Peace River Proceeding Recommendations Status Report as of July 16, 2014
This is a status report on the implementation of the Peace River panel’s recommendations. The report titled Report of Recommendations on
Odours and Emissions in the Peace River Area was released on March 31, 2014, and can be accessed via www.aer.ca.
Recommendations that are in progress and within the jurisdiction of the Alberta Energy Regulator:
Panel Recommendation
Regulatory Recommendation 2
That the AER release the current
draft edition of
Directive 060: Upstream Petroleum
Industry Flaring, Incinerating, and
Venting as soon as possible, with
any additional changes arising in
response to the recommendations
of this report to be developed in a
timely manner.
Operations Recommendation 1
That the AER require that all
produced gas to be captured. Tank
top gas will be captured using a
VRU (vapour recovery unit)
a) within four months from the
issuance of this report in the Reno
and Three Creeks areas, and
b) immediately with respect to all
new operations in the Peace River
area. The captured gas may be
AER’s Response
The AER accepts this
recommendation and has released
the revised Directive 060 in
conjunction with this response
letter. The revised Directive 060
requirements become effective
June 16, 2014. These revisions
include a protocol to help the AER
inspection staff identify and issue
enforcement actions relating to
offensive off-lease hydrocarbon
odours. The revisions also
authorize the AER to exercise its
discretion to require gas
conservation.
The AER accepts recommendation
(a) and will immediately initiate a
project to examine the appropriate
regulatory approach to fulfill the
recommendation that all produced
gas be captured and venting
eliminated in the Reno and Three
Creeks areas. The AER will
mandate existing operations that
are currently venting produced gas
from tanks to capture this solution
Current Status
Compliance sweep teams deployed
to the Peace River area from June
16 to 29.
Future Deliverables
Compliance sweep teams will be
deployed to the Peace River area
from August 18 to 31. The teams
will be responding to complaints
24/7 to determine compliance
with Directive 060. In addition to
responding to complaints, teams
will proactively assess operations
for compliance with Directive 060.
Compliance sweep teams
consisting of three separate teams
of two deployed to the Peace River
area from June 16 to 29.
1a) Compliance sweep teams will
be deployed to the Peace River
area from August 18 to 31. Teams
will verify that all facilities and sites
within the Three Creeks and Reno
Progress Report June 6, 2014 - 1a) areas are capturing all produced
Directive 060 was published on
gas during steady-state operations
May 1, 2014, with an effective date (with the exception of any with an
of August 15, 2014 for capture of
AER-approved extension).
produced gas in the Reno and
Three Creeks areas.
1b) Compliance sweep teams will
Peace River Recommendations Status Report as of July 16, 2014 1
Panel Recommendation
sent to a flare or incinerator until
the feasibility study (discussed in
recommendation 5 of the
Operations section) is
implemented.
Operations Recommendation 2
That each operator in the Seal Lake
and Walrus areas provide a report
to the AER within two months of
the issuance of this report
outlining its plan to install VRUs to
eliminate venting from existing
facilities. The Panel expects the
AER, after considering the
AER’s Response
gas by August 15, 2014. The AER
accepts recommendation (b).
Effective May 15, 2014 the AER will
require all new heavy oil and
bitumen operations in the Peace
River area to capture all produced
gas during steady-state operations.
The AER accepts this
recommendation and will require
operators from the Seal Lake and
Walrus areas that are venting
produced gas to submit a plan by
June 15, 2014, demonstrating
targeted actions to reduce and
eventually eliminate venting. The
AER will then work with operators
Current Status
Penn West was granted an
extension for three facilities in the
Three Creeks area to comply with
regulatory requirement to capture
all produced gas. One facility must
be in compliance by September 30,
2014, the second facility must be
in compliance by November 8,
2014, and the third facility must be
in compliance by November 20,
2014. If odour complaints occur, it
is important to note that any
venting resulting in offensive
hydrocarbon odours outside the
lease boundary may result in AER
enforcement action, as per section
8.2 of Directive 060 (in effect on
June 16, 2014).
1b) Directive 056 was published on
May 1, 2014 with an effective date
of May 15, 2014 for all new heavy
oil and bitumen operations in the
Peace River area.
Operators submitted
implementation plans for the Seal
Lake and Walrus areas to eliminate
venting by June 15, 2014.
Future Deliverables
be deployed to the Peace River
area from August 18 to 31. Teams
will verify that all heavy oil and
bitumen operations approved
since May 15, 2014, are capturing
all produced gas during steadystate operations.
AER staff will assess the
implementation plans and are in
discussions with operators.
Peace River Recommendations Status Report as of July 16, 2014 2
Panel Recommendation
information in such reports, to
work with operators to implement
an appropriate and timely plan to
eliminate venting.
