July 3, 2006

Alberta EUB reports near-perfect compliance record for energy industry

Alberta's energy industry maintained a near-perfect record of compliance with the Energy and Utilities Board (EUB)'s major regulations during 2005, the rate of compliance edging up to 98.2% last year from 98% in 2004. The Board's latest Provincial Surveillance and Compliance Summary for 2005 (Statistical Series 99-2006) also reports that sulfur emissions from Alberta gas plants declined to 57,000 tonnes in 2005, a reduction of 26% from levels in 2000 (78,000 tonnes) and 75% since 1974, when these facilities released a total of 229,000 tonnes. Sulfur recovery efficiencies at gas plants recovering saleable sulfur now stand at 98.9%.

These results come at a time of unprecedented industry activity: in the last five years, the report notes that nearly 84,000 wells have been drilled in Alberta. The Board credits the efforts of companies themselves to meet or surpass EUB requirements with the high compliance rate. Approximately 6,200 enforcement actions were carried out in 2005, of which only six were appealed to the EUB's enforcement advisor.

Energy companies operate almost 206,000 nonabandoned wells, over 18,000 oil batteries and associated satellites, 815 gas plants, more than 10,000 gas batteries and compressor stations, and a pipeline network totalling over 350,000 kilometres (km). During 2005, the EUB carried out 16,782 inspections of Alberta energy facilities, up from 15,379 in 2004. The proportion of minor unsatisfactory inspections rose slightly, to 20.8% of all inspections (compared to 20.5% in 2004), while unsatisfactory inspections, categorized as major or serious, decreased from 2% in 2004 to 1.8% last year. Inspections during 2006 are continuing to focus on pipeline corrosion, air monitoring activities, odour reduction and noncompliant licences, notes the report.

Companies failing to meet EUB requirements or directives are subject to an escalating scale of penalties, up to and including temporary or long-term suspension of operations. In 2005, 91 energy facilities and operations were suspended, including 33 drilling rigs, 30 pipelines and 17 oil production facilities; this was down from 118 suspensions in 2004. Since 2000, the Board has suspended 825 energy facilities and operations across the province.

The report also notes that pipeline failure rate in Alberta has dropped by 30% since 2000. The number of pipeline failures per 1000 km of pipeline was 2.3 in 2005, down from 3.3 in 2000. Most of these involved smaller-diameter gathering lines, and corrosion (primarily external) continued to be the main cause of pipeline failures.

Pipeline corrosion, along with equipment failure, were the two main causes of liquid spills during 2005. There were 14 fewer spills in 2005 than in 2004, the total number declining from 1,443 to 1,429. Of the 1,429 spills last year, 62 (4.3%) were classified as priority 1, i.e. those with the most serious environmental and public impacts; 247 (17.3%) were priority 2, i.e. involving significant volumes or posing concern about environmental impact; and 1,120 (78.4%) were priority 3, i.e. low-volume spills on-site or short-duration releases of sweet gas.

Volumes spilled in 2005 totalled 4,959 cubic metres (m3) of hydrocarbons and 13,159 m3 of produced water; these figures represent a 42.1% decrease in hydrocarbons spilled and a 13.7% decrease in produced water spilled compared to 2004.

The EUB has two mobile ambient air monitoring units, capable of monitoring sulfur dioxide and hydrogen sulfide emissions in the parts per billion range. In 2005, Board field staff conducted 768 air monitoring inspections, a 42% increase over the 695 inspections carried out the previous year; the percentage of satisfactory inspections rose to 97% from 96.6% the previous year.

There are 101 active oilfield waste management facilities approved by the EUB, including storage facilities, transfer stations, processing facilities, waste disposal wells, landfills, and biodegradation and thermal treatment facilities. Board field staff conducted 66 waste management inspections in 2005, down from 104 in 2004. Forty of the 66 inspections were rated as satisfactory; there were 22 minor unsatisfactory inspections, four major unsatisfactory inspections, and no serious unsatisfactory inspections. Off-lease odours and staining or spillage were the most common deficiencies found, and all facilities were brought into compliance. The Board is continuing to focus on waste management inspections during 2006, and is currently reviewing its directive on drilling waste management, with changes expected this year.

The 2005 summary document is the first to combine and replace the previous reports ST57: Field Surveillance Provincial Summary and ST99: Proactive Compliance Report. The new report may be viewed on the EUB Web site, www.eub.ca. More information is available from Davis Sheremata at the EUB, 403/605-4216, FAX 403/297-3757.

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