Waste flare gas from oil drilling sites to help power Saskatchewan's electricity grid
As pressure grows on the oil and gas sector to reduce its emissions, one Calgary-based company is banking on the potential to convert waste gas from oil wells into valuable electricity for nearby communities.
The privately held Steel Reef Infrastructure Corp. — which owns and operates a network of crude oil and natural gas pipelines as well as processing and storage facilities in Saskatchewan and North Dakota — wants to become known as an industry leader in the relatively new space of flare gas recovery.
The company announced this week it has signed a series of power purchase agreements with Crown corporation SaskPower that will see it provide the utility with approximately 100 megawatts of electricity per year for Saskatchewan's grid — enough to power 100,000 homes annually.
The electricity, expected to come onto the province's grid by late 2027, will be produced at five of Steel Reef's gas plants in Saskatchewan, using recovered gas that would otherwise be flared into the atmosphere at well sites.
"When we got into this, flare gas was an issue and it continues to be an issue," said Steel Reef CEO Scott Southward in an interview.
"To me it's inefficient. If you're flaring ... you're missing out on an opportunity, right? That's a valuable product that can't be used."
Flaring refers to the practice of burning off the excess natural gas associated with oil production.
Natural gas is a byproduct that comes to the surface when companies drill oil wells. If the volumes of gas are small, and there are no pipelines nearby to transport the gas, companies often choose, for economic reasons, to dispose of it through flaring.
Since 2012, Steel Reef has helped its oil-drilling customers by capturing this excess gas for them and then transporting it by pipe to its processing facilities where it can be made into useful products like propane and butane.
But its foray into the electricity space is new. Southward said in an interview that the company plans to invest $265 million to install new turbines and electrical substations at five of its Saskatchewan locations to convert the gas into electricity. The power produced at the sites will be "carbon efficient" in that it will put flare gas, a waste product, to productive use at a time when electricity demand is growing.
"The demand for electricity is really growing, so we feel this is a good first step for us to become the market leader in the flare-gas-to-power space that's emerging right now," he said.
"Flaring is wasting possible energy when, as a society, we're crying out for more energy."
Steel Reef's announcement also comes at a time when the practice of flaring is increasingly under environmental scrutiny. The combustion process involved in flaring releases a variety of byproducts and greenhouse gases into the atmosphere, including carbon dioxide, according to oil and gas data provider Enverus.
The World Bank calls the practice of flaring "wasteful and polluting" and has identified the need to reduce flaring volumes globally as an urgent problem. It has also pointed to recent scientific studies that suggest more methane may escape into the atmosphere during the flaring process than previously assumed, suggesting the greenhouse gas impact from flaring could be underestimated.
In Canada, the federal government's updated draft methane regulations — which aim to reduce oil and gas methane emissions by at least 75 per cent from 2012 levels by 2030 — say any flaring not being conducted for safety reasons will need to be supported by an engineering study that demonstrates a lack of other alternatives.
Amanda Bryant, senior oil and gas analyst with clean energy think-tank The Pembina Institute, said the sort of investments Steel Reef is making are exactly what will be increasingly needed in the years to come.
"Capturing waste gas that arises from oil and gas production that would otherwise be vented or flared and instead putting it to productive use is a good thing," Bryant said in an interview.
"I would say that solutions like this are and will be increasingly important."
This report by The Canadian Press was first published Oct. 4, 2024.
CTVNews.ca Top Stories
DEVELOPING Milton increases to a Category 4 hurricane as Florida prepares for massive evacuations
Milton rapidly strengthened into a Category 4 hurricane Monday on a path toward Florida population centers including Tampa and Orlando, threatening a dangerous storm surge in Tampa Bay and setting the stage for potential mass evacuations less than two weeks after a catastrophic Hurricane Helene swamped the coastline.
Canadian scurvy case prompts advisory to doctors: It's still out there
Scurvy is not just an archaic diagnosis of 18th-century seafarers and doctors should be on the lookout for possible cases, according to researchers following a recent case.
Lawyers for Madeleine McCann suspect seek acquittal in his German trial on unrelated sexual offence charges
Lawyers for a man who is also under investigation in the 2007 disappearance of British toddler Madeleine McCann called on Monday for him to be acquitted in his trial on charges of unrelated sexual offences.
Madonna's brother, Christopher Ciccone, dead at 63
Christopher Ciccone, a multihyphenate artist, dancer, designer and younger brother of Madonna, has died. He was 63.
Alleged suicide kit salesman files in Supreme Court to contest whether assisted suicide can ever be murder
Lawyers representing the Ontario man accused of selling hundreds of suicide kits with deadly effect around the globe have filed to intervene in a case in Canada’s highest court, arguing there is no way he can be charged with murder under Canadian law.
DEVELOPING Police in several cities to increase presence ahead of Oct. 7 anniversary
On the anniversary of the Hamas-led attacks in Israel, police departments in cities across Canada are increasing their presence in Jewish and Muslim communities, as well as at the locations of planned protests.
Rare cloud formations ripple the sky over Ottawa
A unique form of clouds made an appearance over the skies of Ottawa on Sunday evening.
Man arrested after stealing Vancouver police cruiser, driving it into neighbourhood park
A man stole a police car and drove it onto the field of an East Vancouver park Sunday morning, placing 'dozens of bystanders in harm’s way,' according to police.
War rages on multiple fronts as Israel marks a year since Hamas' Oct. 7 attack
Israelis held sombre ceremonies on Monday to mark a year since the deadliest attack in the country's history, a Hamas-led raid that shattered its sense of security and ignited wars on two fronts with no end in sight.