Operations Recommendation 5
That towards the objective of
conserving all captured gas, the
AER require that by October 31,
2014, operators, either
collectively or independently,
provide a feasibility study to the
AER into options and timelines to
conserve all gas at sites in the
Peace River area. The Panel
expects that the AER, after
considering the information in the
feasibility study, will require
operators to implement an
appropriate conservation plan.
Geology Recommendation
1
That the AER conduct or require
operators in the Peace River area
to submit a geochemical analysis
of the volatile compounds from
the heavy oil from the Gordondalesourced bitumen
a) at surface prior to processing,
AER’s Response
and stakeholders to design an
appropriate regulatory approach
that will be implemented as
soon as reasonably practical with
the outcome of reducing and
eventually eliminating the venting
of produced gas from existing
heavy oil and bitumen operations
in the Seal Lake and Walrus areas.
The AER accepts the
recommendation. Once the review
and analysis of the feasibility study
is complete, the AER will require
operators in the Peace River area
to implement an appropriate gas
conservation plan. With the
revised Directive 060, the AER will
have the regulatory tools in place
to require conservation.
Current Status
Future Deliverables
Letters requesting implementation
plans for the conservation of all
produced gas in the Peace River
area (Three Creeks, Reno, Seal
Lake, and Walrus) were sent to
operators in the area on June 2,
2014.
AER staff to contact operators in
September 2014 to check on
progress.
The AER accepts this
recommendation. The results of
1(a) will define the boundary of
the play for regulatory
recommendation 1. The results of
1(a) and 1(b) will characterize the
produced hydrocarbons over the
production cycle.
The recommendation will require
1a) A draft geological model of the
petroleum systems in the Peace
River area is complete. The model
is currently being used by a
geochemist to develop a sampling
program for petroleum at the
wellhead.
1b) The AER has finished
consulting with a geochemist and
Based on the geological model,
analysis of the geological data,
consultation with a geochemistry
expert, and analysis of a large
amount of geochemical research in
the public domain, large-scale
wellhead and production facility
sampling will not enable
differentiation of hydrocarbon
Feasibility studies are due to the
AER by October 31, 2014.
Peace River Recommendations Status Report as of July 16, 2014 3
Panel Recommendation
and
b) from the tank prior to transport.
AER’s Response
the AER to specify the sampling
program and laboratory protocols
for consistency; and the samples
need to be collected by the
operators, although supportive
core sampling may be done by the
AER. The AER will immediately
initiate a review of AER regulatory
approaches to enable the
collection of the geochemical
analysis.
Current Status
has determined that sampling
petroleum over the production
cycle (would not be sufficient for
regulatory differentiation.
Future Deliverables
geochemical plays sufficient for
regulatory differentiation. This
means that 1(a)—a detailed
sampling program of pools/plays
associated with Gordondale
petroleum systems— will not
proceed, and 1(b)—the sampling
of production facilities to identify
chemical evolution of Gordondalesourced heavy oils and bitumen—
will not proceed.
Supplementary sampling will be
limited to about 10 samples to
characterize Gordondale- and
Exshaw-sourced hydrocarbons to
characterize hydrocarbon end
members and mixed-source
compositional variations. Since
the AER will be conducting the
sampling, operators will not
receive notification.
Stakeholder Engagement
Recommendation 1
That the AER provide support to
allow stakeholders to work
together and determine what
The AER accepts this
recommendation and will continue
to facilitate stakeholder
engagement.
On June 18, the AER provided local
operations staff the opportunity to
learn on site about Directive 060
and the Hydrocarbon Odour
Management Protocol.
A geological report will be issued
by November 30, 2014, describing
the model of geological plays and
the geochemical play boundaries
to support regulatory responses.
The AER will continue to provide
on-site opportunities for local
operations staff to learn about
Directive 060 and the Hydrocarbon
Odour Management Protocol
Peace River Recommendations Status Report as of July 16, 2014 4
Panel Recommendation
AER’s Response
stakeholder engagement processes
would meet their needs on a goforward basis.
Stakeholder Engagement
Recommendation 2
That the AER enhance its
operational and enforcement
presence in the Peace River area.
The AER accepts this
recommendation. The AER intends
to develop a strategic and focused
surveillance program for the Peace
River area. Surveillance will focus
on compliance, education, and
prevention.
Operations Recommendation 3
That, following implementation of
The AER accepts this
recommendation. The AER
Current Status
On June 19, the AER hosted a
meeting at McKenny Hall in Peace
River for residents and
municipalities.
Peace River residents who
provided the AER with contact
information and were seeking
additional information were emailed a link to information on the
compliance sweep.
