EUB Provincial Surveillance and Compliance Summary

2006·7.7 MB·English

by  Alberta Energy and Utilities Board

ST99-2006
EUB Provincial Surveillance and
Compliance Summary 2005
June 2006
Alberta Energy and Utilities Board
ALBERTAENERGYANDUTILITIESBOARD
ST99-2006: EUB ProvincialSurveillanceand ComplianceSummary2005
June2006
Publishedby
AlbertaEnergyandUtilitiesBoard
640-5 Avenue SW
Calgary,Alberta
T2P 3G4
Telephone: [phone]
Fax: [phone]
E-mail: [email protected]
Web site: www.eub.ca
Formediainquiries, contactBobCurranat(403) 297-3392
Forinquiries onthe individual sectionsofthereport,
2.1.1: Reserves andAllowables SectionandEnforcementand Surveillance Section,
KristaNicholat(403)297-3509
2.2.1: ProductionOperationSection, RoyGraves at(403)297-5678
2.2.2: Well Operations Section, PaulBothwellat(403)297-8995
2.3.1: Waste andStorage Section, SusanHallaat(403)297-3184
2.4.1: UtilitiesFacilities Group, KeithGladwynat(403)297-6938
2.5.1: ApplicationsAuditSection,Dale Schaferat(403)297-8189
2.6.1: LiabilityManagement Section, HowardFedorakat(403)297-8167
2.7.1: Oil Sands Section,MarekDominski at(780) 743-7478
3.1.1: WellTestDataSection,AbbyCookat(403) 297-2581
3.1.2: ProductionandWell Data Services Section, BrendaBensonat(403)297-2888
3.1.3: GeologicalData Section,AbbyCookat(403)297-2581
4: Appealstothe EnforcementAdvisor,DanBartlettat(403) 297-5341
5: SummaryofFieldSurveillanceActivity, MariaPohlat(780)460-3808
6: Drillingand Servicing,Paul Saulnierat(780)460-3809
7: OilFacilities, ClayWickstromat(403)297-3508
8: GasFacilities, ShawnWoodford(403)297-5906
9: Pipeline, MurrayBarberat(780) 538-5664
10: Environment, JoeGormleyat(403)340-5484
Contents
Executive Summary v
1 Introduction 1
2 Operations Division 3
2.1 Geology andReserves Group and ResourcesApplications Group 3
2.1.1 Reserves andAllowables SectionandEnforcem.entand Surveillance Section. 3
2.2 Operations Group 5
2.2.1 ProductionOperation Section 5
2.2.1.1 Directive 060Economic EvaluationAudits 7
2.2.1.2 SulphurRecovery Guidelines 9
2.2.2 WellOperations Section 10
2.3 EnvironmentGroup 15
2.3.1 Waste and Storage Section 15
2.3.1.1 OilfieldWaste Receiver 15
2.3.1.2 OilfieldWaste Generator 17
2.3.1.3 DrillingWaste 18
2.3.1.4 Storage Requirements 20
2.4 Utilities Branch 22
2.4.1 Facilities Group 22
2.5 FacilitiesApplications Group 23
2.5.1 ApplicationsAudit Section 23
2.6 Corporate Compliance Group 28
2.6.1 LiabilityManagement Section 28
2.6.1.1 OrphanLevy 28
2.6.1.2 LiabilityManagementRating 29
2.7 FortMcMurray Oil Sands Office 31
2.7.1 Oil Sands Section 31
2.7.1.1 Mineable Oil Sands 31
2.7.1.2 Operating Criteria 32
1.3.1
3 CorporateDivision 35
3.1 InformationCollectionandDisseminationGroup 35
3.1.1 WellTestData Section 35
3.1.1.1 Annual Gas andOil Pool Pressure Survey Schedules 35
3.1.1.2 Initial Gas andOil TestingRequirements 37
3.1.2 Productionand Well Data Services Section 39
3.1.2.1 MonthlyVolumetric Reporting 39
3.1.2.2 Well Drilling andCompletionsDataRequirement 40
3.1.3 Geological Data Section 42
3. Well Drilling LogReporting 42
4 Appeals to the EnforcementAdvisor 43
5 Summary ofField Surveillance Activity 45
5.1 Introduction 45
5.2 Role ofField Surveillance Staff 45
(continued)
EUBST99-2006: ProvincialSurveillanceandComplianceSummary2005 • i
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5.3 Inspections 47
5.4 Enforcement 49
5.5 Public Complaints 5
5.5.1 ResponsetoPublic Complaints 51
5.5.2 ComplaintFollow-up 52
5.5.3 Types ofPublic Complaints 52
5.6 StakeholderInvolvementActivities 54
5.6.1 Synergy Groups 54
