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Shale Gas: British Columbia’s Regulatory Response
January 22, 2013




Paul Jeakins
Commissioner and CEO
BC Oil and Gas Commission
• Overview of B.C.
• Legislative Structure
• The Commission’s Approach
• The Future
Europe   British Columbia
British Columbia
is Canada’s second
largest producer of
natural gas.
Liard Basin        Cordova Embayment
9,340 sq km        2,690 sq km


Horn River Basin   Montney
11,400 sq km       29,850 sq km
Geological   Liard Basin
             • Shale Gas
             • OGIP – no estimate (large)              Horn River Basin
             • 3 wells                                 • Shale Gas
             • Cumulative production is confidential   • OGIP – 448 TCF
             • Depth: 3,000-3,100 m                    • 202 wells
                                                       • Daily production- 432 MMcf/d
                                                       • Cumulative production – 373 BCF
                                                       • Depth: 2,200-3,100 m



                                                       Cordova Embayment
                                                       • Shale Gas
                                                       • OGIP – 200 TCF (preliminary)
                                                       • 19 wells
                                                       • Daily production is confidential
                                                       • Cumulative production is confidential
                                                       • Depth: 1,500-2,300 m



                                                       Montney
                                                       • Tight gas – Shale Gas Hybrid
                                                       • OGIP – 450 TCF (under review)
                                                       • 1,246 wells
                                                       • Daily production 1.6 BCF/d
                                                       • Cumulative production – 1.5 TCF
                                                       • 1,500 – 3,500 m average depth
Geographical



                 Muskeg

   Mountains




    Sub-Boreal   Prairies
      Forests
Social




 First Nations   Landowners   Stakeholders
Environmental




  GIS map




 Footprints     Wildlife   Water
Authorizes and ensures compliance with
                    regulations:
                             Exploration
                             Production
The Commission is            Gathering
a single-window              Processing
                             Storage
agency                       Disposal
                             Pipelines
                             Reclamation
                             Oil and gas roads
Legislative Structure




  Where we came from                       How we responded

Pipeline Act – 1950s

Petroleum and Natural Gas Act – 1970s
                                        Oil and Gas Activities Act
                                                  2010
Oil and Gas Commission Act - 1998
Legislation and Regulations


Legislation enacted by   •   Oil and Gas Activities Act and General
the provincial           •   Petroleum and Natural Gas Act and General
government               •   Environmental Protection and Management Regulation
                         •   Administrative Penalties Regulation
                         •   Prescribed Road Regulation
                         •   Service Regulation



Regulations maintained   •   Geophysical Exploration Regulation
by Oil and Gas           •   Drilling and Production Regulation
Commission Board         •   Pipeline & LNG Facility Regulation
                         •   Consultation and Notification Regulation
                         •   Fee, Levy and Security Regulation
Enactments specific to oil and gas activities

Land Act:            Occupation of Crown Land        Ministry of Forests,
                                                     Lands and Natural
                                                     Resource Operations




                     Short Term Use of Water         Ministry of
Water Act:                                           Environment
                     Changes in and About a Stream



                                                     Ministry of Forests,
Forest Act:          Licence to Cut                  Lands and Natural
                     Road Use Permit                 Resource Operations




Other                Heritage Protection             Various Ministries

Enactments:          Hazardous Waste, Storage and
                     Disposal
Innovative aspects of OGAA for shale


 Perceived Hazard            Regulatory Mitigation
 Groundwater Contamination   •   Cemented surface casing set to competent formation.
                             •   Non-toxic drilling fluids until porous formations within 600
                                 metres of surface are isolated.
 Hydraulic Fracturing        •   Specific review requirements for fracturing above 600 metres.
                             •   Records of fluid composition required.
                             •   Temporary fluid storage on site in dual containment and
                                 monitored pits and ultimate disposal via deep well injection.
 Carbon Footprint            •   Venting only allowed by exception.
                             •   Surface casing vents controlled and reported.
                             •   Flaring limits and conservation requirements.
                             •   In-line testing requirements.
 Noise and Nuisance          •   Noise limitations.
                             •   Requirements for air monitoring stations near larger plants.
                             •   Flaring limits.
                             •   Consultation and notification requirements.
Modified Subsurface Requirements
                                                     Well spacing
        Drilling and                                 Logging
        Production
                                                     Sampling
        Regulation
                                                     Testing

