Thursday, March 27, 2014

Proposal: Best Practice Exchange between Alberta, Canada and Pennsylvania, USA

        Throughout my Canadian journey thus far, it has been clear that the three overriding issues that dictate energy policy are the same as in the United States: energy security, economy and jobs, and environmental protection (3 E’s).  A general related issue that has become more and more clear to me as I spent more time on energy policy at the “state” (aka province in Canada speak) vs. “national” level is that, like politics, “All energy policy is local.”

Source: Wikipedia
Alberta, like Pennsylvania, has a number of interesting programs to reach the goal of the “3E’s” – particularly regarding the challenges each faces environmentally with oil sands and hydraulic fracturing, respectively.  If each implemented the programs of the other, I believe there would be solid public policy advances to reach these energy policy goals.  And, there is one policy, not yet implemented by both
but recommended by Carnegie Mellon University researchers that I think would be useful for both Alberta, Canada and Pennsylvania (and ideally in multiple regions in the case of the United States).

            First, the Canadian programs that can serve as best practices for consideration in Pennsylvania and elsewhere for hydraulic fracturing regions:

(1) Canadian Oil Sands Innovation Alliance (COISA): COISA is an industry alliance (what in the US 
would be called a partnership) where 14 member companies (with the involvement of government, academia, and the public) share intellectual property on innovations related to environmental protection including improving measurement, accountability and environmental performance in four areas: tailings, water, land, and greenhouse gas emissions.  So far, these companies have shared 560 technologies and innovations with a development cost of $900 million.

Outside organizations and individuals can also submit non-confidential ideas for review through a program called E-tap.   Submitters will hear within 10 days if their proposed technologies are of interest. 

Why should this program be of interest in the US? I believe most industry leaders would agree with me that if there is an environmental incident, it does not just affect the image of the company with the incident, but the industry as a whole.  They should therefore want to work together to exchange ideas that help improve environmental protection.  On occasion, I hear that anti-trust regulations are a barrier, but I believe with the proper management, and if necessary, government help, anti-trust laws should not be a concern. In addition, I sometimes hear from technologists who have ideas to enhance the process or environmental protection, and from companies that say they would like innovations to enhance their process.  Yet there does not seem to be a centralized location for idea submission and vetting. 

Although, as discussed in this article, results will not happen overnight, this is typical with research and innovation.  We do need to get started, regardless. We did not have a presentation on COISA though it was mentioned during the tour.  One aspect that was unclear to me from the tour or the website is the degree to which the academic community, non-governmental organizations, and First Nation communities are involved.  Although outside parties were mentioned, I do think that you need to bring in that community, perhaps via an advisory board, to maintain the integrity of the program.

(2) Canada-Alberta Oil Sands Monitoring Program Information Portal and the Alberta Oil Sands Information Portal: The Joint Oil Sands Monitoring Program (JOSM) This site includes maps, monitoring site details including field data from scientist as well as analysis and interpretations of that data.  The interactive map, for example, includes information on the results from air, water, wildlife contaminants, and biodiversity disturbances.  When you click on the “Google earth” style map, you can get more information about that site and its results.  More work is on the way with a goal of 2015 to complete the activities outlined in the implementation plan.  COISA also plays a role here with a monitoring working group to provide industry input, focused on risk-based monitoring, to JOSM.

The Alberta Oil Sands Information Portal also provides useful information on the location of facilities and the ability to download information for further analysis (as does the previous site).   Click on a facility and you can see more detailed information about it.  Provided below is a picture showing information on the Suncor facility we visited a few days ago.

Interactive Map from Alberta Oil Sands Information Portal
In Pennsylvania, this data is not easily accessible…and it should be…to enhance public policy making and public confidence as well as identify what we do and do not know about the potential impacts of hydraulic fracturing. Although there are efforts underway to attempt to collect water data, what data is available is silo’ed  (as opposed to "one-stop" shopping) so you do not obtain a system’s perspective of the situation.  In addition, it is not easily accessible on a localized geographical basis as illustrated by the map above.

(3) Climate Change and Emissions Management Corporation(CCEMC):  Alberta takes its climate change strategy very seriously – much more than just a handful of U.S. states. Legislation passed in 2007 requires large emitters to reduce their greenhouse gas emissions.  The mechanism – a carbon levy (aka tax) of C$15/tonne CO2e and how it provides funding for the CCEMC is described in the graphic below.