5.6.2 OpenHouses 56
5.7 MajorInitiatives 56
5.7.1 EmergencyResponse Plans 56
6 Drilling and Servicing 57
6.1 Introduction 57
6.2 Well Control Occurrences 57
6.2.1 DrillingBlowouts/Kicks 58
6.2.2 Servicing Blowouts 58
6.2.3 OtherBlowouts 59
6.3 DrillingActivityLevel and Inspections 59
6.3.1 Inspections 59
6.3.2 Minor, Major, and SeriousUnsatisfactory Items 60
6.4 ServicingActivity Level andInspections 60
6.4.1 Inspections 61
6.4.2 Minor, Major, and SeriousUnsatisfactory Items 61
6.5 Public Complaints 62
6.6 InspectionManualReviews 62
7 Oil Facilities 63
7.1 Introduction 63
7.2 Inventory, ActivityLevel, andInspections 63
7.3 Public Complaints 66
7.4 Licenseeswith HighMinorUnsatisfactoryInspectionRates 68
8 GasFacilities 69
8.1 Introduction 69
8.2 Inventory, Activity Level, andInspections 69
8.3 Public Complaints 71
8.4 Licensees withHighMinorUnsatisfactory InspectionRates 72
8.5 SulphurRecovery 73
8.6 CoalbedMethane 73
9 Pipeline 75
9.1 Introduction 75
9.2 Pipeline Failures/Hits 76
9.3 ConstmctionandTesting Inspections 80
9.4 Operations Inspections 80
9.5 Contact Damage 80
9.6 Public Complaints Associated with Pipeline Operations 84
(continued)
EUBST99-2006:ProvincialSurveillanceandComplianceSummary2005
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10 Environment 85
10.1 Introduction 85
10.2 Spills and Releases 85
10.2.1 Spill and Release Statistics and Inspections 85
10.2.2 Main Causes ofSpills 87
10.2.3 Spill Response TrainingandPrevention 89
10.3 Mobile AmbientAirQuality Monitoring 89
10.3.1 Monitoring Equipment 89
10.3.2 Routine and ComplaintResponse Monitoring 89
10.4 Waste Management Initiatives 90
10.4.1 Waste ManagementFacilities 90
10.4.2 DrillingWasteManagement 92
Figures
1. Proactive compliance forOil Overproduction 4
2. Proactive compliance forProduction: Majorand Serious categories 5
3. Proactive compliance forDirective 060Economic Evaluation: Majorand
Serious categories 7
4. Proactive compliance for SulphurRecovery Guidelines: Minorcategory 9
5. Proactive compliance forWellAbandonment: Majorand Serious categories 10
6. Proactive compliance forPackerTesting: MajorandSerious categories 1
7. Proactive compliance forSurface CasingVentFlow/GasMigration:
Majorand Serious categories 13
8. Proactive compliance forOilfieldWaste ManagementFacilities: Majorand
Serious categories 15
9. Proactive compliance forStorageRequirements: Majorand Seriouscategories 20
10. Proactive compliance forUtilities: Serious category 22
11. Proactive complianceregardingDirective 056: Minor, Major, and Serious categories 23
12. Proactive compliance forOrphanLevy: Minorcategory 29
13. Proactive compliance forLicenseeLiabilityRating Program: Majorcategory 30
14. Proactive compliance forMineable Oil Sands: Majorand Serious categories 31
15. Proactive compliance forOperating Criteria: Majorand Serious categories 32
16. Proactive compliance forMonthlyVolumetric Reporting: Minorcategory 39
17. Proactive compliance forWellDrillingandCompletions DataRequirement 41
18. EUB Field Centreboundaries andFortMcMurray office 46
19. Numberoffacilities/operations shutdownatField Surveillancerequest 50
20. Public complaints andcomplaint issues 51
21. Distributionofcomplaintsbymostcommonconcerns 53
22. Public complaintsby source, 2005 54
23. Majorunsatisfactory inspections ondrillingrigs 60
24. Majorunsati—sfactory inspections on servicerigs 61
25. Oil facilities—inventory, facility inspections, andpercentage satisfactory 64
26. Oil facilities Major/Serious andMinorunsatisfactory inspection itemsby
