Field Surveillance and Operations Branch Provincial Summary 2009 August 2010 Energy Resources Conservation Board ENERGY RESOURCES CONSERVATION BOARD ST57-2010: Field Surveillance and Operations Brandi Provincial Summary 2009 August 2010 Published by Energy Resources Conservation Board 640 - 5 A venue SW Calgary, Alberta T2P 3G4 Telephone: 403-297-8311 Fax: 403-297-7040 E-mail: [email protected] Web site: www.ercb.ca For media inquiries, contact Darin Barter at 403-297-41 16. ror inquiries on the report, contact the Customer Contact Centre at 403-297-8311. Contents Executive Summary... iv 1 Introduction 1 2 TheFSOB 2 2.1 Chief Operations Engineer and Technical Engineer 2 2.2 Field Operations Group........ 2 2.3 Emergency Management Group... 3 2.4 Technical Operations Group..................... 3 2.5 Business Analysis, Systems, and Support Group........... 4 2.6 Liability Management Group 5 2.7 Advisory and Regulatory Change Group 5 3 Stakeholder Engagement....... 6 3 . 1 Community and Aboriginal Relations Activities 6 3.1.1 Community Relations.................................................. ...6 3.1.2 Aboriginal Relations.... .....8 3.1.3 Hearing Support. 9 3.2 Appropriate Dispute Resolution. 10 3.3 Emergency Planning and Assessment Stakeholder Relations.. 10 3.4 Public Complaints 10 3.4.1 Complaint Follow-up. .11 3.4.2 Types of Public Complaints .12 4 Emergency Management. ........15 4. 1 Emergency Response Plan Review and Audit 1 5 4.2 Emergency Response Assessment Program 15 4.3 Setback Referrals.................................................................. 15 4.4 Field Incident Response Team 16 5 Industry Activity for 2009............ .......17 5.1 Drilling and Servicing Activities .17 5.1.1 Well Control Occurrences 17 5.2 Primary Causes of Spills 21 5.3 Industry Pipeline Trends...................... .22 5.3.1 Changes in Pipeline Jurisdiction 22 5.3.2 Pipeline Failures 23 6 2009 Compliance Results............................................ 25 6.1 Compliance Summary 26 6.2 Drilling Operations Inspection Results .26 6.3 Well Servicing Inspection Results................... 29 6.4 Well Site Inspection Results....................................... 31 6.4.1 Well Site Abandonment Inspection Results 32 6.4.2 Well Site — Licensees with Persistent Low Risk Noncompliances 32 6.4.3 Well Operations Auditing Results........ 32 6.5 Gas Facilities Inspection Results.............................. 32 6.5.1 Gas Facilities— Licensees with Persistent Low Risk Noncompliances 33 6.6 Oil Facilities Inspection Results........ 34 6.6. 1 Oil Facilities — Licensees with Persistent Low Risk Noncompliances 35 6.7 Waste Facilities Inspection Results 35 6.7.1 Drilling W aste Management Inspection Results 36 6 . 8 Production Measurement Compliance Result s 37 6.8. 1 Directive 060 GOR Greater Than 3000 mVm3 Audits.... 37 ERCB ST57-2010: ERCB Field Surveillance and Operations Branch Provincial Summary 2009 • i 6.8.2 Flaring and V enting Results 38 6.8.3 Sulphur Recovery Efficiency and Results 38 6.8.4 Glycol Dehydrator Annual Inventory Assessment 38 6.9 Pipeline Inspection Results 39 6.9. 1 Pipeline Construction and Pressure Testing Inspections 39 6.9.2 Pipeline Operations Inspections 39 6.9.3 Pipeline Contact Damage 39 6.9.4 Pipeline Failures 40 6.9.5 Spill and Release Statistics and Inspection Results 41 6. 10 Air Monitoring Inspection and Compliance Results 44 6.11 Liability Management Rating Compliance Results 45 6.11.1 Orphan Levy Compliance Results 45 6. 12 Unconventional Resources Inspection and Compliance Results 45 6.13 Enforcement Appeal s 46 6.14 Voluntary Self-Disclosure 46 6. 14. 1 Voluntary Self-Disclosure Form 47 7 FSOB Activity Highlights 48 7 . 1 Field Operations — Environmental Protection 48 7.2 Field Operations — Mobile Ambient Air Quality Monitoring 48 7.3 Pipeline Operations 48 7.3. 1 Pipeline Integrity Management Program 50 7.3.2 ENFORM Industry Recommended Practice 17: Ground Disturbance and Damage Prevention 50 7.4 Well Operations 50 7.4. 1 Well Operations Stakeholder Engagement 51 7.4.2 Well Abandonment and Reclamation 51 7.5 Production Operations 51 7.5.1 Sulphur Recovery /Gas Plant Performance 51 7.5.2 Sulphur Recovery Efficiencies 52 7.5.3 Production Measurement 52 7.6 Unconventional Resources — In Situ Heavy Oil/Oil Sands 52 8 2009 Regulatory Reform and Major Initiatives 54 8.1 Regulatory Reform 54 8.2 Major Initiatives 56 8.2. 