On June 16–29 the sweep teams
provided 24/7 complaint response
to verify compliance with Directive
060. Between June 16 and 20 and
June 23 and 27, additional sweep
teams were brought in to verify
that heavy oil and bitumen
operations approved since May 15,
2014, are capturing all produced
gas during steady-state operations.
On July 9, 2014, letters were sent
to operators directing that they
Future Deliverables
during proactive inspections.
Compliance sweep teams will be
deployed to the Peace River area
for both announced and
unannounced verification periods.
From August 18 to 31, the sweep
teams will provide 24/7 complaint
response to verify compliance with
Directive 060. From August 18 to
22 and August 25 to 29, additional
sweep teams will be brought in to
verify that heavy oil and bitumen
operations approved since May 15,
2014, are capturing all produced
gas during steady-state operations
and to verify that all facilities and
sites within the Three Creeks and
Reno areas are capturing all
produced gas during steady-state
operations (with the exception of
any with an AER-approved
extension).
AER staff to contact operators in
August 2014 to check on progress.
Peace River Recommendations Status Report as of July 16, 2014 5
Panel Recommendation
gas capture measures
contemplated in these
recommendations, the AER
prohibit venting from all facilities.
In the event of an emergency or
upset situation and where flaring
infrastructure is not available
(which results in venting), the well
must be immediately shut in.
Operations Recommendation 4
That where gas conservation
measures have been implemented,
and where upsets and/or
emergencies occur, the AER
require that flaring be limited to a
maximum of three per cent of the
annual operational time, with the
duration of the flaring reported to
the AER monthly.
Operations Recommendation 6
That the AER require that
operators conduct monthly
fugitive emission inspections using
appropriate equipment (e.g., FLIR
camera). The results of monthly
fugitive emission inspections must
be submitted to the AER for review
and made available to area
stakeholders.
AER’s Response
recognizes that the
implementation of operations
recommendations 1 and 2 will
reduce and eventually eliminate
venting in the Peace River area.
Additionally, the AER will examine
regulatory approaches to address
venting in emergency or upset
situations where flaring
infrastructure is not available in
the Peace River area.
The AER accepts this
recommendation and will examine
the appropriate regulatory
approach to ensure that flaring be
limited to a maximum of three per
cent of the annual operational
time in the event of an upset or
emergency where gas conservation
measures have been implemented.
Current Status
provide the AER with a detailed
plan demonstrating how venting
would be eliminated from
emergency or upset conditions in
the Three Creeks and Reno areas.
Future Deliverables
On July 9, 2014, letters were sent
to operators who are conserving
gas to provide the AER information
that includes a plan that
demonstrates how upset and/or
emergency flaring will not exceed
three per cent of the annual
operating time.
AER staff to contact operators in
August 2014 to check on progress.
The AER accepts this
recommendation and will develop
an appropriate regulatory
approach that will require Peace
River area heavy oil and bitumen
operations, as soon as reasonably
practical, to conduct monthly
fugitive emission inspections and
to report the results to the AER.
The AER will make the results of
the monthly inspection reports
available to the public.
On July 9, 2014, letters were sent
to operators requesting that they
provide the AER information on
fugitive emissions from processes
at Peace River facilities and leak
detection and repair information
for Peace River facilities.
Information on fugitive emissions
is due to the AER by July 25, 2014.
Detailed plans are due to the AER
by September 30, 2014.
Information and plans are due to
the AER by September 30, 2014.
Information on available leak
detection and repair information is
due to the AER by July 31, 2014.
Peace River Recommendations Status Report as of July 16, 2014 6
Panel Recommendation
Operations Recommendation 7
That the AER require that where
sources of fugitive emissions are
identified, these be repaired within
12 hours of being detected or the
facility be shut down until such
repairs are completed. Repair
responses would be submitted to
the AER for review and made
available to area stakeholders.
Operations Recommendation 8
That the AER require that
operators implement measures
(such as scrubbing or recovering
displaced truck tank emissions) to
minimize odours from truck
loading and unloading activities.
AER’s Response
The AER accepts this
recommendation’s outcome. For
the purposes of this
recommendation, fugitive
emissions are defined as follows:
“Fugitive emissions at oil and gas
facilities are unintentional leaks to
the atmosphere and arise due to
normal wear and tear on seals,
threaded or mechanical
connections, covers, or other
equipment components.” The AER
will develop the appropriate
regulatory approach to ensure that
operators repair identified sources
of fugitive emissions, as defined, as
soon as reasonably practical and
report to the AER on the repair
response. The AER will make this
information available to the public.
The AER accepts this
recommendation’s outcome but
recognizes that the AER’s
jurisdiction applies only to AERlicensed wells and facilities. The
AER will evaluate and implement
appropriate regulatory approaches
to minimize emissions and odours
associated with truck loading and
unloading activities. For sites not
licensed with the AER, the AER will
engage with the appropriate
parties to discuss strategies to
Current Status
On July 9, 2014, letters were sent
to operators requesting that they
provide the AER information on
fugitive emissions from processes
at Peace River facilities and
available leak detection and repair
information for Peace River
facilities.
