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Water Use in Oil and Natural Gas Production

Water Use in Oil and Natural Gas Production. ConocoPhillips Canada Water in a World of Seven Billion Conference May 10, 2012. 1. Outline. The global energy and water challenge Oil and natural gas production and water use Water sources in oil and natural gas development

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Water Use in Oil and Natural Gas Production

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  1. Water Use in Oil and Natural Gas Production ConocoPhillips Canada Water in a World of Seven Billion Conference May 10, 2012 1

  2. Outline • The global energy and water challenge • Oil and natural gas production and water use • Water sources in oil and natural gas development • Industry response to the energy-water nexus • ConocoPhillips initiatives • Future trends

  3. The Global Energy and Water Challenge World Energy Demand Water Availability Quadrillion BTU Ref 1: World Meteorological Association Quadrillion BTU World Energy Consumption by Fuel Type Ref 2: 2011 EIA

  4. Oil and Natural Gas Production and Water Use Operating and In Construction Western Canadian Oil Production Ref 3: 2010 CAPP RCE Ref 4: 2010 Harvard Kennedy School Ref 5: 2011 CAPP Crude Oil Forecast Energy use and production of energy are linked to water use

  5. Water Sources for Oil and Natural Gas Production

  6. Water SourcesOil and Gas Development • Today’s fresh water sources • lakes, rivers and dugouts • Water use per well • 2,000 to 70,000 m3 • One-time water use • Produces for 40 to 50 yrs • Future sources (lower quality water) • Saline groundwater • Flow back water • Produced water • Municipal wastewater • Water quality Application of Technology is key to decreasing use of fresh water sources

  7. Water SourcesIn-Situ Bitumen Production Fresh and Non-Fresh Water Used by In-Situ Projects (million m3 and barrels) • Primary sources • Non-saline (fresh) and saline (non-fresh) groundwater • 85% of water recycled • Future trends • Increased production with saline sources • technology to reduce steam-to-oil ratio Ref 3: 2010 CAPP RCE

  8. What is the oil and natural gas industry doing to address the energy-water nexus?

  9. Energy-Water NexusIndustry Initiatives CAPP 2011 Water Conservation Efficiency Production Plan(6) Projected fresh water productivity by 2015 (2002-2004 baseline): Oil Sands mining (total fresh water) - 30% Oil Sands in-situ – 47% Conventional oil (including EOR) – 15% Projections depend on Availability and treatability of saline water Net environmental benefit from using saline sources Canada’s Oil Sands Innovation Alliance(7) – announced in 2012 CAPP Guiding Principles and Operating Practices for Hydraulic Fracturing(8)

  10. CAPP Guiding Principles for Hydraulic Fracturing We will safeguard the quality and quantity of regional surface and groundwater resources, through sound wellbore construction practices, sourcing fresh water alternatives where appropriate, and recycling water for reuse as much as practical. 1 We will measure and disclose our water use with the goal of continuing to reduce our effect on the environment. 2 We will support the development of fracturing fluid additives with the least environmental risks. 3 We will support the disclosure of fracturing fluid additives 4 We will continue to advance, collaborate on and communicate technologies and best practices that reduce the potential environmental risks of hydraulic fracturing. 5

  11. CAPP Operating Practices for Hydraulic Fracturing

  12. Energy-Water Nexus ConocoPhillips Global Water Initiatives Minimize Environmental Impacts Our commitment Develop plans to address local freshwater scarcity understanding local needs What we’ve done Fresh water strategy, best practices and developing technologies Fresh water supply risk assessment (WBCSD Global Water Tool) Global Water Sustainability Center focused on water treatment What we plan to do Review and implement (by priority) site strategies Where feasible use treated municipal wastewater as alternative supply New technologies - reduce fresh water to drill and complete wells ConocoPhillips Onshore Well Management Principles Global standards for protecting water resources ConocoPhillips Water Sustainability Position Baseline corporate expectation for managing water resources

  13. Energy-Water NexusConocoPhillips Canada Business Unit Western Canada Business Unit water and energy management initiatives Plans to improve water use productivity and decrease fresh water use Water source and watershed studies Assess centralized management and treatment of water Oil Sands Assets water and energy management initiatives Saline water source assessments Technology and process optimization Reduced steam-oil-ratio (SOR) from 2.92 to 2.36 (from 2008 to 2010) Retrofitted Surmont 1 - direct steam injection technology (reduce makeup water) Evaluating several technologies to reduce footprint Desalination technology Enhanced steam-assisted gravity drainage Centrifuge technology Ceramic membranetechnology 13

  14. Future Trends • Accurate forecasts for water availability and demand • Sourcing from saline, wastewater and low quality water • Environmental net affects assessments to evaluate water source alternatives • Balance energy, economic, environmental and social outcomes • Technology improvements in water treatment and re-use • Collaboration on regional water management Collectively advance initiatives and technology to address the energy-water nexus

  15. Thank You http://www.cpcsustainability.com/ www.cpcsustainability.com/ http://

  16. Background Slides

  17. Power Generation and Water Intensity Gallons / MWh • n Natural Gas is a low carbon and low water energy source Ref 11: U.S Department of Energy Ref 11A: 2006 Chesapeake Energy Source: U.S. Department of Energy, “Energy Demands on Water Resources”, December 2006; Chesapeake for shale gas water use * Assumes closed loop cooling tower **Other use includes water for other process uses such as emissions treatment, facilities. Gas-fired combined cycle power plants use much less water than thermal power plants with only a small contribution from gas production

  18. List of References 1. World Meteorological Association http://www.grida.no/graphicslib/detail/freshwater-stress-1995-and-2025_6250# • 2011 U.S Energy Information Association (DOE/EIA 0484(2011) http://www.eia.gov/forecasts/ieo/index.cfm • 3. CAPP 2010 RCE Report • http://www.capp.ca/library/publications/environmentStewardship/pages/pubInfo.aspx?DocId=187709 • 4. 2010 Harvard Kennedy School Belfer Center - Water Consumption of Energy • Resource Extraction, Processing and Conversion (discussion paper#2010-15) • http://belfercenter.ksg.harvard.edu/files/ETIP-DP-2010-15-final-4.pdf • 5. CAPP 2011 Crude Oil Forecast, Markets & Pipelines • http://www.capp.ca/forecast/Pages/default.aspx 6. CAPP 2010 Water CEP Plan http://www.capp.ca/getdoc.aspx?DocId=187709&DT=PDF

  19. List of References 7. COSIA Website Link http://www.cosia.ca/ • 8. CAPP Hydraulic Fracturing Guiding Principles and Operating Practices • http://www.capp.ca/canadaIndustry/naturalGas/ShaleGas/Pages/default.aspx 9. ConocoPhillips Global Sustainable Development Web Page http://www.conocophillips.com/EN/susdev/commitments/Pages/MinimizeEnvironmentalImpact.aspx 10. ConocoPhillips Canada Sustainable Development Portal • http://www.cpcsustainability.com/ • 11. U.S. Department of Energy, “Energy Demands on Water Resources” • http://www.sandia.gov/energy-water/docs/121-RptToCongress-EWwEIAcomments-FINAL.pdf • 11A. 2006 Chesapeake Energy (data) for shale gas water use • http://www.chk.com/Environment/Water/Pages/information.aspx 19

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