While ratification of the Kyoto Protocol by the Liberal government in Ottawa irritated Canadian natural gas producers, a quieter decision on another environmental front prevented a comparable annoyance from spreading. Environment Canada ruled that there is nothing special about the Deep Panuke gas development project that requires extra scrutiny even though it taps sour gas offshore of Nova Scotia.

The signature on the greenhouse gas control treaty launched up to 10 years of negotiations on what it will mean in practice, plus technical work on monitoring and reducing carbon dioxide emissions. But the quiet ruling on Deep Panuke spelled national acceptance of current standards for handling the Canadian industry’s most hazardous and controversial item. The evil genie of “sour” natural gas production — gas steeped in lethal hydrogen-sulphide — in the Canadian West has been encountered, but kept stowed tightly in its bottle on the East Coast.

Sponsor EnCana Corp. received a clean bill of health from Ottawa. Federal Environment Minister David Anderson announced that an examination of the project concluded it is unlikely have significant adverse effects. As a result, the minister will refrain from using his power under the Canadian Environmental Assessment Act to refer Deep Panuke to a special mediator or review panel.

The 400 MMcf/d gas production development will continue to be examined in a routine fashion by a co-operative procedure involving the National Energy Board, the Canada-Nova Scotia Offshore Petroleum Board, Environment Canada, Fisheries and Oceans Canada and Industry Canada.

The latest documents filed with the authorities by EnCana elaborate on a detail about Deep Panuke that has drawn no notice or protest on the East Coast. The target gas contains hydrogen-sulphide at a concentration of about 2,000 parts per million or 0.2%, double the level where a whiff is rated as liable to cause instant unconsciousness and death by western authorities. About one-third of western supplies are sour.

Devising ways to produce gas tainted with the poison — and keep access to the reserves — has become a top priority for producers and the Alberta Energy and Utilities Board. The federal ruling on Nova Scotia followed a demonstration of the issue’s sensitivity in the mainstay producing Canadian province.

At Princess in southern Alberta, anxious farmers at first refused last year to co-operate with a smaller EnCana project to tap gas with lower concentrations of the impurity at levels of 60 to 1,400 ppm (0.006-0.14%). EnCana only won consent for the development by taking a landmark step in the history of gas-field technology. The Princess project, at a plant called Bantry, made the first North American use of a technology that harnesses bacteria which eat virtually all hydrogen-sulphide they contact.

At Deep Panuke, 175 kilometers (110 miles) offshore of Nova Scotia, EnCana told federal and provincial authorities that it intends to use more conventional means to deal with the hazardous impurity. Of seven wells to be drilled beneath the proposed production platform, one will be for re-injection of waste materials into an accommodating rock formation below the sea floor. Along with hydrogen-sulphide, the injection well will dispose of unwanted carbon dioxide in a concentrated waste stream known as acid gas. Also sent back down into the ground will be excess condensate or natural gasoline occurring in low concentrations as a vapor in the Deep Panuke gas.

The six production wells will penetrate the earth’s crust to a depth of about 3,500-4,000 meters (11,445-13,080 feet) beneath the sea floor to reach the natural gas reservoir, known as the Abenaki Reef. The waste disposal well is expected to be about 2,300 meters (7,520 feet) deep into a zone of porous rock that can absorb the hazardous waste but lies beneath a leak-proof lid of impermeable shale.

The plan calls for use of a chemical system known as amine sweetening. It uses a solvent that absorbs the unwanted gas byproducts then releases them when heated in a concentrated form for disposal. Only all but undetectable traces of the hazardous materials will remain in the gas sent to land for final processing and then injection into Maritimes & Northeast Pipeline for delivery to markets in Atlantic Canada and the northeastern United States. The approach will continuously recycle the solvent in a closed-loop system, with occasional pauses possible to remove and reclaim the chemical if it accumulates buildups of the impurities. EnCana assures that “production will be halted when a complete change-out of amine solvent is required.”

Just as EnCana intends to use methods of handling sour gas that remain standard at all but the touchiest western production sites, the Calgary firm plans to employ standard offshore pipeline technology at Deep Panuke. The project calls for laying on the sea floor a 175-kilometer (110-mile) stretch of steel pipe 24 inches in diameter and coated with concrete as weight to hold it down and stable. At water depths of less than 85 meters (280 feet) near the coastline of Nova Scotia the pipe will be laid in a trench and buried, or else pushed through tunnels to be made with directional-drilling construction technology. The design is intended to protect the pipe against accidental interference by fishing gear as well to shield it from natural hazards such as waves and mobile sediments.

The route runs parallel to a similar pipeline laid in the late 1990s by the first Nova Scotia gas development, the Sable Offshore Energy Project. An engineering risk analysis done for Deep Panuke suggested that the risk of a leak is negligible: “If the project were endless, one might expect a gas leak from the subsea pipeline once every 71 years.”

The life expectancy of the Deep Panuke gas reserves is currently between 11 and 12 years. The acceptance of sour gas production at Deep Panuke underlined differences between the Canadian East Coast and West. The offshore project is not only comparatively remote. In the host community, gas production still represents a fresh start on highly-prized economic development. For the first time, the energy sector overtook the traditional mainstay of Nova Scotia livelihoods in 2001.

Gas produced offshore generated revenue of more than C$1.4 billion (US$900 million) in 2001 compared to the fisheries’ value of C$1 billion (US$645 million) for processed products. In a year-end review of the latest economic data, the federal Department of Fisheries and Oceans reported the energy and fishing sectors reached their turning points in 2001. In 2000, the fishery still led, with C$1.1 billion (US$710 million) in export value. The oil and gas sector was worth C$900 million (US$580 million) to the maritime province in 2000, a sharp rise from its value of C$250 million (US$160 million) in 1996, but still slightly behind the old mainstay.

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