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Life Gets Sweeter for Canada's Sour Gas Producers

Canadian producers have won an exceptionally hard-fought battle -- which escalated into a human rights dispute -- in a continuing war to maintain a prime drilling target, "sour" reserves laced with lethal hydrogen-sulphide.

Opponents -- organized as CEASE, the Committee to Encourage and Advocate a Safe Environment -- converged on Tomahawk, a hamlet about 100 miles southwest of the Alberta capital of Edmonton, for a vigorous but ultimately unsuccessful crusade to ax sour deposits from the industry's development repertoire.

About 30% of Alberta reserves and production are sour, including many of the biggest and best remaining untapped deposits along the foothills of the Rocky Mountains. Tomahawk is on the front lines of duels between the industry and communities over exploitation of resources containing the hazardous impurity, which is a nerve gas capable of killing after brief exposures to concentrations of less than 1%.

The conflicts have spread and escalated as population grows in Alberta and formerly isolated farming districts or empty woods are converted to fashionable country residential, recreational and retirement residential areas. Tomahawk is a classic example as a scenic spot in the heart of one of Alberta's most prolific production districts known to the industry as Pembina, where drilling targets are a rich blend of oil and natural gas often saturated in hydrogen-sulphide.

The battle blew up over six wells proposed by Highpine Energy Ltd. They are the first in a series of drilling programs currently planned by multiple companies. Tomahawk's share of Pembina deposits is estimated to be 16% hydrogen-sulphide. Further hearings into additional drilling proposed for the area were scheduled for this fall by Alberta's Energy Resources Conservation Board.

The Tomahawk battle generated exceptional heat because the hamlet is near the site of the most spectacular sour well accident in Alberta history, the 1982 Lodgepole blowout that killed two rig workers and spewed gas into the atmosphere for days in volumes great enough for hydrogen-sulphide's rotten egg odor to spread as far as Edmonton.

Stringent safety and emergency response planning requirements adopted after an inquiry into the Lodgepole tragedy -- and improved industry performance ever since -- made a strong contribution to ERCB approval of Highpine's wells.

Regardless of the eventual exact hydrogen-sulphide content of the new wells, all will be drilled as if they were designated "critical" or the most hazardous done by industry, the ERCB pointed out. "Critical sour-gas development continues to occur safely in Alberta, with between 50 and 100 such projects undertaken annually," the board observed in its approval of Highpine's program.

Further company commitments, above and beyond the strict letter of the safety rules, include temporarily relocating residents who live in emergency response planning zones during the drilling if they demand the extra help. "Sensitive or interested individuals" who live outside the zones will be included in the plans, which included strict notice and evacuation procedures if the wells threaten to go wrong.

Frustrated CEASE leaders and lawyers resorted to challenging the industry's plans -- and the ERCB's authority to approve them -- as violations of the nation's counterpart to the U.S. Constitution's Bill of Rights, the Canadian Charter of Rights and Freedoms. The legal duel centered on a section that declares, "Everyone has the right to life, liberty and security of the person and the right not to be deprived thereof except in accordance with principles of fundamental justice."

In rejecting the constitutional challenge, the ERCB pointed out that Tomahawk residents and their environmental supporters received abundant notice and information about the drilling program. Expert witnesses hired by the opponents failed to show the risks posed by the wells are unreasonable by the industry's highest standards, the board found. Disclosures by the company were also exceptionally candid and more than strictly necessary to determine whether the drilling program's safety and emergency plans are adequate, the ruling added.

The irate critics also failed to convince Alberta's oil and gas field watchdog that its sour gas safety regulations amount to violations of personal liberty that should force a halt to continued drilling into the hazardous reserves. The opponents insisted that features such as the relocation offer violate the charter's liberty guarantee. The extra safety options are voluntary and evacuation only becomes compulsory if an emergency develops, the ERCB pointed out.

The board also urged local government authorities, and notably a Tomahawk school board, to accept a share of responsibility for distributing reliable information about sour gas projects. The recommendation included passing on accurate versions of basics, such as the distance of school buildings from drilling sites. But heated debates and protests, described by the ERCB as "moving" even if based on incorrect information and exaggerated fears, were expected to continue in the next round of sour gas development hearings.

Further appeals to the law courts were also possible but not viewed as likely to slow down the drilling pace further. In Canada legal appeals of regulatory agency decisions are restricted to narrow grounds of claiming that due process rights are denied, and the ERCB increasingly spends long periods on contested cases and offers extra help such as mediation services.

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