Alberta gas producers have requested exemptions for about 80% of the natural gas wells affected by the Alberta Energy and Utilities Board’s (AEUB) Sept. 1 shut-in order. The 733 wells may continue to produce gas unless objections are filed by crude bitumen producers or the AEUB, according to the shut-in order.

In July, the AEUB ordered the shut in of 938 gas wells in the Wabiskaw-McMurray formation in the Athabasca Oil Sands Area of northeastern Alberta, saying removal of the gas would pose a threat to a much larger amount of crude bitumen. Removing the gas could lower underground pressure hindering crude bitumen production through traditional thermal recovery techniques. The AEUB determined that the threatened bitumen contained about 600 times the energy content of the sacrificed natural gas (a potential total of about 250 MMcf/d of production and 1 Tcf of reserves).

In response to gas producer concerns, the AEUB delayed the effective date of the order by a month (to Sept. 1) and left room for producers to file for exemptions if they could prove their gas wells would have no impact on bitumen production or if their wells were grandfathered under a previous ruling.

So far, the board has received applications for exemptions for 733 out of 938 gas wells in the 8,500-square-mile region near Fort McMurray, AB.

Petro-Canada called the exemption process a disappointment, saying it was subject to abuse. It said it was preparing to fight at least a couple dozen of the exemptions.

Meanwhile, gas producers, led by Paramount Energy Trust, have objected to the shut-ins, arguing the threat to bitumen was unproven. Paramount, BP Canada, Devon Canada, ProGas and Canadian Natural Resources have taken legal action to overturn the AEUB ruling. The gas producers also are pushing the Alberta government for compensation, which they claim could be more than $2 billion (see Daily GPI, Aug. 29).

The board is conducting a geological study to determine the status and impact of all exempted gas production by April 1. An AEUB spokeswoman said it was too early to determine exactly how much natural gas production would remain shut in if all the exemptions were granted.

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