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Shale Gas: British Columbia’s Regulatory Response

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paul jeakins

  1. 1. Shale Gas: British Columbia’s Regulatory ResponseJanuary 22, 2013Paul JeakinsCommissioner and CEOBC Oil and Gas Commission
  2. 2. • Overview of B.C.• Legislative Structure• The Commission’s Approach• The Future
  3. 3. Europe British Columbia
  4. 4. British Columbiais Canada’s secondlargest producer ofnatural gas.
  5. 5. Liard Basin Cordova Embayment9,340 sq km 2,690 sq kmHorn River Basin Montney11,400 sq km 29,850 sq km
  6. 6. Geological Liard Basin • Shale Gas • OGIP – no estimate (large) Horn River Basin • 3 wells • Shale Gas • Cumulative production is confidential • OGIP – 448 TCF • Depth: 3,000-3,100 m • 202 wells • Daily production- 432 MMcf/d • Cumulative production – 373 BCF • Depth: 2,200-3,100 m Cordova Embayment • Shale Gas • OGIP – 200 TCF (preliminary) • 19 wells • Daily production is confidential • Cumulative production is confidential • Depth: 1,500-2,300 m Montney • Tight gas – Shale Gas Hybrid • OGIP – 450 TCF (under review) • 1,246 wells • Daily production 1.6 BCF/d • Cumulative production – 1.5 TCF • 1,500 – 3,500 m average depth
  7. 7. Geographical Muskeg Mountains Sub-Boreal Prairies Forests
  8. 8. Social First Nations Landowners Stakeholders
  9. 9. Environmental GIS map Footprints Wildlife Water
  10. 10. Authorizes and ensures compliance with regulations: Exploration ProductionThe Commission is Gatheringa single-window Processing Storageagency Disposal Pipelines Reclamation Oil and gas roads
  11. 11. Legislative Structure Where we came from How we respondedPipeline Act – 1950sPetroleum and Natural Gas Act – 1970s Oil and Gas Activities Act 2010Oil and Gas Commission Act - 1998
  12. 12. Legislation and RegulationsLegislation enacted by • Oil and Gas Activities Act and Generalthe provincial • Petroleum and Natural Gas Act and Generalgovernment • Environmental Protection and Management Regulation • Administrative Penalties Regulation • Prescribed Road Regulation • Service RegulationRegulations maintained • Geophysical Exploration Regulationby Oil and Gas • Drilling and Production RegulationCommission Board • Pipeline & LNG Facility Regulation • Consultation and Notification Regulation • Fee, Levy and Security Regulation
  13. 13. Enactments specific to oil and gas activitiesLand Act: Occupation of Crown Land Ministry of Forests, Lands and Natural Resource Operations Short Term Use of Water Ministry ofWater Act: Environment Changes in and About a Stream Ministry of Forests,Forest Act: Licence to Cut Lands and Natural Road Use Permit Resource OperationsOther Heritage Protection Various MinistriesEnactments: Hazardous Waste, Storage and Disposal
  14. 14. Innovative aspects of OGAA for shale Perceived Hazard Regulatory Mitigation Groundwater Contamination • Cemented surface casing set to competent formation. • Non-toxic drilling fluids until porous formations within 600 metres of surface are isolated. Hydraulic Fracturing • Specific review requirements for fracturing above 600 metres. • Records of fluid composition required. • Temporary fluid storage on site in dual containment and monitored pits and ultimate disposal via deep well injection. Carbon Footprint • Venting only allowed by exception. • Surface casing vents controlled and reported. • Flaring limits and conservation requirements. • In-line testing requirements. Noise and Nuisance • Noise limitations. • Requirements for air monitoring stations near larger plants. • Flaring limits. • Consultation and notification requirements.
  15. 15. Modified Subsurface Requirements Well spacing Drilling and Logging Production Sampling Regulation TestingMulti-activity permitting Created to Tools used to permit allow for multi-activity more OGAA multi-activity effectively: permitting. • Area Based Analysis • NEWTSpecial Projects Created to allow for OGAA development of special projects.