Future Deliverables
Information on fugitive emissions
is due to the AER by July 25, 2014.
Information on available leak
detection and repair information is
due to the AER by July 31, 2014.
Project has not yet begun.
Peace River Recommendations Status Report as of July 16, 2014 7
Panel Recommendation
Operations Recommendation 9
That the AER should review the
results of the Stantec and
Clearstone studies and
a) require operational changes in
the Three Creeks area, if
necessary, to reduce odours and
emissions from sources identified
in those studies;
b) determine the applicability of
the results and operational
changes to the other Peace River
areas.
Monitoring and Modelling
Recommendation 1
That the AER engage industry,
residents, and stakeholders to
establish a scientific and
technically credible regional air
quality program for the Peace
River area that, to the extent
possible,
a) builds on the efforts of the
existing continuous monitoring
program;
b) includes the Reno area;
c) considers the studies and
monitoring surveys conducted
to date by Alberta
Environment and Sustainable
Resource Development (ESRD),
AER’s Response
minimize odours from these
activities.
The AER accepts this
recommendation and will review
the studies. The AER will evaluate
recommendations from these
reports and, if necessary and
appropriate, require Three Creeks–
area operators to implement
additional operational changes to
reduce odours and emissions from
sources identified in these reports.
Knowledge from these reports will
be applied to the other Peace River
areas if appropriate.
The AER accepts this
recommendation and will
immediately engage with industry,
residents and stakeholders to
establish a regional air quality
monitoring program for the Peace
River area. The AER will also
expand its engagement to ESRD
and Alberta Health.
Current Status
Future Deliverables
Project team has been formed.
The initial planning phases will
begin in mid-July.
Project team has been formed.
The initial planning phases will
begin in mid-July.
Peace River Recommendations Status Report as of July 16, 2014 8
Panel Recommendation
industry, Stantec, RWDI,
Clearstone, Chemistry Matters,
Odotech, and Dr. Zelt;
d) provides greater geographic
and spatial coverage by
monitoring in areas of
anticipated highest
concentrations and where
people might be exposed to
emissions and odours;
e) is operated collaboratively by
industry, residents, the AER,
and other government
agencies (using a Clean Air
Strategic Alliance [CASA] type
model);
f) provides transparent and realtime data to residents and
stakeholders; and
g) assesses innovative monitoring
technologies to better
understand odours and
emissions sources and use the
technology where appropriate.
Monitoring and Modelling
Recommendation 2
That the AER require that holders
of new approvals issued in the
Peace River area join the regional
monitoring program.
Monitoring and Modelling
Recommendation 3
AER’s Response
Current Status
Future Deliverables
The AER accepts the
recommendation. The AER will
require all new heavy oil and
bitumen operations in the Peace
River area to join the appropriate
regional monitoring program as
soon as reasonably practical.
The AER accepts the
recommendation and will
Project team has been formed.
The initiating and planning phase
will begin in mid-July.
Project team has been formed.
The initiating and planning phase
will begin in mid-July.
Peace River Recommendations Status Report as of July 16, 2014 9
Panel Recommendation
That the AER work with
stakeholders engaged in the air
quality monitoring program to
provide a progress report to the
Peace River area community within
six months of the issuance of this
report. The report should describe
a) progress that has been made
in establishing the governance
framework for the monitoring
program,
b) progress that has been made
in modelling or in
characterizing emissions and
odours, and
c) other efforts made to address
the monitoring
recommendations above.
Regulatory Recommendation 1
That the AER establish localized,
“play-based” regulatory
requirements for all heavy oil
operations in the Peace River area
that are producing or will produce
Gordondale-sourced bitumen.
AER’s Response
collaborate with ESRD and Alberta
Health to provide a progress report
on air quality monitoring in the
Peace River area.
Current Status
The AER accepts this
recommendation and will examine
opportunities to develop a playbased regulatory (PBR) approach in
the Peace River area. The AER is
currently considering applying a
PBR approach to other areas of the
province. This would involve
designing unique regulatory
frameworks for areas that have
unique risk profiles with the
intention of achieving assurance of
broad economic, environmental,
and social policy goals. Play-based
regulation would include
Project has not yet begun.
Future Deliverables
Peace River Recommendations Status Report as of July 16, 2014 10
Panel Recommendation
AER’s Response
regulatory approaches to address
risks to outcomes specific to the
Peace River area.
Current Status
Future Deliverables
Peace River Recommendations Status Report as of July 16, 2014 11