Upstream Oil and Gas Industry Overview
Upstream Oil and Gas
The upstream oil and gas industry includes exploration, production and basic processing of crude oil and natural gas. The earliest forms of this industry were as simple as people soaking up natural seeps of oil from the top of some water bodies with blankets that they would then wring out. More familiar are images of gushing oil from latticed oil towers (derricks), or beam pumps currently found scattered across western Canada.
Many technical and industrial improvements have occurred since the early period of this industry, driven by the increasing importance of crude oil and gas in local and global economies. Methods of exploration, drilling, extraction, processing and refinement have all changed significantly and care is taken to minimize the environmental footprint of activities.
The Canadian Context
Crude oil and natural gas can be found in many regions across Canada. The majority of Canadian oil and gas production occurs in Alberta, accounting for 80% of total Canadian production. Other producing provinces are British Columbia and Saskatchewan and offshore production in Newfoundland and Nova Scotia. Small amounts of crude oil and gas are produced in the North West Territories, Yukon, Manitoba and Ontario.
In total, Canada produces enough crude oil and natural gas to supply its consumption needs and create revenues through exports. In 2000, Canada produced approximately 1.6 million barrels per day of conventional crude oil, 325 000 barrels per day of crude from oil sands operations, and 6.3 trillion cubic feet of natural gas.
The majority of Canadian crude and natural gas exports go to the United States. In 2000, 1.4 million barrels per day of crude oil and over 52% of the produced natural gas were exported to the U.S., producing revenues of over $15 billion.
According to the Canadian Association of Petroleum Producers, the industry employs over 89 000 people directly and 153 000 people indirectly.
Environmental Impact on Air Quality
There are many environmental impacts associated with activities from the upstream petroleum industry. The emissions released by the industry to the air from flaring, for example, are of concern with respect to regional air quality and greenhouse gas emissions. Air pollution emissions from the industry include toxics, such as benzene and particulates, smog precursors, acid emissions and greenhouse gases, such as methane and carbon dioxide. Environment Canada's National Pollutant Release Inventory reports that upstream petroleum activities contribute 21% of the sulphur oxide (SOx), 13% of the nitrogen oxide (NOx), and 19% of the volatile organic compound (VOCs) in Canada.
Research and Development in the Upstream Petroleum Industry
Environment Canada develops, promotes and manages environmental research and development (R&D) aimed at reducing and/or eliminating air emissions from the upstream petroleum industry, including pipelines. Through programs such as the Program for Energy Research and Development (PERD), the Technology Early Action Measures (TEAM) component of the Climate Change Action Fund and Action Plan 2000, Environment Canada funds R&D into research topics such as the flaring of waste gases, carbon dioxide capture and storage, and contaminated soil and groundwater remediation.
