Canadian producers face an C$830 million (US$590 million) billto clean up an old bad habit with natural gas in Alberta, andBritish Columbia is starting to demand action, too. The king’sransom is the estimated cost of cutting down on routine flaring ofgas associated with oil in Alberta to reach new targets set by theClean Air Strategic Alliance, a settlement negotiatingorganization.

About 92% of this “solution gas” is used, approaching 20% ofAlberta gas production. But the waste still adds up to about 64Bcf/year burned by eternal flames at 5,246 production sites acrossthe province. Half the flares burn less than 3.5 MMcf/year, but ahandful of whoppers consume as much as 350 MMcf/year.

The Alberta Energy and Utilities Board is expected to enact aregulation soon to enforce flaring reduction targets agreed upon bythe clean air alliance. The coalition, created to try resolvingenvironmental issues by negotiation rather than conflict, includesrepresentatives of the Canadian Association of Petroleum Producers,conservationists, farmers, ranchers, local governments and theprovincial energy, environment and health departments.

Much of the expense is forecast to go toward putting associatedgas to use in mini-turbine power plants, as deregulation makes itpossible for producers to generate electricity for their own fieldactivities and sell surpluses. But the industry is also expected toneed to lay out C$30 million (US$21 million) to addclean-combustion equipment at flares too remote to be incorporatedinto power developments. After a year of negotiation, described byCAPP president David Manning as a “very very difficult forum,” allsides in the clean-air alliance agreed on flaring reduction targetsand, at least initially, on a phased, voluntary program for theindustry. The goals are a 15% reduction of flaring by the end of2000, a 25% cut by the end of 2001, and a reduction by up to 70% asof 2006 or 2007.

In a formal “information letter” circulated throughout theindustry as the Alberta agreement was announced, the B.C. Ministryof Energy said “continued review of production statements hasrevealed that some operators are incompletely or incorrectlyreporting production hours and volumes of gas that are used aslease fuel, flared or vented, including flaring and venting duringgas well testing.”

Studies done for the Alberta air-quality team estimate thattechnology is available to cut flaring by 30% economically. But thenext cut of 30-40% will be much tougher, and Manning said theindustry will work on the economics of marketing or using solutiongas. To take care of all the proposed flaring reductions by relyingheavily on power generation, the environmental coalition estimatesit would take development of 200-300 MW or an amount of powerapproaching 5% of Alberta’s current total capacity.

Gordon Jaremko, Calgary

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