Saskatchewan Energy and Resources Associated Gas ...

Saskatchewan Energy and Resources
Associated Gas Conservation Standards

Directive S-10

Todd H. Han
Petroleum Development Branch

April 18, 2012

www.er.gov.sk.ca

WARNING

This presentation is derived from draft
statistical data and which has not been
finalized. Reader is advised that all wording
and data in the presentation is subject to
change and items in this presentation should
not be viewed or dependant on as accurate

or final information.

Licences issued





2011 Oil Well Production Data

2,017,813,966 BBL

87,437,530 mcf 157,300,824 BBL
14,572,924 BOE

131,487,723 mcf

• The Government of Saskatchewan announced in 2007
an initiative to develop a plan to reduce flaring and
venting emissions.

• This plan will identify economical, practical and
reliable methods of reducing air pollutant emissions
while improving the efficiency and competitiveness
of the oil and gas industry.

• This responsibility was assigned to Saskatchewan
Energy and Resources (ER).

• To achieve this objective, ER established a steering committee,
Saskatchewan Upstream Oil and Gas Industry Flaring and
Venting Emission Reduction Committee.

• The committee is represented by subject matter experts from:
– The Canadian Association of Petroleum Producers (CAPP)
– The Small Explorers and Producers Association of Canada
(SEPAC)
– Saskatchewan Energy and Resources (ER)
– Saskatchewan Environment (SE)
– TransGas Limited
– SaskPower

Greenhouse Gas Sources 2004

Ot her s

1% Oil and Gas
Residential Heat ing Pr o d uct io n

3% 33%

Commericial Heat ing
3%

Other Industry
6%

Agricult ure Elect rical
14% Pro d uct io n

Transp o r t at io n 24%
16 %

Storage Losses Other
Fugitive Equipment 1% 0%

Leaks Fuel Combustion
9% 13%

Flaring
5%

Surface Casing Vent
Flow/Gas
9%

Unreported Venting
13%

Reported Venting
50%

Saskatchewan Greenhouse Gas Emission by Activities in the
Upstream Oil and Gas Industry (2000)

9,000,000 Natural Gas Production Volume 103m3
8,000,000
7,000,000 ASSOCIATED NON-ASSOCIATED
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000

0

1991
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011

Associat ed Gas Flaring and Venting Volume Comparison: Alberta vs. Saskat chewan

18 0 0 1555 SK Fl ar e/ V ent
16 0 0 A B Fl ar e/ V ent
14 0 0 SK Fl ar e/ V ent w/ Non-Recover abl e Gas

million cubic metre 12 0 0 1224

10 0 0 1016

843

800

728 667 689 672 723

600

400 517 529 506 562 543 550

430 450 436 414 405 351

200

0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2 0 10 2 0 11

2000







Flaring Volume by Township N

WE

S

Flared Gas Township
0 - 499
500 - 1499
1500 - 2999
3000 - 4999
5000 - 12000
x1000 cubic meters

Critical Sour Gas Locations

DECISON TREE
•The Licensee must apply the decision tree to all flares and
vents greater than 900m3/day;
• Decision making process should account for the potential

safety, environmental, and economic benefits;

Directive S-10

• Applications:

– Oil Wells and Single Oil Well Batteries

– Multi-Oil Well Batteries

– Associated Gas Processing Plants (case-by-case requirements)

– Any wells and facilities that vents, flare or
incinerate associated gas

• Exceptions

• Any wells and facilities that produces, handles or processes
or non-associated gas

• Directive S-10 provides enforceable regulatory
requirements for reducing flaring and venting of
associated gas.

• Directive S-10 provides equivalent control similar to
the Alberta Energy Resources Conservation Board’s
(ERCB) Directive-60, which as a decade of track
record.

• Volumetric Reporting system will be based on
recognized and proven Production Reporting System.
Saskatchewan is now a partner in the Petroleum
Registry of Alberta.



• Establishes flaring and venting restriction volume for associated gas
produced from licensed oil wells and facilities.

• Designed to restrict flaring or venting associated gas volume above
900 cubic metres/day.

• If limit is exceeded the licensee must conserve (collect, sell or use) the
associated gas, shut-in the well or facility or carry out a calculation to
demonstrate that the associated gas cannot be economically conserved.

• The requirement for conserving may be waived if the licensee can
demonstrate that the cost of conserving associated gas exceeds a
prescribed economic limit. It is designed so that the energy input to
conserve the associated gas does not exceed the benefit of conserving
the associated gas. The economic limit for conservation is Net Present
Value (NPV) greater than -$50,000Cdn (minus fifty thousand dollars).

• For new oil wells and facilities licensed on or after July 1, 2012,
all parts of Directive S-10 come into effect on July 1, 2012;

• For existing oil wells and facilities licensed before July 1, 2012,
all parts of S-10 come into effect on July 1, 2015.

• Immediately, where valid public complaints are raised (validated
by field office investigation) with regards to odours, noise or
visible smoke from venting or flaring from a well or an upstream
oil and gas facility.

• Immediately for a well or a facility ordered by ER to comply with
S-10. These orders can be in the form of a licence condition,
memorandum, letter or Minster’s Order.

• Based on analysis, Directive S-10 is predicted to have the
following GHG emission reduction impacts (based on 2009
associated gas flaring and venting reported volumes).

• Best case-scenario model indicates that there will be 49% in
total reduction of GHG if Directive S-10 is fully implemented
from the upstream oil and gas industry.

• Worst case-scenario model indicates that there will be 21% in
total reduction of GHG if Directive S-10 is fully
implemented.