Oil and Gas Sector

Water resources are below significant pressure from rapid urban and industrial growth. This, coupled with increasing concerns about climate exchange and drought in various regions, sets the scenario to change the way water is used and allocated to industry. The use of the resource by industry has clearly been identified as a major concern by various organizations and in fact, water may well become a constraint in the development of the oil & gas sector.

Governments worldwide have set strategies and targets for improvements in water efficiency, including the use of economic instruments (e.g. pricing policies) for achieving these targets. It has also been recognized that many regions of the world not considered arid are facing major water.

shortages in the future and that action is needed now to avoid a major disaster; a number of studies call for more stringent regulations around water conservation for industry.

A few illustrative figures from activities in Western Canada are reported as follows :
  • Mining oil sands: 2-4.5 m3 water / m3 synthetic crude oil (net figures).
  •  Approved oil sand sites with a cumulative license to withdraw 359 million m3 from the Athabasca River (twice the annual use of the City of Calgary, Alberta).
  • Less than 10% of the volume returns to the river.

Water has been identified as one of the top four challenges faced to exploit one of the largest deposits of crude oil (mining of oil sands); the large volumes stored in tailing ponds as a result of the sand-oil separation require to be managed with long-term vision as dyke failures could represent a major environmental disaster. The cumulative impact of groundwater withdrawals for steam injection and other in situ operations has not been properly evaluated but has the potential to cause serious damage. Even if the clearest impacts will be due to removal operations, the cumulative impact of a large number of in situ and enhanced oil recovery (eg. water flood) projects could be even larger. The goal of water minimization cannot be considered in isolation and other environmental impacts must also be included in the analysis for decision making. Evaluating the various trade-offs in these systems remains a significant challenge. Typically licenses for water diversions involve maximum amounts that can be diverted and used in a given time period (water allocations), and newer licenses usually have an expiration date and are renewable for a nominal fee. More recently the terms and conditions of these licenses depend strongly on the location of the project; in general, local authorities require oil companies to search for alternative water sources before applying for a license. Enhanced oil recovery projects have been increasingly built with saline groundwater as the source and this trend is expected to carry on. Even if the oil & gas sector is not a very big user in terms of total water allocation, it does remove a significant volume of water from the natural cycle by deep well injection. In the oil sands mining operations solo, it is expected that applications for water licenses would result in a water allocation of around 665 million m3 which is greater than the water request from the Greater Toronto Area. In the in situ extraction there was a significant increasing trend close to 30 million m3; back in 2004 actual figures exceeded government estimates by a factor of three.

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