percentage o—ftotal inspections 65
27. Oil facilities—mostcommon Major/Seriousunsatisfactory inspection items, 2005 66
28. Oil facilities—mostcommonMinorunsatisfactory inspectionitems, 2005 67
29. Oil facilities odourandsmoke/flaring complaints 67
—
30. Gas facilities percentage ofsatisfactory inspections 70
—
31. Gas facilities—percentage ofMajorunsatisfactory inspections 71
32. Gas facilities mostcommon MajorandMinorunsatisfactory inspection items, 2005 71
(continued)
EUBST99-2006: ProvincialSurveillanceandComplianceSummary2005 • iii
33. Gas facility complaints (gasplants, batteries, andcompressorstations) 72
34. Effieieney versus emissions ofsulphurrecovery plants 74
35. Priority ratings forpipeline releases 78
36. Pipeline failuresbycause 79
37. Historiealpipeline failuresbyproduet being transported 81
38. Numberoffailuresbypipeline size 82
39. Failures eomparedto totalpipeline length 83
40. Pipeline contaetdamage 83
41 Numberofspills fromupstream oil andgas sources 87
.
42. Spillsby souree and failure type, 2005 88
43. Reportedvolumes ofproducedwaterandhydroearbon spills 88
44. Numberoffacilities monitored and improvement inreduetionofemissions 90
45. Waste managementfacility inspections andresults 91
iv • EUBST99-2006: ProvincialSurveillanceandComplianceSummary2005
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Executive Summary
Thisyearthe Alberta Energy andUtilities Board(EUB) is launehing the EUBProvincial
SurveillanceandComplianceSummary (ST99-2006), whieheombines andreplaees the
previous reportsSTS7: FieldSurveillanceProvincialSummaryandST99: Proactive
ComplianceReport. As inthepast, thisnewreportdetails the oil andgas industry’s
eomplianeewith EUB requirements, the enforeement aetions taken ineases of
noneompliance, andthewiderange ofactivities carriedoutbyEUB field staff
RecordActivity Levels
Industry activity levels continuedto rise in2005, breakingrecords fordrilling andwell
servicing. Inthe last fiveyearsnearly 84 000wells havebeendrilled inAlberta. But
despite operatingat suchafastpace, the energy sectorhas managedto improve its
compliancewithEUB regulations.
Energy companies operate almost206 000nonabandonedwells, 18 449 oilbatteries and
associated satellites, 815 gasplants, 10 291 gasbatteries andcompressorstations, anda
pipeline networkofmorethan350 000kilometres (km). EachyeartheEUB inspects a
portionofthis vastenergy infrastructuretomake certainthatprojects are constructed
properly andoperatedsafely.
Operating outofnine EUB FieldCentres throughoutAlberta, fieldstaffinspect
construction, operation, andabandonmentoperations atoil, gas, andoil sands facilities
includingpipelines, compressors, andprocessingplants. Theyrespondto emergencies
andpublic complaints ona24-hourbasis andensure aconsistentapproachto
enforcementofrequirements.
EUB requirements ensure orderlyandresponsible energydevelopment, while atthe same
timeprotectingpublic safety, minimizing environmental impacts, improving
conservation, andguaranteeingequity.
Whenanoncompliance is identified, theEUB triggers aprocessthathas anestablished
policy forEUB enforcementactions. As outlinedinInformationalLetter(IL) 99-4: EUB
EnforcementProcess, GenericEnforcementLadder, andFieldSw^eillanceLadder,
through 2005 enforcementactions havebeendeterminedby the severityofthe
noncompliance eventandescalated forsubsequentnoncompliance orfailure to comply
withtheEUB’s correct—ive order. (EffectiveJanuary 1, 2006,Directive 019: EUB
ComplianceAssurance EnforcementreplacedIL 99-4.)
