Eileen Kahler
EUB Communications
Tel: (403) 297-8144
e-mail: eileen.kahler@gov.ab.ca

Bob Curran
EUB Communications
Tel: (403) 297-3392
e-mail: bob.curran@gov.ab.ca

EUB Backgrounder - Field Surveillance Summary 2000/2001
Increased Inspections; Improved Compliance

Staff at the EUB's eight Field Centres inspect and monitor Alberta's thousands of oil and gas facilities. EUB field representatives are an important part of a broad energy regulatory program that involves industry, government and the public.

The EUB's annual Field Surveillance Provincial Summary details the wide range of activities carried out by the EUB field staff. The report provides stakeholders with information on industry compliance and EUB enforcement action; it shows trends and assists the EUB in planning its inspection and enforcement strategies.

As well as opening a field sub-office in High Level in 2000/2001, the EUB added 12 new field staff, allowing it to keep pace with record drilling activity in Alberta. There were 14 621 wells drilled in 2000/2001 a 27% increase over the 11 548 wells drilled in 1999/2000. Further planned additions to field staff in 2001/2002 reflect a desire to ensure that the right emphasis is placed on the EUB's surveillance and enforcement roles, and will help the EUB maintain its focus on high-risk operations, operators with poor performance history and sensitive areas of development.

And in a year when activity levels were at a record high and the EUB introduced many new requirements, industry managed a slight overall improvement in its compliance record. This is evidenced by an increase in the percentage of satisfactory inspections and a decrease in the percentage of minor, major and serious unsatisfactory inspections.

Albertans can be assured that firm enforcement action will be taken when an operator breaks the rules. The EUB's objective is to ensure that the energy industry understands and follows rules so that Albertans can be confident that oil and gas companies operate responsibly in ways that protect people, preserve the environment and allow for the efficient and orderly development of their resources.

• Over 75 000 operating wells and related facilities
• 684 gas plants
• 293 799 km of pipeline

A satisfactory inspection is an inspection where all regulations and requirements are met by industry.

A minor unsatisfactory inspection finds a contravention of regulation(s) and/or requirement(s) that does not result in a direct threat to the public and/or the environment and does not adversely affect oil and gas operations.

A major unsatisfactory inspection finds a contravention of regulation(s) and/or requirement(s) that an operator has failed to address and/or has the potential to cause an adverse impact on the public and/or the environment.

A serious unsatisfactory inspection finds a total disregard for regulation(s) and/or requirement(s) that is causing or may cause significant impact on the public and/or the environment.

INSPECTIONS

There are hundreds of requirements in each inspection area monitored by the EUB. Where even one non-compliance item is found no matter how "minor" in nature the item may seem the inspection is deemed unsatisfactory, and a company is put on an enforcement ladder of escalating consequences.

• The total number of initial field inspections in 2000/2001 increased to 8279 from 7340 in 1999/2000. This reflects the EUB's planned expansion of inspection activities set out in its 2000-2003 business plan.
• In addition to the 8279 initial inspections, field staff completed 2053 reinspections.
• Overall, satisfactory inspections increased slightly to 64%, from 63% in 1999/2000.
• Major/serious unsatisfactory inspections were further reduced in 2000/2001 to 3.3%, from 3.5% in 1999/2000 and 5.6% in 1998/1999.
• Out of the total 8279 initial inspections conducted, the EUB identified 4 serious unsatisfactory inspections, compared to 5 in the previous year. Three of these unsatisfactory inspections related to pipeline hits and one involved a waste management facility. Operations at all facilities were shut down until corrections were made.

Drilling

• In 2000/2001, EUB field staff conducted 648 inspections on drilling operations resulting in:
• 568 satisfactory inspections (87.7% up from 87.1% in 1999/2000).
• 39 minor unsatisfactory inspections (6.0%).
• 41 major unsatisfactory inspections (6.3%). Drilling operations were suspended at all rigs with major unsatisfactory items until they were corrected. This resulted in 41 shutdowns.
• During the drilling of the 14 621 wells in 2000/2001, there were 4 blowouts, 6 blows and 162 kicks, or 11 kicks per 1000 wells drilled. The kick occurrence rate has remained relatively constant for the last four years and is a significant improvement from the years prior to 1997/98, when the kick occurrence rate averaged 23 kicks/1000 wells drilled.