Multi-activity permitting

                             Created to               Tools used to permit
                             allow for                 multi-activity more
      OGAA                   multi-activity             effectively:
                             permitting.              • Area Based Analysis
                                                      • NEWT



Special Projects

                            Created to allow for
      OGAA                  development of special
                            projects.
Trustworthiness of different sources of
                                      information about oil and gas development

              Universities/Colleges




 Experts                    ENGOs                    Internet           Friends           National Media




Local Media            Local Leaders        Religious/Spiritual       Government           Politicians
                                                 Leaders
        Strongly Distrust        Somewhat Distrust          Neither      Somewhat Trust      Strongly Trust
The Commission’s Approach




N
E
W
T
Sample map shows:
• Upstream and
  downstream.
• Existing Section 8 and
  Water Licence Points
  of Diversion (POD).
Users:
Public
Statutory Decision Makers
Industry
Area Based Analysis




 Land Use                     First Nations & Stakeholder
                             Consultation and Notification

               Area-based
  Valued      Management     Multi-activity Development      Monitoring
Components     Triggers &                Plans                  &
              Requirements                                   Reporting

Management                   Infrastructure Coordination
 Strategies




                                      Adaptive
                                     Management
Area Based Analysis


                      Valued Components

         Hydro-riparian ecosystems         Most Valued Components:

                                           •   Defined spatially by the
         Old forest                            Commission in
                                               collaboration with the
                                               Ministry of Environment
                                               and other agencies.
         Groundwater
                                           •   Based on stakeholder
         High priority wildlife habitat,       and First Nations input
         ecosystems and features               and interpretation of
                                               strategic government
                                               direction and policy
         Boreal caribou                        using a broad-scale,
                                               ecosystem defined
                                               approach.
         Resource and cultural
         heritage features
Area Based Analysis


                      Non-Operating Area Land Base

                      Operating Area Land Base
                      Open Water Bodies (Lakes and Rivers)
                      Wetlands (W2 and enclosed uplands)
                      Federal Lands
                      Provincial Parks and Protected areas
                      Riparian Reserve Areas (Lakes, Rivers and Wetlands)
                      Riparian Management Areas (Lakes, Rivers and Wetlands)
                      Research Forest
                      Recreation Features and Sites
                      Known First Nation Cultural Features
                      Stream Riparian Areas



                      Operating Area Land Base

                      Private and Municipal Lands
                      Old Forest
                      Boreal Caribou Habitat (UWR)
                      Muskwa Kechika Management Area
                      Potential First Nations Cultural Areas of Interest
Etsho
  Seismic Investigation                                                     31 events (mag 2.2-4.1)
                                                                            April 2009 to July 2011
                                                                            20 station dense array operated
                                                                            June 16 – August 15, 2011
                            Tattoo
                            7 events (mag 2.4 to 3.1)
                            Dec 2011
Objectives:
• Examine linkage
  between oil and gas
  activities and observed
  seismicity.
• Review current
  research on induced
  seismicity.
• Consider mitigation
  methodologies if a link
  between oil and gas
                                      Kiwigana
  activities is seen.                 72 events (mag 0.5 to 1.86ML)
                                      October 25, 2011 – Jan 27, 2012
                                      151 station dense array




                                                        Greater than Mag 0.5 = fault movement
Seismic Investigation
                                          Commission Staff
                                          •     Expert Analysis of
                                                Data
                                          •     Scientists/Geologists
                                          •     Investigation
                                          •     Communications
                                                                            Scientists/Geologists
               Industry Operators                                       •       GeoScience BC
               •    Data                                                •       NRCan Seismologists
               •    Peer Review                                         •       US experts
               •    Communications
                                           Confidential
                                                                        •       Industry Scientists
                                          Working Group
                                                Consultative
                                                     Fair
                                                    Open
               Federal & Provincial             Participatory
                  Government                  Challenge Results
                                                                                    CAPP
           •       NRCan
                                                                            •    Peer Review
           •       Alberta Geological
                                                                            •    Communications
                   Survey
           •       BC and Alberta Gov’t
           •       Communications
                                                 Academia
                                          •     UBC
                                          •     Literature Search
Connecting to science and research
Evaluation of gas migration in unconventional wells
    University of British Columbia


Cementing and surface casing vent flows
    University of British Columbia


Air quality impacts
    University of British Columbia
    University of Northern British Columbia


Seismicity
    University of British Columbia


Public perception
    University of British Columbia
The Future

The economically viable recovery of huge volumes of gas from
shale or similar tight formations means that:


• North American
                                                               Canada
  markets are saturated
  and an oversupply
  situation may persist
  for decades.

