News Release 7 December 1999
FOR IMMEDIATE RELEASE
EUB REQUIRES CANADIAN 88 OLDS SOUR GAS PROCESSING PLANT TO UPGRADE
Calgary, Alberta (7 December 1999) The Alberta Energy and Utilities Board (EUB) today issued Decision Report 99-29 confirming its previous requirement that Canadian 88 Energy Corp. upgrade its Olds Garrington sour gas processing plant to meet sulphur recovery efficiency requirements for existing plants undergoing significant expansion or extension of anticipated plant life span. These requirements are outlined in Information Letter (IL) 88-13, Sulphur Recovery Guidelines for Sour Gas Plants in Alberta. The decision results from a request by Canadian 88 to reduce its sulphur recovery and inlet rates as approved by the EUB in Decision Report 98-13. Local interveners opposed the amendment request, and a public hearing was held.
BACKGROUND
Canadian 88 had initially submitted an application to the EUB on 25 April 1997, proposing to increase the raw gas inlet rate at the Olds Garrington plant while maintaining the approved sulphur inlet rate and a sulphur recovery efficiency of 96.5 per cent on a quarterly basis. Subsequently, Canadian 88 amended its application to increase the sulphur inlet rate and increase the sulphur recovery efficiency to 98.4 per cent on a quarterly basis.
This initial application was considered at a public hearing in March 1998. The EUB issued Decision 98-13 on 30 June 1998, approving the application, which was conditional on Canadian 88 completing undertakings made in both its application and at the hearing. A new approval for the facility was issued on 9 July 1998.
During the early part of 1999, EUB staff requested a schedule from Canadian 88 for the applied-for sulphur plant upgrade. On 5 March 1999, the EUB received a response from Canadian 88 which proposed that the sulphur plant upgrade be delayed until gas deliverability to the plant improved. The company observed that its previous anticipated levels of gas to the plant had not materialized and as a result, its approved expansion was no longer economic. On 10 March 1999, EUB staff advised Canadian 88 that it must either meet its approved sulphur recovery efficiency by 1 September 1999 or apply to amend its approval.
An amendment application was received by the Board on 7 April 1999. Subsequently, the EUB received notice of opposition to this application from the Olds Area Residents Coalition (OARC). OARC is comprised of local landowners and residents who reside or own land in the vicinity of Canadian 88's facility and/or the town of Olds.
CURRENT HEARING
The application and intervention were considered at a hearing in Olds, Alberta, on 29 and 30 September and 1 October 1999. The Board determined the issues it should consider to be:
- the capacity expansion of the plant
- the available gas supply and associated plant life
- associated economic considerations, and
- plant operations, including sulphur recovery efficiency, flaring, and public involvement.
Based on the evidence presented at the hearing, the Board believes that, having regard to the plant modifications implemented by Canadian 88, the volume of additional reserves added to the plant to date and the remaining practical plant life, upgrading of the plant's sulphur recovery efficiency to meet current requirements is warranted and in the public interest. The Board noted that Canadian 88's own evidence confirms that plant life has in fact been extended significantly and furthermore that the company intends to work diligently to extend that life even further. The Board will require Canadian 88 to meet its earlier commitments and upgrade its sulphur plant to meet a sulphur recovery efficiency of not less than 98.4% on a quarterly basis and not less than 98.7% on an annual basis by 31 October 2000.
The Board will reduce the approved raw gas inlet rate and sulphur inlet rate to 2381 thousand cubic metres per day (103 m3/d) and 404.9 tonnes per day (t/d) as requested by Canadian 88. The Board is not prepared to allow the company to preserve the right until 30 June 2002, to expand the plant to the 1998 approved inlet levels, since the need for such an expansion no longer exists.
In the interim period up to 31 October 2000, the Board believes that Canadian 88 must meet its commitments to minimize sulphur emissions and maximize sulphur recovery to the extent possible with its current facilities. Accordingly, during this interim period, Canadian 88 will operate the Olds Garrington gas plant to a maximum daily inlet sulphur rate of 404.9 tonnes and will be expected to sustain a quarterly average sulphur emission level of not more than 9.6 t/d from the flare and incinerator stacks. The Board further expects that Canadian 88 will sustain a 97.1 per cent minimum quarterly average sulphur recovery during this interim period.
The Board expects that Canadian 88 will act in a timely and diligent manner to address the requirements of this decision. The Board is concerned both with the previous delay in implementing improved sulphur recovery and associated issues related to the operations of the Olds Garrington plant. These issues, in the Board's view, have contributed to heightened public concerns.
In the case of the Olds Garrington gas plant, the Board stated that timely compliance with regulatory requirements and the conditions of this decision are essential to reassuring the public and initiating a process of establishing trust within the community. The Board therefore has imposed a number of other conditions upon Canadian 88. These conditions include:
- Canadian 88 must demonstrate to EUB staff that sulphur recovery facilities at the Olds Garrington gas plant are capable of meeting the sulphur recovery requirements prescribed in this decision and that those facilities have been installed and commissioned not later than 31 October 2000. The Board requires Canadian 88 to submit monthly progress reports on the status of the sulphur recovery upgrade installation work commencing 1 January 2000 until such time as the upgraded facilities are operational and performance tested to verify recovery capabilities.
- Canadian 88 will conduct a performance test on its existing sulphur recovery plant by 30 April 2000 and report those results to EUB staff and will conduct a performance test on the upgraded sulphur plant within three months of commissioning.
- Canadian 88 will develop and implement appropriate sour and acid gas flaring management, measurement, and estimating procedures consistent with EUB Guide 60, Upstream Petroleum Industry Flaring Guide, Alberta Environment requirements, and Section 6 of this decision. Canadian 88 must submit its procedures and supporting calculations for review by Board staff not later that 31 March 2000. Board Field Surveillance and Operations staff will monitor plant operations and S-statements to verify compliance with the flaring procedures.
- Canadian 88 must submit to the Board by 31 March 2000 a report on the feasibility of installing a separate emergency acid gas flare system designed to better manage acid gas flaring events.
- Canadian 88 will maintain, subject to EUB audit, a daily log of all flaring events. The log must include details of each flaring incident, including source volumes, method of measurement or estimating, duration of event, reasons for problems, and considerations for continuing plant operations, including public notification.
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Copies of this news release and Decision Report 99-29 are available on the EUB website at http://www.ercb.ca/
For further information please contact:
Greg Gilbertson, Senior Advisor
EUB Communications
Tel: (403) 297-3648
Fax: (403) 297-3757
MR 99-26
