Atlantic Canada's Oil and Gas Industry

2,179
-1

Published on

Presentation to Pictou Town Council
February 25, 2014
Paul Barnes - Manager, Atlantic Canada
Sheri Somerville – Natural Gas Advisor

Published in: Technology
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total Views
2,179
On Slideshare
0
From Embeds
0
Number of Embeds
7
Actions
Shares
0
Downloads
24
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

Atlantic Canada's Oil and Gas Industry

  1. 1. Atlantic Canada’s Oil and Gas Industry Presentation to Pictou Town Council February 25, 2014 Paul Barnes - Manager, Atlantic Canada Sheri Somerville – Natural Gas Advisor
  2. 2. Overview ● ● ● ● Who is CAPP Industry Overview Industry Benefits Offshore:  Seismic Surveys  Spill Prevention & Response ● Onshore:  Unconventional Resource Development  Hydraulic Fracturing  Regulation  Communication & social license ● Conclusion
  3. 3. Canadian Association of Petroleum Producers (CAPP) ● Represents Canadian oil & gas sector (~ 100 member companies) ● Members explore for, develop and produce natural gas, natural gas liquids, crude oil, and oil sands throughout Canada ● Members produce about 90 per cent of Canada’s natural gas and crude oil ● Key focus areas:     Education Communications & outreach Policy & regulatory advocacy Industry performance
  4. 4. Lifecycle of an oil and gas field Exploration Development Seismic Drilling wells Exploration drilling Engineering Delineation drilling Fabrication/ construction Production Decommissioning/ Abandonment Recovering the resource Completion of project Transportation to market Removal of installation Environment, Health and Safety
  5. 5. Atlantic Canada’s Oil and Natural Gas Industry ● Five offshore projects in production: OFFSORE NL GoSL WESTERN NL NB ONSHORE NS ONSHORE OFFSORE NS ● NS: Deep Panuke and Sable (natural gas) ● NL: Hibernia, Terra Nova and White Rose (oil) ● Hebron project offshore NL under development ● Active offshore exploration programs in both NL and NS ● Current NB onshore: ● 1 exploration program ● 2 production programs (oil & natural gas)
  6. 6. NS Onshore Resource Agreements
  7. 7. NS Offshore Licences
  8. 8. NB Opportunity: Proven and Potential Resources Source: DNR NB
  9. 9. NL Offshore and Onshore Licences and Leases
  10. 10. Economic Benefits of Oil and Gas Activity in Atlantic Canada ● Employs over 6,000 people (thousands more indirectly) ● Supports over 800 local supply/service companies ● Cumulative expenditures since 1996:  Over $31 billion in NL  Over $8 billion in NS ● Over $1.8 billion in royalties have been paid to the Gov’t of NS since 1996; supports infrastructure and helps pay for social programs ● Over $2 billion will be spent on offshore exploration in NS in the next few years ● Significant growth potential
  11. 11. The Offshore Industry: Seismic Surveys and Spill Prevention and Response
  12. 12. What is a marine seismic survey? ● Uses sound energy to map geological structures under the seabed ● Vessels tow devices that use compressed air to produce pulses of high energy, low frequency sound waves ● Travel through the water and into the rock layers beneath the seabed ● Bounce back to receivers (“hydrophones”) that measure strength and return time Source: Sikumiut Environmental Management
  13. 13. Why are seismic surveys conducted ● Seismic surveys provide information on the depth, position and shape of underground geological formations that may contain oil or gas ● Help companies decide whether:  The available information is sufficient to justify drilling an exploratory well  Additional surveys are needed to better define the structures before drilling  The features present are not attractive enough to warrant further interest ● Survey results do not show definitively whether oil or gas are present Photo courtesy of Schlumberger
  14. 14. Protecting Marine Life ● Substantial research has been conducted to determine whether seismic surveys have an impact on ocean life and additional research is ongoing:  Current research indicates there is minimal risk of mortality in marine mammals, fish and invertebrates  Marine mammals, depending on species and proximity, can experience temporary changes to hearing thresholds and in some extreme cases these effects can be permanent  DFO research conducted in NL showed no mortality among invertebrates (crab, shrimp, scallop etc.) but showed some non-life threatening temporary behavioural changes  Governments, academia and industry continue to invest in research related to seismic impacts to further broaden the body of knowledge ● Carefully designed mitigation measures are applied to seismic surveys to minimize risk to marine life
