Shell Canada Limited. Shell s Comments for Phase 4: Oral Proceeding Related to Alberta Energy Regulator Proceeding No

Transcription

1 Shell Canada Limited Shell s Comments for Phase 4: Oral Proceeding Related to Alberta Energy Regulator Proceeding No January 22, 2014

2 Good (morning/afternoon) Panel Members, AER staff, members of the public, and industry area operators. We at Shell would like to take this opportunity at the outset to thank the AER for the opportunity to be here today and give our presentation, and to assist the Panel in whatever way possible so that it can hear and receive the information it needs in order to be able to discharge its mandate, issue its report, and make the appropriate recommendations to the Lieutenant Governor in accordance with section 17 of the Responsible Energy Development Act. We would also like to thank the area residents who have participated in the process. They have expended much time and effort in making their written submissions in preparation for this phase and they will be invaluable sources of information for the Panel throughout the proceeding. We look forward to continuing to work together and strengthen our relationship with them in this area as neighbours and partners. Shell filed detailed written submissions in Phases 2 and 3 of this proceeding, which are publicly available on the AER website. Shell s presentation today is a summary of the Phase 2 submission as they relate to the AER s Topic 3: Operations. It is intended to highlight some key points from that submission for the AER Panel. Shell also intends to present on Topic 5: Solutions. Shell s presentation on Topic 3 today highlights four (4) main areas from our Phase 2 written submission: the locations of Shell s operations in the area; a brief description of Shell s Cliffdale facility; a brief description of Shell s Peace River Complex; and Shell s current air monitoring activities, as well as its ongoing and planned air quality initiatives in the area.

3 We ll also be using some photo visual aids throughout the presentation. The photos that we will put up on the screen for everyone to see are the same photos that were filed in our written submissions. I d now like to start off by providing some detail about the locations of Shell s operations in the area. An overview of Shell s operations in the area is shown on the screen. Shell s Peace River Project Development Area is located in Townships 84-85, Ranges 17-19, west of the 5th Meridian, in Northern Sunrise County. Shell owns and operates two main assets in this area, the Cliffdale Cold Production Complex and the Peace River Complex. Shell s Peace River Complex is a thermal production facility that has been in operation since Shell s Cliffdale Complex produces heavy oil via a cold production process. It was acquired by Shell in Shell s Cliffdale Complex is located at Township 84 and Ranges The Cliffdale Battery is approximately 27 km from the nearest resident while the closest well pad is approximately 14 km away. Shell s Peace River Complex is located in Township 85 and Range 17 and is approximately 6 km from Hwy 986. The Peace River Complex Plant is located approximately 9.5 km from the nearest resident and its closest well pad is approximately 4.8 km. Now we d like to provide a brief description of our two operations in the area the Cliffdale Complex and the Peace River Complex. We ll start out with the Cliffdale Complex. We ll talk first about its wells, and then about its battery. In cold production processes, the heavy oil has a low enough viscosity that it is able to flow on its own. Production at Cliffdale has increased steadily over the years as new wells have been drilled. Average production from the field is currently around 12,300 barrels of oil per day. Shell s Cliffdale Complex includes 34 well pads. A typical well pad is shown on the screen.

4 Shell s well pads at its Cliffdale Complex have up to a maximum of 10 wells per pad. The wells produce an oil and water emulsion, which flows to surface via a pump into a production tank. The well pads are typically configured with one tank per well. The produced emulsion from the wells is heated to a maximum of 70 C in the production tanks, to enable it to be transported via truck to the Cliffdale Battery. Any vapours that are vented from these trucks during loading are routed through a scrubber to remove odours. Shell s Cliffdale Complex has a gas gathering system that collects gas directly from the subsurface reservoir during production which is commonly referred to as casing gas. It also collects the gas from the production tanks, which is referred to as solution gas via a Vapour Recovery Unit. The combined gas stream is routed directly to Shell s Cliffdale Battery via pipeline. Shell addressed several important design considerations to ensure successful operation of the vapour recovery units at its Cliffdale Complex. The production tanks operate at low pressures and gas rates can vary. This can lead to a system that can pose challenges from an operational perspective. To deal with these challenges, Shell installed a blanket gas system at Cliffdale well pads. Produced gas is used to blanket the tanks when gas production from the oil is low or when the tank is being emptied. This enables the vapour recovery unit to keep running. The vapour recovery unit also has capacity control that includes a variable frequency drive on the motor and a recycle valve. These measures allow the vapour recovery unit to increase or decrease capacity as required depending on the circumstance. Each production tank has overpressure protection devices known as thief hatches and pressure vacuum relief valves. To prevent these devices from venting to atmosphere, Shell has implemented a number of practices. First, Shell has focused on maintaining high vapour recovery unit reliability to limit the number of high pressure events. Second, Shell monitors production tank pressure and production is shutdown in the case of a high pressure to prevent the thief hatch or relief valve from opening. The shutdown stops the flow of oil into the production tanks and thus also stops the flow of gas. Shell also inspects every relief valve and thief hatch annually and replaces the gaskets to ensure proper sealing during normal operations. Additionally, Shell conducts monthly surveys of all production tanks on the well pads and its battery with a Forward Looking Infrared camera. A FLIR camera is an infrared

