Pump it Out: The Environmental Costs of BC’s Upstream Oil and Gas Industry What is a Typical Upstream Oil and Gas Project, and What are the Potential Environmental Consequences? Pump it Out: The Environmental Costs of BC’s Upstream Oil and Gas Industry is a web-based guide for citizens interested in knowing more about the environmental consequences of a typical ‘upstream’ oil and gas project in BC. You can obtain a full copy of Pump it Out at West Coast Environmental Law, or online. This document summarizes a typical upstream project, and highlights the environmental consequences potentially associated with each step. The most frequently raised public concerns relate to wilderness impacts from seismic, road, and pipeline projects, the flaring of sour gas, and climate change. Please consult Pump it Out for information on what laws apply, what needs to change in order to protect the environment, and what a concerned citizen can do about it. Step in a Typical Oil or Gas Project Potential Environmental Consequence 1. Company explores for oil or natural gas deposits (seismic surveying) To conduct a seismic survey, an oil and gas company will typically begin by clearing several kilometres of trees in a straight line across forested land, non-forested land and water bodies. For some projects, existing lines are used. Historically, these ‘seismic lines’ have been six to eight metres wide. Over the last ten years the average width has been about five metres. Along the seismic lines, the company will drill a series of deep ‘seismic holes’ (40-60 ft) in which to set off dynamite charges, or use mobile machinery to set off vibrations. By measuring the way in which shock waves are reflected back from different rock layers, the company is able to identify geological structures or formations where oil and/or gas may be found. To develop a three-dimensional picture of geological formations (‘3-D seismic’), a company will clear dozens of criss-crossing seismic lines to form a grid for testing. In BC’s northeast, thousands of kilometres of seismic lines are cut each year. 6,913 kilometres were constructed in 1999, for example, and 10,362 kilometres more were constructed in 2000. The provincial government wants to double the amount of oil and gas activity over the next five years. Wildife. * Seismic lines fragment wilderness, making life difficult for species that avoid edges of wilderness and require minimum patch sizes. * Cumulative loss of habitat from seismic lines, roads, and pipelines is particularly hard on large mammals like grizzly bears which need large contiguous tracts for security cover * Seismic lines can alter predator-prey relationships. Wolves, for example, are able to move faster along seismic lines than in the forest, increasing pressure on caribou. Hunting and poaching by humans increase when seismic lines open up previously inaccessible areas. * Reproductive failure in birds is higher near linear disturbances like seismic lines. Forests. * Trees removed to create seismic lines can no longer serve as ‘carbon sinks’ to absorb carbon dioxide. * Clearing brush and burning trees release large amounts of greenhouse gases. Soils. * Heavy equipment can damage roots and cause erosion and soil compaction. * Ongoing use of seismic lines by all-terrain vehicles and snowmobiles make regeneration difficult. Streams/groundwater. * Herbicides, pesticides fertilizers, and E. coli bacteria can enter groundwater through improperly capped holes. * Thousands of stream crossings can alter drainage patterns, increase stream sedimentation and bank erosion, and destroy fish habitat. Solid waste. * Camps constructed for 20-100 person seismic crews generate solid waste, food waste, and human waste. 2. Company acquires subsurface and surface rights to conduct more testing Subsurface rights give the holder of the right the exclusive ability to explore for oil and natural gas, drill for oil and natural gas, and if successful, produce the oil and natural gas. In exchange for the rights, a company will agree to certain work commitments (e.g. to drill) and to pay the Province a royalty for using the rights. A company usually obtains subsurface rights from the Province by successfully outbidding other companies at an auction. In a typical process, a company will first ask the Province to auction rights for a specific area. The Petroleum Titles Branch (PTB) of the Ministry of Energy and Mines will then evaluate the request by asking First Nations, government agencies, and a limited number of other stakeholders whether they have any concerns. Based on the comments, PTB will decide whether to auction the rights, and/or whether any restrictions should be placed on the sale (e.g. restrict access to the area during certain times of the year in order to protect fish and wildlife habitat). Once posted for auction, other companies will have a chance to evaluate the property. On the day of the auction, all interested companies will submit a ‘bid’. The successful company is usually the one with the highest bid. The holder of ‘surface rights’ has the right to enter onto property in order to build roads and drill wells. Perhaps surprisingly, the Province holds these rights as owner of the subsurface resources—they are not held by local landowners. For all grants of Crown land to private landowners after 1891, the government kept for the Crown the right to enter onto the land in order to extract oil and gas. Landowners, however, are entitled by legislation to receive compensation. A company may seek rights for land directly over prospective resources, or land nearby—depending on whether it intends to drill vertically, horizontally, or at an angle. Subsurface rights. * Government agency authorized to attach environmental conditions to auction of subsurface rights is also responsible for generating revenue from the auction. Environmental protection may be compromised as a result. * Unlike Norway ($54 billion), Alaska ($$40 billion), and Alberta ($12 billion), BC has not set aside any royalties from the lease of subsurface rights for future generations and environmental liabilities. Surface rights. * When negotiating surface access with a company, landowners can take steps to protect their health and environment by securing timing restrictions, fencing and vegetation requirements. 