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Bulletin 2009-41
November 13, 2009
Processing of Applications for Sour Oil and Gas Development in Light of the Court of Appeal Decision in the Matter of Kelly v. Alberta (Energy Resources Conservation Board) and Grizzly Resources Ltd.
1 Introduction
On October 28, 2009, the Court of Appeal of Alberta issued its decision in the matter of Kelly v. Alberta (Energy Resources Conservation Board) and Grizzly Resources Ltd.[1] (the decision). The Court found that parties residing in the protective action zone [2] (PAZ) could be directly and adversely affected by an application for approval of a project to which the PAZ relates. The Court also found that applicants must include residents within the PAZ in their participant involvement programs under Energy Resources Conservation Board (ERCB/Board) Directive 056: Energy Development Applications and Schedules.
[1] 2009 ABCA 349.
[2] As defined in Appendix 1 of ERCB Directive 071: Emergency Preparedness and Response Requirements for the Petroleum Industry (November 2008 edition)
In light of the decision and to permit evaluation of impacts of the decision, the Board temporarily suspended the issuance of approvals of all sour applications pending addressing the various issues raised in the decision.
This bulletin outlines the process for and requirements applicable to outstanding and pending applications for approval of wells, facilities and pipelines that contain or are anticipated to contain hydrogen sulphide (H2S). For the purposes of this bulletin, “sour applications” refers to those applications where an emergency planning zone (EPZ) needs to be calculated, i.e., where there is an expected H2S level greater than or equal to 0.1 mole per kilomole of H2S.
2 Background
In addition to being an ERCB requirement, site-specific emergency response planning has been a long-standing practice in the oil and gas industry to provide for the safety of the public. In April 2008, the ERCB issued a revised edition of Directive 071: Emergency Preparedness and Response Requirements for the Petroleum Industry, which included the emergency response concept called a protective action zone (PAZ). The introduction of the PAZ was intended as an enhancement to identify the area within the EPZ downwind of a release in which responders should focus and prioritize their response efforts. The PAZ is a widely accepted concept in numerous jurisdictions and is used as a tool to guide responders in prioritizing and focusing their emergency response efforts. In other words, the PAZ is intended to be an area within the EPZ that takes priority for response purposes over other areas within the EPZ. The introduction of the PAZ was intended as an enhancement to emergency response within the EPZ following an incident. Calculation of the PAZ area is wholly dependent on wind conditions, the volume of H2S released, and other factors that can only be determined at the time of an incident; the true size and location of the PAZ is not determined until immediately after an incident occurs. The PAZ is a concept and tool that the Board still considers valuable and necessary.
3 ERCBH2S Model and Directive 071
Directive 071 (November 2008 edition) defines the PAZ as “an area downwind of a hazardous release where outdoor pollutant concentrations may result in life-threatening or serious and possibly irreversible health effects on the public.” This definition is derived substantially from available literature on emergency response tools and is materially consistent with the PAZ definition used by several North American jurisdictions. The ERCBH2S model, also introduced in 2008, is a state-of-the-art computer model used to calculate EPZs and PAZs. The model was incorrectly calibrated to calculate the PAZ to an endpoint of 10 parts per million (ppm) concentration of H2S averaged over a 3-minute exposure time (10 ppm endpoint). This endpoint is incorrect. The calculation should have been based on anticipated impacts of exposure based on 130 ppm for a 60-minute exposure time.
The ERCB recognizes that it made an error in adopting an endpoint for the PAZ that did not correspond to the definition in Directive 071 and did not reflect the ERCB’s intent. The Court’s decision has assisted the ERCB in reevaluating and correcting Directive 071 to reflect its actual intent. Parties in the vicinity of a 10 ppm endpoint are not expected to suffer life-threatening or serious and possibly irreversible health effects, as contemplated in the PAZ definition. For example, Alberta’s worker safety rules provide that people may work safely in an environment of up to 10 ppm H2S for eight hours.
