Regina 鈥� If you have sour gas, or H2S, be it a well or facility, you can expect an inspection this year. After an alarming series of inspections that found the majority of sites inspected failed to pass muster, the government is clamping down.听
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The province is putting sour gas inspection and enforcement very high on its agenda this year. This past spring CBC reported on suspected calf deaths in addition to a related workplace fatality in recent years in southeast Saskatchewan, and that may have put some feet to the flare, so to speak.听
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This also comes at a time when the province鈥檚 S-10 directives will come into full force on July 1 of this year.
Pipeline News spoke to Ed Dancsok, assistant deputy minister for the Petroleum and Natural Gas Division in the Saskatchewan Ministry of the Economy, during the Williston Basin Petroleum Conference in Regina. In this April 29 interview he outlined the government鈥檚 concerns and intended course of action.
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Pipeline News: There鈥檚 been some concern raised in the media about sour gas issues in southeast Saskatchewan. It鈥檚 been our understanding the province has brought in a number of regulations in recent years to deal with gas issues, such as S-10. So what鈥檚 going on?
Ed Dancsok: Natural gas, or associated gas with oil, is a fact of life. It comes up with the oil. With that, at times, in Saskatchewan鈥檚 past, and in other jurisdictions as well 鈥� Texas, Nigeria, Alberta or Saskatchewan 鈥� some of that gas can be sour. Either it鈥檚 looked after by full combustion of that gas, if it鈥檚 sour, treatment, vapour recovery, or getting that gas either into a pipe and treated to sweeten the gas and remove the sulphur.
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P.N.: I understand flaring is one way to get rid of sour gas. If the purpose is to get rid of the sour part, flaring is actually pretty effective in doing it.
Dancsok: Absolutely. But there are fallouts from that. Then you get sulphur dioxide and other pollutants that generated from the flaring process, of course.
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P.N.: And you also get no money for the province, either.
Dancsok: That鈥檚 correct. So that is where you talk about the regulations we鈥檝e brought in, it鈥檚 around the capturing of associated gas, whether it鈥檚 sour or not, that comes up with the oil. That鈥檚 our S-10 regulations, that are designed (such that) if you are producing over a certain threshold of associated gas, you have to capture that gas and get it into a pipe and get it to market; or, you have to shut the well in.
That鈥檚 really plainly put. It鈥檚 much like what North Dakota has been talking about. There鈥檚 a threshold. Anyone, any well, producing over 900 cubic metres per day, the S-10 directives apply.
Now, S-10 was introduced July 1, 2012, for any new wells being drilled. We gave a three-year grandfathering period for all existing wells. So July 1, 2015, which is quickly approaching, all oil wells will have to be compliant with S-10 in Saskatchewan.
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P.N.: My understanding is these do come into effect on Canada Day, and that this has also driven a substantial amount of gas plant activity in southeast Saskatchewan.
Dancsok: Yes, there have been a few gas plants constructed or proposed. There鈥檚 a lot of activity with TransGas of getting more gas into pipelines. SaskPower has introduced a program of using natural gas to generate power. There鈥檚 a whole outline of that program on the SaskPower website.
There鈥檚 a number of players and technology companies looking at bringing in (H2S-capable) generators to generate power for SaskPower with associated gas. That鈥檚 great.
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P.N.: That鈥檚 associated gas, but the issue right now is fugitive gas.
Dancsok: That鈥檚 correct. S-10 directly deals with the intentional flaring and venting of gas. Where we will allow that to happen is where these thresholds are not met, be it under the 900 cubic metres per day, or if it鈥檚 economic, they must gather it. Otherwise, they can flare, or they can vent.
We discourage venting. We鈥檇 rather see flaring, but there are certain wells that don鈥檛 produce enough to keep a flare going. In those cases, there are instances where venting can be allowed. Beyond that, we have fugitive emissions which S-10 does not cover. Fugitive emissions are the release of very small volumes of associated gas through facilities. It could be pipes, connections between pipes, valves, meters, tanks, anywhere there鈥檚 a potential connection. There could be unintentional release of small volumes of methane gas, some of which contains hydrogen sulphide.