3. Company builds road and drills test well The company typically begins the drilling process by building access roads for delivering heavy drilling equipment to the site and to truck away wastes. It will then clear and level land around the drill site, dig a water well for water supply, and then dig a pit (often lined) on the spot where a well is to be drilled. On this spot, the company will erect a portable, trailer-mounted drilling tower (rig) over the site and drill down through soil and rock. When drilling through rock, the company will inject ‘drilling muds’ into the drill bit. Drilling muds are used to keep the drill bit cool and lubricated, flush out rock chips, line the wall of the hole to reduce water or oil escape, and keep the well under control if the bit breaks into high-pressure gas or water zones. Near the well, the company will dig a large pit called a ‘sump’ where drilling wastes will be stored and treated. After drilling a few hundred metres, but long before reaching the oil or natural gas, the company will stop drilling in order to cement steel surface casing to the wall of the drill hole. Wells are normally drilled vertically because vertical drilling costs less than other methods. For some deposits, it is possible to drill horizontally or at an angle (‘directional drilling’) if a river or other obstacle lies on top. Once drilled, the company will test a natural gas well by allowing it to flow for up to 21 days in order to measure the rate, pressure and chemical contents of the gas reservoir. Companies say the longer the test, the more accurate it is. To burn off gases while the chemical content of the gases is being tested, the company will ‘flare’ the gas by lighting it on fire. Industry and government consider flaring to be the safest way to dispose of the gas while the testing is taking place. If the test well is dry or unsuccessful, the company will plug it with cement, abandon it, and then clean up and remediate the site. Roads. * Like seismic lines, roads are ‘linear disturbances’ and have a number of ecological consequences related to wilderness, streams, and trees (see seismic surveying above). Drilling a well. * Large volumes of toxic drilling wastes are disposed of at the well site or on adjacent land. * Pits dug to store and treat drilling wastes account for over half of the land disturbances caused by a typical project. * Spills and leaks of drilling fluid, hydrocarbons, or salt water can contaminate soil and groundwater. * Water wells drilled to get water for drilling muds or enhance recovery can provide a pathway for contaminants or draw down aquifers. * Drilling can contaminate drinking water if wells are not properly cased or abandoned. * Gas escaping through soil can kill crops. Testing a well. * Flaring releases a wide range of harmful substances that can damage vegetation and affect human and animal health. * Some wells (called ‘sour wells’) will contain hydrogen sulphide (H2S), a poisonous gas that is acutely toxic to humans at low levels. Flaring can significantly reduce the presence of H2S, but flares don’t burn efficiently and leave 16-38% of the gas intact. * Incomplete combustion can release more than 250 hazardous other air emissions known to cause cancer, or negative effect reproduction, respiratory, or cardiopulmonary health. * Flaring, venting, and leakage at the well site are major upstream sources of greenhouse gas emissions. Nationally, the upstream sector is the source of 16% of Canada’s total emissions, and responsible for much of the increase in total emissions over the last decade. The provincial government reports that climate change is already responsible or infestations of forest-destroying beetles, and threats to temperature-sensitive sockeye salmon. 4. Company ‘produces’ oil or natural gas from well If the company thinks a well shows commercial potential, the company will ‘complete’ the well by adding more layers of pipe and concrete. Better, more expensive materials are used if the company expects the well to produce at a high rate for many years. At first, the natural pressure of the oil or natural gas is likely enough to force the substance to the surface. As the pressure decreases over time, the company will drill more wells, add compressors, or inject water into the well. The company will continue to produce oil or natural gas from the well until it is no longer economic to do so. Water * To increase the amount of oil a well can produce, a company will often inject water into a well—obtained from nearby rivers or underground aquifers. Water injected deep into the ground often stays there for thousands of years—effectively taking it out of the water cycle. Air emissions * Also to improve gas flow, a company will sometimes inject into the ground a high-pressure combination of sand, hydrocholoric acid, and condensate to cause reservoir rock to fracture. This practice, called ‘fraccing’ (pronounced ‘fracking’), can create several deadly chemicals that can affect the nervous system and the development of unborn children. * If a sour gas well explodes or leaks, poisonous H2S and other emissions could be released into the air (see ‘testing a well’ above). * Gas that comes to the surface with crude oil is flared or may escape unburned exposing nearby residents to potentially harmful air pollutants. * As more wells are added, the environmental impacts of road building and well drilling are repeated (see road building and well drilling above). Climate change * Flaring, venting, and leakage at the well site are major upstream sources of greenhouse gas emissions (see ‘testing a well’ above) 5. Company transports oil or natural gas to processing facilities via pipeline To begin to get oil or natural gas to market, the