A presentation to the Petroleum History Society
February 22,
2017
By Peter
McKenzie-Brown
My co-authors for the book Footprints: The Evolution of Land
Conservation and Reclamation in Alberta were Bob Bott and Graham Chandler.
Many experts were on the steering
committee and among those we interviewed. Key experts included Larry Brocke,
Bruce Patterson, Chris Powter, and Fred Thiessen, who were leaders in land
reclamation within the province. The province and 31 corporations supported the
project, with contributions of heroic proportions from Charlene Dobmeier of
Kingsley Publishing. We interviewed many people and did further research at the
Glenbow and Provincial Archives, and in the field.
The book
deals with the reclamation of seismic lines, roads, gravel pits, forests, mines,
energy facilities, pipelines, quarries, sulphur blocks, peat, water lines, gas
plants and industrial and recreational facilities. The graphic used to
illustrate the book cover shows a reclaimed coal mine. On the back is a photo of
reclamation at a diamond mine.
Let me begin
with the theory: temporary, non-renewable land use should not diminish the
inherent, sustainable, renewable value of the land. Land is natural capital. We
need to live on the interest and preserve the principal. Everything I say in
the following comments follows from that key idea.
Alberta’s
energy resources
Alberta’s petroleum industry began to develop a century ago,
but only in the last 54 years has the sector developed and complied with
standardized reclamation practices. Part of the reason the regulations took so
long to fully cover the industry is that – especially since the 1980s – oil
companies have developed radically new underground techniques to produce heavy
oil, bitumen, tight oil and shale gas.
After the 1947 Leduc discovery,
energy development grew rapidly, and one result was that conflict arose between
a gung-ho petroleum industry and an agricultural community concerned about
encroachments on its landholdings.
Drilling an oil
well required the clearing of crop land, building roads, transportation of drilling
equipment, digging a sump pit, and the erection of the derrick, coupled with
the arrival of the drilling crew. Farmers complained, and the province
responded by passing the 1947 Right of Entry Arbitration Act. This legislation
provided the petroleum industry with access to surface rights from recalcitrant
farmers.
Atlantic
Leduc #3
A year after
that legislation received assent, the agricultural community got a glimpse of
how bad things can get. In March 1948, drillers on the Atlantic Leduc #3 well
lost mud circulation in the top of the reef, and the well blew wild. Drilling
had barely punched into the main producing reservoir a mile below the surface
when a mighty surge of pressure shot the drilling mud up through the pipe and
150 feet into the air, wrote historian Earle Gray.
"As the
ground shook and a high-pitched roar issued from the well, the mud was followed
by a great, dirty plume of oil and gas that splattered the snow-covered ground.
Drillers pumped several tons of drilling mud down the hole, and after
thirty-eight hours the wild flow was sealed off, but not for long. Some 2,800
feet below the surface, the drill pipe had broken off, and through this break
the pressure of the reservoir forced oil and gas into shallower formations. As
the pressure built up, the oil and gas were forced to the surface through
crevices and cracks. Geysers of mud, oil, and gas spouted out of the ground in
hundreds of craters over a ten-acre area around the well."
It took six months, two relief
wells and the injection of 700,000 barrels of river water to bring the well
under control. Cleanup efforts recovered almost 1.4 million barrels of oil in a
series
of ditches and gathering pools. At one point the well caught fire, and the crew
worked frantically for 59 hours to snuff out the blaze.
One of the
worst blowouts in Alberta’s history, Atlantic Leduc was only one of many.
During the last century, blowouts and other industrial challenges have had
ever-greater impacts on the land in Alberta – especially as exploration and
development shifted northward.
More than
100,000 such wells have been depleted since Alberta’s oil boom began with 1947,
and production of conventional oil is falling throughout Alberta’s oilfields as
older wells become exhausted. By year-end 2013, the petroleum industry had drilled
more than 430,000 wells in Alberta, including 55,000 – mostly long, horizontal
wells – for in-situ bitumen
production in northern oil sands regions. This high level of activity and the
ups and down of the oil and gas market meant that land disturbances rocketed
past reclamation efforts.
