Does crude oil production have environmental consequences?

Oil products, once hailed as 'safe' when they replaced coal and wood as the industrial world's major energy source, are recognized today as having environmental costs that must be weighted against their economic benefits.

The environmental sustainability of the oil and gas industry involves many complex issues. Each aspect of the petroleum industry – from exploration through to the final uses of its products – affects people, animals, plants, soil, air and water. Some impacts are confined to small areas, while others have global implications.

Impacts that can arise from industry activities include disturbances to land and ecosystems associated with oil extraction, and by construction and operation of associated facilities. Other examples can include spills, containment of tailings from oil sands mining, and emissions of various gases that have been identified as contributing to local air quality concerns as well as global climate change.

The environmental implications of industry are regulated by government. For example, oil and gas operations that release water or fluids into the environment must meet high standards established by federal and provincial authorities. The petroleum industry also works closely with government to protect the health and safety of workers and the public.

Are there health effects associated with petroleum?

Benzene is a naturally occurring hydrocarbon found in crude oil, and in natural gas. High levels of exposure to benzene – often 100 parts per million or greater – have been found to be associated with an increased incidence of leukemia among workers in various industries. Benzene is a recognized carcinogen and it is Health Canada's policy that no level of human exposure to benzene can be assumed safe.

What's been done to minimize the risks posed by benzene?

Benzene can be released into the atmosphere from upstream oil and gas industry operations. Release points include glycol dehydrators, incomplete combustion of gas in flares, fugitive emissions from stock tank vents and sumps, and leaks in processing equipment. Following the declaration of benzene as a toxic substance under the Canadian Environmental Protection Act, Environment Canada initiated a multi-stakeholder process to evaluate ways to reduce the volumes of benzene releases. Industry, public representatives, and federal and provincial regulators agreed an industry-sponsored voluntary compliance program was the best way to meet benzene emission reduction objectives. Specific reduction targets and reporting requirements have since been developed and publicized.

What is flaring?

Flaring is the burning of waste gases during well testing and in petroleum production operations. Flaring may occur to dispose of unwanted or unusable volumes of gas, to depressure gas-processing equipment for maintenance, and to protect people and the environment during emergencies. Flaring is an important safety procedure, especially at facilities that handle sour gas.

Is flaring safe?

The hydrogen sulphide (H2S) in sour gas is toxic and heavier than air; if not flared, it could pose a hazard to workers and neighbours. Flaring converts the H2S into less toxic sulphur dioxide (SO2) which is dispersed in the plume of hot gases from the flare. Concern about flaring has been expressed by Albertans who perceive it to be a risk to human health and the environment, and wasteful. Complaints received by Alberta's Energy Utilities Board (EUB) – which regulates flaring in the province – have also focused on smoke, noise and odour problems associated with the practice.

What's being done about flaring?

In July 1999 the EUB directed industry to eliminate the practice wherever possible and, where elimination is not possible, to reduce the volumes that are flared. The EUB also asked industry to find alternative uses for gases that were previously flared, and to improve the design and operation of flares to both increase their efficiency and minimize the release of products of incomplete combustion.

Industry's responses to flaring have included forming a multi-stakeholder group to address the issue, involving representation from industry, governments, the EUB and interest groups. Frameworks have been established for managing routine flaring activities and to initiate actions leading to the eventual elimination of flaring.
Industry has also produced a guide for operators in situations where there are no reasonable alternatives to flaring, is sponsoring research to assess the viability of alternatives to flaring and to optimize flare design to ensure maximum combustion efficiency, and has increased the proportion of gas recovered in operations.

What are greenhouse gases?

Greenhouse gases (GHGs) are so named because they get act like a greenhouse to trap the sun's heat near the earth's surface. Without this naturally occurring greenhouse effect, the earth's temperature would be a chilly minus-18 degrees Celsius. While many GHGs are naturally occurring, human activities are releasing more GHGs than the atmosphere can absorb. GHGs caused by human activities arise mainly from the use of fossil fuels and include carbon dioxide (CO2), methane (CH4) and nitrous oxide (Nox).

Why are GHGs a concern?

Scientists believe that increased concentrations of GHGs are changing the earth's climate. Forecasts show that a continued warming of the earth's temperature – due to increased levels of GHGs – could trigger a wide range of changes in our climate, some of which include:

increased frequency and severity of harsh weather events such as heat waves and floods
changes in precipitation patterns that could stress animals, plants and agricultural crops
sea level rise and inundation of coastal areas
Natural Resources Canada has estimated that the production and pipeline transportation of fossil fuels accounts for approximately 16 per cent of Canada's total GHG emissions, with about half of this total due to coal mining and from transportation of oil and gas.

What's being done about GHGs?

Upstream oil and gas companies representing 95 per cent of national production participate in Canada's Voluntary Challenge and Registry (VCR) program, which encourages energy efficiency and other measures to reduce GHG emissions. While initiatives implemented since the early-1990s have reduced the upstream industry's energy intensity – the amount of energy used per unit of production – by about one per cent per year, total GHG emissions have increased as production has risen.

GHGs emitted by oil and gas pipeline systems have increased since the early 1990s due to increases in the volumes shipped between upstream producers and downstream consumers. Through their national association, pipeline operators are participating in the VCR program and aiming to reduce emissions per unit of throughput, chiefly by improving the efficiency of their energy use.

In the downstream sector, changes in equipment and procedures have helped reduce the total amount of the most prevalent GHGs – including CO2, which accounts for more than 80 per cent of Canada's GHG emissions – released during the refining, storage and distribution of petroleum products.

More information about GHGs and climate change is available at Alberta Environment's website devoted to the topic.