3rd edition
Authors:	Duncan Kenyon, Nikki Way, Andrew Read, Barend Dronkers, Benjamin Israel, Binnu Jeyakumar, Nina Lothian
Publisher:	Pembina Institute
Publish Date:	October 2016
PDF Download:	[Landowners' Guide]              [Landowners' Primer]
Initiation Phase
Exploration Phase
Development Phase                 Overview of Oil and Gas Wells                 Before Drilling                 Questions About Lease Agreements                 Sour Oil and Gas and Emergency Response                 Hydraulic Fracturing                 Environmental Considerations of Hydraulic                  Fracturing
Pipelines and Other Infrastructure
Environmental Impacts
Abandonment and Reclamation
Compensation, Rights, and Hearings
Appendices

Sour Oil and Gas Developments and Emergency Response Plans

Sour oil is crude oil containing free sulphur, hydrogen sulphide (H₂S; see Appendix E Glossary) or other sulphur compounds; sour gas is gas that contains measurable amounts of H₂S. While many wells contain “sweet” gas (gas that does not contain measurable amounts of H₂S), an increasing proportion of wells in Alberta produce sour gas. As explained in Risks of sour gas, H₂S is acutely toxic to humans, even at low levels.

About one-fifth of the gas produced in Alberta is sour, with varying concentrations of H2S. Much of the new H2S-bearing hydrocarbon development in the province is happening in areas that were originally drilled for oil.

Emergency response plans

The AER requires companies that produce sour gas to have an appropriate emergency response plan (ERP) to ensure quick action if there is an operational incident, ranging from a minor leak to a blowout. The AER’s minimum requirements for ERPs are given in Directive 071: Emergency Preparedness and Response Requirements for the Petroleum Industry.

All companies must have a corporate ERP so they can notify the public and respond to any unexpected event. The AER also requires a company to have a specific ERP for a critical sour well, a sour production facility, a sour gas pipeline or a high vapour pressure pipeline. A “critical” well (see Appendix E Glossary) is one that has a high H₂S release rate, or is close to an urban centre. The release rate is determined by both the percentage of H₂S in the gas and the amount of H₂S that can be delivered to the surface (see AER’s EnerFAQs: All About Critical Sour Wells).

Even where a site-specific ERP is not required, it is a good idea for you as a landowner or occupant to discuss safety with the company and examine its corporate ERP so you know what will be done if there is a leak or other emergency. When a company is required to have a specific ERP they must consult or notify those within the emergency planning zone.

Emergency planning zone

An emergency planning zone (EPZ) is an area surrounding a well where residents or other members of the public may be at highest risk in the event of an uncontrolled release of H₂S. The company must be prepared to respond immediately to any event in the EPZ. The zone should be large enough to protect the public, so they can be informed and evacuated in case of emergency.

The basic size of the EPZ will be determined by the maximum H₂S release rate, but the actual size of the final zone must take into consideration the nature of the terrain and other site-specific features. The extent of the zone will also reflect information gathered during the public involvement process. Directive 071 sets out in detail how a company must involve local government and the public in preparing a specific ERP. The company must provide the public within the EPZ a detailed information package that includes an explanation of the potential hazards, the H₂S concentration and release rates, the company’s 24-hour emergency contact telephone number, and the potential health effects of exposure to H₂S and to sulphur dioxide (SO₂), which results from the combustion of H₂S. The package will also have a description of the procedures in place for responding to an emergency. Where people may be absent for extended periods (e.g., trappers or recreational property owners) the company must inform them by registered mail.

The company must review this information with all members of the public (or with the urban director of emergency management in an urban area) and address their concerns. In addition to obtaining input into the actual ERP, the company must obtain information from all those living and working in the zone, including the exact location of their residence/workplace and exit routes, key contact names and phone numbers, so that they can be alerted if there is an emergency. The company must also identify those with special needs (for example, people with health or mobility problems), who may need to be notified or evacuated earlier than the general population. An indication of the type of information that the AER expects with respect to an ERP is given in Appendix 2 of Directive 071.

Companies must update ERPs biannually, and conduct a public awareness program with residents every second year. They are responsible for ensuring resident contact information is up-to-date.

