The business of sour gas is affected by two important factors: the economic value of the gas, and the methods utilized in its production. Sour gas accounts for approximately 30 per cent of all natural gas in Alberta.

Economic Value of Sour Gas

Sour gas is produced because it has significant economic value in Alberta.  About one third of the natural gas produced in Alberta is sour. For more information on the positive economic impacts of sour gas exploration and production to communities, see the report: Nature of Local Benefits to Communities Impacted by Sour Gas Development. For additional information about the natural gas industry in Alberta, see the Alberta Department of Energy Web site.

The Price of Sour Gas

Once sour gas has been processed, it is transported via pipeline to buyers. The free market determines the price of gas. (See "Natural Gas Prices in the North American Market" by the Canadian Association of Petroleum Producers at  http://www.capp.ca/).

Sour Gas Discovery, Development, and Delivery

Discovery

Before a sour gas well is drilled, the location of the gas beneath the surface must be determined. Seismic testing is used to give the developer information about rock formations and the most likely locations for gas deposits. Alberta Environment regulates seismic operations.

For further information, see Seismic Operations and Farmers' Rights, by Alberta Agriculture, Food, and Rural Development.

The illustration below demonstrates the seismic process.

Development

To determine the potential of a sour gas deposit, an exploration well is drilled. If gas recovery potential is economical, further wells may be drilled to produce the gas. After the raw sour gas is extracted, it is processed to remove hydrogen sulphide (H₂S) and other impurities before it is ready for consumption.

Production

To bring sour gas to market, the H₂S must be removed. This is accomplished by removing the sulphur component of the H₂S, leaving only the hydrogen. About 98 per cent of the sulphur recovered from western Canadian sour gas is converted into elemental sulphur, which is used to manufacture fertilizers, paper, pharmaceuticals, steel, and other products. Almost 90 per cent of the elemental sulphur produced in Canada comes from sour gas processing.

Delivery

Gas that is ready for consumption is shipped in pipelines to the end user. The gas is used in petrochemical production, electricity generation, home heating, and barbeque fuel.