5 camera with a hydrocarbon filter that detects any small leaks from the tanks. If a leak is found on a production tank, the well is shut-in until it can be fixed. If vacuum trucks are used for operations or maintenance activities, they are connected into scrubbers to remove the majority of the odours associated with their operations. Some of the gathered gas is used to power the downhole pumps, the vapour recovery unit, and pad compressors, and is also used to heat and operate the production tanks and associated well pad control systems. Conversion of the gas to power is achieved through combustion in a skid mounted light truck engine, complete with pollution control equipment comparable to that found on light trucks registered to drive on public roads. Some of the gathered gas is also used to generate power, which is then transmitted to the Alberta electrical grid. Shell generates power for around 4,800 homes through this arrangement. Shell does not routinely flare gas at its well pads. When Shell s gas gathering systems are partially or fully offline, production is suspended at the impacted wells. Shell does incinerate solution gas from the production tanks during the initial stages of production from a new well pad. This is because the solution gas is typically of poor quality and cannot be used as fuel gas on the pad. Until the quality improves, it is routed to an incinerator and combined with supplemental fuel gas in order to combust the vapour so as to avoid venting of hydrocarbons to the atmosphere. When the quality improves, the solution gas is routed to the gas gathering system and the incinerator is decommissioned. Turning now from the Cliffdale well pads, we will now provide a description of the Cliffdale Complex s Battery. On the screen is a picture of the Cliffdale Battery. The emulsion produced from the Cliffdale wells we just described then enters the Cliffdale Battery via trucks into surge tanks. From here, the emulsion is pumped to emulsion treatment where the water and oil are separated before being shipped to sales via pipeline. Shell does not truck nor rail sales oil from Cliffdale to sales. The casing gas and the solution gas from the Cliffdale well pads enters the Cliffdale battery via the gas gathering system pipeline. The gas is then compressed and any hydrogen sulphide and water are removed.

6 The gas is then shipped to Shell s Peace River Complex Plant via pipeline, where the gas is either burned in the boilers to produce steam or stored in an underground reservoir for future use. Any gas that is separated in the emulsion treating process is captured through the plant vapour recovery unit and routed to the gas treatment system. The Cliffdale Battery has a flare stack to address process upset conditions only. Shell does not routinely flare gas at the Cliffdale Battery. We ll now turn to the Peace River Complex operation, and we ll provide a brief description of Shell s operations there. Shell s Peace River Complex is a thermal production operation in which steam is injected into a reservoir in order to heat the heavy oil. This reduces its viscosity and enables it to flow. The equipment configuration at the Peace River complex is similar to cold production in that the wells are laid out in pads of multiple wells. On the screen is a picture of a typical Peace River Complex well pad. Here, the emulsion and gas produced at the well pads flows from the wells directly into a pipeline gathering system. Any casing gas that flows up the casing of the wells is collected and routed to the Peace River Complex Plant via a pipeline for further processing. There are no tanks on the wells pads in thermal production. Now on the screen is a picture of the Peace River Complex Plant. At the Plant: The produced emulsion from the wells enters the Plant via pipeline and the entrained gas and water is removed from the oil in the emulsion treatment system. The resulting sales oil is then routed to storage tanks before being pumped to a sales pipeline. Shell does not rail nor truck sales oil from the Peace River Complex. The solution gas enters the Plant via pipeline and enters the gas treatment system. Any gas that is removed during the the emulsion treatment is also routed to the gas treatment system. This combined gas is compressed and injected into a gas storage reservoir.

