OILPATCH ENFORCER
Peace River hearings test new
In a slightly drafty conference room just off main street, far from oil company office towers, hearing commissioner Brad McManus and three panellists face the first big test of Alberta’s new oilpatch enforcer.
For eight days in late January, the panel from the Alberta Energy Regulator listened intently as local farmers expressed concerns that air pollution from 86 bitumen tanks around their farms south of Peace River were making them ill. Five families have moved away from nearby Reno, Alta., two during the two weeks of the inquiry.
Calgary-based Baytex Energy, which has operated the Reno tanks since 2011, said studies show air pollution in the area is well below Alberta’s thresholds for toxic levels. Baytex soon told the panel the company intended to install vapour recovery units on all tank tops to capture the emissions coming off the heated bitumen. Residents from Three Creeks, north of Peace River, brought long-standing concerns about emissions from the field where five companies operate — Shell, Husky, Murphy Oil, Baytex and Penn West.
In many ways, McManus and the panel — and the public — were watching the classic Alberta conflict between landowners and oil companies.
It’s happening now in Peace River partly because oilsands operators are drilling aggressively in a populated farming area rather than the middle of wilderness near Fort McMurray, Alta.
The big boom is just around the corner, with Shell ready to build a 1,500-person work camp this spring just outside town for workers building its $3-billion thermal in situ project at Carmon Creek to the north, which will produce 80,000 barrels of oil a day.
But the special issues being dealt with at this inquiry involve a different production process, called CHOPS — cold heavy oil production with sand — that is planting hundreds of tall, black tanks across the landscape, on farms and in the bush.
CHOPS is the only production method that heats bitumen on the surface, rather than underground, to separate oil and sand. That means fumes from heating heavy oil, which stay underground in most other operations, can be released into the atmosphere unless the tanks have vapour recovery systems.
Evidence at the inquiry showed there are no regulations covering hydrocarbon emissions from these tanks, and no requirement to capture the vapours that can spread off site into people’s homes. There is little research into which chemicals might be emitted, although known chemicals include potential carcinogens benzene and toluene.
The inquiry also heard that oilsands deposits near Peace River have much higher sulphur content than deposits in northeast Alberta. As a result, emissions from heating this bitumen will be more problematic.
Residents, the public and oil companies will be watching the AER closely to see how seriously it takes their concerns. The results will be the first signal of how this new, reorganized agency will deal with the competing interests of oil companies, worried citizens and communities under pressure.
Also, later this year, as part of the Alberta government’s new deal for the industry, the regulator takes over responsibility for enforcing all environmental laws in the oilpatch, including the Environmental Protection and Enhancement Act and the province’s water and public lands acts, and the report may yield clues on how the regulator will operate on those fronts.
People in Northwestern Alberta and across the country as well as the oil companies will be watching the AER carefully when it hands down its report in March.
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To find the black, threestorey-tall tanks, you can drive south from the Peace River to the now abandoned Labrecque farm, or drive north of town to County Road 842. The tanks sit above the wells which auger up the thick, sticky mixture from 600 metres below.
The oilsand mix, the texture of thick peanut butter, is pushed up into the tanks where it is heated to separate the oil, sand and water. As the bitumen rises to the top of the tank, it flows over into the second tank and the water and sand fall to the bottom of the first.
All day and night, steel tanker trucks pull up to the tanks, fill up with the hot, tarry bitumen and head off to processing plants. Each tank can hold about 1,000 barrels of oil.
Alain Labrecque, who recently moved out of his farm because of the emissions, said there’s an easy way to understand this smell: “Put a can of oil on the table and turn the heat on under it.”
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On Day 5 of the inquiry, three residents from Three Creeks told the inquiry of a “gassing” the day before. Strong-smelling fumes floated through their homes at about 2:30 a.m., leaving them with headaches and dizziness. Carman Langer immediately called to alert the AER and left his house. Diane Plowman waited until 7:30 a.m. to phone.
The local AER office ordered the companies to check out the complaints. All five companies reported 12 hours later that they found no problems. Residents want independent inspectors “so companies aren’t checking up on themselves,” Plowman told the inquiry.
On Day 7 in the conference room, the panel called on all parties to suggest some solutions.
Calgary engineer Stephen Ramsay, hired by the AER to provide independent advice, told the panel the best way to eliminate pollution problems is to capture all bitumen vapours coming off the tanks. That means installing vapour recovery units, estimated at $120,000 to $200,000 for a unit that could serve several tanks, the inquiry heard.
“If we want to be certain we are eliminating the odour source, we have to use a sealed system,” Ramsay said.
He recommended putting all emissions — both the excess natural gas that comes up with the bitumen and the vapours — to good use, burning them to help heat the bitumen on-site. But the question of whether to burn off the bitumen emissions drew mixed reviews.
The panel will also look at a request by Reno residents to shut down Baytex operations until that tank-top equipment is installed.
Shell Canada, which operates dozens of CHOPS tanks in the nearby Three Creeks area, told the inquiry its company policy is to capture all emissions, tank top vapours and casing gas that comes up with the bitumen and ship it all off to burn for power.
The AER should make it a condition of approval that any new project must capture
“PUT A CAN OF OIL ON THE TABLE AND TURN THE HEAT ON UNDER IT.”
ALAIN LABRECQUE
all excess natural gas and bitumen emission, Malcolm Mayes, Shell general manager, told the inquiry.
Shell would also support requiring all operators to install gas conservation equipment on existing operations, Mayes said.
Calgary odour expert David Chadder, an expert in air quality at consultants RWDI Air, said the regulator needs “clear criteria to enforce compliance” to reduce odours.
Rather than relying on company workers to check odour complaints, he suggested training people to do foot patrols and identify odours, said Chadder, a vicepresident of RWDI.
These so-called “odour rangers” are already being trained for the operations near Fort McMurray, he said.
Resident Doug Dallyn also told the inquiry a lot of emissions are put into the air when the tanker trucks are refilled. The air inside the tanks is contaminated from the heated bitumen and is pushed out into the atmosphere when the tank is refilled, which happens dozens of times a day.
Residents also discussed the health impacts of the oil industry at the inquiry, with some describing dizziness, cognitive impairment, passing out, headache, fatigue and other issues.
Like most in the Peace River area, Mike Labrecque was supportive of the oil industry when it came to his farm. He told the inquiry he worked for years in the oilpatch, including for Baytex, until he got too sick and he realized the source of his health problem.
“We aren’t against the industry. We just want the problem fixed,” he said.
Vivian Lalaberte told the panel she spent her 60th birthday last week packing up a few things before abandoning the farm in the Reno field that had been in her husband Marcel’s family since the 1920s.
They first left their farm in October 2012 for seven months, feeling ill. They came back in June 2013 hoping Baytex would have fixed the tank tops and contained the emissions. But the family’s symptoms soon came back.
“This isn’t a game. We are sick. This field has to be shut down or the field evacuated until the problem is fixed,” Lalaberte told the inquiry.
“If there are companies that can do a better job and put in vapour recovery, what are we waiting for?”
“We worked all our life to pay for the farm but I don’t like the way we are being treated now,” she added. “And I don’t like it when I hear (Alberta Premier Alison) Redford say we are environmental leaders.”