1 Enhanced Production Audit Program 56 8.2.2 Flaring and Venting Review Project 56 8.2.3 Provincial Inspection Team Initiatives 57 8.2.4 Pipeline Operations Initiative 57 8.2.5 Legacy Initiative 57 8.2.6 Liability Management Group Initiatives 58 Tables 1 ERP approval activity, 2009 15 2 Length of pipelines by type in Alberta under ERCB jurisdiction (km) 22 3 FSOB compliance summary, 2009 27 4 Facilities and operations shut down by FSOB request, 2009 28 5 Well Operations auditing activities and compliance results, 2009 32 6 Production measurement and reporting audits and compliance results, 2005-2009 37 7 Directive 060 GOR greater than 3000 m3/m3 and compliance results, 2006-2009 38 8 Directive 060 economic evaluation audits and compliance results, 2005-2009 38 9 Sulphur recovery and compliance, 2005-2009 38 10 Failures reported from January 1 to December 3 1 , 2 009 41 ii • ERCB ST57-2010: ERCB Field Surveillance and Operations Branch Provincial Summary 2009 1 1 Pipeline release, 2009 (percentage of total) 43 12 LMR and compliance results, 2006-2009 45 13 Orphan Levy and compliance results, 2005-2009 45 14 Enforcement appeals by year 46 15 Technical Pipeline Operations activities during 2009........ 49 16 Total Directive 056 pipeline application referrals by year.... 50 Figures 1 Branch organization 2 2 Community relations activites.. 6 3 Inspections, complaints, and releases handled on aboriginal lands/territory 9 4 Public complaints and complaint issues................................ 1 1 5 Distribution of complaints by most common concerns....... .12 6 Complaints related to well sites, 2009 13 7 Oil facilites — odour and smoke/flaring complaints 13 8 Complaints related to gas facilities, 2009 14 9 Drilling activity levels 17 10 Drilling blowouts 18 1 1 Kicks per 1000 wells 19 12 Servicing blowouts....................................................... 19 13 Other blowouts...... 20 14 Spills by source and failure type, 2009 .......21 1 5 Reported volumes of produced water and liquid hydrocarbon spills 22 16 Historical pipeline failures by product being transported .23 17 Failures compared to total pipeline length ................24 18 ERCB drilling inspection results....... 28 19 High risk noncompliances on drilling rigs 29 20 Drilling — most common high risk noncompliances, 2009 29 2 1 ERCB well servicing operations inspection results 30 22 Well servicing— most common high risk noncompliances, 2009. ...30 23 Well site — most common high risk noncompliances, 2009 ............31 24 Gas facilities — most common high risk noncompliances, 2009 33 25 Oil facilities — inventory and Inspections 34 26 Oil facilites— high and low risk noncompliances by percentage of total inspections........................ 35 27 Waste management facility inspections and results ...36 28 Pipeline contact damage........................................... .......40 29 Priority ratings for pipeline releases.................................... 42 30 Number of spills from upstream oil and gas sources 43 31 Air monitoring results and compliance rates. 44 32 Efficiency versus emissions of sulphur recovery plants 52 ERCB ST57-201 0: ERCB Field Surveillance and Operations Branch Provincial Summary 2009 • iii Executive Summary The Energy Resources Conservation Board (ERCB/Board) remains committed to ensuring that energy development in Alberta occurs in a manner that is fair, responsible, in the public interest, and, above all, carried out in a way that is safe for Albertans and the environment. To help fulfill this commitment, in June 2009 the Board introduced a n ew vision for the ERCB: to be the best nonconventional energy regulator in the world by 2013. This vision is in response to three key drivers in the energy sector: 1 ) a r esource base that is changing from conventional energy sources to unconventional sources, such as natural gas from coal and shale (or tight gas) and oil sands, 2) a critical need to manage legacy assets more effectively, and 3) an increasing demand for regulatory reform. To meet the new operational