The following projects have long-term environmental benefits, including energy and/or emissions reductions. 302-4 305-5
In April 2014, we closed the purchase of Elkhorn, a small private company with light-oil assets in Southeast Saskatchewan. Following the purchase of these assets, Vermilion has made important improvements that reflect our focus on Safety, Integrated Sustainability, and Operational Excellence, based on our target to reduce flaring and venting from this operation by 50% by 2020.
Beginning in 2015 and continuing into 2019, through the construction of new infrastructure, operational changes and increased infrastructure runtimes have resulted in:
In May 2018, Vermilion completed the acquisition of Spartan Energy Corp., a publicly traded company headquartered in Calgary, Alberta. A major addition, the acquisition of Spartan resulted in an approximately 30% increase to our Canadian production relative to 2017 totals. Similar to the 2014 Elkhorn acquisition, a target was set in 2018 to reduce the flaring and venting emissions associated with the Spartan assets by 50% by 2024. This will be accomplished through a variety of initiatives including the construction of new infrastructure, tying gas production into gathering systems to reduce flaring, installing vapour recovery units to mitigate fugitive emissions, and shutting-in uneconomical assets.
Infrastructure changes and performance optimization activities undertaken in 2018 and 2019 have resulted in:
It is important to note that these assets would have been in production regardless of whether we were the operators. Our philosophy is that we don't shy away from bringing assets with higher emissions profiles into the company, because we seek to improve those profiles. As a result, once we take over assets that were previously in production with less efficient and less emissions-conscious companies, we substantially reduce emissions. More information on this can be found in the CDP Case Study on Vermilion -- How an oil and gas company survives the low-carbon transition -- here.
We have a non-operating financial interest in the Weyburn-Midale Carbon Capture and Storage facility in Saskatchewan, Canada. This is one of the largest carbon capture, utilization and storage projects in the world, bringing in CO2 from a utility in North Dakota to use in an enhanced oil recovery (EOR) method of production. The CO2 then remains permanently sequestered in the field.
It’s important to note that we do not claim the carbon sequestered as credits against our own carbon production, because the US utility – as the organization responsible for creating the carbon emissions – has already claimed the credits, in accordance with globally recognized carbon accounting methodologies. However, we are proud to play even a small role in this groundbreaking project. In 2019, our partnership accounted for 2,045 bbls/day, or approximately 4% of our total production on a financial control basis.
In 2020, our Canadian operations worked with our vendors to trial the replacement of diesel or propane with compressed natural gas (CNG) for boilers and water heating for the drilling program in Alberta. This provided cost savings while also reducing CO2 emissions by 27% for the program this year: 380 Tonnes, which is equivalent to taking 82 passenger vehicles off the road for a year.
In 2016, Vermilion began purchasing 100% green power from our largest power provider in our Netherlands Business Unit, resulting in a 97% reduction in Scope 2 emissions in NBU from 2015 to 2016. This represents an estimated 39,145 tCO2e avoided based on 2015 emission intensity levels for purchased energy and 2016 energy consumption. The Netherlands accounted for approximately 41% of Vermilion's gross Scope 2 emissions in 2015, and for less than 2% beginning in 2016. We have continued this program through the year 2020.
As part of Vermilion’s operational excellence, our processes are designed to optimize the conservation/capture of energy and its use. At our battery in Parentis where no regional gas gathering infrastructure exists to tie in our gas, Vermilion has installed high efficiency incinerator technology that has significantly reduced flaring, and helped us be a good neighbor to the community.
Given the proximity of the glass windows of the tomato greenhouse that is co-located with our battery, it was particularly important to find a solution that avoided strong vibrations. Our installation of the new incinerator, along with new piping, scrubber and safety fencing in the incinerator area has resulted in no noise, vibration or smoke. Because the incinerator runs at a much higher temperature (900°C instead of 400-500°C) and combusts the gas in a much taller, 9-metre stack, significantly more of the gases – such as methane, sulphur oxides and nitrogen oxides – are safely incinerated, minimizing the gas that has to be flared.