  15. 15. Protecting Marine Life ● Comprehensive Environmental Assessments (EAs) are completed prior to conducting surveys which must be approved by regulators ● Seismic vessels and their operators are guided by the Statement of Canadian Practice with Respect to Mitigation of Seismic Sound in the Marine Environment  Outlines mitigation measures that must be considered in the planning of seismic surveys  Examples: • Air source arrays must be shut down immediately if an endangered marine mammal or sea turtle is observed within 500 metres • Surveys must be planned to avoid dispersion of groups of spawning fish from known spawning areas
  16. 16. Impact on fishing and marine industries ● Seismic surveys in the Atlantic Canada offshore are typically scheduled during optimal weather conditions (June to Sept) because:  Surveys cannot take place if waves are higher than 3 metres  Rough seas affect quality of data ● June to Sept is also peak fishing season in Atlantic Canada ● Effective communication and coordination between petroleum and fishing industries is critical Photos courtesy of Schlumberger
  17. 17. Proactive mechanisms in place to minimize potential conflicts ● Fishing industry advised of marine seismic survey activity through direct communication and communiqués with fishing industry members, public service announcements etc. ● A fisheries liaison officer (FLO) may be required on board the seismic vessel - the FLO communicates directly with fishing vessels in the field to resolve situations where overlap and conflicts could occur ● Working with the fishing industry:  In NL, One Ocean was created as a communication & liaison organization between fishing and petroleum industries  Fisheries advisory committee in NS advises regulator on minimizing impact on fishing industry ● Compensation programs in place for damage to fishing vessels or gear
  18. 18. Offshore Oil Spill Prevention and Response ● Operators have comprehensive safety and environmental management systems to ensure safe and environmentally responsible operations ● Spill preparedness and response is one component of an operator’s overall management ● Although the ability to respond to any emergency situation, including an oil spill, is critical, an Operator’s priority is to ensure process and engineering controls are in place and effective to prevent occurrence of the event Equipment is deployed during an on-water spill response exercise
  19. 19. Offshore Oil Spill Prevention and Response Oil spill preparedness and response programs include:  Risk identification and assessment of potential spill scenarios  Mutual Emergency Assistance Agreement  Understanding of the regulatory requirements  Contracts with response organizations (e.g., ECRC and OSRL)  Detailed Oil Spill Response or Contingency Plans (which are reviewed by regulators during Authorization applications  Definition of roles and responsibilities, including response management structure, both offshore and onshore  Operational preparations and procedures, including training and exercise requirements for responders (e.g., Synergy)  Compensation procedures  Availability and maintenance of response equipment  Processes to review/enhance response capability as necessary
  20. 20. Tiered Oil Spill Response ● Operators have developed the following three-tiered oil spill response structure that enables them to effectively respond to different types of events  Tier 1 • Equipment and resources that are maintained offshore on either the installation or support vessel (Operator Equipment)  Tier 2 • Equipment and resources that are maintained onshore that can be mobilized to support the offshore response (Operator Equipment and ECRC)  Tier 3 • Equipment and resources that are not available locally but that can be accessed nationally or internationally (OSRL and the Global Response Network)
  21. 21. Offshore Spill Response Capability ● Several reviews and reports have been released related to spill response capability in Atlantic Canada in recent years:  Reviews by the Senate of Canada and House of Commons of Canada (2011)  Review of Offshore Oil Spill Prevention and Remediation in NL (Turner, 2010) ● These reports recognized the robust offshore regulatory environment and strong spill prevention and response capability in Atlantic Canada, which was found to compare well with other jurisdictions ● Operators have continued enhancing spill response capability in recent years
  22. 22. The Onshore Industry: Unconventional Resource Development and Hydraulic Fracturing
  23. 23. North American Shale Gas Plays
