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Alberta Dispute to Block 'Sour' Gas Development Heats Up

A new battle is developing in a marathon industry campaign to maintain access to a prime Alberta drilling target -- "sour" natural gas, steeped in hazardous hydrogen-sulphide, which accounts for nearly one-third of the main Canadian producing province's reserves.

The Alberta Energy and Utilities Board (AEUB) set a date of April 18 to start a second round of hearings on a hard-fought test case, a plan by Compton Petroleum Corp. to accelerate production of sour gas on the southeastern fringe of the industry capital of Calgary.

The announcement followed futile efforts by Compton to comply with a condition in a June board decision to approve the plan as well within the industry's technical capabilities and reasonable risk assessments. The catch was that the company had to work out a cooperative emergency response plan with local authorities, which have used the requirement to reopen the case.

The complicated tangle includes Calgary's city hall, two neighboring rural municipal districts and especially Calgary Health Region, a provincial agency responsible for hospital and medical services in the area.

The health region has appealed the board's June approval of the drilling plan to the courts, challenging the AEUB's jurisdiction on emergency planning as well as the particular program in the Compton case. While Compton and the board are agreed on a plan that settles for residents outside the immediate area of the wells taking shelter if there is a leak or blowout, the health region wants a commitment to a full-scale evacuation of thousands of homes miles away from the drilling site. The nearest houses are 4.5 kilometres (2.8 miles) away from the Compton project site.

The Calgary gas drilling target is 35.6% hydrogen-sulphide, or vastly higher than the 0.1% level where the substance is rated as potentially lethal by provincial occupational health and safety regulations.

But such high concentrations have been routinely produced in Alberta for generations, including by old wells in the field where Compton wants to drill new ones to accelerate production.

Both the immediate and long-range stakes in the case are high. Compton estimates its proposed six wells will tap 68 Bcf of gas. The entire Alberta industry, meanwhile, is embroiled in intermittent and escalating duels over sour gas with increasingly hostile and numerous groups who are gaining influence with local governments that formerly accepted sour-gas operations as routine. About 30% of Alberta gas reserves and production, which in turn account for about four-fifths of Canadian output, harbor enough hydrogen-sulphide to be recorded as sour and hazardous in the AEUB's provincial reserves records.

The level of public anxiety - and its power to influence local officialdom -was highlighted by a summer AEUB report on its investigation into a well blowout on the western edge of the Alberta political capital of Edmonton last winter.

A brief emergency planning slip-up that let uninformed police overreact caused the unnecessary evacuation of about 500 residents, the inquiry concluded. The well's owner, Acclaim Energy Trust, lapsed by failing to establish the danger zone around the accident site in the first minutes after the well-servicing accident, the AEUB found.

There was only a whiff of hydrogen-sulphide - just enough to cause the substance's notorious rotten-eggs odor, detectable in tiny traces by sensitive noses, the board said, echoing Acclaim statements at the time of the mishap. "There was no need to even notify people for public safety reasons, let alone evacuate anyone," the seven-month investigation concluded.

"The evacuees were unnecessarily inconvenienced, and those in nearby communities likely experienced a heightened sense of anxiety," the AEUB said.

At most, the trace amount of lethal hydrogen-sulphide in the gas that a rare underground explosion spewed into the atmosphere was temporarily hazardous only within 220 meters (720 feet), the board found.

But the Royal Canadian Mounted Police carried out a "precautionary" evacuation of homes within a 1.6-kilometer (one-mile) radius of the blowout because Acclaim was unable to say where the hazard stopped.

Edmonton's fire department prevented alarm and potentially far more home evacuations from spreading downwind into the city by doing rapid tests with air monitors, which showed the problem was an odor instead of a threat to life.

"It is clear that there was a lack of understanding between Acclaim and the local government agencies regarding roles, responsibilities and the necessary public protection measures to be taken during this emergency," the AEUB said.

"None of these issues resulted in any impacts on public safety. However, improvements must occur, as poor communication or coordination among government agencies could potentially result in reduced public safety during emergency response."

On the industry side, the AEUB tightened regulations to ensure all companies define emergency zones around any sour-gas operations and ensure the information is given to field personnel in a form that can be translated into appropriate action in a mishap.

The next round of the Compton case will deal with unresolved questions of local government roles in sour-gas operations, and especially of establishing standards for co-operation, emergency planning and disaster responses that municipal leaders feel comfortable explaining to anxious communities.

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