Another spot where it can happen is where flares go out, and they aren鈥檛 relit. That is another spot for potential emissions. Tank hatches are another big contributor.
And, I want to talk about his as well 鈥� the loading and unloading of trucks. We get a lot of fugititive emissions from that, and beyond that, things we have no jurisdiction over. That鈥檚 the transport of oil in trucks down the highway and trucks that are not properly sealed, and we鈥檙e getting emissions from there. And rail cars, perhaps.
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P.N.: You had an anecdote about that?
Dancsok: In response to the sour gas concerns, we鈥檝e stepped up our inspection activities. From 2013, 2014, now 2015, we鈥檙e already into it. This past week, we hit the area where most of the concerns are coming from, the Oxbow-Glen Ewen area. Our inspectors were out there last week for about a week and a half and did a sweep of a number of wells and facilities.
A couple of my inspectors were on their way home and following a tanker, hauling crude oil, down the highway. A car was between them and the tanker, and that car kept backing away and slowing down until they finally passed the car, thinking, "What鈥檚 wrong?"
They got up behind the tanker, and they could barely stand it, the odours coming off the tanker.
Obviously, anything that was supposed to be on the tanker to prevent the emission of the gas was not in place.
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P.N.: Isn鈥檛 that potentially a health concern?
Dancsok: It certainly is. What we inspect is point sources of emissions, fugitive emissions, of wells. That鈥檚 a spot where you can go up to it and say, 鈥淟et鈥檚 fix it.鈥�
But you鈥檝e got a moving source of emissions now, with a truck going down the highway, or a rail car going down a rail, making odours across the whole countryside. It鈥檚 affecting a much larger area.
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P.N.: Having taken H2S Alive many times myself, the odours are not what鈥檚 going to kill you. It鈥檚 the stuff behind it.
Dancsok: The odours are a good sense of where there鈥檚 smoke, there鈥檚 fire.
We certainly do rely on that.
The odours are what鈥檚 causing the public concern. People aren鈥檛 calling in, saying people are dying from it. They鈥檙e saying, 鈥淭he odour is a nuisance. It鈥檚 bugging me, it鈥檚 affecting my quality of life. It鈥檚 making my eyes water;鈥� no serious health issues.
I want to mention there was one fatality, a workplace fatality at a facility, and all I鈥檒l say is that, because that鈥檚 under investigation with OH&S. That鈥檚 all I鈥檒l say about that, but it was definitely H2S.
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P.N.: That鈥檚 not the first, and unfortunately, probably not the last, workplace fatality. One of the things that did not come up in the CBC story was the fact that if you want to work in the oilpatch, you have to have this card (pulled out H2S Alive certification ticket).
Dancsok: You know what? Even myself, I don鈥檛 inspect wells, but if I want to accompany my inspectors, I need to have this. I鈥檓 thinking of doing that, by the way. It鈥檚 been a while since I鈥檝e done it, and I need a refresher.
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P.N.: This is not a meteor that fell out of the sky. This is something the oilfield has dealt with, essentially, forever.
Dancsok: And certainly residents that live in oilfield areas are aware of the odours that come from the oilpatch and understand that is H2S, and that what we call 鈥渟our sites鈥� are properly placarded, saying H2S production, danger, do not trespass.听
Still, there鈥檚 the odours. There鈥� the potential. Ten parts per billion is when we start smelling sour gas. That鈥檚 a far cry from what is lethal, and that鈥檚 1,000 parts per million.
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P.N.: When I first moved to southeast Saskatchewan in 2008, when I was driving Highways 13 and 18, I really noticed, just in my truck, certain locations. Especially around Glen Ewen, I could smell it. It was quite noticeable. I don鈥檛 smell it as much anymore. Is that because of the S-10?
