Why isn’t AER’s Fox Creek Frac Frenzy Regulatory Failure front page news? AER releases evaluation of its Play-Based (Blanket Approval) DeRegulation Pilot

Why did the AER leave this out of their Fox Creek blanket approval frac frenzy “evaluation?”

Fox Creek Alberta Crime stats, dramatic increase in crime and severity rating after AER's blanket approval, massive play-based deregulation pilot project fracing started

Fox Creek has now the highest crime severity rating in Canada (rural and municipal)

Source Stats Canada

Get crime stats on your community here. Click on the ADD/Remove data tab and choose.

And why did the AER leave out all the other serious frac impacts too?

Play Back? AER’s Evaluation of its Play-Based Regulation Pilot Released by Alan Ross, Borden Ladner Gervais LLP, July 26 2016, Mondaq

The Alberta Energy Regulator (the “AER”) released an evaluation of its Play-Based Regulation Pilot (the “Evaluation”) concerning unconventional resource development in Duvernay shale play near Fox Creek, Alberta (see our prior commentary on the key impacts to industry of Play-Based Regulation). Under the Play-Based Regulation Pilot (the “Pilot”), the AER trialed a single, integrated scheme which invites energy companies to submit one application for all activities associated with a development project within the defined play. The Evaluation of the Pilot presents a mixed review.

This blog post comments on the need for adaption of the AER’s traditional regulatory framework and outlines the key outcomes of the Evaluation.

Play-Based Regulation – Why the change?

The AER’s willingness to consider a new regulatory approach to unconventional oil and gas activities is a welcome development. The fragmentation in the AER’s current system of regulation creates ongoing burdens for energy companies. These burdens include regulatory duplication, project delays associated with a multiple approval system and overlapping jurisdiction.1 The single, multiple-activity application would be more desirable if the consequence is certainty of longer-term approval.

Additionally, the extraction of unconventional resource poses unique challenges, some of which highlight shortcomings in the AER’s traditional regulatory framework. In particular, Play-Based Regulation (“PBR”) may be better poised to address the potential regional effects of unconventional oil and gas activities. These regional effects stem from the increased geographical scale of these activities and their use of different technologies, primarily hydraulic fracturing.

Key Outcomes of the Evaluation

  1. Reduction of cumulative effects on the land and water.

One of the Pilot’s stated objectives was to minimize the cumulative effects of unconventional oil and gas activities on land, water, air and biodiversity.

[Like this?

Wildlife conservationists urge Alberta to abandon proposed caribou restoration plan
‘Science, even the best science, doesn’t give us permission to do whatever we want’

Alberta’s wolf cull to continue as it scrambles to save caribou

Group campaigns for changes to Alberta wolf policy

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The Evaluation concluded that progress was made towards reducing, but not minimizing, the cumulative effects of surface disturbances and water management in the Pilot area.

[Like this?

AER allows Repsol to resume fracking after causing world record 4.8M frac quake (felt 280 km away near Edmonton) in AER’s Fox Creek Blanket Approval Frac Frenzy Free-for-All Experiment. But, Repsol appears too shaken to resume

Alberta Venture Special Report: Towns in Alberta’s industrial heartland ran out of water last summer. Is fracking to blame? Is “No Duty of Care” legally immune AER’s one-size-fits-all, world-record quaking frac frenzy drying up Fox Creek’s drinking water supply?

Canada breaking frac quake records: Geosciences professor thinks earthquakes near Fox Creek are clearly linked to fracking

AER’s EMERGENCY COMMAND CENTRE SET UP 2.5 HRS AWAY! DON’T AER COMMAND STAFF WANT TO DAMAGE THEIR BRAINS? Encana’s Fox Creek blow out spewing 20,000,000,000 litres/day sour gas & condensate: Where’s the regulator? Ex-Encana VP Gerard Protti = AER Chair; Ex-Encana Manager Mark Taylor = AER VP Industry Operations

AER & Encana Lying Update: Encana’s Deadly Sour Gas Blow Out at Fox Creek: Did Alberta’s Energy Minister lie for Encana & “No Duty of Care,” cover-up agent extraordinaire, the AER?

Fox Creek: Yet another earthquake in AER’s deregulated blanket approval frac experiment. Fracking-Related Earthquakes Could Ding Credit Quality

Fox Creek Mayor Jim Ahn rightfully worried about frac quakes harming sour gas infrastructure in the community. How much damage have the quakes already caused sour gas wellbores and pipelines?