 Technologies are funded that have the potential of reducing greenhouse gas emissions.  So far, CCEMC has funded 51 projects – a total commitment of C$212.8 million – on carbon capture and storage, energy efficiency, greening fossil fuels, and renewables.   Projects are funded not only in Alberta, but elsewhere, including the United States.  The results of a call for proposals focused on a CCEMC grand challenge on innovative carbon uses will be announced in about a month.  A new call for proposals that will provide C$65 million was just announced.  I’ll certainly pass this on to my colleagues back at Carnegie Mellon University.

In the United States, researchers would love this sort of funding stream for research activities – alas, the politics mean it is unlikely to occur – but it is nice to see it working elsewhere.

Source: Wikipedia
Second, I do want to spend a bit of time on programs in Pennsylvania that I think should be considered in Canada, particularly in Alberta.  Why do I think the programs are needed?  Because unlike the situation in Pennsylvania, the government of Alberta receives a major revenue stream from oil sands production, as they own the land where oil sands production is taking place.  In the United States, hydraulic fracturing activities take place on private lands.  This has the potential of creating a conflict of interest and can reduce the government’s credibility in monitoring these activities.  A good illustration of this is a quote from an Edmonton Journal article that appeared during our visit there: “’The government has a vested interest in the oil sands,” [Liberal Leader Raj] Sherman said. ‘They cannot be trusted.’”

Provided below is information on possible programs that may be worthy of consideration in Canada and Alberta.

(1) Center for Sustainable Shale Development: This organization's mission, overseen by a multi-stakeholder board,  "is to support continuous improvement and innovative practices through performance standards and third-party certification” for the hydraulic fracturing industry.  Performance standards thus far have been developed for air and climate (flaring limitations, green completion use, engine emission reduction, storage tank emission control) and surface & ground water performance standards (maximize water recycling, groundwater protection plan development, closed loop drilling, well casing design, groundwater monitoring, impoundment integrity, reduced toxicity fracturing fluid.)
Illustration of Difference between CCSD Performance Standards and Regulatory Standards
Source: Except from CCSD, as analyzed by Eckert Seamens
Setting up the organization has not been without controversy among all the stakeholders, however, it has developed practices that can immediately improve environmental protection without the delays that can be caused by awaiting laws to pass or permits.  Throughout our journey in Canada, I was told about compliance with the law and that new permits set the new standard.  However, what is really needed is continuous improvement in the existing practices and to take innovations that occur for new facilities and incorporate those ideas into older facilities – rather than grandfathering them in older regulations that are at least, several years old.  Improvements in technology are constantly changing.  Outside experts are needed for credibility – particularly from independent academics.

STRONGER, a non-profit, multi-stakeholder organization, that will, when requested, conduct a review of a state’s environmental protection – basically an audit to evaluate environmental protection strategies and opportunities for improvement based on innovative practices.  It is co-funded by federal energy and environmental agencies and a major trade association on a “no strings attached” basis. Volunteers provide reviews of the programs.  There is also longevity to the program as assessments occur over a number of years so the degree to which states are following recommendations can also be assessed.  Pennsylvania’s first assessment was in March 1992 and its most recent in September 2013.

Finally, these activities are not sufficient in Pennsylvania, and the following three groups have made recommendations to improve the process even further.  Some of these independent assessments and related recommendations would also be useful in Alberta and Canada as a whole.

(1) Shale Gas Roundtable Report:  This report, developed by a multi-stakeholder group, managed University of Pittsburgh’s Institute for Politics provides an independent assessment of the status of government regulations.  The report provides “eight core, overarching recommendations that emerged from the overall effort and specific recommendations within each of four focus areas – water, midstream, research, and unitization and conservation.”  Among its recommendations are:

  • The Commonwealth of Pennsylvania should increase investments in improving the accuracy, functionality, and transparency of its oil and gas data infrastructure.
  • The Pennsylvania Department of Environmental Protection should strengthen engagement with and support of various cross-sector and industry efforts to develop Best Management Practices.
  • Create a fund be to support rigorous and enhanced research to guide unconventional oil and gas development. The fund would have the following characteristics: diverse funding streams (state and federal governments, industry, and private philanthropy);  regularly updated multi-year strategic research plan; scientifically rigorous (competitive funding awards and peer review); transparency of funding and of research outcomes; strong government and stakeholder relationships; supportive of informed policy and practice based on state-of-the-art science; able to synthesize existing research for shorter-term consumption by decision makers; and adequacy of funding support and staffing to implement a multi-year strategic research plan,

