Responsible Energy Development

Transcription

1 BC Natural Gas Symposium Responsible Energy Development CAPP Guiding Principles and Operating Practices for Hydraulic Fracturing within a Global Energy Context Geoff Morrison, Manager British Columbia Operations Vancouver, British Columbia June 6, 2013 Overview Natural Gas in the Global Context - Supply and Demand Social Licence to Operate Responsible Canadian Energy Program CAPP s Hydraulic Fracturing Guiding Principles and Operating Practices Natural Gas Dialogues and Natural Gas Polling 2

2 Global Primary Energy Demand IEA New Policies Scenario Significant energy demand growth: Population, standards of living Need all forms of energy: Increasing role for renewables Continuing reliance on hydrocarbons Increasing role for nonconventional crude oil & natural gas Environmental challenges Technology is a key lever for sustainable growth 20,000 18,000 16,000 14,000 12,000 10,000 8,000 6,000 4,000 2,000 million tonnes oil equivalent Other Renewables Bioenergy Hydro Nuclear Natural Gas Oil Coal Source: International Energy Agency World Energy Outlook 2012 Top 10 World Natural Gas Producers in 2011 Trillion Cubic Feet US Russian Federation Canada Iran Qatar Canada, is the 3 rd largest producer of natural gas in the world. China Norway Saudi Arabia Algeria Indonesia Source: BP Statistical Review 2012

3 N.A. natural gas supply The opportunity Shale gas supply a game-changer. Technology breakthroughs. New producing regions. 100 years + supply. Market growth opportunities (LNG exports, power generation, transportation). Current Disposition of W. Canada s Natural Gas Production (2012) Westcoast ANG/ Foothills TransCanada Alberta (NGTL) Alliance TransCanada Transmission Mainline Northwest Foothills East M&NE 1.1 bcf/d TQ&M PGT Northwest Great West Northern Lakes 2.5 bcf/d Border Iroquois PNGTS PG&E Kern River CNG Trailblazer Algonquin ANR Mid West NGPL Panhandle Transwestern 4.8 bcf/d Texas SoCal ANR El Paso NGPL Eastern El Paso Domestic 5.3 bcf/d Vector Transcontinental

4 Source of Natural Gas Supply for Ontario & Quebec Canadian gas Imports Billion cubic feet/day NOTE: Excludes Canadian gas re-imported. BC s Production & Resources Canada 6.4 trillion cubic feet (tcf)/year BC ~ 1.3 tcf/year. 3.5 Bcf/day 93 Conventional* Source: BC s Natural Gas Strategy Source: BC Natural Gas and Petroleum yours to explore 2010 *includes offshore

5 British Columbia s natural gas resource B.C. home to some of North America s most promising natural gas plays: Horn River and Montney Resource estimated at up to 336 tcf That s enough supply to last at least 100 years at current demand levels B.C. is Canada s second-largest producer of natural gas, behind Alberta Annual production is 1.3 tcf per year More than 20,000 wells drilled in B.C. since the early 1900s 9 Source: B.C. OGC Investment in B.C. s natural gas sector $4 billion estimated for 2012 $6.7 billion invested in 2011 $70 billion invested up to 2010 $14 billion spent on acquisitions in B.C. gas plays by foreign companies from 2010 to date 10 Billion dollars Capital Investment in British Columbia e 2013F 10

6 British Columbia Crown Land Sales $ millions T T T TT YTD T 2013 YTD 11 Total Wells Drilled in Western Canada 28,000 24,000 20,000 Dry/Susp. Gas Oil F Alberta 7,087 6,481 7,345 British Columbia Saskatchewan 2,980 3,098 3,200 Manitoba ,000 12,000 8, = 16, = 8, =10, = 11, = 10, F = 11, ,600 4,000 9, E Source CAPP. Based on Rig Release

