Climate

At MEG, we recognize there is an expectation that we demonstrate climate leadership. This continues to be a priority as developers of a shared resource.

Our employees are proud of the significant progress we’ve made to reduce environmental impacts and we hold ourselves accountable to continue to improve.

It has become increasingly evident that we are entering a global energy transition and we are preparing ourselves to respond to shareholders, policy-makers, peers and community members by advancing our drive to improve our emissions performance.

We currently incorporate climate risks within our ERM and will continue to identify and prioritize business risks associated with climate change, along with comprehensive mitigation strategies.

As we move forward with a climate focus within our business, we have found ways to further strengthen our commitment across the organization. Our first step in 2018 was the adoption of net GHG intensity performance targets on our scorecard to emphasize the management of climate-related issues internally and externally. In 2018, our GHG performance improved from previous years and met the corporate performance targets. In addition, a segment of our board was established in 2018 to strategically address environmental performance including climate (Health, Safety, Environment & Reserves Committee).

In 2019, MEG proudly announced its plans to investigate a sequestration pilot to help achieve net zero GHG emissions from our operations by capturing emissions from electricity and steam generation and sequestering them in deep underground reservoirs. It’s an aspirational goal that is in the early stages of research and assessment.

Transforming the global energy market will take time and we are continuing to identify opportunities that can support a balanced transition. To find out more about our approach to the management of climate-related issues see our recent submission to the Carbon Disclosure Project.

Innovation to Address Climate Change

The investment in innovative technology has improved our operational and environmental performance by decreasing our energy footprint and helping us adapt to shifting climate pressures. To understand how those investments help our performance, it is essential to highlight where our energy demand is concentrated within our operations.

Steam-Oil Ratio (SOR) and Advanced Resource Recovery

MEG uses steam-assisted gravity drainage (SAGD) technology to recover bitumen. In SAGD operations, steam is injected into the oil reservoir to separate the bitumen from the sand, which is then pumped to the surface. Approximately 80% of the fuel consumed across the facility is for steam generation, resulting in a significant focus on optimizing steam to improve environmental outcomes. An important metric for this purpose is Steam-Oil Ratio (SOR), the quantity of steam used to produce a barrel of oil. SOR is a key measure of efficiency for thermal heavy oil projects, with a lower SOR indicating that the steam is being more efficiently used. By decreasing the amount of steam used, MEG is able to reduce water and fuel requirements, which results in lower greenhouse gas emissions intensity and more economic projects.

In 2018, MEG had an average SOR of 2.19 which is approximately 20% lower than the SAGD industry volume weighted average SOR of 2.7 and significantly better than the in situ project average of 3.1 (according to AER ST-53 reported information).

Reducing GHGs with eMSAGP & eMVAPEX

When approximately one-third of the oil from a well has been recovered and the reservoir has been heated, MEG’s patented, proprietary enhanced Modified Steam and Gas Push (eMSAGP) technology can be introduced. eMSAGP involves injecting a non-condensable gas, like natural gas, into the reservoir to reduce the steam injection rate by approximately 50%, resulting in steam-oil ratios in the range of 1 to 1.25.

By applying the eMSAGP process to significant portions of the operation, MEG has achieved an average SOR of 2.19 in 2018 at its Christina Lake Project compared to the in situ industry average of 3.1.

Recently, MEG has further reduced the SOR through advanced solvent injection technology by piloting enhanced Modified VAPour Extraction (eMVAPEX). This proprietary technology, if proven successful, will further enhance our growth potential while minimizing GHG emissions, even beyond those from eMSAGP. MEG has been granted funding from Alberta Innovates, Natural Resources Canada, Emissions Reductions Alberta, and Sustainable Development Technology Canada for continued eMVAPEX work.

We will continue to explore additional recovery advancements that can further reduce our environmental impacts and improve performance.

Cogeneration

In addition to heat, our operations require power to run equipment across the facility. Electricity can be sourced through a de-centralized power network or integrated within the operation to leverage the combined need for both heat and power through cogeneration.

MEG has been a strong advocate for the use of industrial cogeneration technology which is another key element to our energy management strategy. MEG’s natural gas turbine generates electricity that is used in its operations, with surplus power sold into the Alberta electricity grid. The heat from the turbine is recovered by a heat recovery steam generator for use in the thermal heavy oil recovery process, resulting in more efficient use of natural gas and a thermal efficiency of 86%. Revenue from the sale of surplus power helps offset the company’s energy costs and the electricity provided to the power grid had a lower GHG footprint in 2018 than the provincial average, helping to reduce total GHG intensity for provincial consumers. The use of cogeneration reduces the net GHG intensity of our oil and provides a stable source of baseload power as coal-fired generation is phased out in Alberta.

Electricity generated through cogeneration has a GHG intensity that isapproximately 1∕3 of the current provincial power grid.

The access to highline power generated through cogeneration has allowed us to provide electricity to remote areas surrounding our facility to support our drilling program. In the past, drilling would have been powered with diesel engines. Now, with electricity from cogeneration, we have equivalent power capabilities with an approximate 60% reduction in emissions related to drilling activites.