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Alberta Restricts Flaring; BC to Follow Suit

June 29, 1998
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Alberta Restricts Flaring; BC to Follow Suit

Canadian producers face an C$830 million (US$590 million) bill to clean up an old bad habit with natural gas in Alberta, and British Columbia is starting to demand action, too. The king's ransom is the estimated cost of cutting down on routine flaring of gas associated with oil in Alberta to reach new targets set by the Clean Air Strategic Alliance, a settlement negotiating organization.

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

The Alberta Energy and Utilities Board is expected to enact a regulation soon to enforce flaring reduction targets agreed upon by the clean air alliance. The coalition, created to try resolving environmental issues by negotiation rather than conflict, includes representatives of the Canadian Association of Petroleum Producers, conservationists, farmers, ranchers, local governments and the provincial energy, environment and health departments.

Much of the expense is forecast to go toward putting associated gas to use in mini-turbine power plants, as deregulation makes it possible for producers to generate electricity for their own field activities and sell surpluses. But the industry is also expected to need to lay out C$30 million (US$21 million) to add clean-combustion equipment at flares too remote to be incorporated into power developments. After a year of negotiation, described by CAPP president David Manning as a "very very difficult forum," all sides in the clean-air alliance agreed on flaring reduction targets and, at least initially, on a phased, voluntary program for the industry. The goals are a 15% reduction of flaring by the end of 2000, a 25% cut by the end of 2001, and a reduction by up to 70% as of 2006 or 2007.

In a formal "information letter" circulated throughout the industry as the Alberta agreement was announced, the B.C. Ministry of Energy said "continued review of production statements has revealed that some operators are incompletely or incorrectly reporting production hours and volumes of gas that are used as lease fuel, flared or vented, including flaring and venting during gas well testing."

Studies done for the Alberta air-quality team estimate that technology is available to cut flaring by 30% economically. But the next cut of 30-40% will be much tougher, and Manning said the industry will work on the economics of marketing or using solution gas. To take care of all the proposed flaring reductions by relying heavily on power generation, the environmental coalition estimates it would take development of 200-300 MW or an amount of power approaching 5% of Alberta's current total capacity.

Gordon Jaremko, Calgary

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