June 21, 2011
Regulating Unconventional Oil and Gas in Alberta – ERCB Perspective
Presentation to Synergy Alberta Conference 2012
Cal Hill | October 30, 2012
Outline
The ERCB Conventional versus Unconventional Shale Resources in Alberta Regulatory Challenges Regulatory Framework
The Energy Resources Conservation Board (ERCB) “A quasi-judicial, arms-length body created by the Alberta Government to ensure that the discovery, development and delivery of Alberta's energy resources take place in a manner that is fair, responsible and in the public interest”
The ERCB Across Alberta
9 Field Centres Head Office (Calgary) Core Research Centre (Calgary) Alberta Geological Survey (Edmonton) Fort McMurray Oil Sands Regional Office
Conventional versus Unconventional
Drivers for change
Depleting conventional oil and gas
New technology; economics
Abundant unconventional resources
New risks and opportunities
Conventional
- Fluids flow through porous and permeable rock by pressure and buoyancy forces
- Hydrocarbons migrate from source rock to reservoir rock
- Hydrocarbons are trapped in pools by seals; low permeability rock
Unconventional - Rock has poor or no permeability - Requires innovative technology; hydraulic fracturing - Source rock is often target - Covers broad areas
Conventional versus Unconventional Oil & Gas
Conventional versus Unconventional
- Play scale - Permeability
Technological Innovation
Historical context - 171,000 wells hydraulically fractured in Alberta since 1950s - Drilling horizontal wells since mid 1980s - Since 2008, horizontal multi-stage hydraulically fractured wells >5200 Wide spread use of new technology --In 2011, over half of all wells drilled were horizontal - Wide range of geological targets (Cardium, Viking, Montney, Glauconitic, Mannville, Ellerslie, Exshaw, Duvernay)
Horizontal Multi-stage Hydraulic Fractured Wells by Formation
Shale Resources in Alberta
Shale Play Duvernay Formation
Initial area of interest
Challenges of Unconventional Oil and Gas Development
Unconventional Oil & Gas Development Challenges
Water management and protection Hydraulic Fracturing Development planning and cumulative effects Communication
Unconventional Oil & Gas Challenges
Water management and protection - Volumes and sources - Potential groundwater / surface water contamination - Flowback fluid management
Unconventional Oil & Gas Challenges
High-pressure Hydraulic Fracturing - Understanding 3-D fracture propagation - Communication with offset wells - Cement integrity - Natural faults and fractures - Other
• Sub-surface wellbore spacing
• Caprock integrity • Resource assessment
Unconventional Oil & Gas Challenges
Development planning and cumulative effects - Density of surface infrastructure and scale of development - Sensitive species habitat impacts - Access restrictions - Opportunities for collaboration - Nuisances
• Truck traffic – impact on roads • Noise • Duration of wellsite activity • Dust • Flaring and emissions • Light pollution
Meeting the Challenge
Regulatory Fundamentals
Comprehensive system of safety, environmental, and technical requirements; Well design Well casing and cementing blowout prevention groundwater protection Well completions shallow fracturing
Regulatory Fundamentals Facilities design and operation
flaring, venting, emissions
Waste Management drilling waste flow back & produced water oilfield wastes
Compliance Assurance production reporting field inspection and audits authority to shut-in operations emergency response
Closure suspension & abandonment requirements
ERCB Basic Requirements Dir 008: Surface Casing Depth Requirements Dir 009: Casing Cementing Requirements
Dir 020: Well Abandonment
Dir 027: Shallow Fracturing Restricted Operations Dir 029: Applications and Hearing Process Dir 031: Guidelines for… Cost Claims
Dir 035: Baseline Water Well Testing
Dir 038: Noise Control
Dir 044: Surveillance - Water Production in Wells
Dir 050: Drilling Waste Management
Dir 051: Injection and Disposal Wells
Dir 055: Storage Requirements
Dir 056: Energy Development Applications
Dir 058: Oilfield Waste Management
Dir 059: Drilling & Completion Data Filing
etc…
Evolving the Regulatory Framework
Reducing Surface Impact
Unconventional Oil & Gas Regulatory Framework (URF)
Start with the regulatory fundamentals Address regional aspects of unconventional development Address new technical challenges
URF Concept
URF based on two components: - risk-based -organizes risks by plays
Addresses ‘game changing’ new technologies Priority is low permeability resources Addresses regional impacts
Play/project approach - Based on level of risk - Applied to resource plays
- Move from well-by-well authorization to project based approach
- Requires project plans -Water management
-Surface infrastructure
-Sub-surface reservoir management
-Stakeholder engagement
-Wellbore integrity
- Move to performance-based / management system approach
Plans Must Address Water management - Play or project level Surface infrastructure development - Footprint, linear disturbances, trucking, dust, noise, etc. Sub-surface reservoir management - Resource recovery, minimize flaring, ER potential, reserves assessment Stakeholder engagement - Local community, business leaders, local authorities Lifecycle Wellbore Integrity - Apply Management-System approach to play
Addressing Technical Challenges
Hydraulic Fracturing -Fracture fluid disclosure requirements -Disclosure through Fracfocus.ca -Field office notification of HF operations -Interwellbore communication addressed -Ensuring wellbore integrity -Requirements for wells; intermediate depths (200 – 600 m) -Monitoring potential for induced seismicity
-Target Winter 2012