requirements, the ERCB was restructured and the Field Surveillance and Operations Branch (FSOB) was created. The FSOB combines most of the former Public Safety/Field Surveillance and Compliance, Environment, and Operations Branches. Operating from the Calgary Head Office, Fort McMurray Regional Office, and nine ERCB Field Centres throughout Alberta, FSOB field staff inspect and audit construction, operation, and abandonment activities at oil, gas, and in situ oil sands facilities and pipelines. FSOB now monitors about 393 359 wells, 23 896 oil batteries and associated satellites, 787 gas plants, 19 776 gas batteries, 3609 compressor stations, and nearly 400 000 kilometres (km) of pipelines. Inspection and Performance ERCB staff carried out a r ecord 25 373 field inspections and audits in 2009, compared to 18 667 inspections in 2008. There was a s light increase in 2009, compared to 2008, in the high risk compliance rates. This can partially be attributed to the proactive compliance of licensees, as well as operator awareness sessions conducted by the FSOB. In 2009, the ERCB suspended 127 energy facilities, pipelines, and operations that did not meet the ERCB’s stringent regulatory requirements. The number of public complaints received in 2009 was 643, compared to 744 in 2008. The ERCB responds to 100 per cent of complaints and concerns. There were a t otal of 102 Appropriate Dispute Resolution files in 2009, of which 88 were successfully resolved, representing a r esolution rate of 86 per cent. In 2009, a t otal of 7232 wells were drilled, compared to 15 417 wells in 2008. This 53 per cent decrease in drilling activity (8185 fewer wells) was due to declining conventional reserves, low gas prices, and the global economic situation. iv • ERCB ST57-201 0: ERCB Field Surveillance and Operations Branch Provincial Summary 2009 In 2009, there were 23 blowouts out of a t otal of 246 156 nonabandoned wells in Alberta. « Four blowouts occurred during drilling operations (0.56 blowouts per 1000 wells drilled), which is a d ecrease from nine in 2008. • Five blowouts occurred during well servicing operations, all of which were sweet gas releases. • Fourteen blowouts occurred for reasons not related to drilling or servicing, including third-party damage, equipment failure, and well design issues. Of these 14 blowouts, 12 were sweet and 2 w ere sour. The majority of these were of short duration with minimal public and environmental impact. There were increased shutdowns on service rig operations. The total shutdown time of well servicing operations in 2009 was nearly 27 hours, compared to 3 h ours in 2008. The 2009 record-low pipeline failure rate of 1.7 per 1000 km of pipeline was better than the previous record low of 2.1 set in both 2008 and 2007. In 2009, there were 3720 gas facility inspections, compared to 2023 inspections in 2008, representing a 4 6 per cent increase. The percentage of facilities in compliance in 2009 was 73.6, while in 2008 it was 64.3. There were increased oil facility inspections in 2009, with 4695 inspections completed. Of the facilities inspected, 78.3 per cent were in compliance. Regarding well abandonment and reclamation, in 2009 • the current owner of the historical Turner Valley plant site, under direction from the Well Operations Section, properly abandoned the leaking Dingman #2 well, • the final phase of the Bromley Marr Waste Facility cleanup near Bonny ville was completed, and • a r eclamation certificate was granted to the ERCB for the stratigraphic test hole that was drilled in preparation for the ERCB Peace River well control project. Emergency Management In 2009, the FSOB increased its efforts in the area of emergency management with enhanced capacity in air dispersion modelling to support Directive 071: Emergency Preparedness and Response Requirements for the Petroleum Industry and to accommodate the expansion of the role of the Field Incident Response Team (FIRST). FIRST provides training and exercises for ERCB staff and works with external emergency management partners to provide a c oordinated response to petroleum industry incidents. FIRST assisted the Government of Alberta during the 2009 spring fire season and contributed to the