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BC Regulators Undeterred from Sour Gas Pursuit

For the second time in three months Alberta has sent a message that fear will not be allowed to crumble a cornerstone of its natural gas supplies: "sour" reserves laced with lethal hydrogen-sulphide.

Over emotional protests, the Alberta Energy Resources Conservation Board's (ERCB) last decision of 2008 approved sour gas drilling about 100 miles southwest of the provincial capital of Edmonton. It was the second decision in favor of a hotly contested development program by Highpine Oil & Gas Ltd. beside Tomahawk, a hamlet that includes a regional school for about 140 children of families in the farming community (see NGI, Oct. 6, 2008).

The Tomahawk well applications blew up into a test case of industry access to sour deposits that span western Alberta and extend into northern British Columbia (BC), where resistance recently escalated into attempts to stop production with home-made bombs that attracted international news attention (see NGI, Dec. 8, 2008).

In BC the explosives failed. Most of the area residents repudiated the violence instead of rallying around protests against the industry that provides jobs in an otherwise flat northern economic region. The scare died out after the bombings apparently stopped and investigators concluded that they were almost certainly the work of local extremists rather than international terrorists. The culprits continue to elude an anti-terrorism squad of the Royal Canadian Mounted Police known as INSET, the integrated national security enforcement team.

In Alberta the ERCB -- like the RCMP in the BC case -- acknowledged that increasingly elaborate precautions taken with sour reserves play a role in spreading fear by highlighting potential hazards. Standard practice includes extensive public consultations and emergency response plans that can include evacuation drills. The Tomahawk decision said the board "recognizes that its own requirements to plan for a worst-case scenario may also contribute to public anxiety. However, to plan for anything less would be irresponsible."

Highpine's development program has 97 risk-control measures and follows a recent pattern of raising emergency planning standards with almost every new sour gas program. The company voluntarily agreed not to run its drilling rigs at the two wells closest to the Tomahawk school during class hours, and to have buses and drivers on standby at the building during operations at a third site outside the emergency planning zone.

Up to one-third of Alberta gas reserves and production are sour. The figure varies from one year to the next depending on prevailing types of industry activity. Shallow drilling and unconventional production such as coalbed methane lately reduced the sour proportion to about one-quarter of Alberta supplies.

But ERCB officials predict that the role of sour gas will grow again as flat prices lead to increases in low-cost workovers of old fields. The programs often raise output by sour fields that are among Alberta's oldest and best reserves, or deepen wells at previously "sweet" or untainted production sites into geological zones prone to the hazardous deposits.

An early example -- including a warning to industry not to take access to sour gas for granted -- is under way in the southwestern corner of Alberta in Shell Canada's half-century-old Waterton field, where the reserves are 36% hydrogen-sulphide. The ERCB in mid-December rejected Shell in-fill drilling and pipeline applications, saying it first has to decide whether to hold a full-dress public inquiry into a 2007 pipeline leak and emergency evacuation of nearby residents.

There were no injuries. But the accident delayed review and approval of Shell's Waterton plans by the ERCB's predecessor, the dismantled Alberta Energy and Utilities Board. The drilling and pipeline applications were rejected "without prejudice" against any new ones Shell wants to make. But the next versions will have to show how the Waterton program satisfies recent ERCB directives on improving sour gas operations, the ruling said.

Hydrogen-sulphide, a nerve gas, rates as lethal in concentrations of less than 1%. The Tomahawk drilling targets are estimated to be 16% sour. The Alberta industry routinely taps deposits containing twice as much of the impurity, generating landmark yellow piles of mineral sulfur extracted by sour gas processing plants and exported during highs on an international market for the material, chiefly as an ingredient in farm fertilizers. Basic training for Alberta field workers includes a course, called H2S alive, in sour gas risks, safety precautions and use of emergency gear.

Like all other operations on sour gas reserves rated as "critical" or posing potentially serious hazards, the Tomahawk program follows elaborate safety behavior and equipment protocols developed since a 1982 well blowout at a nearby site southwest of Edmonton called Lodgepole. There are "significant risk control measures in place," the ERCB observed. "A multitude of overlapping failures, over a period of many hours or even days, would have to occur before a release of hydrogen-sulphide during drilling and completion operations. The potential for such an occurrence is extremely unlikely."

As in past cases, the ERCB urged all concerned -- such as county councils and school boards as well as the industry -- to spread sour gas knowledge rather than keep secrets or inflame fear. "While it is important for the community to be aware of sour gas activities and to be cognizant of potential dangers, inflated views of the real risks are not helpful to anyone."

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