  24. 24. Top 10 World Natural Gas Producers in 2012 0 5 Trillion Cubic Feet per Year 10 15 20 25 US Russian Federation Iran Qatar Canada Norway China Saudi Arabia Algeria Indonesia Source: BP Statistical Review 2013 Canada, is the 5 th largest producer of natural gas in the world. (5.56 tcf/year) 30
  25. 25. Geology of Natural Gas Resources Source: U.S. Energy Information Administration
  26. 26. Stages of Exploration and Production for Unconventional Resources Nova Scotia New Brunswick Duvernay Horn River Marcellus
  27. 27. Geophysical Exploration (Seismic): Vibroseis truck Seismic charge
  28. 28. Technology Makes it Work • Drilling technology improvements – Longer horizontal laterals – Multiple-stage hydraulic fractures per lateral • Horizontal drilling and hydraulic fracturing result in gas wells with long stable production lives • Ground water is separated by thousands of feet and tons of impermeable rock • Significant amount of water is recycled • “Micro-seismic” technology evolving and enabling greater precision in fracturing wells • Small surface footprint for multiple, extended wells
  29. 29. How does hydraulic fracturing stimulation work? ● ● ● Approximately 4,000 cubic metres (4 million litres) of water used to fracture each stage of a well  Water amounts may vary depending on type and location of reservoir.  Total water used at the 4 major shale plays in the USA is less than 1% of total water usage in each state Fracture stimulation fluid consists of 98.5% water/sand and 1.5% chemical additives All chemical additives are disclosed by industry to regulators before hydraulic fracturing occurs
  30. 30. Fracture Fluid Use & Disclosure The water, sand, and additives used to convey pressure from the surface to the reservoir to create fractures to be created 98.5% Water & Sand 1.5 % Additives Gelling Agents Cross Linkers Clay Control Breakers Surfactants Biocides Energizers www.fracfocus.ca
  31. 31. Multi-Well Pads Vertical Well Pad Horizontal Well Pad Source: ERCB 2011 Advantages of Multi-Well Pads: •Reduction of land use for the pad, access roads & pipelines. •Easier monitoring of site and enforcement of regulations. •Conducive to establishing and enforce traffic/trucking corridors. •Optimization of location. •Establish and enforce noise, light, air emission and water plans.
  32. 32. McCully Field, Sussex
  33. 33. Regulatory Considerations: The New Rules We Support Strong Regulations •Consistent and Stable Operating Environment •Responsible Environmental Management of Oil &Natural Gas Activities
  34. 34. Guiding Principles for Hydraulic Fracturing We will: 1 Safeguard the quality and quantity of regional surface and groundwater resources, through sound wellbore construction practices, sourcing fresh water alternatives where appropriate, and recycling water for reuse as much as practical. 2 Measure and disclose our water use with the goal of continuing to reduce our effect on the environment. 3 Support the development of fracturing fluid additives with the least environmental risks. 4 Support the disclosure of fracturing fluid additives. 5 Continue to advance, collaborate on and communicate technologies and best practices that reduce the potential environmental risks of hydraulic fracturing.
  35. 35. Being Part of the Discussion - Fact vs. Fiction @oilgascanada www.facebook.com/OilGasCanada
  36. 36. Responsible Energy Development ● Canadians want to know that oil and natural gas can and will be developed safely ● Strong regulation that has worked successfully in Canada can provide framework for emerging provinces ● Companies are committed to: • Responsible energy development and abide by codes of conduct that further supports strong regulation • Accountability and transparency • Strong regulatory frameworks, enforcement policies • Scientific research and continuous improvement ● Atlantic Canada important part of national dialogue
  37. 37. Conclusion ● Onshore and offshore oil and natural gas resources are being developed safely and responsibly in Atlantic Canada ● The industry brings major benefits to the economy ● The potential exists for further industry growth ● We recognize that the public is a stakeholder in oil and gas development and are committed to earning our “social license” to operate  Performance + Communication  Must be earned (every day!)
  38. 38. For More information CAPP.ca Follow CAPP on Twitter: @OilGasCanada Like CAPP on Facebook: facebook.com/OilGasCanada CSUR.com Morefactslessfriction.ca Canadiannaturalgas.ca
  39. 39. THANK YOU QUESTIONS? Paul Barnes Paul.barnes@capp.ca Sheri Somerville Sheri.somerville@capp.ca www.capp.ca

×