development of the Emergency Management Decision Support Initiative and a s oftware program designed to manage information and communication among multiple agencies during emergencies. Legacy With the decline of conventional oil and gas reserves, many FSOB staff in 2009 represented the ERCB in the Government of Alberta Regulatory Alignment and Enhancement Project to determine appropriate timelines for the abandonment. ERCB ST57-201 0: ERCB Field Surveillance and Operations Branch Provincial Summary 2009 • v remediation, and reclamation of inactive wells and the related upstream infrastructure in Alberta. Regulatory Reform The goal of regulatory reform is to provide industry with clear, concise requirements that are easy to understand and lead to improved compliance in the interests of public safety, environmental protection, and resource conservation. In 2009, the FSOB participated in the review, development, or rewrite of 16 regulatory initiatives. vi • ERCB ST57-2010: ERCB Field Surveillance and Operations Branch Provincial Summary 2009 1 Introduction The introduction of the new vision for the Energy Resources Conservation Board (ERCB/Board) to be the best nonconventional regulator in the world by 2013 resulted in the creation of the Field Surveillance and Operations Branch (FSOB) in June 2009. The FSOB combines the former Public Safety/Field Surveillance and the Compliance, Environment, and Operations Branches. This report details the organizational shift to the FSOB, the oil and gas industry’s compliance with ERCB requirements for which the FSOB is responsible, and the wide range of activities and initiatives carried out by FSOB staff in 2009. The Industry Activity section describes key industry performance indicators, some within the context of 5 -year trends. Then, to accurately reflect the branch activities, this report integrates the compliance results of the FSOB. Annual compliance statistics for each group prior to 2009 are in ST99: Proactive Compliance Report and ST57: Field Surveillance Provincial Summary. The FSOB Activity Highlights section describes some of the key activities in which the Field Operations and Technical Operations Groups were engaged. The report ends with a d iscussion of the significant number of regulatory reforms and other initiatives led by the FSOB in 2009. Because an ERCB reorganization occurred mid-year, the 2009 report is transitional and covers activity of the past year, as well as looks ahead to future developments as the FSOB moves toward achieving the new ERCB vision. In future years, the FSOB will report on further regulatory change initiatives, process streamlining, and proactive compliance activities. ERCB ST57-2010: ERCB Field Surveillance and Operations Branch Provincial Summary 2009 • 1 2 The FSOB The FSOB joins over 200 highly trained professionals into a t eam that provides technical expertise, advice, and support to a b road range of internal and external stakeholders. They include engineers, scientists, technicians, technologists, field inspectors, regulatory reform and systems specialists, business analysts, and support staff. FSOB staff respond to incidents and public complaints on a 2 4-hour basis. Figure 1 2.1 Chief Operations Engineer and Technical Engineer The Chief Operations Engineer and Technical Engineer monitor, evaluate, and communicate trends and changes in the upstream oil and gas industry, network with relevant regulatory agencies, and develop appropriate strategies to ensure the effectiveness of the ERCB’s technical capacity. 2.2 Field Operations Group The Field Operations Group is divided into three sections. Field Surveillance From the nine ERCB Field Centres, Calgary Head Office, and the Fort McMurray Regional Office, Field Surveillance field staff • conduct inspections of construction, operational, and abandonment activities at oil, gas, mining, and in situ oil sands facilities and pipelines; • respond to and monitor emergencies, incidents, spills, releases, and public complaints on a 2 4-hour basis; • improve industry performance and minimize potential impacts on public safety and the environment; and 2 • ERCB ST57-2010: ERCB Field Surveillance and Operations Branch Provincial Summary 2009