Brian Zinchuk is editor and owner of Pipeline Online
Minister of Energy and Resources Colleen Young, left, was shown the control room of the Whitecap Resources-operated Weyburn Unit, part of a tour on Sept. 4. Photo by Brian Zinchuk
On Sept. 4, Minister of Energy and Resources Colleen Young spent the day touring the Whitecap Resources-operated Weyburn Unit and Steel Reef’s Viewfield Plant 4 gas plant, which has a new power generating turbine that will soon be contributing to the SaskPower grid.
In a way, both have direct ties to the electrical side of the energy sector, especially as Saskatchewan begins its work rejuvenating its coal-fired power generation fleet.
That’s especially important for the Weyburn Unit, as it is the recipient and end-user of the carbon dioxide captured at the Boundary Dam Unit 3 Integrated Carbon Capture and Storage Project. If SaskPower were to shut down its conventional coal-fired power generation, as per federal regulations, by Jan. 1, 2030, the probability of keeping the Estevan mine open for just one medium-sized generating unit was vanishingly small. So if coal was to be lost, it would almost certainly be completely lost, and the CO2 along with it.
But since the June 18 announcement by Crown Investments Corporation and SaskPower Minister Jeremy Harrison that the coal fleet would be rejuvenated, that brings forward all sorts of possibilities, including the prospect of additional coal-fired power generation.
The Steel Reef plant is located at the heart of the former Crescent Point/Veren Bakken play. That area, now owned and operated by Whitecap Resources, has been identified by the Saskatchewan Geological Survey as prospective for possible CO2-enhanced oil recovery.
Young told Pipeline Online at the conclusion of the tours, “It was very interested in seeing the amount of work that’s being doing been done by Whitecap with regards to CCUS and EOR and how it is reducing emissions, and reusing CO2 to be able to get more oil out of the ground, and then reducing emissions at the same time.”
She noted it’s a “closed system that’s recycling everything and reusing everything in order to produce more oil, which is what we need to get to market.”
(Pipeline Online will publish later story will discuss the Steel Reef portion of the tour.)
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Coal leading to more CCUS?
Asked if coal’s refurbishment and life extension means there’s an opportunity to take a look at doing more carbon capture, utilization and storage (CCUS), resulting in more enhanced oil recovery, and if that was part of the reason for the tour, Young replied, “Absolutely, I think back in early summer, when I was at FPT meetings, in meeting with our federal minister, Hodgson, that was one of the things we discussed with him, was using more CCUS and enhanced oil recovery methods in order to support the industry, the oil and gas industry, and that industry in our province. We have the technology and we have the carbon capture ability to reuse and recycle things in a way that is environmentally friendly and more efficient.”
Capturing carbon dioxide, just to put it in the ground does not make economic sense, according to Whitecap president and CEO Grant Fagerheim in an August interview with Pipeline Online. But using it for enhanced oil recovery does, he explained.
Similarly, for a power utility to capture CO2, with around a 30 per cent parasitic loss in generation as a result, it makes it hard to justify as well. But for the province, the broader view of more economic benefits, from jobs, taxes and royalties from increased oil production are an important part of the equation for CO2-EOR.
“We’re also generating power out of it, right” Young said. “Additional power, which is what we need, in this province, and as we saw, even in the winter months, Alberta needed our extra energy and power. So, I mean, if we can produce more and do it in an environmentally friendly way, as well as an economical way within the province, and produce more power that can be used in communities, that can be used in industry within our province more efficiently. That’s the way to go.”
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Hitting 600,000 bpd on the way to a million
Senior research geologist Gavin Jensen did a presentation to the Williston Basin Petroleum Conference in May where he said if carbon capture was implemented across the entire coal-fired generation fleet, it could result in an additional 73,000 barrels of oil production per day in southeast Saskatchewan. The province has a stated goal of hitting 600,000 barrels of oil per day by 2030, a number Young reiterated on that day, but Premier Scott Moe has frequently discussed the possibility of eventually hitting one million barrels per day.
Asked about that, Young said, “It would be awesome, if we could.
“We are still set, under our growth plan, to reach 600,000 barrels per day by 2030 and that is our target, and we do need to get there. And you know, any method that we can that I said, that works within the industries, we want to support it and push it forward.
Minister of Energy and Resources Colleen Young, right was shown the main plant of the Whitecap Resources-operated Weyburn Unit, part of a tour on Sept. 4. Photo by Brian Zinchuk
“Our federal counterparts need to get on board, because that is something that is holding us back, is the fact that EOR and CCUS is not recognized by the federal government under their ICT (input tax credit) program.”
Asked if it was an ideological issue for the federal government, since it otherwise would make sense, Young replied, “It makes sense. I don’t know how much they understand about it, and that’s one of the reasons I want to get out and see how it actually works, and then try to understand it myself. So when I am in these meetings, I can be the advocate for the industry, right?”
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The most obvious candidate for a new CO2 flood in the southeast is the Canadian Natural Resources Limited-operated Steelman Unit, which has similar geology to the Weyburn Unit. Back in 2011, then-CEO of CNRL Steve Laut expressed an interest in acquiring the CO2 that would be captured at the Boundary Dam Project, CO2 that was eventually acquired by Cenovus, which then operated the Weyburn Unit. Notably on the wall of the Weyburn Unit offices is a plaque listing all the partners in that unit, one of which is CNRL. As a part owner, they have access to the intellectual property and learnings of the Weyburn Unit on how to incorporate a CO2 flood, should they ever choose to do so.
The idea of expanding CO2 to other areas of southeast Saskatchewan is being looked at, Young said, noting her ministry is working with Crown Investments Corporation Minister Jeremy Harrison.
With regards to the premier’s hopes of hitting one million barrels, Young said with a smile, “That’ll be after 2030. I need to get to 600,000 first.”
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Setback on other side of the province
Saskatchewan has faced a major setback in that goal on the other side of the province, with the Cenovus Rush Lake blowout in May taking two significant SAGD facilities offline – Rush Lake 1 and 2. Combined, that’s 32,000 barrels per day production that’s come off the provincial total.
Asked about the blowout’s impact, Young said, “Rush Lake 1 and 2 are temporarily shut down right now, closed in until the we are just starting the investigation on it. It took some time for them to shut off the Well, the one well out of the 16 that was causing some issues. I have had a very heavy technical briefing with them recently, in the last week and a bit. And they’re pretty sure at what the cause was and how to mitigate that. But we have an ongoing investigation through ER with Cenovus.”
She acknowledged that those two plants equate to a 32,000 barrel per day hit. Asked if there’s a possibility those plants could be redeemed or possibly relocated, she said, “I think they may. We have talked about reassembling them and moving them shutting off the wells. In order to get control of it, they had to cement in most of them. So whether or not they are reactivate, be able to reactivate in that play, and it is a deep play, and a heavy play as well in their largest play. So it would be nice to bring it back on, but that will be up to Cenovus as to how they move forward.”
Back to Whitecap’s CO2-EOR, she said, “It’s just very interesting the work that they’re doing and the technology that they have available now, and it’s such a great system. It’s a closed system, so pipes are all under the ground. Stuff is going in the direction it’s supposed to go. And, you know, getting barrels of oil out of the ground by using enhanced oil recovery is the most efficient way to do this.”
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