Dancsok: Well, S-10 is really starting to kick in this summer.听
I think it鈥檚 because we have raised industry鈥檚 awareness. I want to tell you this: Industry has responded very well. I鈥檓 very pleased with their response. They are taking this seriously, right to the highest level, the CEOs. The (Crescent Point CEO) Scott Saxbergs of the world are aware of this. Perhaps, in the past, that wasn鈥檛 really happening. Our inspectors were going out, throughout time, and this isn鈥檛 the first sour gas we鈥檝e encountered, our inspectors went to an operator in the field and said, 鈥淵ou鈥檝e got a problem here. Shut this down and get it fixed.鈥�
That message was not getting to the CEOs. So the CEOs were thinking, 鈥淗ey, we鈥檝e been compliant. We鈥檝e heard no bad stories from operations. They must be good.鈥�
Now the CEOs are starting to hear this. The communication is moving up the food chain, so to speak, and the CEOs don鈥檛 want it to be their company that is creating a problem. They are taking it seriously, and they are making sure their staff are educated, trained.听
H2S is one. When a vapour recovery unit goes off, you don鈥檛 just unplug the alarm, you go out and fix the source, and take corrective action. That whole culture is changing. Just by our increased presence, that鈥檚 helping that culture to change.
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P.N.: Regarding inspection, can you describe the role of the ministry, your staffing levels, and is that enough?
Dancsok: So, on an annual basis, our inspectors go out and do numerous inspections. Last year alone? Ten thousand. Ten thousand sites were inspected. About 7,700 were wells, but we inspect wells, facilities. We inspect rigs during drilling. We do the BOPS tests. We inspect spills. We inspect pipelines.听
We have 16 inspectors in the field, in four field offices, doing that work. They inspect the oil and gas for everything.
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P.N.: Don鈥檛 we have around 100,000 wells in the province?
Dancsok: We have 80,000 wells, yes.听
By comparison, just for example, Alberta. They have about 280,000 wells. Last year, they did 12,500 inspections. I think our level of inspection, at 10,000 site inspections, compares favourably with Alberta鈥檚 level of inspections. Would you agree?
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P.N.: Some people would say, 鈥淲hy not 100 per cent? Why not 50 per cent?鈥�
Dancsok: Okay, right. What you look at is it鈥檚 impossible. Not every car that drives through a school zone has a radar gun trained on it. You do an adequate level of inspection and enforcement to modify the behaviour.
That鈥檚 efficiency. We鈥檙e doing in the order of 10,000 inspections of 80,000 sites. That鈥檚 in the order of 10 to 12 per cent. That鈥檚 seen as an adequate level of inspection. You know that you鈥檙e going to be inspected somewhere along the way, you better be in shape.
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P.N.: Do you need more inspectors?
Dancsok: We could always use more inspectors, absolutely.
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P.N.: But will you have more inspectors?
Dancsok: We are doing work to get more inspection boots-on-the-ground, absolutely. We鈥檙e re-allocating from within the ministry to get head office staff. We鈥檙e in the process of building a field presence in Regina.
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P.N.: And this was done in 2013?听
Dancsok: 2013. In 2014, I talked about the gas compositional analysis for all operators. Now we have a database so we can focus our future inspections. In the summer of 2014, we looked at the highest concentration. Now, just because a facility is sour, it doesn鈥檛 mean it鈥檚 emitting sour gas. It just has sour production. It may be fully compliant. But we looked at the enforcement pyramid, where the highest emitters are the smallest numbers. We looked at the critically sour sites, 10,000 parts per million, or more, that are also close to highways, residences, public places. There were 84 sites in southeast Saskatchewan.
When we inspected those 84 sites, specifically for sour gas, we had a 70 per cent failure rate.
Even by doing that, everyone understands now we鈥檙e looking at sour gas. There isn鈥檛 a question about it.
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P.N.: Did you shut in any sites at that time?
Dancsok: Yes, we had suspension orders on 35 sites, and 29 sites were shut in, which means when you shut it in, you don鈥檛 get the minister involved. We just say, Dean (Pylypuk, an inspector) says to the guy, 鈥淪hut this in, I鈥檒l come back tomorrow to see if you have this fixed.鈥�
Thirty 鈥� five and 29, that鈥檚 64 out of 84. That鈥檚 pretty high, for sure. There were 35 where we had 听the minister sign an order saying this is suspended and will remain suspended until I say you can start it up.
