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The world population continues to grow,
developing economies continue to mature and demand more energy.
And those two factors together
mean we'll double our energy demands in the next 35 years.
To meet the global demands, all sources of energy will have to grow.
However, fossil fuel is expected to remain the dominant source.
Canada actually ranks as third in the world for oil reserves.
Carmon Creek inside of that represents a safe and secure source of energy
to meet the growing demands.
Shell has been in the area since the early '50s when it first acquired heavy oil leases.
Since that time we've developed a number of drilling techniques
to test out recovery methods,
which have really led us to the point we are today
where we think we now understand a reserve well enough to recover commercially.
With our Carmon Creek project, we think we've found the answer
to developing our Peace River resource
in an economical, safe and environmentally friendly way.
We think this represents a real step forward in meeting some of the future energy demands.
The Carmon Creek project will drill wells,
build a facility to process the bitumen,
recycle the water,
and use the gas in an environmentally friendly way
to generate electricity.
A key component of the execution strategy
is to build the plant as much as possible in modules.
Modules are building blocks which we construct off-site
within a controlled environment.
This kind of environment allows us to have better control
over the quality and efficiency of construction and, most importantly, the safety.
The Carmon Creek project will peak at approximately 1200 workers on-site,
so in order to minimize the impacts on the local infrastructure,
we're building a world-class construction camp close to the site.
Eighty per cent of the province's heavy oil is located underground
and it's too deep to be recovered by mining.
It will be recovered by drilling wells using steam to recover it.
The oil is found in a formation about 600 metres below the surface.
In its natural state it has the consistency of peanut butter.
So to produce the oil we inject steam into the reservoir,
the steam then lightens the oil,
and we use a traditional pumping technique to bring it up to the surface.
We will arrange the wells in a series of well pads.
Each well pad will have about 48 wells.
We've really shrunk those down to minimize the overall footprint.
We drill them out to cover a much larger area.
When the early wells are abandoned after about 10 years or so,
we will reclaim that land back to nature
and move the equipment to a new well pad.
At any one time we will disturb no more than five per cent
of the Carmon Creek development area.
The goal of the reclamation process is to return the land
to a point where people and wildlife
would not know that Shell previously had facilities in that location.
What you see here is a model of the Carmon Creek facilities.
It will be one of the most modern and efficient plants in the industry.
There are three areas of the process that are unique to the industry,
water treating, gas treating and co-generation.
Use of water is one of the critical elements of the Carmon Creek project.
All of the processed water which comes up from the reservoir
is recycled and reused to make steam
to inject back into the reservoir.
This means we need very little, if any, water from outside
to produce the steam and make the bitumen.
The second piece is we clean this water
to distilled water levels that make us one of the safest and cleanest facilities in the industry.
The gas produced in the field contains hydrogen sulfide, often known as H2S,
so in this part of the plant we remove that H2S,
pipe it away and inject it deep underground.
We then take the gas that it's come from
and use that in the plant for fuel.
Steam and electricity will be generated on-site in our co-generation facilities.
We will have three separate co-generation plants
that will convert natural gas into clean electricity
as well as using the waste heat and our recycled processed water
to create steam to inject underground.
This co-generation facility will provide enough electricity for half a million homes
and emit roughly 65% less carbon dioxide than a coal-fired power plant.
For projects on the scale of Carmon Creek,
it's important that we consult with the public, and that includes Aboriginal communities,
to identify potential opportunities for them,
and ways for them to participate in the project and benefit from it.
We have to identify exactly how the project might impact them
and we have to look for ways to mitigate those impacts.
As an example, we need to know when First Nations might be hunting in an area
where the Carmon Creek project is going to further develop,
so that we can adjust our schedule and avoid that area for a period of time.
On a project like this it's really important
that Shell has a positive working relationship with the community.
Shell is giving back to the local community in a number of ways.
Under our social investment program,
we're making investments in education, training, workforce development,
and in other areas of priority that the community has identified for us.
My personal hope for Carmon Creek is we deliver a long-term project
that provides sustainability and employment opportunities for the local region.
During the construction phase we'll have 1200 people on-site,
but actually that's just the tip of the iceberg.
To have those people on-site requires a large amount of supporting infrastructure
and we hope to get a large part of that from the local community.
My hope for the project is that we achieve
the world-class health and safety performance that we're looking for,
and for me what that means is that not one person on our project gets hurt.
I'm very excited to be part of the Carmon Creek project.
We're taking the first steps after many, many years of studying this resource
and we're on the verge of unlocking a very significant heavy oil resource
for the benefit of the province, the nation and the world.