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Alberta announces new energy industry water policy

Government releases policy as upstream industry continues to innovate and reduce water use intensity.

Alberta Environment and Parks (AEP) has introduced a new water policy that provides policy direction for water use in major upstream oil and natural gas operations.

The Water Conservation Policy for Upstream Oil and Gas Operations (WCP) establishes water conservation direction for guidelines to be developed for specific industry sectors including oil sands in situ operations, enhanced oil recovery (EOR), cold bitumen recovery, and multi-stage hydraulic fracturing. No changes are anticipated for oil sands mining operations, which are already regulated by two existing policies covering water withdrawals from non-saline water sources (surface water and groundwater), and management of wastewater in tailings ponds.

The Alberta Energy Regulator (AER), which will implement the new policy, expects to release guidelines for in situ, EOR and hydraulic fracturing in 2021.

The WCP replaces the Water Conservation and Allocation Policy for Oilfield Injection (2006). The new policy emphasizes using alternative water sources where possible, including non-saline water such as industrial wastewater and low-quality groundwater.

The new policy is meant to achieve the province’s water conservation goals, and offers flexible tools and incentives to achieve water conservation improvement and enable adoption of new technologies, building on past improvements in water conservation and management performance especially in oil sands mining and in situ operations.

“The new Water Conservation Policy will enable modernized and more efficient regulations governing alternative water use in natural gas and oil operations, which will help producers find more ways to minimize their fresh water use,” comments Tim McMillan, president and CEO of the Canadian Association of Petroleum Producers. “Our industry is proud of its work in protecting valuable water resources and this new policy offers a pathway to decrease the costs of development while lowering the environmental impact.”

Reducing water intensity

Innovative approaches and advanced technologies are having a positive impact on water use intensity across the upstream industry.

For decades, the upstream industry has worked diligently to reduce water use intensity, through recycling the water needed for various processes, using saline and other non-fresh water sources and developing innovative technologies that reduce the need for water in upstream operations. ‘Water use intensity’ refers to the volume of non-saline water required to produce a barrel of oil equivalent (boe).

For example, a large number of research projects supported by Canada’s Oil Sands Innovation Alliance (COSIA) have developed and shared new technologies worth $438 million and established a world-leading research and testing facility, the Water Treatment Discovery Centre (WTDC) located at Suncor Energy’s Firebag in situ operation.

And a recent AER publication, the Alberta Energy Industry Water Use Performance Report, shows increased use of alternative water sources and improvements in technology have reduced the energy industry’s need for non-saline water.

According to the report, the upstream industry was allocated 13 per cent of all industrial non-saline water allocations in the province in 2019, and the industry used just 20 per cent of its allocation. Of the total amount of water used by the industry in 2019, 81 per cent was recycled and only 18 per cent was non-saline. This accomplishment is the result of alternative water source adoption and advances in technology. 

Oil sands mining operations — the most intensive user of non-saline water in the upstream industry — used 2.18 barrels of non-saline water per boe of production in 2019. This is the best water use intensity achieved in the last several years. Of the total water used for oil sands mining in 2019, 78 per cent was recycled water and the remainder was water from non-saline sources. 

The story for oil sands in situ production is also positive. In 2019, about 256 million cubic metres of total water was used to produce approximately 558 million boe from steam-assisted gravity drainage (SAGD) or cyclic steam stimulation (CSS) operations. Of the total water used, about 87 per cent was recycled water. Of the 33 million cubic metres used for in situ operations in 2019, 53 per cent was non-saline water and 47 per cent was alternative water. Due to the high rate of recycling and the preferential use of alternatives such as saline groundwater, in situ operations have consistently used just 0.20 barrels of non-saline water for every boe produced since 2016, down from 0.79 barrels per boe in 2003.

In EOR operations, water is used to flood mature conventional oil reservoirs to displace residual oil still trapped underground. In 2019, EOR operations in Alberta used almost 214 million cubic metres of water to produce nearly 109 million boe. Of the total water used, nearly 94 per cent (201 million cubic metres) was recycled. Non-saline water use intensity for EOR continues to decrease year over year, with 0.60 barrels of non-saline water used to produce one boe in 2019. 

Hydraulic fracturing operations across the province used about 24 million cubic metres of water in 2019 and the vast majority — 98.5 per cent – was from non-saline sources. Hydraulic fracturing operators are working to increase the use of alternative sources, including industrial and municipal wastewater. Companies have invested in infrastructure to store and move alternative water sources.