AER Frac Pilot Project: Earthquakes, tax increases, water restrictions, double homicide, spills and accidents shake Alberta town’s faith in fracking; Aging sour facilities in deregulated Fox Creek a big worry for council; AER’s FracQuake Red Light stops Chevron only 16 days; Families moving out

AER, Chair Protti and CEO Ellis: WHERE ARE YOU? ‘Very special person’ one of victims of fatal Fox Creek Blanket Approval Frac Experiment Camp knife attack

Cumulative Impacts Frack Attack? Double Homicide in “No Duty of Care” AER and Gerard Protti’s Fox Creek Blanket Approval Pilot Project

The AER asks: How far do we go? Fox Creek residents react to the latest 4.4 Magnitude quake

Chevron reported 3.6 magnitude event; Shut down by AER. Is the AER’s Frac Quake Stop Light System Irrelevant? Another 4.4 Magnitude Earthquake at Fox Creek

Thank Fracking: Business licence for Fox Creek hotel goes up 133,233 per cent

Fox Creek frac quakes make AER play deregulation with you and your loved ones: “Red Light = Green Light”

Fracking Quakes Pose Added Risks but Oil and Gas Companies Refuse to Share their Collected Seismic Data. “In low seismic environments like Fox Creek where the natural earthquakes are infrequent, the hazards from an induced seismic event can exceed the hazards from a natural source”

Fracing Record Breaking Quaking at Fox Creek Alberta? 100% Industry Controlled, “No Duty of Care” AER Fracing Backtracks

Did Alberta Just Break a Fracking Earthquake World Record with 4.4 Temblor at Fox Creek? Sounds of Silence: The Crooked Lake Earthquakes

WARNING! Synergy and blanket approval to give industry free-for all fracking in Alberta! Watch out Fox Creek and the rest of Canada, Synergy is brainwashing controlled by industry, incredibly evil and works well

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The Evaluation credits the Pilot for reducing surface disturbances by increasing the use of fewer, larger multi-well pads. Further, Pilot participants applied for water licenses for their long-term needs of the entire project, instead of temporary diversion licenses. Giving broader consideration to the long-term diversion demands placed on regional water sources can reduce cumulative effects.

[Like this?

Fox Creek mayor concerned by oilpatch impacts after earthquake

“Fox Creek town council is very concerned,” wrote mayor Jim Ahn in a letter to reporters. “It seems industry and the provincial government have been turning a blind eye as to what has been going on in our area.”

It was the town’s 367th seismic event since January 2015.

But earthquakes aren’t the only thing Ahn is concerned about.

“We have industry pulling water from our rivers, streams and lakes at rates we feel far exceed their capabilities to replenish themselves,” he wrote.

“We do not want to be left with swamps that were once prize trophy lakes.”

The town has had to spend $300,000 to truck in water after levels in the aquifers it normally depends on fell too low, said Ahn. The town has received whistleblower reports of drilling rig leaks that could affect Fox Creek’s water supply and received contradictory messages from those involved.

Ahn said the town fears government and regulatory officials don’t have its best interests at heart.

“We have had many experts in these fields explain to us that what is happening has been examined and explored for years,” he wrote. “We are still very worried that we, the town of Fox Creek, will be the ones left that will have to try and make a life here after all the activity is gone.”

How much has Fox Creek paid for hauled water? What happens when Fox Creek runs out of money?

Alberta Government Low Flow Advisory in Fox Creek/Peace Region, Asks Users to Reduce Water Consumption. Does that include in AER’s Fox Creek Fracing Pilot Project?

Town of Fox Creek Water Ban on ALL Non-Essential Use. Does that include fracking in AER’s Deregulated, Blanket Approval, Frac Frenzy, Play-Based Pilot Project surrounding Fox Creek?

Alleged groundwater pollution concerns by Trilogy at Fox Creek under investigation; Whistleblower: “cement job didn’t go as planned and there was NO cement in the hole” 

2014 01: Getting ahead of the Curve, Alberta regulators, companies preparing for accelerated Duvernay activity

“The fracturing techniques used for early exploration in this area are larger scale, says [AER’s Bob] Willard, adding that, as such, the amount of water used for an individual well is probably the highest in this area of the province. For example, outside the City of Calgary in the Cochrane-Lochend area, operators use about 1,000-2,000 cubic metres of water when performing a slick-water fracture of a tight Viking horizontal well, whereas in the North Duvernay it might require 50,000 cubic metres of water per horizontal well, he says.

“Obviously, when you have multiple wells, that starts to add up.” [Emphasis added]

2014 07 02: Report shows helicopter pilot was drunk before fatal crash in northern Alberta
FOX CREEK, Alta. – An investigation has determined a helicopter pilot was drunk when he died in a crash in northern Alberta last year. A report by the Transportation Safety Board says the unnamed man had a blood alcohol level of about .35 — more than four times the legal limit for driving a vehicle. “This amount of alcohol was more than sufficient to cause major impairment of judgment and performance,” said the report, released Friday. “While piloting the helicopter under the influence of alcohol, the pilot made flight control inputs that caused the main rotor blade to contact the cabin and precipitate the in-flight breakup.”

