Lexin Resources complies with safety orders after watchdog sounds alarm by Reid Southwick, August 30, 2016, Calgary Herald
A Calgary oil and gas company that ran afoul of Alberta’s energy watchdog has complied with orders to return its sour gas pipelines to a safe state after warning about gaps in its ability to detect and respond to leaks.
Lexin Resources Ltd. had told the Alberta Energy Regulator in late June that it had laid off most of its staff, leaving behind just six employees to oversee its sour gas plant in Mazeppa northeast of High River, along with its network of pipelines.
The company had indicated it could not respond to any emergencies at its facilities and that its leak detection system was no longer working.
The admissions prompted a stern warning from the regulator, which said any failure to provide sufficient oversight could result in sour gas — a poisonous substance — being released into the environment with potentially dangerous effects.
The regulator said this week Lexin has complied with orders to ensure its facilities are in a safe state. The company had already shut in its plant and replaced all sour gas with sweet gas. Last week, it shut in its remaining sour gas pipeline and replaced the sour gas with sweet gas. [Who trusts/believes the AER? Who trusts/believes Lexin?]
The energy watchdog had also ordered the company to submit an emergency response plan, among other measures. The regulator said this week it has received the requested plans and is reviewing them, though it left the door open to further action against the company if it uncovers any more breaches.
Lexin has also attracted complaints for failing to compensate landowners who have the company’s wells on their properties.
The company could not be immediately reached for comment. [Emphasis added]
A comment to the article:
Norm Wells
I know of another case of a company admitting to the AER it ‘could not respond to emergencies’ and telling AER it was aware of the problem and that was a risk it was willing to take. The site is within the corp limits of a city as well.
[Emphasis added]
WHAT ABOUT THE POLLUTION BELOW? WHO FIXES IT?
Under section 113 of the Environmental Protection and Enhancement Act
Under section 27 of the Oil and Gas Conservation Act
Shoreline Energy Corporation
c/o Grant Thornton Limited
900, 833-4 Ave SW
Calgary, AB T2P 2V6
Attention: Guy Odhams
High Mark Energy Corp.
#600, 9835 101 Ave
Grand Prairie, AB TBV 5V4
Dark Warrior Resources Ltd.
1100, 630 6 Ave SW
Calgary, AB T2P 058
Progress Energy Canada Ltd.
1200, 205 5 Ave SW
Calgary, AB T2P 2V7
Iteration Energy/Chinook Energy Inc.
1000, 517 10 Ave SW
Calgary, AB T2R OSS
Lexin Resources Ltd.
400, 1035 7 Ave SW
Calgary, AB T2P 3E9
WHEREAS Shoreline Energy Corporation (Shoreline) is the holder of well licences granted by the Alberta Energy Regulator (AER) under the Oil and Gas Conservation Act (OGCA) including wells licence numbers 0120403 and 0123432 (Wells);
WHEREAS on December 23, 2015, Shoreline made a voluntary assignment in to bankruptcy and Grant Thornton Limited was appointed as trustee (Trustee) in accordance with the Bankruptcy and Insolvency Act (8/A);
WHEREAS a “working interest participant” is defined in section 1(1)(fff) of the OGCA as a person who owns a beneficial or legal undivided interest in a well or facility;
WHEREAS High Mark Energy Corp., Dark Warrior Resources Ltd., Progress Energy Canada Ltd., Iteration Energy (Partnership), Chinook Energy Inc. (surviving partner of Iteration Energy) and lexin Resources ltd. (the WIPs) are working interest participants of the Wells;
WHEREAS Shoreline disclosed to the AER that natural gas (the Substance) has escaped and been released by way of escaping from the surface casing of the Wells, an event also commonly known as a Surface Casing Vent Flow (SCVF);
WHEREAS the SVCF is deemed to be “serious” by Interim Directive ID 2003~01, section 2.2 Definitions, article #8;
WHEREAS the Substance contains methane which is a substance known to be hazardous to the environment and human health;
WHEREAS the Substance may enter the aquifer, or may have entered the aquifer and continue to enter the aquifer if it is not contained forthwith;
WHEREAS the AER in a letter dated January 27, 2016 notified the Trustee of its obligations under the OGCA and requested that the Trustee provide its agreement to repair the SCVF by February 3, 2016; [Was the repair appropriately undertaken? Was it successful?]