  • (2) Carnegie Mellon University Scott Institute for Energy Innovation policymaker guide: Shale Gas and the Environment: Critical Need for a Government-University-Industry Research Initiative: Similarly to those who participated in the Shale Gas Roundtable report, CMU researchers believe that a government-university-industry initiative with regional clusters can provide a 'firewall' between the funding of research and research priorities, set a common basis for conflict of interest policies, reduce duplication of research efforts, and focus on policymaker information needs. Industry involvement is important in identifying research priorities, using research results to establish best practices, and providing the information researchers need to better understand shale gas operations. As a result, industry initiation and leadership are key criteria for the success of such an initiative. The proposed regional research centers are important because the geology as well as public concerns differ from one region to another. For example, while water scarcity is an issue in Texas, it is less so in Pennsylvania. This influences public concerns about the environmental challenges presented by issues such as oil sands and hydraulic fracturing.

    (3) Public Health Monitoring Data:  In "Potential Public Health Hazards, Exposures and Health Effects from Unconventional Natural Gas Development," an Environmental Science and Technology journal article.  As summarized in their abstract, there is a need for population-based studies: 

    "The rapid increase in unconventional natural gas (UNG) development in the United States during the past decade has brought wells and related infrastructure closer to population centers. This review
    evaluates risks to public health from chemical and nonchemical stressors associated with UNG, describes likely exposure pathways and potential health effects, and identifies major uncertainties to address with future research. The most important occupational stressors include mortality, exposure to hazardous materials and increased risk of industrial accidents. For communities near development and production sites the major stressors are air pollutants, ground and surface water contamination, truck traffic and noise pollution, accidents and malfunctions, and psychosocial stress associated with community change. Despite broad public concern, no comprehensive population-based studies of the public health effects of UNG operations exist. Major uncertainties are the unknown frequency and duration of human exposure, future extent of development, potential emission control and mitigation strategies, and a paucity of baseline data to enable substantive before and after comparisons for affected populations and environmental media. Overall, the current literature suggests that research needs to address these uncertainties before we can reasonably quantify the likelihood of occurrence or magnitude of adverse health effects associated with UNG production in workers and communities."

    Source: John L. Adgate, Bernard D. Goldstein, and Lisa M. McKenzie; “Potential Public Health Hazards, Exposures and Health Effects from Unconventional Natural Gas Development,” Environmental Science & Technology, Publication Date (Web): February 24, 2014.

    While here in Canada, there have been several news stories about public concern about potentially higher cancer rates and criticisms of a government report assessing this concern.  Industry has indicated its support for more health monitoring data.  Again, independent assessments are critical to credibility on this issue.  One last related example is an analysis from Resources for the Future that brought together a diverse of stakeholders to identify what areas of risk created the most concern for each group.  The twelve issues where there is overlap provides guidance on directing government and research efforts.

    Of course, there will never be 100% confidence in environmental protection by all parties, but reasonable efforts will improve the confidence of most.

    Wednesday, March 26, 2014

    Oil Sands: Canada's "shale" controversy

    Just as the extraction of shale gas is a controversial issue in the United States, the same is true of oil sands (also known as tar sands) are in Canada.  Both are considered unconventional sources of fossil fuel energy. As mentioned in yesterday’s blog, the major oil sands in Canada (also the largest in the world) are located in Alberta, a province located just north of Montana.

    The proposed Keystone XL Pipeline
    Imperial Oil Sands Project:
    1 year of operation
    Source: Doug Vine Twitter Feed
    would transport oil extracted from this resource (see picture below) from Canada to Gulf Coast of the United States.

     The two sites that we visited as part of the Pan-Prairie tour illustrated the two ways oil sands are extracted: mining (the older traditional technology) and in-situ drilling (a new technology using a combination of horizontal drilling and “steam assisted gravity drainage”).  Reaching both from Edmonton required a plane ride (about an hour) or it would have been a long drive (about the time it takes to get from Pittsburgh to Philadelphia.)  See

    The mining site we visited was managed by Suncor.  As we drove through the “boom” town of Fort McMurray, I was struck by how much this town faced the same challenges as the smaller boom towns in Pennsylvania.  Fort McMurray had its initial boom when mining began in the 1960s.  The population has boomed again as Fort McMurray serves as a base for oil sand extraction using both technologies throughout the region.  The population in the town is about 77,000 and for the municipality (what we would call a county, it is about 104,000).  In 1951, the population was about 1,000; 1971 about 7,000; and 2001 about 39,000. 

