Supply needs and confidence in engineering trumped public fear and environmental loathing in a landmark regulatory decision to let Alberta producers keep a major drilling target, "sour" gas laced with lethal hydrogen-sulphide.
In a ruling that irate protesters immediately branded "a licence to kill," the Alberta Energy and Utilities Board approved a sour-gas drilling program by Compton Petroleum Corp. next to affluent neighborhoods on the southeastern boundary of Calgary.
Government and industry officials including provincial Energy Minister Greg Melchin described the decision, which followed about two years of preliminary wrangling and 30 days of hard-fought oral hearings, as an important signal.
The message was clear. Provided enough precautions are taken, by adopting special equipment and making emergency plans that satisfy the senior engineers who run the regulatory system, the industry will keep access to the nearly one-third of Alberta gas which contains hydrogen-sulphide.
There was no doubt that the gas involved in the Compton case is dangerous. The drilling target is an estimated 68 Bcf of gas with a hydrogen-sulphide content of 35.6%. The impurity is rated as deadly by provincial occupational health and safety regulations at concentrations of one-tenth of 1%, and as dangerous at significantly lower levels to workers liable to be exposed to the gas for prolonged periods.
The AEUB's ruling acknowledged "the potential hazards associated with an uncontrolled release are significant where the hydrogen-sulphide content of the gas that will likely be encountered is 35.6%, as is the case with Compton's applications."
Calgary civic and health officials, while using more diplomatic language than community protesters, lined up against the drilling program. The gas field involved is one of the oldest in Alberta and was tapped quietly for decades before suburban expansion put a growing city population into direct contact with industry operations. Compton was producing the target gas in small volumes but sought to increase production with up to six horizontal wells in order to drain the reserves within 15 years in order to clear the field from the path of further residential development.
The decision said, "The Board does not consider that the public interest would be served by requiring (industry) applicants to show that a proposed project presents no risk whatsoever in all cases. Such a requirement would be unrealistic and insurmountable, guaranteeing that no exploration for or recovery of sour gas reserves could be approved in Alberta."
The ruling included a lecture on the difference between hazard and risk. The two concepts are very different, the AEUB said. Hazard describes the nature of the substance involved. Risk describes the likelihood that something will go wrong to turn the hazard loose on society.
Viewed through the cool, rational, calculating perspective of engineers "any form of energy development presents a level of risk to the public," the AEUB said. The question is whether technology and plans exist to hold the risk down to acceptable levels, the board emphasized.
The decision imposed more than a dozen conditions on the approval of Compton's program, led by an elaborate emergency response plan covering the area out to a distance of about 10 miles from the well site. Requirements also include immediate ignition of any leak. When burned, hydrogen-sulphide turns into relatively harmless sulphur-dioxide or the smelly but not immediately lethal vapor left after blowing out a freshly-lit match. In areas close to the well, the emergency plan requires either immediate evacuation of the population or ignition of a leaking well if the hydrogen-sulphide concentration approaches 20 parts per million.
Although Compton won the case in principle, in practice it put off deciding on whether to go ahead on the drilling program. Time was needed to see whether the project was still economic under the conditions the AEUB put on the permit, the company said. Other producers and industry associations likewise pored over the decision, studying it for precedents with potential to affect sour-gas projects across Alberta.
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