performance. We’re tracking our spills and making our spill prevention process more rigorous and increasing spill prevention awareness efforts among our workers,” says Mark Grant, Senior Advisor, Environment & Regulatory at Cenovus.

Ways we are addressing spills include:

  • Continuing to raise awareness among our contractors and employees about how to prevent or reduce the number, size and extent of spills that occur in our operations through our Every Drop Counts program
  • Establishing spill committees across our operations to help identify spill trends and prevention opportunities
  • Implementing a Fluid Haulers Spill Prevention Work Practice that gives fluid haulers tips to prevent spills

A reportable spill is one that exceeds the volumes specified by the governing regulations for our operating areas. The increase in the number of oil sands reportable spills was primarily due to growing activity at our oil sands operations.

A reportable spill is one that exceeds the volumes specified by the governing regulations for our operating areas. The increase in volume spilled was mostly because of two large spills of process water and emulsion at our Foster Creek oil sands drilling project. These spill volumes were recovered and cleaned up.

To address these increases, we're targeting a number of actions in 2014, including a concerted effort to decrease the number of spills by third-party contractors working at our sites.


Environmental performance: land

Re-establishing the habitat to restore the natural diversity of plants and animals in areas where we operate is an integral part of the work we do. The goal of our reclamation efforts is to reduce habitat loss and keep core habitat areas connected.

Since no two areas across our operations in Alberta and Saskatchewan are the same, we give a lot of thought to the reclamation approach we take. Depending on the area and type of operations, the reclamation process can begin right after a well is no longer producing. In other cases, like at our oil sands projects, we choose to reuse already disturbed land for other purposes and reclaim it once we’re finished. While the result may be that we don't receive as many reclamation certificates for those areas in the short term, this approach helps to reduce the total amount of land that's disturbed in the long run.

We track and manage wells throughout their life cycle, from planning through production to reclamation, and have a long-term strategy in place to manage our inactive wells and actively accelerate the pace of our reclamation.

Currently 250 to 300 wells become inactive each year. That number will increase significantly over the next 15 years when a good many of the conventional natural gas wells drilled during the 1970s reach the end of their productive lives.

In 2013, we had more than 2,000 wells under active reclamation. We set annual targets so that this work remains a priority. We’re pleased to report that we achieved 116 percent of our inactive well reclamation target for 2013, and 102 percent of our surface reclamation target – receiving 126 reclamation certificates from the province.

Long before we break ground on a new project, we’ve already developed a comprehensive plan to reclaim that land once it’s no longer in use.

“We focused on efficiencies in our northern programs and because the late winter breakup gave us additional time to access more area, we were able to reclaim additional sites and reduce our costs associated with site access,” says Dave Marks, Group Lead, Environment & Regulatory at Cenovus.

 

 

Collecting cones for future growth

Cones from trees are more than just squirrel fodder – they hold the future of our reclamation needs in their seeds. We collect select species of cones to extract the seeds and store them for future reclamation projects. The seeds will be used to produce seedlings, which will then be planted to revegetate areas under reclamation.

“In 2013, we took advantage of an exceptionally good tamarack cone crop, a sought-after item in the reclamation world,” says Ariane Bourassa, Environmental Advisor, Environment & Regulatory at Cenovus. “That’s because the cones are quite rare and viable cone crops may only occur once every five to six years. Collecting cones allows us to have access to a known number of seeds and eliminates our need to purchase them.”

 

We partnered with several Aboriginal businesses on this project, and gathered enough cones to produce more than 1.5 million seedlings. In January 2014, we also collected black spruce cones to add to our seed collection for future planting.

Tamarack, a native species to Alberta and Canada, grows quickly on disturbed sites. Fast growth and adaptability to wet peaty areas make it a perfect candidate for muskeg regions, which cover the majority of Alberta’s oil sands resource.


Reducing our impact on wildlife and habitat

We work closely with government, industry partners and researchers on ways to reduce the impact our operations have on wildlife and habitat. We also plan our activities to avoid sensitive times for wildlife, such as migration and nesting periods for birds and calving season for caribou. As well, we have some innovative projects underway to help protect and restore wildlife habitat in northern Alberta.

One project involves the habitat of the Alberta woodland caribou, which is considered an endangered species in Alberta. During exploration activities over the past 40 years, many oil and gas companies cut corridors – long open stretches within the boreal forest – for seismic exploration and access routes. Exploration and restoration techniques have since improved so there’s less disturbance of the forest, but the older corridors have been slow to return to forest cover. These corridors attract wildlife including wolves, and as a result, more caribou are being preyed upon.

Our environmental specialists are working to restore these older disturbed areas to their natural state through a linear deactivation (LiDea) project, which began in 2012. They’re testing a number of innovative treatments for the corridors near our oil sands operations, with the goal of restoring the forest and giving young trees a chance to grow more quickly. We completed the second phase of the project this past winter, actively treating 210 kilometres of linear disturbance. LiDea is not a regulatory requirement – in fact, we are voluntarily working with the Province of Alberta to restore disturbances that we are not responsible for in an effort to improve regional habitat quality.

Going digital to protect wildlife in northern Alberta

We’ve always encouraged our employees and local stakeholders to report wildlife sightings near our areas of operation. In the past, we used pen and paper to record the sightings. In 2013, we launched our Wild Watch website and app, developed for us by the Miistakis Institute at Mount Royal University, a non-profit organization dedicated to wildlife management and conservation. The app makes it easy for our field staff and other stakeholders to report wildlife sightings with the click of a button using their mobile devices.

Wild Watch will enable us to more accurately identify areas of concern, so we can adjust our behaviour and mitigation measures to reduce disturbance to wildlife. For example, we can reduce the speed limit at an identified high wildlife traffic area to avoid vehicle collisions.

“This smartphone app is great. It’s helping us better understand wildlife movements, so we can increase staff awareness about wildlife and help them be more conscious of our protection efforts,” says Susan Patey LeDrew, Senior Advisor, Environment & Regulatory at Cenovus.

Examples of wildlife that live in our operating areas.

 

 

Measurement abbreviations used throughout the report

 

bbls barrels
BOE/d barrel of oil equivalent per day
CO2 carbon dioxide
CO2E carbon dioxide equivalent
GJ gigajoules
GHG greenhouse gas
m³OE cubic metres of oil equivalent
mg/L milligrams per litre
MMcf/d million cubic feet per day
SOR steam to oil ratio