Q&A: PTRC’S MALCOLM WILSON

08/24/12

The following interview with Malcolm Wilson, chief executive officer of the Regina-based Petroleum Technology Research Centre, was conducted by GHG Monitor Reporter Tamar Hallerman.

ON CANADIAN ENERGY POLICY: PTRC’S MALCOLM WILSON

Next month, the Petroleum Technology Research Center is preparing to release a best practices manual for the monitoring work it conducted at the Weyburn-Midale enhanced oil recovery site over the last 12 years. What are some of the overarching conclusions you’ve come to after more than a decade working at the site?

The manual is an attempt to look at the 12 years of monitoring work we conducted since the project started in 2000 and review what we learned in that time and what is transportable. Some of the major findings include how vital it is to have baseline information in place, the fact that the 4-D seismic surveys are really one of the best monitoring tools that we have in an EOR situation. So I think the findings are probably not unexpected coming out of this. This is also a bit of a gold-plated research project in that it was possible to try a number of different techniques, and so anybody reading the manual will be able to review a broad range of techniques and then assess what makes the most sense for their project.

How much information can translate to other projects when so much of CO2 storage work is site-specific? 

Each reservoir is site-specific, no doubt about that, but the techniques being used are pretty generic. And so if there is a specificity to this, it really revolves around the techniques that are used in an enhanced oil recovery situation, and how transportable are they to an ordinary storage situation. There may be some discussion around that, although personally I think that certainly the basic techniques are transportable. 

Weyburn was one of the pioneering and longest-running monitoring projects. Looking back at the last decade, how would you characterize PTRC’s experience out there? What kind of an impact do you think your work will have on field of CO2 monitoring and storage?

It was one of the early projects, so I think it’s extremely valuable from that perspective. We’ve got 12 years of history now with this project, and that’s something that doesn’t exist in the majority of other projects around the world. Of the three main monitoring projects—Sleipner, Weyburn and In Salah—this was the EOR representative project, so I think it nicely complements what we’ve learned from the other projects as well. In the end we learned that yes, we can monitor the CO2 in the subsurface. We have a pretty good idea of where the CO2 is going in the subsurface and how to model what’s happening.

Of course, with all of the issues that have come about, particularly over the last year-and-a-half or so with the accusations of leakage at the Weyburn site, I think having that 12 years of history and having independent, highly reputable groups doing all of the background work, collecting that information and placing that data into the scientific literature has been very valuable in terms of counteracting those kinds of accusations. All of that baseline work undertaken by groups like the British Geological Survey has demonstrated its value over time in increasing people’s confidence in our ability to store CO2 in the subsurface.

Tell us more about your experience dealing with the leakage allegation at Weyburn in early 2011 and the media circus that ensued. You also brought PTRC into a similar discussion earlier this summer after a pair of studies linked CCS with induced seismic events. What did you learn in terms of communicating with the public and the media about storing CO2 in the subsurface?

I think what we learned was that you really need to be prepared for these proverbial curve balls coming at you. Certainly in terms of what we’ll call crisis management, we’ve learned a lot—we now better understand how to deal with that kind of situation. What we did was provide a science-based response to the issue, and it’s unfortunate how that approach always puts us at a disadvantage. You’re never going to say that you’re 100 percent confident in something when you’re dealing with it on a scientific basis, particularly when you’re dealing with the unknowns of the subsurface, et cetera. And so we tend to get caught up in those kinds of debates. It’s very difficult for the public to really understand what extremely low probabilities actually mean. We tend to find that the other side of the equation picks up on very low probabilities of occurrence and focuses in on those kinds of things, and that has been a disadvantage for us. It will always be a disadvantage.

Our strength was that we had 12 years of data to respond with, and we were able to demonstrate using all the tools available to us that we were not seeing any leakage from the subsurface in that particular instance. We were also able to demonstrate that some of the groups doing that work—the British Geological Survey, the University of Rome, the Italian Geological Survey—were entirely independent and not even paid for by us to do the work, and so they had a great deal of independence and therefore a great deal of credibility in whatever was said.

PTRC is co-hosting a conference on EOR in Saskatchewan next week. Here in the U.S., the Department of Energy has been advocating heavily for EOR and CO2 utilization over the last year as a way to incentivize CCS in the absence of a price on carbon. But outside of Weyburn, in Canada there hasn’t been much CO2-EOR activity, despite western Canada’s vast oil resources. Why is that?

