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Essential Energy Insights - October 2021


Oil sands producer Cenovus aims to cut emissions intensity by 30%

Canadian oil sands producer Cenovus Energy Inc. said it plans to cut its emissions intensity by 30% by the next decade and keep output of greenhouse gases flat as it increases production.

The proposed cuts to emissions are part of an environment, social and governance outline that includes boosting spending with businesses owned by indigenous people by C$1.5 billion by 2030, the Calgary, Alberta-based company said in a statement. Emissions intensity is a measure of emissions per unit of production.

Cenovus, which creates the bulk of its income by flushing tar-like bitumen out of wells in northeastern Alberta, also plans to reclaim about 1,500 decommissioned well sites and spend C$40 million to restore caribou habitat.

Canada's oil sands producers are frequently targeted by environmental groups because of their carbon footprint. A cluster of mines and steam-assisted wells, mostly in the Athabasca region of Alberta, produces more than 3 million barrels per day of bitumen, which accounts for the bulk of Canada's oil exports to the U.S. In July 2019, the company became the first oil sands company to reach 1 billion barrels of total bitumen production using steam-assisted gravity drainage, a method where well pairs are drilled and steam is injected into one to flush bitumen out of the other. The company aims to reach net-zero emissions by 2050.

Cenovus set a goal of reducing freshwater consumption in its oil sands production operations of 0.1 barrel per barrel of oil output. It also plans to reduce methane emissions at its Deep Basin natural gas operations in western Alberta.

The company is also a partner in two refineries with U.S. crude processor Phillips 66.