The energy industry’sproactive efforts inmeeting andexceeding EUB requirementshave
resulted in overall highcompliancerates. In2005, the EUB carried outabout6200
enforcement actions, ofwhichamere 6 were appealed to the EUB’s Enforcement
Advisor.
In the Facilities Applications Group, thenumberofinitial audits grew to 1555 in 2005
from 1092 in 2004, a42 percentjump.
Proactive compliance inFacilities Technical increased to 97 percent in 2005 from 90per
cent in 2004. Proactive compliance in WellsTechnical increased to 90 percent in 2005
from 84 percent in 2004.
EUBST99-2006: ProvincialSurveillanceandComplianceSummary2005 • v
The total numberofinitial inspeetions/investigations, ineludingwell site inspeetions,
increased from 15 379 in2004 to 16 872 in 2005. The oil andgas industrycontinuedto
maintainahigh compliancerecord. Minorunsatisfactory inspections increased slightly to
20.8percent ofall inspections in 2005 from 20.5 percent in2004, whilemajorand
seriousunsatisfactory inspections decreased slightly to 1.8 percent in2005, comparedto
2.0percent in 2004.
In2006, HUB staffwill continue to focus onpipeline corrosion, noncompliantlicensees,
airmonitoring activities, reduction ofodours, and improvingcommunicationwith all
Albertans.
Enforcement
Companiesthatfail to meetrequirements orfollowEUB directionare subjectto
escalatingenforcementconsequences. Enforcementactions always include deadlines for
fixingaproblemandmaybereinforcedbypenalties, suchastemporaryorlong-term
suspensionofoperations.
In2005, the EUB suspendeda total of91 facilities, including 33 drillingrigs, 30
pipelines, and 17 oilproductionfacilities. Inthepreviousyearthe EUB suspended 118
facilities. Since 2000, 825 facilities havebeen suspended.
DrillingandServicing
Increasedactivity creates challenges forboth industryandthe EUB to ensurethatdrilling
andservicing operations are carried outsafelywhile meetingthe stricteststandards.
Tenblowoutswere recordedduring thedrilling of20 545 wells in2005. Nine ofthese
were freshwaterflows andthe tenth involved a sweetgaswell. Therewasno significant
impactonthepublic andonlyminimal impactonthe environmentas aresultofthese
events. Inaddition, 128 kicks wererecordedduringdrilling operations in2005, or
roughly6kicksper 1000wells drilled.
Sixblowouts occurredduring servicing operations in2005, two onsourwells andfouron
sweetwells. Five ofthe sixblowouts wereattributedto equipment failure andone to
operatorerror. One oftheblowoutswas causedbyanexplosionthatresultedin one
workerbeingkilledandtwo workers injured.
In 2005, fourteenblowoutswereregistered inthe “other”category, all ofwhich occurred
on sweetwells. Sixresulted from third-partydamage whenequipmentstruckawell. The
remaining eightblowoutswere causedby equipmentfailure. Theseblowoutswere of
shortdurationandhadminimal impactonthepublic orthe environment.
In addition.Directive 036: DrillingBlowoutPreventionRequirementsandProcedures
wasrevised in 2005. The update was released in February 2006.
Pipelines
The pipeline failure rate fell to 2.3 per 1000km ofpipeline in 2005 from2.4per 1000km
in 2004. The majority offailures occurred in smaller-diametergathering lines, primarily
the 60.3 millimetre (mm), 88.9 mm, and 1 14.3 mm systems.
VI EUBST99-2006:ProvincialSurveillanceandComplianceSummary2005
1
Field staffconducted446 pipeline constructionandtest inspections in 2005, ofwhich 41
were satisfactory, 19 were minorunsatisfactory, 15 were majorunsatisfactory, and one
was serious unsatisfactory. Allunsatisfactory inspection items were brought into
compliance. This compares to 564pipeline construction andtest inspections in 2004, of
which 536 were satisfactory, 18 minorunsatisfactory, 9 majorunsatisfactory, and one
seriousunsatisfactory.
Although corrosioncontinuedtobethe maincause ofpipeline failures in 2005, there
were fewerinternal corrosion failures (420) comparedto historical data. External
corrosionremainedrelativelyconstantat 116 in2005 comparedtopastyears, with
reducing failure incidents inolderpipeline coating systems continuingtopresent
challenges.
