News Release July 31, 2002

FOR IMMEDIATE RELEASE 

CALGARY (July 31, 2002) - The Alberta Energy and Utilities Board (EUB) has released its annual Field Surveillance Provincial Summary (Statistical Series 57), which supplies stakeholders with information on industry compliance, EUB enforcement actions, and details about the wide range of activities carried out by EUB field staff. 

The Provincial Summary reports on inspections and results for drilling, servicing, oil and gas production facilities, pipelines, and spills. The report also covers enforcement actions taken by the EUB during the year, statistics on the numbers and types of public complaints the EUB responded to, and field staff participation with the public. 

In 2001/2002, the EUB recorded improved industry performance in a number of operational areas, including an improved satisfactory inspection rate for drilling and servicing operations, a decreased number of spills and releases, a substantial decrease in the failure frequency for pipelines, and fewer public complaints, particularly related to odours and flaring. 

The EUB is encouraged by the positive results reported in many areas, but has noted the overall increase in the number of major and serious unsatisfactory inspections from 3.3% in 2000/2001 to 4.4% in 2001/2002. This was partially attributed to increased air monitoring for off-lease H₂S odours, increased inspection frequency of sour gas operations, and an enhanced inspection program aimed at mitigating pipeline corrosion. 

An overview of the EUB's Field Surveillance Provincial Summary report for 2001/2002 is provided in the attached backgrounder. 

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This news release and the Field Surveillance Provincial Summary are available on the EUB Web site at http://www.ercb.ca

For more information, please contact:

Bob Curran, Senior Advisor, EUB Communications

Phone: (403) 297-3392   Fax: (403) 297-3757

E-mail: bob.curran@gov.ab.ca  

NR2002-19

The Field Surveillance Role

The 115 field staff operating out of 8 EUB Field Centres located around the province inspect construction, operation, and abandonment operations at oil, gas, and oil sands facilities (including pipelines, compressors, and processing plants). They respond to emergencies and public complaints on a 24-hour basis, facilitate resolution of landowner-industry conflicts, participate in public-industry liaison committees, and ensure a consistent approach to enforcement of requirements with noncompliant operators.

Adding 12 new field staff in 2001/2002 helped the Field Surveillance Branch accomplish its inspection goals and increase emphasis on priority areas.

With oil and gas industry activity continuing at record pace, vast sums of money being committed to oil sands development, and sour gas drilling and development increasing, we expect more emphasis will be placed on our role of overseeing the safe, responsible, and orderly development of Alberta's energy resources. In the face of increasing activity and the associated issues that presents, we remain committed to our vision of building a regulatory framework that inspires public confidence.

Following is a brief summary of the overall inspection statistics, results, and field staff activities reported in the Field Surveillance Provincial Summary April 2001/March 2002.

Brief Summary of Field Surveillance in 2001/2002

Inspections 

The EUB was able to keep pace with activity levels in what was a near record year for energy development. 

• 14 307 wells were drilled in 2001/2002, a slight decrease from the 2000/2001 record of 14 621.

• a total of 8407 initial inspections and 2129 reinspections were completed, a slight increase over 2000/2001.

While notable industry improvements were recorded in areas such as drilling and servicing, the overall percentage of major and serious unsatisfactory inspections increased from 3.3% of total inspections to 4.4%. This increase is attributed in part to increased air monitoring of off-lease hydrogen sulphide (H₂S) odours and increased inspection requirements. 

Enforcement

The EUB is confident that, in general, Alberta's energy industry strives to comply with EUB rules, regulations, requirements, and programs. However, while comfortable, we are not complacentcompanies that fail to meet requirements or follow EUB direction are subject to escalating enforcement consequences. Enforcement 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.

In 2001/2002 there was a significant decrease in the number of facilities the EUB ordered suspended: 142 facilities, compared to 236 in 2000/2001. However, this resulted in a greater cost to the industry$16.3 million, compared to $12 million in 2000/2001. (See Table 2, page 5, of report.)   