company must transport it from the producing well to processing facilities where the oil or gas will be stripped of unwanted substances. To transport the oil and gas the company will construct small pipelines called ‘gathering’ or ‘flow’ lines and along the way may install ‘compressor stations’ in order to create and maintain pressure in the lines. Long pipelines require a series of compressors. Gathering and flow lines. * Like seismic lines and roads, gathering and flow lines are ‘linear disturbances’ and have a number of ecological consequences related to wilderness, streams, and trees (see seismic surveying above). * Stream crossings are susceptible to ‘slump,’ can cause erosion and bank failure, or harm water quality/fish habitat. * A leak or accident can contaminate land and surface water. Compressor stations * Combustion emissions and escaped vapour can affect air quality. * Noise from compressors can also disturb nearby residents. 6. Company processes oil or natural gas to remove impurities Oil and natural gas in their raw forms contain a number of ‘impurities’ that the company must remove if the substances are to be marketable. The impurities are removed at a variety of facilities once the oil or natural gas reaches the surface. For example, in a typical gas project the company will build a structure called a ‘battery’ to separate the gas from oil and water, and then pipe the gas to a ‘processing facility’ to remove unwanted chemical substances. A battery collects a stream of oil or natural gas from one or more wells, separates it into different streams for oil, gas, and water, and then pipes the now distinct streams to a processing facility to have the remaining impurities removed. Separation facilities are becoming more and more common at the well site itself. At a processing facility, the company will strip unwanted chemical substances from the oil or natural gas before it is piped forward to markets. At a natural gas processing facility, for example, some sulphur from the H2S is removed and sold to fertilizer and chemical companies when prices are suitable. Excess H2S is flared or incinerated, although flaring is less common today than in previous years. Carbon dioxide (CO2) is removed because it erodes metals and promotes a process that clogs pipes. At sophisticated processing facilities, propane, butane, and natural gasoline are removed and sold at a price that often generates significant revenue for the company. The mixture of H2S and CO2 (collectively known as ‘acid gas’) is sometimes injected back into the ground—lowering CO2 and other harmful emisions. The company will flare gas at a processing facility if the gas is ‘solution gas’ (gas that comes to the surface with oil), if the gas is not marketable, or if the company is required to do so in an emergency. Flaring at processing facilities is becoming less common in Northeast BC. To prevent freezing and corrosion in gas pipelines, the company will remove water from the gas by using a ‘dehydration’ process. Note: Dehydrators may also be used at well sites and compressor stations. Batteries. * Alberta officials have documented problems with batteries in relation to emissions and spills. Processing facilities * Flaring releases a wide range of harmful substances that can damage vegetation and affect human and animal health. * Some wells (called ‘sour wells’) will contain hydrogen sulphide (H2S), a poisonous gas that is acutely toxic to humans at low levels. Flaring can significantly reduce the presence of H2S, but flares don’t burn efficiently ad leave 16-38% of the gas in tact. * Incomplete combustion can release more than 250 hazardous air emissions known to cause cancer, or negative effect reproduction, respiratory, or cardiopulmonary health. * If there are problems with an ‘acid gas’ injection system (for H2S and CO2), the highly concentrated gas is flared and local air quality can be adversely affected because of very high levels of SO2 and some H2S. * The ‘dehydration’ process used to remove water from gas to prevent freezing and corrosion results in emissions of benzene—for which there is no safe limit. * A considerable amount of energy is needed to remove sulphur from sour gas. * Processing is a major upstream source of upstream greenhouse gas emissions. Nationally, the upstream sector is the source of 16% of Canada’s total emissions, and responsible for much of the increase in total emissions over the last decade. The provincial government reports that climate change is already responsible or infestations of forest-destroying beetles, and threats to temperature-sensitive sockeye salmon. 7. Company abandons well and reclaims well site/pipelines If a well is dry or no longer in use, the company is required by law to properly abandon and ‘reclaim’ the well site, production site, batteries and other facilities and pipelines. To abandon a well, the company sets cement plugs in the well hole, and in some cases a steel plate is welded across the well opening. Down the well, all drinking water zones are covered with cement to protect groundwater. The company removes all wellhead equipment on the surface. The land around the well must be restored to ‘as close to its original state’ as possible (including replacing the topsoil and seeding/replanting). Pipelines are either ‘abandoned in place’ or removed. Groundwater * If improperly abandoned, oil or gas can flow through the well casing and contaminate groundwater. Erosion, ground subsidence * Abandoned pipelines can, over time, erode and leak. Long-term structural deterioration of a pipeline may lead to ground subsidence. 8. Company transports oil and natural gas to ‘downstream’ sector Once produced and processed the oil or gas is transported to refineries and consumers via pipeline, oil tanker or truck. # See gathering and flow lines (above) Please consult Pump it Out for fuller descriptions, and for information on what laws apply, what needs to change in order to protect the environment, and what a concerned citizen can do about it.