Servicing

• In 2000/2001, EUB staff conducted 348 inspections on well servicing operations resulting in:
• 303 satisfactory inspections (87.1% - down from 89.7% in 1999/2000).
• 31 minor unsatisfactory inspections (8.9%).
• 14 major unsatisfactory inspections (4.0%). Servicing operations were suspended at all rigs with major unsatisfactory items until they were corrected. This resulted in 14 shutdowns.
• A total of 4 blowouts and 1 blow occurred in well servicing operations in 2000/2001.

Oil and Gas Production Facilities

• EUB staff conducted a total of 6704 inspections/ reinspections of oil and gas production facilities in 2000/2001. This is an increase over the 6412 inspections/reinspections conducted in 1999/2000.
• Continuing a downward trend in the percentage of major unsatisfactory inspections for oil production facilities, there were 103 major unsatisfactory items identified (or 1.9% - a decrease over the 2.3% in 1999/2000). Appropriate enforcement action was taken to bring facilities into compliance, and 34 oil production facilities were suspended as a result.
• Major unsatisfactory inspections accounted for 3% of all gas facility inspections completed in 2000/2001 an improvement over the 4% in 1999/2000. EUB field staff suspended seven facilities until improvements were made to ensure proper operation of the facilities.
• The EUB also reports increased sulphur recovery efficiencies at gas plants (98.8% in 2000, compared to 98.7% in 1999).

Pipelines

No matter how small a leak, if a pipeline failure occurs, the licensee or operating company is required to inform the local EUB field centre.

• Over the last decade there has been a significant reduction in the overall pipeline failure frequency. In 2000, the ratio decreased to 3 failures per 1000 km of pipeline, from 5 failures per 1000 km in 1988. The majority of failures occur on small diameter water lines and multiphase oil effluent (a mix of oil, water and gas) lines.
• There were fewer pipeline ruptures than in the previous year 39 ruptures in 2000/2001, compared to 44 in 1999/2000.
• Of the total pipeline incidents reported during 2000/2001, 89.6% were leaks, 4.1% were ruptures and 6.3% were hits that did not result in a release.
• 77.6% of releases were classified as "priority three". Priority three releases have minimal potential for hazard or environmental impact, and do not require inspection.
• A decrease in the number of "priority one" releases (which require immediate response) can be attributed to the use of sensitive leak detection systems, automated shut in equipment and pipeline patrols (aerial and ground). 1.7% of releases were classified as "priority one".
• The EUB reports an increase in corrosion failures, noting that most of the leaks were on sweet gas pipeline systems in southeastern Alberta. These types of leaks are typically very small in volume and difficult to detect under normal operating conditions. Investigations of first time corrosion failures on systems ensure that corrosion problems are analyzed and adjustments made to reduce future failures. The EUB has also established a corrosion team to review requirements and examine all opportunities for avoiding corrosion.
• The EUB responded to a greater number of contact damage hits, which is largely attributed to increased development. There were 97 in 2000/2001, compared to 68 in 1999/2000. The goal of this surveillance area is prevention of hits. EUB staff conduct ground disturbance seminars for companies in violation of requirements, and others undertaking ground disturbance operations, and the Field Surveillance Branch continues to investigate ways to reduce pipeline hits.

Spills

The ideal situation would be the elimination of all spills. Notwithstanding that desire, the EUB's goal is to minimize the effects of spills and releases by working cooperatively with industry and other regulators.

Releases must be reported to the EUB to allow for an appropriate, timely and effective response. Failure to do so will result in escalating consequences through the EUB's enforcement ladder process, which may include suspension of operations.