7 Economic benefits to British Columbia Significant Economic driver and revenue generator for B.C. 12,000 people directly employed in B.C. natural gas sector $1.35 billion 2009/2010 gov t revenues (royalties, land sales) ~60% of total direct revenues from B.C. resource industries 4 per cent of total provincial revenues Has been as high as $2.6 billion 2005/06 (B.C. Natural Gas Strategy) Largest source of natural resource revenue in 2011/2012 fiscal year Impact over next 25 years from natural gas development: By 2035, direct employment could reach 40,000 people Taxes and royalties will exceed $160 billion (CERI 2011) 13 Outlook for Global LNG Trade LNG Trade - Historical Global LNG trade has almost tripled since Increases in global gas consumption will drive growth in LNG trade. Bcf/d LNG is about 7% of all natural gas produced. LNG market will account for an increasing share of global natural gas trade - liquefaction capacity ~ doubles over the next 2 decades Projected Global Natural Gas Consumption Source: EIA 2011 International Energy Outlook

8 B. C. Production New Market Opportunity Case 15 B. C. Production Market Constrained Case 16

9 Industry key success factors Key success factors: Attract investment capital (supply & infrastructure) Maintain / enhance support from public & stakeholders Competitiveness Fiscal Regulatory Market Access (infrastructure & tolls) Costs Social Licence Performance + Communications = Social licence Industry reputation / social licence key elements Performance + Communication Performance Continuous industry improvement: Technology is the key enabler. Industry operating practices raise bar on industry performance. Solutions-oriented advocacy for balanced policy. Robust & predictable regulatory framework. Science-based monitoring, 3 rd party validation, transparent reporting. Communications & Outreach: Messaging balanced, fact-based, solutions oriented. Delivery diversity of mediums, approaches, spokespersons. Strong focus on outreach / engagement local / regional / national. Grounded in performance improvement.

10 Public concerns about shale gas People Health effects of hydraulic fracturing additives. Land Surface footprint. Induced seismicity. Wildlife disruption. Air Air quality during extraction, processing, delivery and end-use. Water Drinking-water contamination migration of methane and fracturing additives. Volumes of water used. Handling and disposal of fluids. GHGs Emissions from production & processing. Responsible Canadian Energy Program Canadian Responsible Energy represents a collective commitment by CAPP s members to: Measure our performance Find new and innovative approaches to reduce our environmental footprint Ensure every worker returns home safely every day Continue to improve the ways in which we communicate and engage the public and other stakeholders

11 Responsible Canadian Energy - water objectives Through the CAPP RCE program, Canada s oil and gas industry works to: Reduce the amount of freshwater required per barrel equivalent of production Safeguard the quality of regional surface and groundwater resources Our safety record: 175,000 wells fractured safely in B.C. and Alberta without an incident of harm to drinking water, according to regulators Robust regulations and industry best operating practices are key to earning our social licence to operate 21 Guiding Principles for Hydraulic Fracturing We will safeguard the quality and quantity of regional surface and groundwater resources, through sound wellbore construction practices, sourcing fresh water alternatives where appropriate, and recycling water for reuse as much as practical. We will measure and disclose our water use with the goal of continuing to reduce our effect on the environment. We will support the development of fracturing fluid additives with the least environmental risks. We will support the disclosure of fracturing fluid additives We will continue to advance, collaborate on and communicate technologies and best practices that reduce the potential environmntal risks of hydraulic fracturing.

12 Operating Practices for Hydraulic Fracturing 23 Practices put Principles into action I Wellbore Construction and Quality Assurance Comply with regulatory requirements and good engineering practices Confirm wellbore integrity prior to fracturing Integrity can be evaluated through field inspection and wellbore logging at any point in the life of the well Undertake remedial actions, when required

13 Practices put Principles into action II Fracturing Fluid Additive Disclosure Publicly disclose all information on fracturing fluid additives Hydraulic Fracturing Fluid Product Component Information Disclosure Sample 26 Souce: Fracfocus.ca

14 Adatives 27 Practices put Principles into action III Water Sourcing, Measurement and Reuse Reduce overall use of freshwater Measure water quantity Monitor water sourcing Make water sourcing, measurement and reuse practices publicly available