• Alternative global
  markets are
  accessible via
  shipping LNG from
  Canada’s west coast.
Within the next 10 to 15
Currently the U.S.
                            years, the U.S. will not
accounts for 2/3rd of our
                            need to import natural
production.
                            gas from Canada.




     Without LNG             With LNG
     capacity or              Canadian    2020
     other markets,         Production
     Canadian                   could
     production will        significantly
     decline.                 increase.
                                            2013
Challenge for all of us is to meet world oil and gas
demands while benefiting all citizens:




• Be strong regulators.
• Analyze and share knowledge.
• Regulate effectively.
Paul Jeakins
Commissioner and CEO
BC Oil and Gas Commission

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paul jeakins

  • 1. Shale Gas: British Columbia’s Regulatory Response January 22, 2013 Paul Jeakins Commissioner and CEO BC Oil and Gas Commission
  • 2. • Overview of B.C. • Legislative Structure • The Commission’s Approach • The Future
  • 3. Europe British Columbia
  • 4. British Columbia is Canada’s second largest producer of natural gas.
  • 5. Liard Basin Cordova Embayment 9,340 sq km 2,690 sq km Horn River Basin Montney 11,400 sq km 29,850 sq km
  • 6. Geological Liard Basin • Shale Gas • OGIP – no estimate (large) Horn River Basin • 3 wells • Shale Gas • Cumulative production is confidential • OGIP – 448 TCF • Depth: 3,000-3,100 m • 202 wells • Daily production- 432 MMcf/d • Cumulative production – 373 BCF • Depth: 2,200-3,100 m Cordova Embayment • Shale Gas • OGIP – 200 TCF (preliminary) • 19 wells • Daily production is confidential • Cumulative production is confidential • Depth: 1,500-2,300 m Montney • Tight gas – Shale Gas Hybrid • OGIP – 450 TCF (under review) • 1,246 wells • Daily production 1.6 BCF/d • Cumulative production – 1.5 TCF • 1,500 – 3,500 m average depth
  • 7. Geographical Muskeg Mountains Sub-Boreal Prairies Forests
  • 8. Social First Nations Landowners Stakeholders
  • 9. Environmental GIS map Footprints Wildlife Water
  • 10. Authorizes and ensures compliance with regulations: Exploration Production The Commission is Gathering a single-window Processing Storage agency Disposal Pipelines Reclamation Oil and gas roads
  • 11. Legislative Structure Where we came from How we responded Pipeline Act – 1950s Petroleum and Natural Gas Act – 1970s Oil and Gas Activities Act 2010 Oil and Gas Commission Act - 1998
  • 12. Legislation and Regulations Legislation enacted by • Oil and Gas Activities Act and General the provincial • Petroleum and Natural Gas Act and General government • Environmental Protection and Management Regulation • Administrative Penalties Regulation • Prescribed Road Regulation • Service Regulation Regulations maintained • Geophysical Exploration Regulation by Oil and Gas • Drilling and Production Regulation Commission Board • Pipeline & LNG Facility Regulation • Consultation and Notification Regulation • Fee, Levy and Security Regulation
  • 13. Enactments specific to oil and gas activities Land Act: Occupation of Crown Land Ministry of Forests, Lands and Natural Resource Operations Short Term Use of Water Ministry of Water Act: Environment Changes in and About a Stream Ministry of Forests, Forest Act: Licence to Cut Lands and Natural Road Use Permit Resource Operations Other Heritage Protection Various Ministries Enactments: Hazardous Waste, Storage and Disposal
  • 14. Innovative aspects of OGAA for shale Perceived Hazard Regulatory Mitigation Groundwater Contamination • Cemented surface casing set to competent formation. • Non-toxic drilling fluids until porous formations within 600 metres of surface are isolated. Hydraulic Fracturing • Specific review requirements for fracturing above 600 metres. • Records of fluid composition required. • Temporary fluid storage on site in dual containment and monitored pits and ultimate disposal via deep well injection. Carbon Footprint • Venting only allowed by exception. • Surface casing vents controlled and reported. • Flaring limits and conservation requirements. • In-line testing requirements. Noise and Nuisance • Noise limitations. • Requirements for air monitoring stations near larger plants. • Flaring limits. • Consultation and notification requirements.