Corporate emergency response plans

The AER requires all companies drilling for oil and gas to have a corporate ERP, which they can review on request. The ERP describes how a company will manage and communicate during an emergency and is used as a training manual for company employees. Directive 071 sets out the mandatory requirements for a corporate ERP. The plan must, among other things, set out a system to classify emergencies, using the AER’s assessment matrix:

Alert — The company has identified a significant problem that is confined to the lease and is progressing towards a solution. Relevant company personnel have been alerted, but no additional personal are required. The AER may or may not be contacted.

Level 1 Emergency — The problem is complex and deteriorating and may not be contained to the lease, and off-site management are involved. The AER are notified, along with the public within the EPZ who have requested early notification. Those with special needs and others may choose to voluntarily evacuate.

Level 2 Emergency — The hazard has likely extended past the leased area and isn’t contained, which could jeopardize public health and safety. The public within the EPZ is likely notified, and could be given instructions to evacuate or shelter-in-place, according to the situation and the ERP. The company will notify the AER, the local municipality, and the regional health authority. The company may request assistance from local authorities.

Level 3 Emergency — Control of the situation has been lost and there are off-site impacts to the public. Evacuation or shelter-in-place will likely be activated, according to the ERP. The company requires assistance from outside parties to attempt to bring the hazard under control. If the hazard progresses beyond the EPZ, notification and evacuation will depend on the level of the concentrations of the hazardous gases (H₂S, SO₂, etc.). The AER fully implements the incident management system, which includes working with Alberta Emergency Management Agency (AEMA).

The ERP should set out how a company’s ERP coordinates with the local municipal disaster services. As only large cities have safety professionals, if the ERP relies on municipal staff to respond to a problem then the company will have to ensure that the municipality has enough staff who are adequately trained to deal with such an emergency and that they have the appropriate equipment.

There are no regulations in place regarding compensation in the event of an evacuation. The company is usually expected by the AER to cover reasonable costs incurred when evacuation is due to a company incident and there is potential for harm. If there is an issue of unpaid costs between a landowner and the company, the issue may be resolved through an Alternative Dispute Resolution (ADR) in the case of multiple issues between parties, or if compensation is the only concern, the issue may need to be resolved through a small claims court. If individuals need to claim on their personal insurance policies, they should ensure that the company’s declaration of an emergency was endorsed by the municipality; if not, some insurance companies may not pay out on the claim. As sour gas emergencies can be life threatening, regardless of what municipal declaration, as a landowner you should follow the instructions the company has provided.

Risks of sour gas

While the acute effects of H₂S are of greatest concern, there are indications that cumulative low-level exposure can also affect health, even though it is not known what levels constitute a health risk to the general public or sensitive individuals. A study of medical literature conducted by Alberta’s health ministry found that young, healthy adults can tolerate short-term exposure up to 10 parts per million (ppm) H₂S without significant effects, but that values of 2 ppm induced bronchial obstruction in individuals with mild to moderate asthma. The potential impacts of exposure to SO₂ have also received increasing attention. This suggests that it is advisable for those with impaired health to identify themselves as being in the “special need” category when a company is compiling an ERP, so that they receive early warning of any potential release.

Reducing risks

Because of public concerns about the potential risks associated with sour gas, the Provincial Advisory Committee on Public Safety and Sour Gas was set up in 2000, which led to the Public Safety and Sour Gas Report in 2007. The 2007 report implemented a suite of recommendations around sour gas operations in Alberta. Among these changes was the lowering of H₂S and SO₂ thresholds to prompt evacuations of the public, and a commitment to inspect critical wells at least once during or immediately prior to drilling of the critical zone.

Additionally, the AER requires that companies conduct proliferation assessments for critical sour wells, pipelines and facilities and disclose the information so that impacts on the public could be minimized. The AER expects companies drilling sour gas wells that are part of a larger project to disclose the project and, where possible, the extent of the planned development (i.e., the number of wells, pipelines and processing facilities that may be needed). They ask companies within a common area to minimize the effects of sour gas developments by sharing information, pooling efforts and using common roads, pipelines, and processing facilities.

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