What this
means, of course, is that you can’t just drill a well and walk away. You have
to reclaim.
Around Alberta the importance of reclamation grew
ever-deeper roots – at least in part, because of the unruly growth in the
petroleum industry itself. There were well sites everywhere. The oil sector was
interrupting farming, damaging the land. And especially in the early days, producers
weren’t cleaning up the mess. Landowners would ask, “How come all they have to
do when they're done on a wellsite on my place is come in, take the wellhead
out, take away the garbage, and they're done? I can't farm this!” That
understandable sentiment was the trigger for today’s land reclamation
regulations.
To give you
a sense of perspective, the petroleum industry has drilled more than 430,000
wells in Alberta. Of those, perhaps 60,000 are neither producing nor
permanently sealed, and could lead to hydrocarbon or saltwater spills. Most
spills don’t migrate far from the hole and are easy to remediate because they
biodegrade or can be treated chemically.
The final
cleanup of a wellsite begins with "abandonment" (the technical
decommissioning of the well). Remediation, if necessary, comes next, followed
by reclamation activities such as topsoil replacement, contouring, and
establishment of vegetation. “Orphan wells” are those operated by companies
that become insolvent.
If at time
of exploration a well is “dry,” it needs to be abandoned and the site
reclaimed. If both oil and gas are found, the oil will likely be depleted
first, since pressure from the gas cap helps drive oil to the surface. When the
oil is depleted, most of the wells in the field are shut in, abandoned, and
reclaimed. In general, operators need fewer wells to produce natural gas, which
flows more easily to the surface than oil. When the gas cap is gone, the
operator abandons and reclaims what’s left.
Reclamation
continuum
Before I continue,
let me address a key question: what must land reclamation do? It must preserve
the land’s topography – its contours and structure; it must preserve the
life-sustaining nature of the soil, which is mostly in the upper 30
centimetres. It must be concerned about the land’s ability to retain and
transport water. And finally, it must preserve ecosystems – the creatures that
live in and on the soil.
Land
reclamation is a surrogate for the way environmental concern developed within
Alberta. Roughly speaking, it evolved along a continuum.
At one
extreme of this continuum is restoration – to restore a piece of land exactly
as it was. If a parcel of land has been used for extractive operations,
complete restoration is virtually impossible, so the next level is reclamation:
returning the land to a specific standard for reuse. Next is rehabilitation,
which involves bringing land back to a condition which allows it to have at
least a single use. Remediation involves improving damaged or polluted land.
Different kinds of energy-related activities
developed in the province, ultimately enabling the industry to do larger mining
operations, to develop sophisticated in-situ
facilities, and to frack. Regulations evolved with the changing industry.
Alberta’s
land reclamation practices have developed methodically. Through the 1950s, oilfield practice was simply intended
to keep a site clean and safe. This changed in the 1960s, when an increasingly activist
province focused on making sure that its petroleum industry kept its
exploration and production sites safe and stable.
In
1963 the Surface Reclamation Act covered all “Surveyed Lands” in Alberta and a
number of coal mines. It established a Land Conservation and Reclamation
Council, which was the
first to recognize the value
of cross-ministry integration for policy development and decision-making. A
1969 amendment allowed the provincial government to issue reclamation orders
and certificates for public lands not covered by the Surface Reclamation Act.
In the
1970s, industry and government worked together to create greener and more stable
oil and gas sites. Key government initiatives included the 1973 Land Surface
Conservation and Reclamation Act and the creation of a Land Reclamation
Division within the province’s Department of the Environment.This
legislation set standards for conditioning, maintaining and reclaiming the
surface of the land.
A
decade on, the importance of soil handling and vegetation emerged. The province
released minimum reclamation standards in 1980, and updated them two years
later. The province also developed the concept of equivalent land capability.
Land didn’t need to be returned to its original use, but to something similar
or a desired alternative use. A 1983 amendment also required remediation of
polluted sites. A key component of the 1983 directive was to establish the need
to salvage and replace topsoil.