Field inspections/investigations, 2001/2002

Well Control Occurrences

Blows and blowouts during drilling and servicing operations can present some of the most serious incidents for well operations, having the potential to cause public safety and environmental impacts.  The EUB pays particularly close attention to the number of blows, blowouts, and kicks and industry's response to these incidents, as they are a primary indicator of industry's drilling and servicing performance.

Requirements that ensure high training standards and sophisticated blowout detection and prevention equipment have helped to keep well control occurrences to a minimum. Of the 14 307 wells drilled in 2001/2002, the EUB recorded

• 2 blowouts and 1 blow during drilling operations, and

• 6 blowouts and 1 blow during servicing.

All were brought under control with minimal environmental damage and no public safety impacts.

Flaring

The impact gas production facilities have on the public continues to be a concern to the EUB. Fugitive emissions, noise from compressors, black smoke, and flaring are the primary issues affecting the public. In response we

•  increased gas production inspections by 76% (1778 inspections completed), and

• increased inspections of well test flaring operations by 69% (122 inspections completed).

The industry has adopted an emphasis towards flaring reduction. This responsive attitude, along with a surveillance program that encourages industry to reduce flaring at gas processing plants, seems to have had a positive effect, contributing to a reduction in public complaints:

• 113 in 2000/2001, compared to 77 in 2001/2002.

Inspection audits of well test flaring operations will continue to be a priority. EUB field staff will focus on flaring operations in populated areas and those wells containing greater than 5% H₂S.   

Spills

The EUB's goal is to minimize spills and the effects of spills and releases by working cooperatively with industry and other government agencies to reduce environmental impacts.

• 100% of all spills that pose any kind of public safety or environmental threat are inspected immediately. (These accounted for 2%, or 30 spills, in 2001/2002.)

• More than 75% of spills were low volume and most were contained on lease.

• A total of 1434 releases were reported in 2001/2002, a decrease from the 1475 in the previous year.
  

Pipelines

In 2001/2002, 18 777 kilometres of new pipeline were connected to Alberta's pipeline infrastructure, bringing the total to 306 618 kilometres of energy-related pipeline. Despite having more pipeline in operation, the overall picture for pipeline performance improved in 2001/2002. EUB field staff recorded higher percentages of satisfactory inspections in each of the four key pipeline inspection areas: pipeline hits/failures, construction and pressure testing, operations inspections, and contact damage.

Of the 523 inspections conducted on pipeline failures/hits in 2001/2002, the EUB recorded

• 23 major unsatisfactory inspections (4.4%) and 1 serious unsatisfactory inspection. All were brought into compliance;

• 32 ruptures, compared to 39 in 2000/2001;

• a failure frequency of approximately 2.8 failures/1000 kilometresa substantial improvement over the 1988 benchmark of 5 failures/1000 kilometres. 

Responding to Public Concerns

For the EUB, one of the measures of our performance is our responsiveness to public complaints. Although the activity level in the oil and gas industry remained high in 2001/2002, the number of public complaints decreased marginally in most categories compared to last year:

• 881 complaints in 2001/2002 (a decrease of 5% compared to 2000/2001). 

The EUB receives complaints on a variety of issues, the most common being odours:

• There were 367 odour complaints in 2001/2002, a reduction of 10% over last year. (See Figure 4, page 8, in the report, for a distribution of complaints by issue). 

Through increased surveillance, application of escalating enforcement for non-compliance, and active and extensive public and industry involvement with synergy groups, open houses, and facilitation efforts, we believe public confidence will strengthen and public complaints will continue to decrease.

• In 2001/2002, Field Surveillance efforts to connect with the community included

• staff participation in 57 active synergy groups, and

• open houses in High Level, Midnapore, Rocky Mountain House, and Pincher Creek.

Public Safety and Sour Gas (PS&SG) Initiatives

In January 2000, the EUB established a 22-member multistakeholder Advisory Committee on Public Safety and Sour Gas to review Alberta's sour gas regulatory system. The committee made a report of 87 recommendations, 12 of which specifically related to the Field Surveillance role.

In 2001/2002, the Field Surveillance Branch made significant progress on the recommendations, completing work on 8 of the 12. As a result, enhancements were made to the Branch's sour gas surveillance processes.