15 Industry in Action Shell Canada and the City of Dawson Creek Reclaimed Water Project - The facility treats municipal waste water for use in Shell s Groundbirch natural gas venture and the City of Dawson Creek s municipal operations. The Debolt Water Treatment Plant The first of its kind in North America and a joint venture between Encana and Apache Canada in the Horn River Basin, takes sour, saline water from the Debolt formation to use for hydraulic fracturing. The Montney Water Project A project between 7 natural gas producers, Geoscience BC, the B.C Government, the City of Dawson Creek and UNBC, is designed to provide an inventory of water resources in the Montney region. 29 Practices put Principles into action IV Baseline Groundwater Testing Baseline groundwater testing prior to development and monitor over time Sourcing freshwater alternatives and recycling Share data collected as legally permitted

16 Practices put Principles into action V Fracturing Fluid Additive Risk Assessment & Management Create demand for more environmentally sound fracturing fluids Assess potential risks and mitigate these risks Make processes for developing wellspecific risk management plans publicly available CAPP Hydraulic Fracturing Fluid Additive Screening Tool CAPP sponsored the development of a tool to classify fracturing fluid additives according to potential health and environmental risks Identify and manage potential health and environmental risks associated with these additives Builds awareness Selection of fracturing fluids with lower risk profiles, where possible Develop risk management plans for each well fractured Part of overall corporate risk management program 32

17 Practices put Principles into action VI Fluid Transport, Handling, Storage and Disposal Mitigate potential risks of accidental spills Ensure quick response to accidental spills Make fluid transport, handling, storage and disposal practices publicly available Practices put Principles into action VII Anomalous Induced Seismicity: Assessment, Monitoring, Mitigation and Response Assess the potential for anomalous induced seismicity Comply with applicable regulatory requirements and employ sound wellbore construction practices Where assessment indicates potential for anomalous induced seismicity, establish procedures for: Wellbore placement and drilling design Personnel preparedness Monitoring Mitigation and response, including suspension of operations if required

18 Implementation of Operating Practices CAPP Operating Practice Implementation Status Fracturing Fluid Additive Disclosure Mandatory disclosure in BC & AB on FracFocus.ca Advocating for mandatory disclosure across Canada Fracturing Fluid Additive Risk Assessment & Management Developed a CAPP chemical screening tool to increase awareness of risks and drive selection of greener products Tool training sessions were offered for member companies and service providers in Q1 Baseline Groundwater Testing New West Partnership has oversight for development of regional groundwater monitoring policies/protocols Well Construction & Quality Assurance Process for conformance was developed, for individual company modification and adoption Water Sourcing, Measurement & Reuse Process for conformance was developed, for individual company modification and adoption Fluid Transport, Handling, Storage & Disposal Anomalous Induced Seismicity: Assessment, monitoring, mitigation and Response Process for conformance was developed, for individual company modification and adoption Six new seismic monitors will be added in NEBC total of eight Natural Gas Dialogues CNGI (CAPP, the Canadian Gas Association, the Canadian Energy Pipeline Association, Canadian Natural Gas Vehicle Association and the Canadian Society for Unconventional Resources) engaged a broad group of stakeholders in Halifax, Moncton, Montreal, Ottawa, Toronto, Red Deer, Fort St. John and Vancouver Brought together Canadian business, environmental, sustainability, academic, aboriginal and community leaders to involve Canadians in a larger discussion of the economic, environmental and energy security and reliability dimensions of natural gas. A report on what we heard and industry s response was released in April. This is being used as a foundation for future discussions with governments and the public at large. 36

19 Impressions of Natural / Shale Gas National results For each of the following, indicate if your overall feelings arepositive, neutral or negative. Impressions of Natural / Shale Gas BC only results For each of the following, indicate if your overall feelings arepositive, neutral or negative.

20 Summary Huge opportunity for Canada Need to be competitive Social Licence to Operate Principles and Practices: Guide development Inform and complement regulations Consistently deliver responsible operations across Canada Continue to develop the resource safely For More Information Natural Gas Fact Book: Hydraulic Fracturing Animation: efault.aspx 40