Currently, a portion of the PAZ is included within the EPZ. However, because the PAZ is calculated using a 10 ppm endpoint, a portion of the PAZ currently falls beyond the boundary of the EPZ. The outer boundary of the calculated EPZ for a well, pipeline, or facility is based on a very conservative endpoint of 100 ppm concentration of H2S over a 60-minute exposure time. Evidence suggests that this concentration does not represent conditions that would result in life-threatening or serious and possibly irreversible health effects. [3] In fact, evidence suggests that parties would have to be significantly closer to the source of the release than the currently calculated extent of the PAZ to suffer those effects. In fact, to suffer impacts contemplated in the PAZ definition, parties would have to be closer to the release than the outer boundary of the EPZ.
The ERCB will revise the current ERCBH2S Model v.1.19 and subsequently v.1.20 Beta. Following a period of testing of ERCBH2S Model v.1.20 Beta, the ERCB will release a final version of v.1.20 and will rescind v.1.19 and v.120 Beta at that time. [4] In all three updated versions of the ERCBH2S model, which will be effective immediately upon their release, the ERCB will have adopted an endpoint for calculation of the PAZ that reflects the PAZ as defined in Directive 071. The correct endpoint has been defined as a 130 ppm concentration of H2S over a 60-minute exposure time. [5] Based on scientific data, this endpoint is consistent with the PAZ definition and more appropriately indicates the area in which parties may suffer the impacts contemplated in the PAZ as defined.
[3] See report Health Effects Associated with Short-Term Exposure to Low Levels of Hydrogen Sulphide (H2S) – A Technical Review (October 2002), available on the Alberta Health and Wellness Web site at www.health.alberta.ca/newsroom/pub-environmental-health.html.
[4] All references to ERCBH2S v.1.20 in this bulletin refer to v.1.20 Beta until such time as it is rescinded and replaced with the final v.1.20.
[5] This endpoint is equivalent to a 100 ppm outdoor concentration of H2S over a 150-minute exposure time.
The Board emphasizes that neither the error in the ERCBH2S model nor this change compromises public safety in any way. By better predicting the boundary to which the PAZ could extend, this change will allow licensees to focus and prioritize their immediate response efforts on those parties who may be at most risk of exposure to a hazard in the unlikely event of an incident.
The Board has also reviewed Directive 071 and has concluded that because the EPZ area as calculated provides robust, comprehensive and conservative protective measures, other zones, such as the emergency awareness zone and the two sulphur dioxide (S02) zones calculated by ERCBH2S, do not add material public safety measures over those provided within the EPZ. The Board has therefore concluded they are unnecessary and inconsistent with the overall intent of the public safety and emergency response measures outlined in Directive 071. As result, those concepts and related requirements will be removed from Directive 071 and the ERCBH2S model in the upcoming revisions.
Alberta Health and Wellness agrees with the methodology used in calculating the endpoints adopted by the ERCB. For more information on endpoints and the stakeholder consultation process that occurred before their adoption, see the document ERCBH2S Response Planning Endpoints, which is available on the ERCB Web site. [6] The revised versions of the ERCBH2S model (v.1.19 and 1.20 Beta) will be released as soon as they are available. Additionally, the ERCB will publish errata to Directive 071 to reflect the corrected endpoint of the PAZ and other related changes. The errata will be posted on the Directive 071 Web page.
[6] www.ercb.ca/docs/public/sourgas/EUBModelsDraft/Volume2_ERPEndPoints.pdf
As a result of the changes to Directive 071 outlined in this bulletin, the PAZ for a given well, facility, or pipeline will not extend beyond the boundary of the EPZ.
4 Directive 056 and Public Involvement Programs
To ensure compliance with the Court’s ruling related to public involvement programs set out in both Directive 071 and Directive 056, the ERCB has also undertaken a detailed review and highlights changes to the various consultation programs below. Tables 5.1, 6.1, 6.2, and 7.1 of Directive 056 will be revised to reflect the changes to the participant involvement program requirements applicable to sour applications and to more accurately reflect the ERCB’s intent in adopting various participant involvement and emergency planning and response requirements in Directives 056 and 071. The revised tables are attached to this bulletin. The changes will be posted on the Directive 056 Web page as errata to Directive 056.
The Board recognizes that the changes to the Directive 056 participant involvement requirements represent a significant change in process for facility and pipeline applications where notification of residents within the EPZ did not previously occur until after construction and prior to the operational phase of a project. Such notification must now be done prior to submission of an application under Directive 056.
