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Fear and loathing vs. self-assurance Albertans in two camps as energy regulator sets benchmarks for sour gas development near high-density populations, approving four of six wells requested by Compton Petroleum Gary Park Petroleum News Canadian Correspondent
It has been billed as the ultimate showdown in Alberta between economic gain and public safety, with the well-being of 250,000 residents and the development of 40 percent of the province’s remaining natural gas reserves at stake.
Not surprisingly, it turned into the longest well license hearing in Alberta history and ended June 22 with a ruling by the Alberta Energy and Utilities Board that had something for everyone, without any clear-cut winner emerging.
Since late 2001, Calgary-based Compton Petroleum has been locking horns with communities, environmentalists and health groups in battling for permission to drill six sour gas wells just outside Calgary’s southern limits to tap a reservoir of about 68 billion cubic feet.
At issue is a hydrogen sulfide content of 35.6 percent and the danger that would pose to 250,000 residents — one-quarter of Calgary’s population — if ever there was a blowout or a leak.
The board estimates there are already 6,000 “significant” sour gas wells close to human settlements in Alberta, including 105 around the Calgary city limits. Sour gas has killed 36 Sour gas pumps C$1.5 billion a year into government coffers and accounts for 37,000 jobs and C$1.3 billion in annual wages.
But the dangers are equally well documented, with 36 industry workers killed by sour gas exposure in Alberta over the last 30 years, two of them in a celebrated 1982 blow-out that lasted 68 days, forced an evacuation of nearby communities and spread the distinctive rotten-egg smell of hydrogen sulfide over a wide swath of the province.
The conflicting opinions over the risks of sour gas production got a thorough airing during a 30-day EUB hearing earlier this year and culminated June 22 when the regulator approved four of Compton’s planned six wells.
But the board took the unusual step of withholding drilling permits until Compton met 15 conditions, dominated by the need for an improved emergency response plan.
It gave Compton until Aug. 15 to say whether it would proceed with the project and until Nov. 1 to file a revised response plan. If licenses are issued they will remain valid only until Jan. 1, 2008.
While Compton said it needed more time to study the ruling before commenting, some analysts believe the costs of complying with the ruling might outweigh the economic benefits.
If that happens it will likely drive away other companies reportedly eager to drill close to Calgary, depending on the outcome of the Compton application. Government says board set high standards The Alberta government’s stance is unqualified.
Energy Minister Greg Melchin said that although the threat to life can’t be overlooked, the EUB has set high standards in regulating sour gas production and the industry has complied with those rules to ensure Albertans are safe.
He said there is a “far greater hazard with driving our cars … than there is with sour gas.”
Melchin said the EUB verdict was an “important signal” that sour gas can be safely developed.
Premier Ralph Klein urged Calgary-area residents to follow the government’s lead and put their faith in the EUB, which he said has done a good job of “enforcing safety standards.”
David Pryce, a vice president of the Canadian Association of Petroleum Producers, said the industry has maintained for “quite a while” that it has developed the expertise to safely drill for and develop sour gas.
But David Swann, a former medical officer and health and environment spokesman for the opposition Liberal party in the Alberta legislature, said that allowing four wells with “critical levels” of hydrogen sulfide in “such close proximity to hundreds of thousands of southeast Calgary residents poses an unacceptable hazard.”
“We cannot be certain evacuations will run smoothly and safely when mere minutes can mean the difference between life and death.”
Ric McIver and Diane Colley-Urquhart, two members of Calgary city council, suggested that the only good EUB decision would have been a rejection of Compton’s plan. Board says wells a potential hazard, but have low risk The EUB itself conceded that given the hydrogen sulfide content of the Compton wells, they present a “potential hazard during drilling, completion and production operations (expected to stretch over 15 years), but a low level of risk.”
However, the EUB gave an assurance that it had applied “extra caution” in weighing the Compton proposal, including rejecting Compton’s initial emergency response plan as inadequate.
It imposed an emergency awareness zone covering a 15-kilometer radius from the Compton wells — almost double the 8-kilometer zone suggested by Compton — while reducing the size of the area that would have to be evacuated in the event of a leak from 15 kilometers to 5 kilometers, plus a sheltering zone of 4.7 kilometers where residents would be notified to remain in their homes until the sour gas had passed.
In 2002, the EUB imposed tighter controls on oil and gas producers who encounter even small quantities of hydrogen sulfide.
The regulator took two years to approve plans by Compton to drill a well and associated facilities in southern Alberta.
That well was designed to produce only 2 million cubic feet per day of natural gas, of which 0.4 to 0.64 percent was expected to be hydrogen sulfide.
To overcome strong resistance from farm families in the area, Compton was forced to accept an alternative well site and take elaborate precautions during drilling and production.
The EUB said then it was taking the measures to create and sustain “public credibility and confidence.”
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