The chopper, owned by Gemini Helicopters of Grande Prairie, was monitoring well sites when it went down on Jan. 27, 2013, in a wooded area near Fox Creek, about 260 kilometres northwest of Edmonton.

The board said the pilot had been with the company for nearly two years but hadn’t been following proper procedures before the crash. He didn’t file a flight plan that day and hadn’t filed itineraries on several other flights that week. The night before, he drank three or four beers at a work camp. The day of the crash, he visited several oil sites then landed — after three approaches — at one site’s security gate.

“The pilot was observed to be staggering and smelling of alcohol,” the report said. “On being questioned, the pilot uttered some derogatory remarks.”

He flew off with an unauthorized passenger and spent 48 minutes at a remote cabin, where investigators later found an empty wine bottle and liquor bottle.

The pilot then dropped his only passenger back at the same security gate, before flying off erratically.

He crashed five minutes later.

A team of RCMP officers, firefighters and military searched the area on foot and by plane, and found the wreckage the next day. [Emphasis added]

End “Like This?” insert]

Next, as part of the Pilot, the AER envisioned industry voluntarily collaborating on surface development plans (eg water reservoirs, roads and pipelines). This proved abortive. Although practical barriers to collaboration, such as the relative physical dispersion of activities throughout the Duvernay are present, the AER will ultimately need to either mandate or incentivize operator collaboration if it wishes to see a change in the industry’s highly competitive culture.

  1. Lack of clarity for Pilot participants. [Frac Frenzy Free-for-all isn’t clear enough?]

The Evaluation concluded that the requirements to submit a single application were not sufficiently detailed and clear. This made it challenging for Pilot participants to develop their applications. Of note, the AER’s December 4, 2014 Manual 009, Play-Based Regulation Pilot Application Guide recognized that the Pilot’s objectives would be less prescriptive than current AER requirements for single-activity authorizations. However, going forward, it will be critical for the AER to develop clear and comprehensively defined minimum application requirements for single, multiple-activity applications.

Despite this lack of clarity, the six Pilot participants’ applications were approved, subject to only a few limitations and outstanding authorizations (the seventh participant, the Athabasca Oil Corporation, withdrew its application during the Pilot). Yet, concerns surrounding the increased risk of reviews, appeals and legal challenge stemming from this lack of clarity may linger.

  1. Inadequate regulatory tools to that support and enable Play-Based Regulation.

The AER intended to develop appropriate regulatory responses to the generic risk profile given the characteristics of the Duvernay play. On March 17, 2015, under another concurrent project, the AER issued Subsurface Order No 3; this Order provided uniform subsurface requirements for the Pilot area. However, surface-related play-based requirements were not developed within the time frame of the Pilot, owing to the lack of regulatory tools that support and enable PBR. While it is still possible for such surface-related requirements to be introduced, at present, the Pilot appears to have fallen short of this objective.

  1. Diminished stakeholder understanding and engagement.

[Because of the intentional play-based regulation “consultation” neglect by the AER?

2014 07 14: Watch out! Industry’s requested “Blanket Approval” coming soon to an Alberta community near you; AER says it will “reduce the need for public hearings.”

And AER intentionally not sharing important details with the public or communities about to be frac’d and harmed?

2014 06 12 TITTLE ALBERTA ENERGY REGULATOR AER CHAIRED BY ENCANAS GERARD PROTTI BRINGS ON BLANKET APPROVAL & SYNERGY TO BLAST UNACCOUNTABLE FRACING ON FOX CREEK 229407362-Play-Based-Regulation-Pilot SNAP

The Evaluation concluded that stakeholders, including First Nations and Métis, see a benefit to having a broader, long-term view of energy development plans. However, the stakeholders did not feel that Pilot participants provided them with enough information to fully understand the project plans or their potential impacts. Additionally, information about the Pilot provided to stakeholders by the AER was insufficient. In turn, this lead to a limited understanding of the Pilot and its outcomes. Much work needs to be done to ensure PBR adequately and meaningfully engages with all stakeholders.

[Will industry let its “world class” enabler, rights violator and abuser, the AER, do this much needed work? It hasn’t for decades, why start now in the midst of AER’s massive deregulation that industry demanded in 2004?

Looking Ahead to 2010:  Natural Gas Markets in Transition by the National Energy Board, Cat. No. NE23-118/2004E, ISBN 0-662-37107-0, August 2004
There are currently about two dozen pilot projects to develop CBM across the WCSB and some participants noted that about 1,000 CBM wells will be drilled this year, resulting in an expected 100 MMcf/d (2.8 million m3/day) of production.  While it is too early to accurately assess this emerging supply source, the Board’s scenarios for CBM supply also indicate about 100 MMcf/d in 2004, consistent with actual production to-date.