The changes are effective immediately.
4.1 Notification and Consultation Requirements for Sour Applications
4.1.1 Applications Currently Under Review by the ERCB
The ERCB recognizes that companies that have submitted or will submit new sour applications to the ERCB will have conducted and completed a participant involvement program based on calculations from the previous versions of either ERCBH2S Model v.1.19 or v.1.20 Beta or the requirements of Directive 056. The following requirements apply to those applications.
Previously Submitted Well Licence Applications
Applicants must provide written confirmation to the ERCB application coordinator assigned to the application regarding which ERCBH2S model was used to calculate the EPZ and that it notified and consulted those parties noted in attached new Table 7.1 of Directive 056. Because parties located in these areas will also be residents in the PAZ, which is fully contained within the EPZ, the program undertaken and completed should comply with ERCB requirements. The ERCB requires applicants to confirm this in writing.
Previously Submitted Facilities or Pipeline Licence Applications
Applicants have three options for these types of applications:
1) Retain the existing EPZ size: Applicants may rely on the calculation and participant involvement program previously conducted for the application (provided there are no residents within the EPZ who require notification); or
2) Retain the existing EPZ size: Applicants may conduct a supplementary participant involvement program with notification to residents within the calculated EPZ; or
3) Recalculate the EPZ size: Applicants may conduct a new participant involvement program as outlined in the attached new Tables 5.1, 6.1, and 6.2 of Directive 056 and use the updated ERCBH2S v.1.20 Beta or the final v.1.20 to calculate the appropriate EPZ. Applicants choosing this option may elect to replace their application previously filed and not delay the processing of their application.
Under each option, the applicant must provide written confirmation to the application coordinator assigned to the application regarding which ERCBH2S model was used to calculate the EPZ, how many residents are within that EPZ, and the date that notification was completed to the residents as well as to the other parties noted in Tables 5.1, 6.1, and 6.2 as applicable. [7]
[7] Because parties located in these areas will also be residents in the PAZ, which is fully contained within the EPZ, the program undertaken and completed should comply with ERCB requirements.
If applicants can provide the above information to the application coordinators, the ERCB will resume processing of the application on a priority basis, barring any material deficiencies.
If the notification and/or consultation areas intersect with a large town or urban centre, the ERCB may consider a participant involvement program tailored to the specific application, even if it does not strictly comply with the notification and consultation requirements in Directive 056. In these circumstances, applicants must file a nonroutine participant involvement application. The ERCB will consider such applications on a case-by-case basis.
4.1.2 Applications Not Yet Submitted to the ERCB
The ERCB is aware that applicants will have initiated and possibly completed participant involvement programs based on ERCBH2S Model v.1.19 or v.1.20 Beta. The ERCB will accept those applications provided that the applicant confirms in writing that it has adopted the EPZ size calculated in ERCBH2S v.1.19 or v.1.20 Beta, identifies the number of residents within the EPZ, and provides the date the participant involvement program was completed. If such confirmation is not submitted with new applications, the ERCB will assume that the applicant has conducted a participant involvement program for the application that follows the new requirements and has used the updated version of ERCBH2S Model v.1.20 Beta or the final v.1.20 to calculate the EPZ/PAZ.
5 Conclusions
Applicants that hold valid approvals or licences for applications previously approved by the ERCB are not required to notify and/or consult parties residing in the previously calculated EPZ/PAZ for the facility contemplated in the approval or licence.
The ERCB advises that the above requirements are being implemented as a result of and in response to the Court of Appeal decision and apply only to PAZs associated with sour applications. All other applications, objections, and review applications will continue to be processed as before and be considered and adjudicated on their merits.
Questions regarding the application processing procedures outlined in this bulletin may be directed to Paul Forbes, Facilities Applications, at 403-297-3199. Questions relating to Directive 071, including calculation of the EPZ/PAZ, may be directed to the Emergency Planning and Assessment Help Line at 403-297-2625 or by e-mail to epassessment@ercb.ca.
<original signed by>
Dwayne Waisman, B.E.S., C.E.T.
Executive Manager
Field Surveillance and Operations Branch
<original signed by>
Stephen Smith
Executive Manager
Applications Branch
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