Canada’s Cenovus takes steps to green its fossil-rich portfolio
Cenovus Energy, one of Canada's top oil producers, is greening its power credentials by agreeing to a 15-year purchase of 150 MW of solar energy and associated credits from Cold Lake First Nation in southern Alberta.
Cold Lake First Nations and Elemental Energy, a Vancouver-based renewable energy developer and operator, have teamed up to develop the solar project that is expected to become operational in 2023.
The Cold Lake First Nations is a part of the Denesųłiné Nation with 3,000 members and reserve lands around Cold Lake and Primrose Lake near some of Cenovus's oil sands projects in northern Alberta. It has been a long-time supplier of services at Cenovus's projects.
"As stewards of the land, our Nation fully supports sustainable renewable energy development respecting environmental, economic, cultural and social contexts, while realizing long-term economic benefits through an ownership stake in the project," Cold Lake First Nations Chief Roger Marten wrote in a 22 July statement accompanying the announcement.
The offtake agreement with Cenovus will not only enable Cold Lake First Nation and Elemental Energy to proceed with construction, but also will help the energy company mitigate its Scope 2 GHG releases. Such emissions are associated with the purchase or acquisition of electricity, steam heat, or cooling.
"Through this agreement we're reinforcing our commitment to using multiple levers and innovative approaches to help us in our long-term ambition of achieving net zero emissions by 2050," Cenovus CEO and President Alex Pourbaix added.
Implications for AlbertaThe agreement by Cenovus has "interesting implications" for Alberta & other oil sands companies, IHS Markit Chief Canadian Oil Market Analyst Kevin Birn told Net-Zero Business Daily on 26 July. "This move can help accelerate advancements of renewables and further decarbonization of Alberta grid, while providing a means for Cenovus to offset some of their GHG impact," Birn said. "The implications for Alberta are interesting should additional oil and gas companies in the region follow suit."
Cenovus is one of five Canada's largest oil producers that formed the Oil Sands Pathway to Net Zero Initiative on 9 June to achieve carbon neutrality by 2050.
The initiative's net-zero plan is anchored by a carbon capture, utilization, and storage (CCUS) hub near Cold Lake into which several pipelines will deliver captured carbon for sequestration similar to the multi-billion-dollar Longship/Northern Lights project in Norway.
Together with Cenovus, Canadian Natural Resources, Imperial, MEG Energy, and Suncor Energy are responsible for 90% of oil sands emissions of GHGs.
Mining, extraction. and production of oil sands were responsible for about 83.36 megatonnes of CO2 equivalent (Mt CO2e) in 2018 in Canada, according to an April 2020 report by Environment and Climate Change Canada.
The same report said Canada's oil and gas operations were the largest GHG emitters in 2018, responsible for releasing 193.2 Mt CO2e, or 26% of the country's total emissions. GHGs from this sector increased 82% from 106 Mt CO2e in 1990 primarily due to the increased production of crude oil and the expansion of the oil sands industry.
Strident US opposition led by President Joe Biden to bringing Canadian oil sands crude across US borders resulted in rejection of a key cross-border permit into the US for Keystone XL pipeline. This caused TC Energy, the project developer, to cancel the project in June.
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