In
1993 the Environmental Protection and Enhancement Act came into force,
consolidating and replacing earlier environmental legislation, including the
Land Surface Conservation and Reclamation Act. These measures beefed up
requirements for reclamation plans, soil decompaction, native vegetation and
orphan wells. At the same time, the province released the first version of its
wellsite and associated facilities reclamation criteria. These were the
standards industry had to meet to get certification.
As the
new century began, the province passed a water act and associated regulations.
This was relevant for the reclamation of ponds, lakes and streams. Also, the
province established detailed requirements for assessing contamination and practicing
remediation.
The
oil sands
To put the oil
sands in perspective, 20 per cent of their reserves are mineable. But mining
takes up only 3 per cent of Alberta’s oil sands area, so mining is by far the
more efficient extraction process. However, it has taken decades to develop
effective ways to reclaim those mines and their associated tailings ponds.
In the
earliest days of oil sands mining – at Great Canadian Oil Sands (GCOS), which
was the first truly commercial plant – little thought went into what to do with
the sand and other materials (including water) left over after extracting the
bitumen. This presented huge challenges to those later responsible for mine
reclamation. That experience led to regulatory change in the early 1970s, when
the Syncrude proponents made their pitch to build a new plant.
As time went on, those changes
accelerated. So did the technology and scale of operations. The photo shows the
immensity of Shell’s state-of-the-art Jackpine mine.
Reclaiming
the giants
To appreciate the
nature of the problem, consider how GCOS functioned when it started operations
in 1967. The plant employed two operations that, by disturbing the earth, had
an impact upon the environment. First, the company cleared away the ground
cover and overburden on top of the ore body. This material went to waste dumps
beyond the mining limits. In addition, oil extraction operations released
mountains of fine uniform tailings sand to a tailings dyke. Wind and water
eroded both waste dumps and tailings dyke – the latter more than the former: 15-20
mph winds would generate sand storms; heavy rainstorms would erode deep gullies
in the river banks.
The original
concept was to take tailings from oil sands production – an emulsion of clay,
bitumen and other chemicals – and spill them over the escarpment into the
Athabasca River where a small collector dam would hold them, releasing clean
water. Unfortunately, the materials turned out not to work according to plan.
Instead of effectively cleaning the water for reuse in oil sands operations,
the small dyke was releasing these chemicals as an untreatable colloidal
suspension into the river, and reclamation quickly became an issue.
This was not
only because of the lack of attention GCOS originally paid to these wastes, but
because oil sand effectively expands when mined and processed. From each barrel
of oil sand processed, the operator ends up with more than a barrel of sand,
plus bitumen (about 12 per cent by weight), and waste water. At first, this
would seem odd, but both geology and engineering have explained it. The
expansion takes place because processing eliminated the compaction of the
sands, which took place over geological time.
This growth in these materials
created reclamation challenges. For example, if the area being reclaimed was
originally a wetland or fen, the reclaimed area was likely to include a mound
or hill and a lake, say, but not the original habitat. Given available
compaction equipment, plus the changed chemistry of the sand being used as
landfill, reclaiming a mine to its original state is difficult or impossible.
The first
problem operators have to deal with in oil sands reclamation is that the
processed sand is essentially infertile – virtually barren of nitrogen,
phosphorus and potassium, which are the three major nutrients for plants. The
overburden, clay and muskeg were higher in available nutrients and, mixed with
sand, would provide a suitable seedbed by reducing alkalinity and improving
water percolation and moisture retention. Until mixed with clay, peat and
fertilizers, it would not support the mix of boreal vegetation that existed
before mining began. Early efforts to reclaim these mined areas, which began in
the 1970s, would fail totally during the occasional rainless summer.
Proof
of success
Mining companies
need to reclaim the land they have disturbed before mine closure. Defined in
Alberta as the ‘stabilization, contouring, maintenance, conditioning or
reconstruction of the surface of land,’ reclamation became an essential
component of oil sands development since the 1970s. Although reclamation
presented many challenges, both Suncor and Syncrude have made steps forward.
 |
| Wood Bison |
The evidence? In 2008 Syncrude
received a reclamation certification for a 104-hectare area known as Gateway
Hill, which included wood bison habitat. In 2013, Suncor’s reclamation efforts
included creating a fen, or wetland. These were both landmarks in the
reclamation story.