There’s a large potential in Alberta and Saskatchewan, but if you look at what’s driving EOR, particularly in the Permian Basin of Texas, it’s purely based on the driver of a cheap supply of CO2, largely from natural sources. What we’re facing in Western Canada and down into North Dakota and Montana is the fact that we really only have two supply sources that are really low cost, and we pretty much used those up. We’re starting to transition into the next level, the more expensive CO2 that’s going to come from coal-fired power plants, et cetera. We’re seeing people starting to tie in the industrial high-quality sources in Alberta, but we’ve only now seen the one project and that is the SaskPower project that’s looking at the next level, which is going to coal-fired power plants capturing the CO2 and putting those into the EOR market or that supply into the EOR markets. Right now we’re fundamentally CO2-constrained—more lower-cost sources are needed. 

The provinces of Saskatchewan and Alberta have been driving a lot of investment in CCS in Canada in recent years, arguably more so than the federal government. However, in recent months we’ve seen Project Pioneer fold, as well as some waning political interest from provincial officials. Do you see Alberta and Saskatchewan continuing to be leaders in the technology, or has some of that momentum been lost?

I don’t think we’ve lost all of the momentum. We lost some with Pioneer, but I think it’s a manageable loss because SaskPower’s Boundary Dam is similar and moving ahead, as is Shell, presumably, with Quest. We’re also still seeing a substantial amount of interest and investment into commercial-scale projects in Canada. So I think the momentum has not been lost and it’s really kind of incumbent on us in western Canada to continue to build on what we’re doing and demonstrate the outputs. We’re approximately a year-and-a-half out from seeing CO2 captured out of Boundary Dam on an industrial scale, so it’s a pretty exciting time to be in this industry.

The administration of Conservative Party Prime Minister Stephen Harper has been both lauded and chided for its stance on environmental issues. While it has moved forward on setting performance standards for coal-fired generation, it also recently dropped out of Kyoto Protocol, a major driver for emissions reductions. Overall, do you think that the Harper government cares about CCS and mitigating climate change?

I think the answer to that is yes. There is still a commitment within the federal system to clean up fossil fuels—they’re starting with coal and they’re going to be moving into the refinery area, natural gas generation and eventually oil sands development over time. I don’t think we’ve seen them renege on some of their promises. They may have backed out of Kyoto, but there are still commitments out there to move ahead with emissions reductions.

Would they like the provinces to take a leadership role? Yes, and I think that makes a lot of sense. Saskatchewan and Alberta obviously have a lot of commonalities, and we are quite different than other parts of the country. I think the closer you are to where the action is, the better able you are to manage it in a comprehensive fashion. I think it’s the federal government’s role to really continue to be the driver, but it does make a lot of sense for the provinces, as the regulatory and legislative bodies that are closer to where things are happening, to take a leadership role in actually doing the implementation.

Norway recently spent the equivalent of $1 billion on its Mongstad capture technology test center, which it unveiled in May. Given that its economy is heavily reliant on exporting fossil fuels like oil and gas, one could argue that the facility is an insurance policy of sorts to ensure the continued marketability of its main exports should there eventually be a carbon-constrained economy. Given that western Canada also has a large market for its fossil fuel exports, do you see Canada eventually making a similar investment, or is the lack of international climate legislation hampering that?

You are seeing a substantial investment in western Canada for taking the first steps along the road to commercial testing of these technologies and carbon storage. However, the lack of political will in the international arena is certainly not helping things in terms of making those investments, but you are seeing it happen. Alberta is quite aware of the carbon intensity of its oil sands and seeking to do something about it—legislation is in place, regulatory review is under way and will be concluded relatively soon. So western Canada is certainly moving forward and is certainly very aware of the issues it has with its high carbon intensity economies and making sure that exports are deemed to be, you know, environmentally sensitive, et cetera.

Norway made a big splash with Mongstad. We’re perhaps a little lower key in Canada, but you’re certainly seeing substantially larger investments occurring than so far in Norway. So I think it is important to put this into context. I’m hoping we will have several commercial-scale CCS projects with expenditures of several billion dollars going into capture, transport, EOR, and storage in western Canada, and the numbers will be quite large. What you’re seeing in Canada is pretty impressive.