    Reclaimed Site
    Source: Marcus Thibalt Twitter Feed
    The Suncor site itself is vast and faces all the challenges of surface mining.  In particular, the loss of habitat for wildlife on both land and water as well as concerns about the impact of hazardous materials on air, land, and water.  Because the oil sands in this area are close to the surface they can be extracted using large shovels in an open pit mind with the oil sands then loaded into tremendously large trucks for processing.  The oil sands are then crushed and processed so that they can eventually enter a pipeline as heavy oil.  Besides the impact on the land, “tailings ponds” are created for the waste products (commonly known as “settling ponds” in the U.S.).  There are about 77 square kilometers of tailings ponds in Alberta.  At one time, the life span for these tailings ponds was expected to be about 40 years; today it is more on the order of 10 years.  The goal for both the land and the ponds is reclamation – after the resources are extracted restoring them to their natural state.  During the tour, we were shown several sites where reclamation had occurred.  Although the land is reclaimed, the wildlife  In addition, there are concerns that the tailing ponds leak.  An overview of the environmental issues is provided by Pembina – the nongovernmental organization to whom we spoke on the previous day.  And a Royal Society of Canada (analogous to the US National Academy of Sciences) report outlines questions they have as of 2010.

    Oil Processing
    Source: Marcus Thibalt Twitter Feed
    When we visited the MEG Energy Christina Lake In-Situ Drilling site, the site was much, much smaller than the mining site and its environmental footprint appeared to be less.  In addition, the impact appeared to be less than hydraulic fracturing.  Steam is generated using off-the-shelf cogeneration technology.  The steam is then injected down a horizontal pipeline to heat the oil sands which then enter a second pipeline to bring the oil to the surface so it an eventually enter the pipeline network.  A third pipeline goes between the other two pipelines to extract additional oil which enhances the efficiency of the process.    Unlike surface mining, the land disturbance (at least above ground) is less and there are no tailings ponds. And unlike hydraulic fracturing, the steam that enters the pipeline is not at high pressure, so there appears to be less impact below ground.  Overall, less waste also appears to be generated so there are no tailings ponds created for in-situ drilling, and the amount of wastewater
    generated seems to be less of a concern than for hydraulic fracturing.

    The good news perhaps is that while 20% of Canada’s oil sands reserves can be extracted using surface mining, 80% of the reserves would be extracted via in-situ drilling.  This assessment of Pembina compares the environmental impact of the two. 
    Source: Pembina

    The bottom-line:  Not all oil sands extraction is alike and this nuance needs to be considered in public policy-making both in Canada and the United States.  Personally, I would like to see some calculations that really make a true assessment of both processes in terms of their environmental impact relative to traditional oil well processes.  There may well be such an analysis out there but if not I may try to do it myself when I’m back at Carnegie Mellon.  This I think will give, from a public policy standpoint, more guidance to US policy-making.  In addition, my I believe there are lessons that can be shared between Pennsylvania and Canada that would increase both environmental protection and public confidence.  I’ll discuss more on this issue in my next blog.

    Tuesday, March 25, 2014

    A Tale of Two Cities (Edmonton, CA and Pittsburgh, PA)