In-situ
development
The
first bitumen to be developed commercially in Alberta was through mining. The
second was through in-situ development.
The first field at Elk Point, on the Alberta/Saskatchewan border, was an Amoco
Canada project. The project used vertical wells and resulted in a land
nightmare, according to some of the people we interviewed. Gradually, industry
perfected directional drilling and developed drilling pads that substantially
reduced the land footprint.
Reclamation of in-situ facilities poses several unique
challenges in comparison to conventional oil and gas and oil sands mining. These
projects tend to involve many smaller-disturbances in areas with bitumen
resources too deep to be mined. Disturbances from these projects range widely
in intensity, in size and in duration.
Although steam-assisted gravity
drainage and other approaches to in-situ
oil sands production are relatively new, that segment of the industry is already
massive. It stretches from
Bonnyville to Fort McMurray and then west to Peace Country. An individual in-situ project starts with 3-D seismic
across the landscape to identify the resource. Then you drill shallow core
holes to identify where the resource is, how thick it is, and its other
attributes.
After deciding to put an in-situ project in play, the operator
constructs a central processing
facility. That could involve, for example, seven-hectare, multi-well pads. Above-ground
pipelines carry steam to the wells and product back to the central processing
facility, and each of those multi-well pads has a borrow pit. Borrow pits are
excavations where crews can get clay, for example, for use in construction.
In-situ
development involves horizontal or directional drilling and steam generation
and injection, and
it is different from conventional oil and gas activity in another way. Before
beginning operations, in-situ
operators need to secure approval under the Environmental Protection and
Enhancement Act. That approval has other things associated with it –
environmental impact assessment, pre-disturbance assessment and so on.
Wherever there’s going to be a
disturbance more than one hectare in size, op
erators need to do a lot of
pre-site work. They need to identify the soils, to help the companies properly
conserve that material. They need to establish large stockpiles of topsoil and
subsoil for reclamation. They need to have closure plans in place, conservation
and reclamation plans. There’s a lot of planning to do, but we’re still in the
infancy of these developments. We haven’t seen a lot of sites go to closure and
final reclamation. How do you reclaim well pads back to a peat land or a
wetland? Conventional oil and gas we’ve got a pretty good handle on.
Like
most surface mines, oil sands projects use progressive reclamation. While
reclamation is taking place in some areas, clearing and mining are taking place
in others. It is as though a slow-motion assembly line were moving across the
landscape. Sometimes it is possible to move the materials (topsoil or
overburden) directly from the newly cleared areas to the reclamation site.
Called direct placement, this single-haul transfer saves money and minimizes
degradation of topsoil. In many instances, especially in early stages of
development, mines cannot avoid stockpiling large volumes of topsoil and
overburden.
After coal and oil sands, the first
disturbances to be regulated were those that arose from pipeline construction.
NOVA
Corporation, which merged with TransCanada in 1998, was the leader in developing
workable procedures, especially at stream crossings. The photo illustrates one
of numerous pieces of heavy equipment designed specifically for stockpiling topsoil
from a pipeline construction site.
Alberta’s
orphans
Having been abandoned
by their owners, many wells in this province are now orphan. This has become an
enormous problem.
Let’s
start with the background. In the Alberta Legislature in 1994, Energy Minister
Pat Black explained a piece of legislation aimed at amending the Oil and Gas
Conservation Act. Supposedly, it would do the following:
1.Give
the Energy Regulator the authority to order abandonment of wells and a method
of ensuring compliance for that abandonment.
2.Provide
clear public records showing transfer of ownership of a well, so records would
be there for ultimate claiming.
3.Create
an industry-driven and industry-funded bucket of money to deal with orphaned
well sites.
Supposedly,
this amendment would enable the industry collectively to deal with orphaned
wells. Even though operators participating in the scheme had little or no
vested interest in the orphaned wells, they would contribute to the costs of
reclamation.
Revisions
to the regulation in 2004 reflected consultation with landowners, industry and
other stakeholders. Theoretically the program would ensure that oil and gas
lands would be reclaimed to a productive state.
