Alberta regulators chose the province’s bitumen reserves over natural gas last week, ordering EnCana Corp. and Canadian Natural Resources Ltd. to shut in 121 gas wells south of Fort McMurray. The Alberta Energy and Utilities Board (EUB) concluded that future gas production from the Cold Lake Oil Sands Area Clearwater Formation “presents an unacceptable risk to a much larger bitumen resource” adjacent to the gas.

The EUB plans to assess at a later time whether additional gas production should be shut in.

The ruling, Decision 2007-056, ordered that 122 intervals in the 121 gas wells be “shut in or not allowed to produce.” The EUB said the energy content of the bitumen reserves conserved in the contested area by the decision is about 50 times larger than the energy content of the shut-in gas production.

“The EUB notes that all parties agree gas production has caused pressure depletion in the bitumen zone, and this in turn has caused solution gas to migrate to the gas zones,” the board stated. “EnCana, however, did not agree that this would impact bitumen production.”

The decision followed a February public hearing in Calgary. The EUB invited all interested parties to contribute technical evidence related to the effect of associated gas production on bitumen recovery, and it said the technical input allowed it to make the best decision possible.

“As it was necessary to shut in gas as a result of this hearing, the EUB believes there is a need to assess whether additional gas production should be curtailed in situations similar to those considered at the hearing,” it stated. The specific process to be used for the assessment is expected to be determined at a later time by the EUB.

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