              As I arrive at the airport in Edmonton, I am immediately reminded of Pittsburgh.  In the international terminals baggage area are signs of the sports culture.  Instead of the Pittsburgh Steelers and Penguins, there are statues and signs promoting the Edmonton Oilers (hockey) and Eskimos (football).  As I exit, I see snow still on the ground (not that way when I left Pittsburgh, but there was snow just a week ago) and the temperatures are cold (14 degrees F).  As my taxi drives me to my hotel in downtown Edmonton, I cross a major river filled with ice and a bridge – just like I do every day in Pittsburgh! (though again the ice has disappeared for the moment).  Their mountain is not as big as Mt. Washington (so no tunnel) and thus begins the differences between the two cities.
    In Pittsburgh, discussions focus on a daily basis on shale gas from the Marcellus.  In Edmonton, the focus is instead on oil sands, also know on tar sands.  These tar sands have been getting a great deal of publicity in the United States because the goal of the Keystone XL pipeline is to carry the result of processing these sands to the Texas Gulf Coast.  Both hydraulic fracturing of shale and the “steam assisted gravity drainage” of oil sands use horizontal drilling.  While shale in the Marcellus is “fractured” with a combination of high-pressure water, silica, and chemicals in a single pipeline to produce shale gas, tar sands instead uses two parallel pipelines for what is called the “in-situ method.”  The top pipeline is steam.  This steam heats the tar sands with the result of producing heavy oil that is then taken to the surface by the second pipeline.  Both processes use high volumes of water, primarily recycled. Oil sands can also be mined, but industry has been transitioning to the newer technology.
    During the first day of the Pan Prairie Energy Tour, we heard from representatives of the government, industry, and an environmental group.  A few factoids first as summarized in Canada’s Energy Markets Fact Book 2013-2014, and as provided by Canadian government representatives(s) during the briefing:

    ·      Canada is 3rd in the world in proved crude oil capacity (behind Venezuela and Saudi Arabia)
    ·      Canada is 5th in world in exports with 99% of those exports going to the United States.
    ·      Canadian crude oil accounts for 28% of U.S. imports and 16% of U.S. refinery crude oil intake.
    ·      The chief environmental challenges of oil sands are water use, greenhouse gas emissions, and land.
    o   In-situ uses 1 barrel (BBL) of water per BBL of bitumen, while mining uses 3-4 BBL.
    o   Oil sands producers recycle about 75% of the water used in mining and 90% under in-situ. 
    o   Greenhouse gas emissions from oil sand operations are 7.8% of Canada’s total greenhouse gas emissions (1% globally).
    o   Approximately 22% of the Lower Athabasca Region (where the oil sands are located) is comprised of conservation areas.

    The following “points to ponder” struck me as I listened to the presentations:

    ·      While in Pennsylvania, shale is primarily in private lands so negotiations are between individual homeowners and companies, the same is not true in Canada.  In Canada, the oil sands are viewed as public lands owned by the Province of Alberta (similar to a US State; Alberta is the size of Texas).  So the model here is public ownership with private investment with royalties paid to the province for oil production.    How does this change political decision-making?
    ·      The environmental group representative brought up a thought-provoking issue given the concern about impact on ecological reserves: “What level of oil sands development is appropriate?”.  This has not been an issue so much in Pennsylvania.
    ·      Greenhouse gas emissions seem more of an issue here than in Pennsylvania and there is a price put on carbon.  However, the environmental group also expressed concern that it is not sufficient.  What price of carbon would be appropriate?
    ·      The difference between shale oil production in the United States (in North Dakota and Texas) is that it produces light oil while the oil sands produce heavy oil.  This heavy oil is needed in Texas for production of goods.  How much heavy oil is needed by this industry and is the Keystone XL pipeline the optimal way to obtain that oil?

    Today we are off to see the oil sands region.  So more to come tomorrow!

    Friday, March 21, 2014

    Stine Joins Canadian Pan-Prairie Energy Tour

    Athabasca Oil Sands
    Source: Wikimedia Commons
    Deborah Stine, Associate Director of Policy Outreach for the Scott Institute for Energy Innovation, is participating in a Canadian Pan-Prairie Energy Tour from March 24th to 28th, 2014 at the invitation of the Canadian government.  She will provide her perspectives on the tour on this website. 

    The tour will profile innovation, environmental protection, and community engagement in the energy sector in Alberta, Saskatchewan, and Manitoba. 

    During the tour, she will discuss energy-related issues with government officials, industry and non-governmental organization representatives, aboriginal groups, and other members of academia.  In addition, she will participate in technical visits to oil sands, a coal power generation plant with carbon capture sequestration technology, technology/research centers, and one of the most energy efficient buildings in North America. 

    Discussions and site visits will focus on the broad narrative with respect to Canada's energy sector, touching on oil, gas, clean coal, uranium and renewable energy. The Canadian government will be "sharing pictures, live-tweets, quotes and testimonials with participants and a broader web audience to demystify the energy tour process, and encourage a wide-ranging a discussion on all elements of the visit.  Live Twitter sharing is available from:  @MarcusThibault and the Tour Hashtag is: #EnergyPartners.