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Organization Name

Suncor Energy Inc.

Case Story Title

Life-Cycle Value Assessment at Petro-Canada Oil Sands Facility

Case Story Date

2003/01/07

Issues Addressed

  • Principle 7 - Businesses should support a precautionary approach to environmental challenges
  • Principle 8 - Undertake initiatives to promote greater environmental responsibility
  • Principle 9 - Encourage the development and diffusion of environmentally friendly technologies

Case Story Category

Partnership Project

Countries of Impact

Canada

Case Description

Petro-Canada takes a full-life-cycle approach to integrate and balance environmental and economic decisions for major projects, including the MacKay River in situ oil sands facility near Fort McMurray, Alberta, which started operation in October 2002. Life-Cycle Value Assessment (LCVA) is one of the key business analysis tools that Petro-Canada employees have available to them.

Since 1998, Petro-Canada has employed LCVA to assess environmental impacts and costs over the full life cycle of major projects. The LCVA planning methodology was developed in consultation with the Pembina Institute for Appropriate Development, an independent not-for-profit environmental policy research and education organization based in Drayton Valley, Alberta.

At the heart of LCVA is the concept of including in the front-end planning all of the life-cycle stages involved in manufacturing a product or in a development process, including raw material inputs and utility requirements such as fuel and power. Thinking beyond the traditional corporate boundaries to the final disposal of a product or the eventual dismantling of an operating facility encourages more direct awareness about the potential impacts or ?environmental loadings? of a specific decision, and encourages more comprehensive exploration of possible alternatives. Through this process, new ideas emerge and opportunities are discovered to improve technical designs, reduce environmental pollutants and other impacts, and reduce costs.

Parallel to the LCVA process, Petro-Canada undertook an extensive stakeholder consultation process that began in 1997, five years before the MacKay River project came on stream. The commitment to consultation is ongoing, and will continue through the life of the project. A formal process was also devised to optimize local involvement in the benefits associated with development of the project, including partnerships with local business associations and ongoing relationships with community representatives. Formal agreements were developed with affected Aboriginal groups to address environmental and socio-economic issues and business opportunities.

Petro-Canada is currently working with the Pembina Institute to enhance the LCVA approach by adding socio-economic aspects to the process. Adding these aspects would attempt to capture economic and social benefits and costs for the impacted communities over the life of the project.The application of the LCVA process to the MacKay River project means greenhouse gas emissions will be reduced by 50 per cent relative to the original design. LCVA led to the decision to involve TransCanada Energy Ltd. as a partner to build and operate a 165-megawatt natural gas-fired co-generation power plant. The power plant will supply all of Petro-Canada?s steam and power requirements at the MacKay River site as well as 152 megawatts of electricity for the provincial power grid.

Petro-Canada?s MacKay River operation, which is expected to produce 30,000 barrels of bitumen per day, also uses steam-assisted gravity drainage (SAGD) technology that requires much less surface disruption and therefore leaves a smaller environmental ?footprint? than other extraction technologies. More than 90 per cent of the water used at MacKay will be recycled.

LCVA derives its effectiveness from the premise that good information enables better decisions. Following a six-stage process that moves from goal definition, scoping of life-cycle flows, inventory assessment, impact assessment, and design improvements through to the final decision, LCVA methodology has proven to be both practical and flexible enough to apply to a wide variety of development challenges.

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