  • 15. Modified Subsurface Requirements Well spacing Drilling and Logging Production Sampling Regulation Testing Multi-activity permitting Created to Tools used to permit allow for multi-activity more OGAA multi-activity effectively: permitting. • Area Based Analysis • NEWT Special Projects Created to allow for OGAA development of special projects.
  • 16. Trustworthiness of different sources of information about oil and gas development Universities/Colleges Experts ENGOs Internet Friends National Media Local Media Local Leaders Religious/Spiritual Government Politicians Leaders Strongly Distrust Somewhat Distrust Neither Somewhat Trust Strongly Trust
  • 18. Sample map shows: • Upstream and downstream. • Existing Section 8 and Water Licence Points of Diversion (POD).
  • 20.
  • 21. Area Based Analysis Land Use First Nations & Stakeholder Consultation and Notification Area-based Valued Management Multi-activity Development Monitoring Components Triggers & Plans & Requirements Reporting Management Infrastructure Coordination Strategies Adaptive Management
  • 22. Area Based Analysis Valued Components Hydro-riparian ecosystems Most Valued Components: • Defined spatially by the Old forest Commission in collaboration with the Ministry of Environment and other agencies. Groundwater • Based on stakeholder High priority wildlife habitat, and First Nations input ecosystems and features and interpretation of strategic government direction and policy Boreal caribou using a broad-scale, ecosystem defined approach. Resource and cultural heritage features
  • 23. Area Based Analysis Non-Operating Area Land Base Operating Area Land Base Open Water Bodies (Lakes and Rivers) Wetlands (W2 and enclosed uplands) Federal Lands Provincial Parks and Protected areas Riparian Reserve Areas (Lakes, Rivers and Wetlands) Riparian Management Areas (Lakes, Rivers and Wetlands) Research Forest Recreation Features and Sites Known First Nation Cultural Features Stream Riparian Areas Operating Area Land Base Private and Municipal Lands Old Forest Boreal Caribou Habitat (UWR) Muskwa Kechika Management Area Potential First Nations Cultural Areas of Interest
  • 24. Etsho Seismic Investigation 31 events (mag 2.2-4.1) April 2009 to July 2011 20 station dense array operated June 16 – August 15, 2011 Tattoo 7 events (mag 2.4 to 3.1) Dec 2011 Objectives: • Examine linkage between oil and gas activities and observed seismicity. • Review current research on induced seismicity. • Consider mitigation methodologies if a link between oil and gas Kiwigana activities is seen. 72 events (mag 0.5 to 1.86ML) October 25, 2011 – Jan 27, 2012 151 station dense array Greater than Mag 0.5 = fault movement
  • 25. Seismic Investigation Commission Staff • Expert Analysis of Data • Scientists/Geologists • Investigation • Communications Scientists/Geologists Industry Operators • GeoScience BC • Data • NRCan Seismologists • Peer Review • US experts • Communications Confidential • Industry Scientists Working Group Consultative Fair Open Federal & Provincial Participatory Government Challenge Results CAPP • NRCan • Peer Review • Alberta Geological • Communications Survey • BC and Alberta Gov’t • Communications Academia • UBC • Literature Search
  • 26. Connecting to science and research Evaluation of gas migration in unconventional wells University of British Columbia Cementing and surface casing vent flows University of British Columbia Air quality impacts University of British Columbia University of Northern British Columbia Seismicity University of British Columbia Public perception University of British Columbia
  • 27. The Future The economically viable recovery of huge volumes of gas from shale or similar tight formations means that: • North American Canada markets are saturated and an oversupply situation may persist for decades. • Alternative global markets are accessible via shipping LNG from Canada’s west coast.
  • 28. Within the next 10 to 15 Currently the U.S. years, the U.S. will not accounts for 2/3rd of our need to import natural production. gas from Canada. Without LNG With LNG capacity or Canadian 2020 other markets, Production Canadian could production will significantly decline. increase. 2013
  • 29. Challenge for all of us is to meet world oil and gas demands while benefiting all citizens: • Be strong regulators. • Analyze and share knowledge. • Regulate effectively.
  • 30. Paul Jeakins Commissioner and CEO BC Oil and Gas Commission