This blog is the second in a series written by Ivey HBA student, Alyna Liu, who is currently researching the effects of flaring and venting regulation in Alberta and Saskatchewan’s oil industry.
It took Alberta 116 years to move from the discovery of natural gas to regulating gas flaring and venting. A previous post explored the history of Alberta’s energy industry, emphasizing the development of Alberta’s natural gas and the “pre-history” of the province’s flaring regulations. This post explores what occurred since 1996, the year the province introduced the first limits on flaring.
To start, it is worth emphasizing that Alberta does not have a single flaring and venting law. Rather, a combination of four documents – Alberta’s Gas Resources Preservation Act (1980), the Mines and Mineral Act (1983), Directive 017 (1985), and the Environmental Protection and Enhancement Act (1993) – form the legislative framework for flaring and venting regulations in Alberta (AER, 2021).
Landmarks in Alberta's regulatory development
Interestingly, it was the Canadian Association of Petroleum Producers (CAPP), a lobby group, who helped the Clean Air Strategic Alliance (CASA) establish limits on maximum flaring volume. CASA, created in 1994 to manage air quality in Alberta, is a multi-stakeholder organization composed of representatives from industry, government and non-government organizations. Part of its mandate involved managing flaring and venting as this was viewed as a critical step towards improving the province’s air quality.
Several dates stand out as Alberta wrestled with the trade-off between encouraging the growth of its energy industry while managing the environmental effects of flaring.[1]
- 1996: CAPP sets first baseline of max flaring per year at 1340 106 m3/year (utilization rates hover around: 91-92%)
- 1997: Flaring Project Team established by CASA to develop recommendations to address potential and observed impacts of flaring
- 1998: Flaring Project Team submits report outlining regulatory framework
- 1999: First official Directive 060 published (then called Guide 60)
- 1999: ST57 is published online for the first time
CAPP established the first baseline max of 1340 million cubic meters per year in 1996. Should gas flaring exceed this aggregate limit in any given year for Alberta, the AER would impose reductions and penalties for individual sites to reduce flaring.
The following year, in 1997, CASA established the Flaring Project Team to develop recommendations on the potential and observed impacts of flaring, with a view towards continually updating flaring regulations. This team was composed of representatives from Alberta Environment, environmental NGOs, the energy industry and representatives from the AER (then known as the Energy Resources Conservation Board). Within a year, they submitted a report outlining a prospective regulatory framework and creating a process for flaring analysis at each site. Subsequent to this, in 1999, Directive 060 was published, establishing specific flaring, incarnating, and venting requirements in Alberta. As a component of Directive 060, the publication of annual field surveillance report (ST57) started. Over the next few years, Alberta also began to publish annual flaring and venting reports at a well-by–company-by–location-by-year level, via ST60B. This provided one of the most detailed looks at flaring in the world.
Even with the regulations established, the industry thrived, with the spot price of gas closing at a record of $16.95 CAD per gigajoule and production peaking at 14 BCF per day for marketable gas in 2001. Additionally, the Alliance Pipeline, connecting gas from BC and Alberta to the US for the first time, was completed in 2000.
Yet, even as the industry continued to flourish, the negative environmental impacts became more noticeable. In September 2003, 337 gas wells were shut down by the Alberta Energy Regulator (then known as AEUB) to preserve the reservoir pressure for future bitumen extraction. In the same year, the Emissions Management and Climate Resilience Act (EMCRA) was established, designed to address how gas emissions contribute to climate change. In response to these growing environmental concerns, several initiatives and landmarks are notable.
- 2003: September—337 gas wells (100MMcf/d) are shuttered in the Fort McMurray area
- 2003: Emissions Management and Climate Resilience Act (EMCRA) established
- 2004: CAPP created the Non-Routine Flaring Task Team (NRFTT)
- 2004: Specified Gas Reporting Regulation (SGRR) published
- 2005: Although flaring has declined, data shows venting has increased
- 2006: EMCRA reviewed, starting an annual review process lasting until 2009
In 2004, CAPP established the Non-Routine Flaring Task Team (NRFTT) to review dispersion modelling requirements for intermittent and infrequent flaring. This was a big step towards eliminating routine flaring. In the same year, the Specified Gas Reporting Regulation (SGRR) was put in place, requiring facilities that emit 10 000 tonnes or more to submit annual emission reports.
Although efforts to minimize flaring appeared to succeed in reducing volumes, data from the World Bank shows that internationally venting continued to increase. Venting leads to greater climate change harm, but is also more challenging to observe. Flaring releases CO2 into the atmosphere by combusting natural gas, while venting represents direct methane releases. Methane is a substantially more potent greenhouse gas.
By 2008, Alberta publicly set a goal to eliminate all routine associated gas flaring and venting that is feasible to recover. The following years included regular revisions to existing acts to reduce emissions as climate change awareness increased.
Recent data shows progress towards eliminating routine flaring. Total gas flared for 2019 was 382 million cubic metres, 28.5% of the 1996 limit and 4.3% lower than in 2018.[2] Further, gas vented in 2019 from crude bitumen and crude oil batteries decreased 15% from 2018.[3] Unfortunately, for sources other than crude bitumen, crude oil batteries and gas production, flaring and venting increased between 2018 and 2019. This increase was attributed to two factors. First, a definition in Directive 060 changed to include gas for pneumatics as a part of emissions, so a previously uncounted source of flaring was incorporated into the regulations. Second, the industry experienced an underlying increase in flaring and venting activities.
Alberta appears committed to minimizing flaring and venting. It will be interesting to see if it is able to eliminate routine flaring and venting in the next decade, while also reducing non-routine flaring and venting.
Sources
https://www.aer.ca/regulating-development/rules-and-directives/directives https://www.alberta.ca/specified-gas-reporting-regulation.aspx#:~:text=Contact-,Overview,annual%20reports%20on%20their%20emissions.
https://www.canlii.org/en/ab/laws/stat/sa-2003-c-e-7.8/latest/sa-2003-c-e-7.8.html#regulation
https://www.canlii.org/en/ab/laws/stat/sa-2003-c-e-7.8/latest/sa-2003-c-e-7.8.html
https://www.flarevent.com/services/
https://www.seankheraj.com/the-history-of-oil-pipeline-spills-in-alberta-2006-2012/
https://www.aer.ca/providing-information/data-and-reports/statistical-reports/st60b
[1] Note: all timeline landmarks were collected from https://csegrecorder.com/articles/view/a-brief-history-of-canadas-natural-gas-production, https://www.aer.ca/regulating-development/rules-and-directives/directives and https://www.canlii.org/en/ab/laws/stat/sa-2003-c-e-7.8/latest/sa-2003-c-e-7.8.html#regulation unless otherwise indicated
[2] Data taken from Alberta’s ST60B-2020 and 2019 report: https://www.aer.ca/providing-information/data-and-reports/statistical-reports/st60b
[3] Ibid.