Recent
drilling in Alberta
The chart of drilling
in the province over the last four years shows the problem’s potential.
Theoretically, at least, each well could become an orphan one day.
It
seemed like a simple approach to the problem, but there were many
complications. For one, regulatory
requirements don’t stipulate when reclamation and certification should begin. Unless
there are contamination problems, there are no deadlines for reclaiming abandoned
wells.
Plugging,
abandoning, and reclaiming a wellsite can be an expensive – from $50,000 to
several million dollars per site. However, a well that has stopped producing
need not be immediately plugged, abandoned, and reclaimed. To defer reclamation
costs, operators suspend production, listing reclamation on their books as a
liability. Those liabilities then grow and grow and grow.
Landowners
are often happy with this arrangement, because they want operators to continue
paying rent for access roads and other production facilities. The province
permits this because inactive wells often go back into production because of higher
commodity prices.
At
the moment, there are 2,287 orphan wells in the province. About 1,600 of those
need to be abandoned and 700 reclaimed. But those numbers are just the tip of
the iceberg. At the beginning of this month, there were 83,000 inactive wells. Until
reclaimed, those wells, too, run the risk of becoming orphans.
As a result, the population of
non-reclaimed, non-certified sites steadily increased. In response to concerns
that these sites may never be reclaimed, with liability falling on the
landowner, in 2003 the province passed legislation formalizing an orphan well
program and creating the Orphan Wells Association, which manages the
abandonment of orphan wells, pipelines and facilities, and reclaims associated
sites. The association’s annual budget is now in the $15-16 million range,
although in 2011 Alberta’s Ed Stelmach government provided a one-off grant of $30
million.
As you will
be aware, last week The Energy Regulator suspended operations at Lexin
Resources after the company said it would not reclaim. For practical purposes, the
Regulator seized the company’s 1,600 wells, pipeline segments and other
facilities, which include a sour gas plant near High River. The Regulator will
now work with the Orphan Well Association to decide whether to clean up or sell
off the Lexin assets. Before the Lexin announcement, the Orphan Well
Association had a backlog of 1,600 wells that need to be plugged and reclaimed
and a further 700 that are under reclamation.
Lexin wasn’t
the first, but it was one of the worst. Many operators have walked away from these
obligations, especially during tough economic times. According to the Energy
Regulator, in 2013 some 30 per cent of the wells in Alberta were inactive. Ten
years earlier the number was about 25 per cent.
That change shows a developing
pattern. Companies are happy with the notion of turning reclamation into a
function of accounting. Doing the fieldwork itself, not so much. The good
corporate citizens in the province, of course, do the fieldwork. Companies like
Lexin do not. Fortunately, they are in the minority.
Fairy-tale ending
I have said much today about how
land reclamation evolved to meet such challenges from blowouts, oil sands
mining, and the removal of facilities. But rather than end with this difficult problem,
I’d like to conclude with an example of how effectively the new policies can
deal with mixed-use lands.
Nestled in
the Rocky Mountain foothills near Canmore is the Ghost River wilderness, which
has been a popular recreation area for half a century. It also has a long oil
and gas and forestry history, and old seismic lines and resource roads
criss-cross the area. As recreational activity increased, so did land
disturbance from off-road vehicles.
The province
began to develop the Ghost Waiparous management plan in 2002. Implemented in
2006, this regulatory activity prevented further damage to the area and
reclaimed land that had suffered damage long ago, as well as damage from such
later events as the 2013 floods.
Land
reclamation has been a product of communication and cooperation. It is a
collaborative effort, with government agencies, industry, landowners, environmental
organizations and community groups involved. It improved public safety, and
aimed at helping sustain the area’s natural resources and its natural beauty.
Also, it promoted recreational off-highway activities. The petroleum industry
benefits from this, but so do cattle grazers; those who enjoy either motorized
or non-motorized recreation, or both; the environment; and the local community.
Was this solution
ideal? Not really, since it could not fully deal with the cumulative effects of
land use in the area. As a growing population puts more pressure on our land,
it will become an increasingly important approach to balancing environmental,
economic and social considerations. It is playing an ever more important role
in land reclamation.
