“We need water. We need energy. It’s not a question of one or the other. It’s a matter of using both responsibly.”

Dave Lye Vice-President, Corporate Environment, Health & Safety, Security & Corporate Responsibility

Water

We continue to evolve our water management approach to address geological factors, hydrology and operational needs. It is not a one-size-fits-all philosophy. No single water management approach works in all of our operating areas.

Protecting water resources and using them wisely is critical to our continued success. We recognize that our water requirements and the challenges posed by our operations require tailored approaches to water management. We work to reduce the use of freshwater through the sourcing of alternatives where appropriate and seek to reuse water wherever possible. Where produced water cannot be reused, it is managed and disposed of responsibly to prevent the potential contamination of freshwater resources or land.

Caring about water in Colorado

Since 2003, we have been using an extensive water treatment and distribution system to support drilling and well completion operations in Colorado’s Piceance Basin. Produced water is removed from the wells, along with natural gas, from thousands of feet below the ground surface.

Due to salt content – up to 30 times higher than drinking water – produced water and completion flowback is unsuitable for domestic or livestock use. Encana’s facilities in four locations are designed to treat about 45,000 barrels (5,366 cubic metres) per day and reuse produced water. Produced water from our wells and flowback water from well completion operations is transported to these facilities by an extensive network of pipelines. In the region, we also continue to build pipeline infrastructure to minimize the need for trucking water. In 2010, we installed another 10 miles (16 kilometres) of water pipelines, bringing the total to 111 miles (178 kilometres).

Once we recover water through our operations in the Piceance Basin, the water is run through a Dissolved Air Flotation Unit for treatment before the water is put into secure water storage ponds. Dissolved Air Flotation is used as a water treatment process to clarify wastewater by removing suspended matter, such as oil or solids.

The water is then discharged into the storage ponds. To further reduce air emissions and risk to wildlife, certain secure storage ponds are also covered.

During this same period, the South Piceance Basin team began an ambitious effort to close approximately 180 historic and active pits containing drill cuttings and completion flowback water. The last drilling and flowback pits were closed in early 2011. We are committed to not constructing any new drilling or flowback pits in this area. In so doing, the South Piceance has been able to address community concerns regarding perceived risks to groundwater and wildlife.

Industry recognition for water plant

Seeking alternatives to freshwater use in our operations is a major part of our water management strategy. We strive to use unutilized sources of water where appropriate and seek to reuse water as much as we can.

Encana was a co-winner of the Canadian Association of Petroleum Producers’ 2010 Responsible Canadian Energy Award, for the Debolt Water Treatment Plant, which has been operating since June 2010 in the Horn River Basin of British Columbia.

A joint project between Encana and Apache Corporation, the plant supplies the bulk of the water needed for both companies’ hydraulic fracturing operations in the Two Island Lake area – providing a viable alternative to freshwater use and serving as a testament to collaboration and innovation.

The Debolt formation, a deep, sub-surface, non-potable aquifer holding saline, sour water, was identified in 2007 when Encana and Apache began examining alternatives to freshwater use for hydraulic fracturing. Tapping into the resource required a dedicated team effort, with more than 40 different water supply systems considered during initial testing.

Encana and Apache went on to design and build the water treatment plant and develop the Debolt formation as a water source reservoir, the first of its kind in Canada. The Debolt facility is designed to deliver water at a maximum daily volume of 134,000 barrels (16,000 cubic metres). This amounts to 80 percent of the supply needed by hydraulic fracturing undertaken by both companies in the area.

In 2010 alone, 6.7 million barrels (800,000 cubic metres) of Debolt water were used in completions – which in the past would have been sourced from freshwater. In 2011, the plant is expected to produce more than 12.6 million barrels (two million cubic metres) of water, leaving only 10 percent of the water supply needed for hydraulic fracturing to be drawn from surface sources.

A water win-win

By constructing a water storage pond on our Kakwa property in west-central Alberta, we are optimizing collection of surface water flow and providing a permanent wetland habitat for wildlife use in the future.

The water required to develop the Kakwa resource was being purchased from the municipality of Grande Cache, Alberta and trucked to the Kakwa Field – a round trip of about 90 miles (140 kilometres). At a development rate of 40 wells per year, approximately 500,000 barrels (79,500 cubic metres) of water would be required annually.

The stakeholders near our Kakwa operations were concerned with the amount of truck traffic that would be added to their main transportation route, which is narrow, steep and winding. By constructing the water storage pond, we fulfill our water use requirements within the Kakwa field, which eliminates the need to use municipal water, reduces truck traffic and the associated emissions, as well as the costs of purchasing and transporting water from Grande Cache.

We know that research goes a long way

In the Peace Region of British Columbia, the Kiskatinaw River watershed is the only source of water for the City of Dawson Creek and the Village of Pouce Coupe. We have supported water research by the University of Northern British Columbia which monitors surface water and groundwater levels in the Kiskatinaw watershed and furthers our understanding of the hydrology in the area.

We have also supported the Horn River and Montney water projects undertaken by Geoscience BC. This industry-led, industry-focused, applied geoscience organization encourages mineral and oil and gas exploration investment in British Columbia through the collection, interpretation and marketing of publicly available applied geoscience.

The Montney Water Project is designed to provide a regional overview of water sources in the Montney resource play area of northeastern British Columbia. The project will create a comprehensive database of surface water, groundwater and deep saline aquifers in the area.