Irving Oil and TC Energy bolster joint venture to cut Atlantic Canada carbon emissions

Irving Oil and TC Energy signed a memorandum of understanding to examine ways to reduce greenhouse gas emissions from New Brunswick and other provinces in Atlantic Canada, the companies said Aug. 12 in announcements.

The joint-venture announcement precedes Canada's Clean Fuel Standard regulation, which goes into effect in 2022 and requires refiners to reduce carbon-intensity levels in liquid transportation fuels from the most recent 2016 levels.

"Together, the two energy companies have identified a series of potential projects for exploration focused on decarbonizing current assets and deploying technologies to reduce overall emissions," the companies' statements said.

"The partnership's initial focus will consider a suite of upgrade projects at Irving Oil's refinery in Saint John, New Brunswick, with the goal of significantly reducing emissions through the production and use of low-carbon power generation," they added.

Spokespeople for both TC Energy and Irving Oil declined to provide project information details not included in their statements.

Expanding JV

Irving and TC Energy already have a JV with the Grandview Cogeneration plant, a 90 MW low-carbon power plant located inside the fence line of Irving's 313,000 b/d Saint John refinery.

The Grandview Cogeneration plant has played a part in significantly reducing the refinery's carbon intensity by 750,000 metric tons of greenhouse gas emissions since it was commissioned in 2004, the companies said.

According to the refinery facility profile filed with the New Brunswick Department of Environment, the cogeneration plant uses two of the refinery's existing heat-recovery steam generators (HRSG) to power two combustion turbines. These turbines generate up to 90 MW of electricity, which is sold to NB [New Brunswick] Power. Roughly 65 MW of that power is then sold back to Irving for use in the refinery.

Clean Fuel Standard nears

Canada's Clean Fuel Standard mandates parties, such as refiners, reduce their carbon-intensity levels in liquid transportation fuels from 2016 levels, starting with a 2.4 gCO2e/MJ reduction in 2022 and increasing to a 12 gCO2e/MJ reduction by 2030.

Carbon intensity is the measure of greenhouse gas emissions from transportation fuels and expressed in grams of carbon dioxide equivalent per megajoule of energy.

The new standard uses a credit system for compliance, similar to the US Environmental Protection Agency's Renewable Fuel Standard, by which refiners can create or buy credits to comply with the law.

Under Canada's Clean Fuel Standard, there are three compliance categories under which a refiner can make credits. First, refiners can create projects that reduce the lifecycle carbon intensity of fossil fuels, including carbon capture and storage, on-site renewable energy and co-processing renewable feedstocks. The second involves supplying customers with low-carbon fuels, such as ethanol, biodiesel and other renewable fuels. And, the third category includes investing in advanced vehicle technology, such as electric or hydrogen fuel cell vehicles.

Irving Oil previously canceled in 2010 plans to build a biodiesel refinery on an Irving refinery site, which it had planned to use for blending purposes in order to comply with the upcoming regulations, according to provincial documents.

Irving is a major supplier of transportation fuels to the US, exporting over half of their refined products to the northeastern US.

The newly expanded JV between TC Energy and Irving also will explore opportunities around the production and distribution of low-emission hydrogen, as well as carbon capture and storage as ways of meeting the carbon reduction goals for Atlantic Canada, according to the statements.

Besides New Brunswick, Atlantic Canada is comprised of the provinces of Newfoundland and Labrador, Nova Scotia and Prince Edward Island.