A small but dramatic accident involving hazardous “sour” natural gas just outside the Alberta capital of Edmonton has left Canadian producers braced for more of their long and increasingly difficult campaign to keep access to a key supply source.
The mishap on the Enoch Cree aboriginal homeland beside the western city limit of Edmonton highlighted the environmental and cultural sensitivity of tapping deposits contaminated with hydrogen-sulphide. The case is liable to provide “some learnings” for the industry and the Alberta Energy and Utilities Board alike, said David Pryce, western operations chief at the Canadian Association of Petroleum Producers.
The case is also unlikely to end soon. Eight days after a sour gas well operated by Acclaim Energy Trust blew out and about 700 Enoch residents were evacuated on Dec. 12, a handful of families were still guests of hotels at the company’s expense. Efforts to stop the leak by a contractor, Safety Boss, with an international track record in taming runaway wells including service in Kuwait after the 1991 Gulf War, continued with no easy or quick solutions in sight.
Acclaim and the AEUB alike emphasized the accident was a small one by industrial standards. The sourness of the gas in question is only 370 parts per million or 0.037%. Flows from the blowout were estimated at 1 MMcf/d or less.
But the trademark rotten eggs stench of hydrogen-sulphide is so potent that it causes offense among people with good noses at concentrations as low as one ppm. At 370 times the human detection threshold, the leak annoyed wide swaths of the Alberta capital downwind from the accident. Slightly heavier than air, hydrogen-sulphide emissions tend to hang together in gradually thinning plumes rather than disperse evenly and quickly, especially in the cool to very cold winter temperatures typical in Edmonton (which is at about the same latitude as Moscow).
After dousing an accidental fire caused by static electricity generated during initial attempts to control the well, the specialists deliberately re-ignited the gas in order to burn off hydrogen-sulphide while control efforts continued. When incinerated, the substance becomes relatively inoffensive sulphur-dioxide with a milder burned-matches odor. Well beyond the detection range of even the most sensitive nose, the blowout set off public alarm and affected industry fortunes. The Edmonton accident was immediately seized upon as a reason to put a stop to plans for sour gas wells on the southeastern fringe of Calgary by interveners in a case involving Compton Petroleum.
At the same time, the Canadian industry highlighted the value of keeping access to sour gas. Just four days before the Edmonton accident, Shell Canada announced the largest Alberta gas discovery in about 18 years — and reported the deposit of 500-800 Bcf is 35% hydrogen-sulphide. While the drilling location on the eastern slopes of the Rocky Mountains in central Alberta is more than 100 miles from either Edmonton or Calgary, the rural district involved is already a hotbed of sour-gas production and no less touchy about health, safety and environmental issues.
The new Shell discovery was in a location only a few minutes by road away from a spot where a coalition of town residents,agricultural interests and environmental critics led by a school teacher persuaded the AEUB to turn down an exploration well less than two years ago. On average, the AEUB calculates that sour reserves account for one-fifth to one-fourth of Alberta’s annual inventory of marketable gas. The province in turn continues to be the source of about four-fifths of Canadian production. About one-fifth of Alberta’s sour gas contains hydrogen-sulphide concentrations exceeding 10%. The substance causes immediate unconsciousness and rapid death at concentrations of about 1,000 ppm or one-tenth of 1%.
CAPP voiced hope that the AEUB and industry associations will put the Edmonton accident to constructive use by incorporating any lessons from it into standard field operating procedures including public communications about sour gas.
“It’s an important resource,” Pryce said. Sour gas operations are bound to increase, he added. The high sulphur-dioxide content of Shell’s new find was entirely predictable because most discoveries are sour in the foothills of the Rockies, the Canadian industry’s deep drilling frontier. Shell’s well found its new deposit at a depth of 5,100 metres (16,680 feet).
But the Edmonton accident also sent a message that no Alberta location or company is immune against running afoul of sour gas. The mishap involved a routine “workover” to revive and extend the life of a relatively small,aging well that Acclaim Energy acquired earlier this year in a C$433.7 million(US$350 million) purchase of assets across central and northern Alberta from ChevronTexaco Corp. The presence of sour gas nearby in high enough concentrations to cause potential concerns came as news to most Edmonton residents.
The mishap was also the first blot on a stellar record achieved by Acclaim as a rising star of the Alberta industry. In just 44 months since being created by a friendly merger of three home-grown junior energy and finance enterprises, Acclaim has emerged from a string of takeovers and asset purchases as one of the five largest Canadian income trusts. Daily production in third quarter 2004 was 109 MMcf of gas and 22,800 barrels of oil, and the company’s executive ranks and board of directors are studded with locally prominent fixtures of the business and professional communities.
Pryce predicted the Edmonton blowout could ultimately become a helpful case history to be dissected and used as a basis for improvements in the field by the Alberta Advisory Committee on Public Safety and Sour Gas, a collaborative agency founded by the AEUB and led by retired chairman Gerry DeSorcy.
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