Our Environmental Innovation Fund
Our Environmental Innovation Fund directs investment to projects that develop innovative processes and technologies to improve the company’s environmental performance. The Environmental Innovation Fund seeks ways to increase our investments in projects and technologies that create measurable reductions in energy consumption, air emissions and land and fresh water use.
We direct our efforts not only to improving our production methods, but also to reducing emissions by sourcing alternative forms of energy for use in our operations.
Two Rigs Run on liquefied natural gas
In 2010, Encana’s Environmental Innovation Fund worked with Ensign US Drilling and Prometheus Energy in Louisiana to convert two rigs to run on liquefied natural gas (LNG) from diesel.
The conversion of these rigs significantly reduces the amount of greenhouse gases, nitrogen oxides and sulphur dioxides emissions they produce.
Using natural gas to reduce emissions one rig at a time
A 2010 bi-fuel project – funded by our Environmental Innovation Fund – allowed our equipment to run on diesel and natural gas simultaneously, achieving cost savings and reducing emissions and greenhouse gases in our Canadian Division.
The complex machinery necessary for drilling in tight, unconventional natural gas reservoirs requires multiple diesel engines. Our Fort Nelson Business Unit has successfully piloted the use of a bi-fuel system on the generator of an underbalanced rig. The bi-fuel system is designed to substitute 50 to 60 percent of an engine’s energy requirement with natural gas, resulting in significant reductions in diesel fuel consumption, cost and emissions.
As a result of this successful pilot, bi-fuel engines have been used to drill wells in our Fort Nelson and Canadian Deep Basin Business Units. In 2010, the use of bi-fuel engines displaced more than 2,500 barrels of diesel. Depending on the engine types, emissions (carbon dioxide equivalent) are reduced by as much as 15 to 20 percent. Nitrogen oxides and other air pollutants are also cut significantly. That means operating costs and air emissions were reduced by approximately $600,000 and 1,000 tonnes (CO2e) respectively per rig annually, based on drilling 24 wells a year.
As bi-fuel rigs continue to reduce our environmental impact and provide cost savings, we look forward to implementing this technology in other operating areas.
Tracking our Environmental Innovation Fund
| 2009 | 2010 | |
|---|---|---|
| Internal Rate of Return (percentage) | 61(1) | 33 |
| Cumulative CO2e(2) avoided (kilotonnes) | 195 | 400 |
| Cumulative natural gas conserved (Bcf) | 1.79 | 3.40 |
| Capital ($MM) | 17.98 | 11.81 |
- (1) 2009 data included results from projects completed in 2008 that have ongoing emissions reductions.
- (2) CO2e = carbon dioxide equivalent.