7 Steam is produced for injection into the wells to recover the heavy oil. The boilers that produce the steam use a combination of purchased natural gas and gas from Shell s operations at Cliffdale. The tank storage area at the Peace River Complex consists of large tanks used to store a number of liquids including sales oil, and produced water. All of the tanks are connected to a vapour recovery unit system, which collects the low pressure gas from them and compresses it to the main gas treating system. In 2009, Shell completed substantial work on the vapour recovery system at the Peace River Complex Plant. This work included the installation of new vapour recovery compressors to improve the reliability, maintainability and capacity of the system. The Plant at the Peace River Complex has a flare system designed to address upset conditions only. Shell does not routinely flare gas at the Peace River Complex. Shell s employees at its Cliffdale and Peace River Complex are proud of the way our facilities are presented and operated. Our facilities not only meet all applicable regulations, but exceed them while using the best available technology and minimizing as much as possible any associated impacts. Finally, we ll turn now to a brief description of Shell s current air monitoring activities, as well as its ongoing and planned air quality initiatives in the area. Shell participates in a number of air quality monitoring initiatives in the vicinity of its operations within the Peace River Area. There are two kinds of monitoring initiatives - continuous monitoring and passive monitoring. I will talk first about the continuous monitoring and then about the passive monitoring. The picture on the screen is a typical continuous air quality monitor. These types of monitors rely on a steady supply of electrical power and a temperature controlled shelter to house analyzer technology that takes measurements on a continuous basis. The locations of the continuous monitors are shown on the screen. Shell is currently operating a continuous air quality monitoring station that is part of its environmental approval at a location to the north-east of its Peace River Complex Plant. Shell is also involved in the monitors located on township road 842 and on Hwy 986. Both the 842 and 986 stations were implemented as a result of initiatives from industry and the local community. Both stations

8 measure sulphur dioxide, total reduced sulphur, total hydrocarbons, ambient temperature, wind speed, and wind direction. Additionally, Shell is also currently in the process of establishing a new, voluntary continuous air quality monitoring station. It s currently located south of the Peace River Complex Plant. The station became operational in December In addition to its participation in continuous air monitoring initiatives, Shell participates in a number of passive air quality monitoring initiatives. On the screen now is a typical passive monitoring station. These stations consist of passive sampling discs housed in a rain shelter. The rain shelter protects the passive sampling discs from interference from elements such as birds and rain, but the shelter does not interfere with exposure of the sampling discs to the environment. Through diffusion, these passive sampling discs chemically react with any potential ambient contaminants of interest, and after thirty (30) days of exposure to the environment, they are collected and replaced with fresh media. The exposed samples are provided to outside laboratories for analysis and reporting. On the screen is a map showing Shell s network of passive monitors. It consists of twelve (12) passive stations spread over the area surrounding its Peace River Complex Plant, and one (1) passive station added in the spring of 2012 in the eastern part of its Cliffdale Complex. These passive stations measure monthly concentrations of sulphur dioxide and hydrogen sulphide. Shell also has a number of planned and future air quality initiatives to be conducted in this area. Shell is an active member of the Three Creeks Industry Steering Committee and its working groups. This Committee is made up of senior representatives of operating companies in the Peace River Area. Area operators provide resources and funding to the numerous initiatives being carried out by the working groups. The working groups are the Best Practices Working Group and the Industry Air Quality Working Group. The Best Practices Working Group concentrates on sharing best practices amongst the area operators and also focuses on traffic concerns and road safety. The Industry Air Quality Working Group concentrates on efforts to improve air quality in the region.

9 Shell is also involved with the Three Creeks Multi-stakeholder Air Monitoring Subcommittee. This Subcommittee is comprised of representatives from the local community, industry, AESRD, Northern Sunrise County and the AER. There are two (2) air quality studies currently underway via the Subcommittee. The results of these studies may be relevant to the Panel. Both studies are being funded by the Industry Steering Committee, which includes members from Shell, Penn West, Baytex, Husky, Murphy and Tervita. The first air quality study involves the completion of a Three Creeks Air Monitoring Data Review. This review will provide a detailed analysis of historical air quality monitoring data collected in the Peace River region and recommend potential improvements and/or modifications to the existing air quality monitoring regime. The second study involves the development of a Three Creeks Regional Air Emissions Inventory. This inventory will identify emission sources and data trends, as well as identify types of emissions being released to the air, and address key questions regarding possible historical emission patterns from the past five (5) years. We are proud to be involved in these air monitoring and air quality initiatives and plans to continue to do so. In closing, we reiterate our thanks to the AER for the opportunity to be here today and share this information with the AER and other stakeholders. We continue to work directly with residents and other stakeholders to address any concerns they may have. In Shell s view, being a good corporate citizen is a very important part of its operations. Shell continuously strives to conduct its operations in the most responsible manner possible, using safe practices, right technology and best people to ensure that we meet or exceed applicable requirements. We look forward to being of assistance in the proceeding today and we welcome any questions from the AER Panel. [End]