Government-Industry Advisory Group on Gas and Bitumen Conservation in Oil Sands Areas (GIAG)

Contents

Introduction
Participating Organizations
GIAG Objectives
The Process Used
The Results
Solution Gas Definition
Region of Influence
Thermal Bitumen
Primary Bitumen
Data Collection

INTRODUCTION TO GIAG

The Government-Industry Advisory Group on Gas and Bitumen Conservation in Oil Sands Areas (GIAG) formed in April 2001 to generate process and policy recommendations on the gas over bitumen issue that could be presented to the EUB for consideration.

PARTICIPATING ORGANIZATIONS

To date, the following organizations have taken an active role in GIAG's work:

GIAG welcomes the input and participation of all firms with an interest in the gas over bitumen issue so that its findings and recommendations are truly representative of the industry.

GIAG OBJECTIVES

GIAG set three objectives:

• To reduce the uncertainty associated with gas and bitumen development in oil sands areas by reaching consensus about decision-making criteria.
• To expedite the EUB's approval process for gas development in oil sands areas by achieving consensus about appropriate decision-making criteria.
• To improve public access to technical data generated by gas and bitumen developers operating in oil sands areas.

The EUB initiated GIAG and fully supports its objectives. However, under EUB legislation collaborative efforts involving EUB staff cannot pre-judge the Board's decision process or limit the factors the Board considers in making its decisions. For this reason GIAG agreed to present its findings in the form of recommendations to the Board.

GIAG chose to follow the 80/20 principle seeking recommendations that would enable industry to resolve 80% of its ongoing issues. Hearings could focus on clarifying areas where genuine differing interests require regulatory direction.

Early dialogue disclosed the following challenges to reaching these objectives:

• The issues are numerous, technical and complex with substantial divergence of views held by various participants
• Given the time limitations set by GIAG for a fall report and the busy summer schedule, the work of GIAG needed to be realistically limited in scope.
• Collaborative efforts must overcome either lack of credible supporting data or the confidential nature of that data.

THE PROCESS USED

GIAG agreed that it would create a consensus-based report utilizing five integrated technical subcommittees, each of which examined a different aspect of the gas over bitumen issue.

The benefits of a facilitated consensus process were:

• It improved communication among previously polarized industry participants
• It promoted useful interest based discussions and creative options rather than positional debate.
• It was felt that genuine industry consensus would enhance the credibility of the recommendations presented to the EUB.

THE RESULTS

Following are brief, high-level summaries of the focus and nature of the recommendations proposed by each of the five technical subcommittees. Parties will need to review the full reports of the subcommittees (which are shown as links in each title) to gain a thorough understanding of the recommendations.

Solution Gas Definition: This subcommittee has proposed criteria for determining the ownership of gas produced from oil sands zones. This subcommittee report is still in draft form at this time and may change as a result of further subcommittee or main GIAG committee meetings.

Region of Influence: The focus of this subcommittee was to try and develop criteria that would reduce the uncertainty of production approval for gas wells drilled in proximity to commercial bitumen resources. Criteria have been proposed that define situations where there would be a high likelihood that production from gas wells would be either approved or denied. The criteria focus largely on the geological environment and the distance from the gas well to a potentially commercial bitumen resource.

Thermal Bitumen: The effort of this subcommittee focused on defining criteria that would describe a commercial bitumen resource. The initial scope of the team was limited to the development of preliminary criteria that would define commercial bitumen in the Wabiskaw-McMurray formation assuming the bitumen resource would be developed using SAGD technology. A draft definition for "reasonable, foreseeable technology" was also proposed. Future work has been identified to assist in validating some of the proposed criteria.

Primary Bitumen: This subcommittee has proposed a decision tree that could be used to evaluate gas production applications where the region of influence of the gas well encounters (directly overlies) a potential primary bitumen resource. The decision tree uses a number of different criteria (in a progressive manner) in order to determine whether the gas production application can be approved in a routine fashion.

Data Collection: This group focused on defining and validating the EUB's data collection and submission requirements and exploring means to ensure submission of the data. The team has proposed short term recommendations intended to clarify or expand on existing regulatory policy and has identified some longer term work that would consider changes to enhance existing data collection and submission requirements (e.g. requirements for bitumen viscosity data, requirements for pressure and gas measurement for bitumen wells).

GIAG now requests all industry players with an interest in this work to provide comments and feedback to GIAG before the end of October 2001. Your input will assist GIAG in finalizing its recommendations and completing the process of putting the recommendations before the EUB for consideration.

Responses should be submitted in writing no later than October 31st to:

David G. Gould LL.B., Q.C., C. Med.
Facilitator – GIAG Consensus Process
Canadian Dispute Resolution Corporation
4th Floor, 1504-15th Avenue SW
Calgary, AB T3C 0X9
Tel: (403) 233-2209 Fax: (403) 233-7446
Email: dgould@cdrc.com