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P.N.: If this was a math class, and you had this many failures, your bell curve isn鈥檛 doing too well. So what鈥檚 happening in 2015 now?
Dancsok: We put together a committee with all the agencies; Environment, Health, Occupational Health and Safety, as well as industry, looking at a strategy going forward. That was a short-term, knee-jerk reaction to get the worst problems looked at.
I think it has improved. If you look at the end of that CBC report, they said no more cattle have died on that farm. I think that problem has been fixed. I think there has been a better general overall awareness in the industry that we are not going to allow this to happen.
They will be inspected. They will be subject to enforcement actions.
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P.N.: Is there anything else you want to say on this?
Dancsok: In 2015, we鈥檙e going to focus those 10,000 inspections on the sites we know, or suspect, are sour, and we鈥檝e already started part of that sweep.
Based on our analysis, only about six per cent of the wells in Saskatchewan are sour. That鈥檚 a pretty important piece as well. Out of the total, it鈥檚 not a big number, but it certainly has a higher impact because of the odours. There鈥檚 about 6,000 sites that we know are sour, based on our analysis. We鈥檙e planning to inspect 10,000 sites that we know or suspect are sour.听
That鈥檚 our medium-term thing. We鈥檙e going to try to get each and every site we know or suspect is sour looked at. That鈥檚 going to help us where the good players are, the bad players are, that sort of thing. We鈥檙e not just going to look at sites that are close to highways. We鈥檙e going to look at all sites. That鈥檚 important.
Longer term, we鈥檙e involved with the (Canadian Standards Association) putting together, across Canada, so all jurisdictions are involved, fugitive emissions guidelines. What is a fugitive emission? What needs to be done? What the standards are for measuring that and eliminating it?听
A draft of that is coming out. We鈥檝e been working on it, and with them. We鈥檝e been working with AER, the British Columbia Oil and Gas Commission, all of the jurisdictions. A draft for public consumption should be coming out this summer. We are certainly at the table on that.
We are also engaged with AER (Alberta Energy Regulator). They鈥檝e had a sour gas problem for many years. They conducted a four-year strategy project on how to deal with their sour gas issue, which is large. I think 20 per cent of their production is sour, and it鈥檚 big volumes of sour gas. I think ours is a smaller problem, with smaller volumes. But we鈥檙e going to look at their strategy and glean from it what we need. Without pushing us down, they are considered one of the best regulators in the world. The best financed regulator, they have a very large contingency and expertise. We鈥檙e going to use that expertise and leverage it to find a Saskatchewan solution to a very similar problem to what they had. No point in re-inventing the wheel, right?
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P.N.: What about the truck? What are you going to do about trucks with fugitive emissions?
Dancsok: Part of that whole strategy around having all the important agencies involved includes Highways, and the need for Highways to get involved for safe transport of products up and down our roadways.
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P.N.: You couldn鈥檛 pull over that truck?
Dancsok: I can鈥檛. We have no jurisdiction over that. We have jurisdiction over the wellsite.听
There鈥檚 another thing I want to talk about. You know about the airshed authority. They are our vehicle for communications to the public. They have the website with 18 Air Pointers (air quality monitoring stations). You can go on the website and look at any of them in southeast Saskatchewan and some in the Lloydminster area and find out the air quality, based on that live data. It does measure H2S.
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Another thing, we support the airshed authority financially as well as Gary Ericson and Dean Pylypuk are on the board of directors. Environment does as well. We support them not only financially, but by having people on the board to support them. They go to RM meetings. They go to public places and talk about air quality. And industry supports this.
This is our vehicle for getting out information. I think that was one of the criticisms that was out there 鈥� how are you informing the public of this problem? We do it through the airshed authority.听
On the web: 麻豆传媒AVeast Saskatchewan Airshed Association 听