To-date, there has been mixed success.  In attempting to develop CBM, some projects have experienced fresh or salt water production which presents additional challenges with water disposal and tends to increase costs and impact gas production.  ….there is still significant uncertainty surrounding the future of CBM development.

The Horseshoe Canyon play in south-central Alberta was described as an example where developments have been positive.  Ultimately, some 50,000 wells may be needed to recover the CBM from this area alone.  The drilling risk in CBM development is relatively low due to the widespread deposits of known gas resources and drilling programs typically involve a large number of wells and high drilling density to achieve economies of scale.

Several participants have characterized the exploitation of these resources as a “manufacturing process”.  At the same time, some concern was expressed by CBM producers over their ability to obtain timely regulatory approval for the large numbers of wells that may be required to develop CBM.  It was suggested that a new regulatory framework may be beneficial, and that regulators could consider a “blanket approach” to approve drilling programs for this type of development. [Emphasis added]

Play-Based Regulation: “I’ll be back”

The Pilot represents the first step towards a new regulatory framework in Alberta’s energy sector. Indeed, the AER has given every indication that it intends to operationalize the PBR more broadly across the province. If so, this process will need to be refined. Frank contemplation of the results of this Evaluation will be critical for the AER’s success. Ultimately, if the shortcomings of the Pilot can be overcome, benefits will flow to all [industrial] stakeholders [and only industrial stakeholders]. [Emphasis and inserts added]

To view all formatting for this article (eg, tables, footnotes), please access the original here.

Play-Based Regulation Pilot Project by AER, undated

In September 2014, the Alberta Energy Regulator (AER) launched a play-based regulation (PBR) pilot in the Fox Creek area to test a new approach to govern [unaccountable] unconventional oil and gas development.

The PBR pilot tested a single, integrated application that allows energy companies to submit one application for all activities under an energy development project, instead of submitting separate applications for each activity. [AKA, massive deregulation for industry while the AER’s grossly over paid PR staff lie and lie and lie and lie some more to the public and harmed communities and non-industrial stakeholders.]

The single, integrated application approach requires energy companies to engage stakeholders [by intentionally withholding critical information and lying, along with synergy groups and the AER?] for the entire project plan instead of for each individual well, and allows the AER to better understand the broader impacts of energy development projects so we can ensure steps are taken to minimize potential impacts on the environment, communities, and stakeholders. [Refer to a few of the inserted links above, to see how untrue that is.]

The AER has evaluated the PBR pilot, and findings are included in the report, Evaluation of the Alberta Energy Regulator’s Play-based Regulation Pilot. The findings will help inform new ways of regulating oil and gas development in the province.

The PBR pilot builds off of the work completed under the Energy Resources Conservation Board’s Unconventional Regulatory Framework discussion paper in 2012. Regulating Unconventional Oil and Gas in Alberta: A Discussion Paper outlined a vision of the future state of unconventional resource regulation in Alberta that considers the cumulative effects of development, water and waste management, air quality, and public safety. The paper describes a play-focused approach to regulation, describing the impacts associated with unconventional development as well as when and how the regulator will apply science-based, risk-assessed, play[lie-]based regulation. [Emphasis added]

2016: AER’s Fox Creek Play Based DeRegulation Evaluation Report

2016 06 AER's Fox Creek Blanket Approval Play Based deRegulation Duvernay Pilot, map

2012 February: Alberta Plays Catch-up on Frack Front

Regulator acknowledges water risks….

Cal Hill, executive manager of the Regulatory Development Branch of the Energy Resources Conservation Board (ERCB, now AER) said his agency is now actively investigating four (the ERCB later corrected that figure to five) well blow-outs caused by horizontal multi-stage hydraulic fracking…. The Alberta regulator did not announce an investigation until a January 2011 fracturing incident made global headlines. That remarkable event sent oil and fluid spurting out of an existing well 1.2 km away from the oil shale well being fractured near Innisfail, Alberta….

Methane is buoyant and looking for a way up to the surface, explained Hill “There is an expectation you are going to find some signal in groundwater,” he added.

“We are working for full fluid disclosure,” said Hill…. [As of August 1, 2016, full fluid disclosure is not yet happening, anywhere in Alberta. When citizens ask for full disclosure, companies and regulators are uncooperative, despite public proclamations that chemical disclosure is provided upon request.]

Moreover, Hill admitted that he knew of no toxic fluids “that are prohibited” in the province.

“Nothing specific” has been set aside for additional monitoring admitted Hill.

Asked if the ERCB would implement recommendations proposed by noted researcher Karlis Muehlenbachs on hydraulic fracturing, Hill remained non-committal. … Muehlenbachs, a global expert on gas leaks from wellbores, recently recommended at a Washington, D.C. conference that regulators do rigorous gas and water testing prior to fracturing formations. [Emphasis added]

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