News Release 25 November 1999

FOR IMMEDIATE RELEASE

EUB ENCOURAGES STAKEHOLDER CONSULTATION ON GRANDFATHERED GAS PLANTS ANNOUNCES MEMBERSHIP OF SULPHUR RECOVERY REVIEW ADVISORY GROUP

CALGARY (25 November 1999) The Alberta Energy and Utilities Board (EUB) in consultation with Alberta Environment (AENV) has begun an extensive stakeholder consultation review to clarify how current sulphur recovery guidelines and "grandfathering" allowances apply to older sour gas plants and to other facilities in Alberta where sour or acid gases are handled. These guidelines are currently stated in Informational Letter (IL) 88-13, which was put into effect in 1988.

Concurrent with this stakeholder consultation, the EUB and AENV have also established a multi-stakeholder advisory group of invited industry and public representatives headed by a third-party facilitator, Mr. Harold Keushnig, a former senior staff member of the EUB, currently in private practice as a consultant. Members of the group are listed in the attachment to this release. The group will submit a report to the EUB/AENV in early 2000.

On 28 September 1999, a discussion paper to facilitate consultation with stakeholders was released by the EUB and AENV on the EUB web site and notification of this was made via a General Bulletin (GB 99-17). The discussion paper has been designed to provide sufficient background, so that the public can become aware of and comment on the issues being addressed. The EUB wishes to actively encourage members of the public who wish to comment on this review to send their submissions to Mr. Kim Eastlick of the EUB at (403) 297-4325, by fax at (403) 297-3520 or by e-mail to kim.eastlick@eub.gov.ab.ca. Expected deadline for submissions is 15 December 1999.

When IL 88-13 was issued, existing sour gas plants were not required to meet the revised sulphur recovery guidelines. This decision was made based on perceived environmental benefits relative to the associated costs, and because of the believed-to-be short life expectancy of many of these plants. However, many of these plants have been or may be upgraded, and now have longer lifeexpectancies. There is also a broader awareness of environmental issues. Hence, the EUB has determined that this review is now needed. It is the review's intention that clarification is required for fair and consistent application of existing EUB guidelines that deal with various aspects of sulphur recovery. The objectives of the review were established to update and/or clarify:

• sulphur recovery requirements for grandfathered sour gas plants
• the application of sulphur recovery guidelines to other facilities, and
• proliferation guidelines for small gas plants and other facilities.

An important element from the public perspective is the review of grandfathering provisions. In Alberta, 61 sour gas plants have approved recovery levels less than those specified for new or upgraded plants. Based on 1998 operating data, eliminating grandfathering would have reduced emissions by 91 tonnes per day (32% of total sour gas plant emissions). However, Alberta's air quality standards continue to be met at current emission levels and this level of reduction cannot be achieved without significant cost. The review will examine whether the grandfathering provisions set out over a decade ago in IL 88-13 for these older plants remain relevant and if they are not, to what extent they should be changed.

Because IL 88-13 was originally intended to apply only to sour gas plants, the review will also clarify how the sulphur recovery guidelines should be applied to other facilities that also have sulphur emissions. The current practice of applying IL 88-13 to other petroleum facilities such as production batteries, compressor-dehydrator sites, refineries and/or upgraders has not yet received adequate input from either the public or industry.

In IL 88-13, sulphur recovery requirements become more stringent with increasing sulphur throughput. This may be providing an unintentional incentive to build and operate a greater number of smaller, lower sulphur recovery facilities than would otherwise be the case. Clarification regarding proliferation of these small sour gas facilities is thus also necessary.

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Copies of this news release and the Sulphur Review Consultation Document are available on the EUB website at http://www.ercb.ca

For further information please contact:

Julie Harrington, Comm. Coordinator,
EUB Communications
Tel: (403) 297-4105

NR 99-23

Alberta Energy and Utilities Board
Sulphur Recovery Review Advisory Group

Chairman

Harold Keushnig Regulatory Affairs Consultant.

Environment Members

Dr. Martha Kostuch Environmental activist. Veterinarian from Rocky Mountain House. Representing the Prairie Acid Rain Coalition. Active in air pollution issues for over 20 years.

Tom Marr-Laing Environmental activist. Directs the Energy Watch program of the Pembina Institute. Energy Watch advocates for policies and practices by government and industry that reduce risks to the environment and human health associated with fossil fuel production and use.

Industry Members

Paul Galachiuk Director of Upgrading Process Engineering at the Suncor Energy Oil Sands facility in Ft. McMurray. Over 18 years experience in both the refining and upgrading areas of crude oil processing.

Ian Kilgour More than 20 years of experience in the upstream petroleum industry with Shell Canada. Principle focus has been natural gas operations and development.

Gordon Rankin Over 20 years of experience within the oil and gas industry in Canada and internationally. Experience and responsibilities have been in both operations and facility engineering areas.

Ron Schmitz Environmental engineer with Husky Oil. Past experience with numerous Clean Air Strategic Alliance (CASA) groups, including SO2 Management Project Team, and the Enhanced Performance subgroup of the Acidifying Emissions Management Implementation Team.

Technical/Academic Members

Dr. Sheldon Roth Professor in the Faculty of Medicine, and Director of the Environmental Research Centre at the University of Calgary. Research interests include toxicity of environmental pollutants such as hydrogen sulphide.

Ed Wichert Oil and gas industry consultant with many years of sour gas industry experience. Research interest in sour gas properties.

Public Members

Dave Brown A rancher in the Caroline sour gas exploration and production area of west central Alberta. Active in the Sundre Petroleum Operators Group (SPOG) which combines industry and public representation to deal with mutual aid, environmental and community affairs issues.

Bart Guyon Bison rancher and municipal official in the Drayton Valley gas production area, with 15 years of oil and gas industry experience in electrical and instrumentation construction and maintenance.