WHEREAS in a letter dated February 12, 2016 the Trustee stated it was immediately taking certain steps in relation to the SVCF;
WHEREAS on February 17, 2016 the AER issued a Notice of Noncompliance to Shoreline in care of the Trustee with copies to the WIPs requiring certain remedial actions be completed by March 17, 2016 in order to be compliant with regulatory requirements;
WHEREAS Shoreline and the Trustee have failed to comply with the directions contained in the Notices of Noncompliance;
WHEREAS the AER has reasonable grounds to believe that Shoreline and the Trustee have failed to repair or remediate the surface casing to stop the SCVF;
Whereas on March 15, 2016, the Trustee executed a Notice of Renunciation in accordance with section 20(1) of the BIA to quit claim and renounce Shoreline’s interests in the AER well, facility and pipeline licenses held by Shoreline.
WHEREAS the Environmental Protection and Enhancement Act (EPEA) and the OGCA permit the AER to issue orders in certain circumstances;
WHEREAS Helene de Beer, Director, Closure and Liability, has been authorized to issue orders under EPEA and the OGCA;
WHEREAS under section 113 of EPEA, the Director is of the opinion that a release of the Substance into the environment has occurred, is occurring, or may occur and that the release of the Substance has caused, is causing, or may cause an adverse effect to the environment; [Where’s the AER’s order against Encana for illegally injecting chemicals into Rosebud’s drinking water aquifers in 2004 and contaminating them and area municipal and private citizen water wells with methane, ethane, heavier hydrocarbons, chromium, phthalates, Tert-butyl alcohol and other harmful substances? ]
WHEREAS the Director is of the opinion that Shoreline, as licensee is a “person responsible” as defined in section l(tt) of EPEA;
WHEREAS the Director is of the opinion that the WIPs, as beneficial or legal owners of an interest in the Wells are “persons responsible” as defined in section l(tt) of EPEA;
WHEREAS under section 27(3) of the OGCA, the Director is of the opinion that it is necessary to abandon the Wells to protect the environment; [What if the leaking methane is already contaminating aquifers and water wells?]
WHEREAS section 250(4) of EPEA provides that a person directed under an environmental protection order to carry out any work or do anything in respect of a place, and any other person carrying out the work or doing the thing on that person’s behalf, may, without incurring liability for doing so, enter the place for the purpose of carrying out the work or doing the thing required by the environmental protection order;
WHEREAS section 101(1) of the OGCA provides that a person carrying out suspension or abandonment operations pursuant to section 27 or 28 of the OGCA is entitled to have access to and may enter on the land and any structures on the land concerned for the purposes of carrying out the suspension or abandonment;
THEREFORE, I, Helene de Beer, Director, Closure and liability (Oil & Gas), pursuant to section 27(3) of the OGCA, section 113 of EPEA and section 241 of EPEA, DO HEREBY ORDER that Shoreline and the WIPs shall do the following:
Abandonment
1. Zonal abandon the Wells in accordance with the requirements of Directive 020: Well
Abandonment by June 30, 2016 as follows:
a. Perform a zonal abandonment for the Doe Creek perforations;
b. Repair the following low cement top deficiencies:
i. Porous zones isolation; and
ii. Base ground water isolation from the hydrocarbon formations below
and protected intervals above the base ground water protection.
Repair of SCVF
2. Repair the SCVF by June 30, 2016 as follows:
a. Repair the SCVF and/or gas migration in accordance with the requirements in ID 2003-01, section 2.4 Repair Requirements.
b. Monitor the wells for a minimum of 5 months to confirm the repair was
successful.
c. Report the repair required in clause 4 on the DDS system.
d. Cut and cap the Wells by December 31, 2016.
Reporting to the Director
3. Provide to the Director by 12:00 noon on Thursday of each week, a weekly written
report outlining the progress on the activities required by clauses 1 and 2 of this Order,
until otherwise directed by the Director in writing.
General
4. Submit all applicable documentation confirming completion of abandonment
operations, including confirmation of surface abandonment and removal of surface
equipment, cement pads, debris, and produced liquids associated with the wells by the
dates specified in Clauses 1 and 2.
5. Where a deadline or reporting frequency has been specified in this Order, the Director may authorize in writing a different deadline or reporting frequency as applicable.
[Refer also to:
Yet CAPP’s Alex Ferguson says many worries about water quality are based on past operations involving coal-bed methane — shallow deposits in closer proximity to groundwater. These did occasionally contaminate water resources, he says. In some of the more infamous instances, affected landowners could light their well water on fire.
Ernst’s “drinking” and “bathing” water from her well at Rosebud, Alberta