  16. 16. Trustworthiness of different sources of information about oil and gas development Universities/Colleges Experts ENGOs Internet Friends National MediaLocal Media Local Leaders Religious/Spiritual Government Politicians Leaders Strongly Distrust Somewhat Distrust Neither Somewhat Trust Strongly Trust
  17. 17. The Commission’s ApproachNEWT
  18. 18. Sample map shows:• Upstream and downstream.• Existing Section 8 and Water Licence Points of Diversion (POD).
  19. 19. Users:PublicStatutory Decision MakersIndustry
  20. 20. Area Based Analysis Land Use First Nations & Stakeholder Consultation and Notification Area-based Valued Management Multi-activity Development MonitoringComponents Triggers & Plans & Requirements ReportingManagement Infrastructure Coordination Strategies Adaptive Management
  21. 21. Area Based Analysis Valued Components Hydro-riparian ecosystems Most Valued Components: • Defined spatially by the Old forest Commission in collaboration with the Ministry of Environment and other agencies. Groundwater • Based on stakeholder High priority wildlife habitat, and First Nations input ecosystems and features and interpretation of strategic government direction and policy Boreal caribou using a broad-scale, ecosystem defined approach. Resource and cultural heritage features
  22. 22. Area Based Analysis Non-Operating Area Land Base Operating Area Land Base Open Water Bodies (Lakes and Rivers) Wetlands (W2 and enclosed uplands) Federal Lands Provincial Parks and Protected areas Riparian Reserve Areas (Lakes, Rivers and Wetlands) Riparian Management Areas (Lakes, Rivers and Wetlands) Research Forest Recreation Features and Sites Known First Nation Cultural Features Stream Riparian Areas Operating Area Land Base Private and Municipal Lands Old Forest Boreal Caribou Habitat (UWR) Muskwa Kechika Management Area Potential First Nations Cultural Areas of Interest
  23. 23. Etsho Seismic Investigation 31 events (mag 2.2-4.1) April 2009 to July 2011 20 station dense array operated June 16 – August 15, 2011 Tattoo 7 events (mag 2.4 to 3.1) Dec 2011Objectives:• Examine linkage between oil and gas activities and observed seismicity.• Review current research on induced seismicity.• Consider mitigation methodologies if a link between oil and gas Kiwigana activities is seen. 72 events (mag 0.5 to 1.86ML) October 25, 2011 – Jan 27, 2012 151 station dense array Greater than Mag 0.5 = fault movement
  24. 24. Seismic Investigation Commission Staff • Expert Analysis of Data • Scientists/Geologists • Investigation • Communications Scientists/Geologists Industry Operators • GeoScience BC • Data • NRCan Seismologists • Peer Review • US experts • Communications Confidential • Industry Scientists Working Group Consultative Fair Open Federal & Provincial Participatory Government Challenge Results CAPP • NRCan • Peer Review • Alberta Geological • Communications Survey • BC and Alberta Gov’t • Communications Academia • UBC • Literature Search
  25. 25. Connecting to science and researchEvaluation of gas migration in unconventional wells University of British ColumbiaCementing and surface casing vent flows University of British ColumbiaAir quality impacts University of British Columbia University of Northern British ColumbiaSeismicity University of British ColumbiaPublic perception University of British Columbia
  26. 26. The FutureThe economically viable recovery of huge volumes of gas fromshale or similar tight formations means that:• North American Canada markets are saturated and an oversupply situation may persist for decades.• Alternative global markets are accessible via shipping LNG from Canada’s west coast.
  27. 27. Within the next 10 to 15Currently the U.S. years, the U.S. will notaccounts for 2/3rd of our need to import naturalproduction. gas from Canada. Without LNG With LNG capacity or Canadian 2020 other markets, Production Canadian could production will significantly decline. increase. 2013
  28. 28. Challenge for all of us is to meet world oil and gasdemands while benefiting all citizens:• Be strong regulators.• Analyze and share knowledge.• Regulate effectively.
  29. 29. Paul JeakinsCommissioner and CEOBC Oil and Gas Commission