Whenafailure occurs, the licensee mustconfirmthe integrity ofthe entirepipeline
segment,performanengineering assessmentonthepipeline systemthatitoperates in,
andoutline measures topreventfurtheroccurrences. Whenthe cause ofthe failure isnot
readily identifiable, the licensee mustperformafailure analysis.
SulphurRecovery
Sulphuremissions have decreased26percentsince2000, from 78 000to 57 000 tonnes
in2005. Since 1974, operators ofAlbertagasplantshavereducedsulphuremissionsby
about 75 percent. Sulphurrecoveryefficiencies atgasplants recovering saleable sulphur
are nowat98.9percent.
Spills
Thenumberofspills declinedin2005 to 1429 from 1443 thepreviousyear. Ofthose
1429 spills;
—
• 62 (4.3 percent)werepriority 1 thosethatposethemostserious environmental and
public impact
—
• 247 (17.3 percent)werepriority2 thosewhere asignificantvolume hasbeen
released orthe impactonthe environmentis aconcern
—
• 1120 (78.4percent) werepriority 3 low-volume spills on site orshort-duration
releases ofsweetgas
As inpastyears, equipment failureandpipeline corrosionwerethe leading causes of
liquid spills in2005.
Inspections were carriedouton 689 spills, resulting in 583 satisfactory inspections, 58
minorunsatisfactory inspections, and48 majorunsatisfactory inspections. The EUB did
notregisterany seriousunsatisfactory inspections.
EUBST99-2006; ProvincialSurveillanceandComplianceSummary2005 • vii
The spill volumes forhydroearbon andprodueed water in 2005 were 4958.8 eubie metres
and 13 158.9 cubic metres respectively. This represents a42.1 percent decrease in
hydrocarbons spilledanda 13.7percentdrop inproducedwaterspilledcomparedto
2004.
The HUB stronglybacks spillcooperatives andprovides supportto the WesternCanadian
Spill Service (WCSS) to enhance spill responsepreparedness throughouttheprovince.
Together, theWCSS, Enform, industry, andthe EUB worktowards improving spill
preventionprograms. In2006, the EUB will concentrate onproactive spill prevention
measures at oil spillcooperative meetings andduringtrainingexercises.
AirMonitoring
In2005, therewere 768 airmonitoring inspections conducted, a42 percentincrease over
the 695 inspections carried outin2004, revealing an improvement in industry’s
compliance record.
The EUB has twomobile ambientairmonitoringunits (AMUs) equippedwithanalyzers
capable ofreadingandrecordinghydrogensulphide andsulphurdioxide emissions. In
addition, theAMUs are capable ofmeasuring andrecordingwindspeedandwind
direction.
Waste Management
In 2005, fieldstaffconducted66 waste managementinspections, comparedto 104 carried
out in2004. Ofthe 66 inspections, 40 were categorized as satisfactory, 22 minor
unsatisfactory, and fourmajorunsatisfactory. Therewereno seriousunsatisfactory
inspections.
Off-lease odours andstaining/spillagewere the mostcommondeficiencies identified, and
all facilitieswerebroughtinto compliance. The EUB will continueto focus onwaste
management inspections in2006.
MajorInitiatives
The EUB has detailedemergencypreparedness andresponse requirements inDirective
071: EmergencyPreparednessandResponseRequirementsforthe UpstreamPetroleum
Industry. Aspartofthe inspectionprocess, field staffdetermine ifthe licensee has an
approvedemergencyresponseplan(ERP) on site, has gone overtheplanwiththe
potentially affectedresidents, andhas assessed its capability to implementthe ERPby
conducting exercises.
A more detailedauditprotocol forassessing a licensee’s capabilityto implement its ERP
will be introduced in2006.
Responding to PublicConcerns
In 2005, there was a 9 percent increase inpublic complaints compared to the previous
year. Since some complaints highlightedmore than one issue, the EUB identified 1049
issues associatedwith 924 complaints in 2005, compared to 965 issues associatedwith
850 complaints in 2004.
viii • EUBST99-2006:ProvincialSurveillanceandComplianceSummary2005