• A total of 1475 releases were reported to the EUB in 2000/2001 up from 1318 the previous year. The 752 inspections conducted by the EUB resulted in:
• 711 satisfactory inspections,
• 29 minor unsatisfactory inspections, and
• 12 major unsatisfactory inspections

The EUB notes that in 2000/2001, more than 70% of the spills were low-volume and were usually contained on-lease with minimal impact on the surrounding environment.

• Although the number of spills reported increased over 1999/2000, spill volumes decreased:
• Spill volumes for oil were 6469.1 cubic metres in 2000/2001, compared to 7247.1 cubic metres in 1999/2000 a decrease of 10.7%.
• Spill volumes for water were 22 874.1 cubic metres in 2000/2001, compared to 23116.7 in 1999/2000 a decrease of 1.0%.

ENFORCEMENT

The EUB has an enforcement process that sets clear guidelines for enforcement action when dealing with regulatory noncompliance. This process, known as the "enforcement ladder," allows the EUB to take a firm, fair and consistent approach. Our actions always include deadlines for fixing a problem and may be reinforced by penalties, such as temporary or long-term suspension of operations, closure or refusal of applications, and even prosecution.

There was a significant increase in the estimated cost to industry as a result of EUB suspensions of industry operations approximately $12 million in 2000/2001, compared to $3.6 million in 1999/2000, with the number of suspensions increasing from 211 to 236.

PUBLIC COMPLAINTS

Along with the record amount of energy development activity in 2000/2001, the EUB recognized an associated increase in public concerns. The EUB places a high priority on addressing these public concerns. Field Surveillance staff respond to all complaints. The aim is to ensure prompt, effective and lasting resolution of any problem that is identified.

• During 2000/2001, the EUB received and responded to 924 complaints, compared to 859 in the previous year.
• Of note, complaints related to odours and spills were down, 2% and 15% respectively. However, there was an increase in the number of complaints related to flaring, noise, and public health and safety. The EUB is confident that its effort on major initiatives, such as work currently underway to address 87 recommendations of the Advisory Committee on Public Safety and Sour Gas, and development of requirements in connection with the Clean Air Strategic Alliance to target reductions in flaring, will help ease public concerns related to flaring and public health and safety. 

• Results from the complaint handling follow-up process indicate a decrease in customer satisfaction, indicating that:
• overall, 65% of incidents were resolved to the satisfaction of the complainants, compared to 81% in 1999/2000.
• 66% were satisfied with the companies' responses, compared to 89% in 1999/2000.
• 86% were satisfied with the response from the EUB, compared to 99% in 1999/2000.

The EUB attributes some of the decrease in customer satisfaction to new requirements regarding flaring and expectations around public consultation regarding flaring matters. Many of the public complaints and concerns reflect these new consultation requirements. Field Surveillance Branch is investigating ways to improve customer satisfaction. The addition of new field staff, along with the progress on the EUB's public safety and flaring initiatives described above, will assist the EUB in effectively addressing complaints.

STAKEHOLDER INVOLVEMENT

• Field Surveillance staff were involved with 177 facilitations, where EUB staff coordinate discussions between affected parties who find themselves on opposite sides of a development issue. Of these facilitations, 105 were successfully resolved and 22 were candidates for Appropriate Dispute Resolution (ADR.) Facilitation efforts are ongoing with the remaining 50.
• The EUB's ADR process appears to be effective in resolving issues. Results to date indicate that of the 7 third party mediations that have completed the process, 5 have been successfully resolved and 2 have gone to hearing. Mediation is ongoing for the remaining 12.
• The number of synergy groups, formed by affected individuals and companies with common interests in local issues of energy development, continues to increase. Currently EUB field staff participate in most of the 67 synergy groups in the province. The EUB endorses their cooperative approach as an effective way to improve communication and address issues.
• Field Surveillance will continue to hold open houses in 2001/2002, as an effective means for communicating with stakeholders.

For further information please contact:

Eileen Kahler
EUB Communications
Telephone: (403) 297-8144
email: eileen.kahler@gov.ab.ca

EUB website: www.ercb.ca