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Gas-Over-Bitumen Issues in the Alberta Oil Sands Region: Where Have We Been and Where Are We Going

Brad Gilmour¹ and Bennett Jones¹
¹Bennett Jones LLP

Abstract

The Alberta Energy and Utilities Board (EUB) (predecessor to the Alberta Energy Regulator) held an inquiry in 1998 to consider whether continued production of associated natural gas (i.e. natural gas in direct contact with in-situ bitumen reservoirs) was in the public interest. The primary issue was whether production of associated natural gas would negatively impact the efficient and economic production of bitumen. Ultimately, the EUB concluded such negative impacts could occur and developed a number of measures and initiatives to ensure conservation and protection of bitumen resources. The EUB then made a series of decisions in the late 1990's and early 2000's that lead to the shut-in of various associated natural gas pools. These decisions concluded that production of associated gas would negatively impact steam assisted gravity drainage (SAGD) production of bitumen. Arguably, the EUB did not fully address the impact that bitumen production could have on shut-in natural gas pools such as the evolution of water, carbon dioxide and hydrogen sulphide from bitumen steam chambers, or the repressurization of depleted pools by the bitumen owner. This presentation will discuss recent interventions by associated gas owners opposing SAGD applications who claim that SAGD bitumen production will negatively impact associated gas and possible outcomes if these matters were addressed by the AER in a public hearing. The presentation will also discuss issues associated with split title between bitumen and associated gas including liability and responsibility for impacts to associated gas and related infrastructure.

AAPG Search and Discovery Article #90207 © AAPG Geoscience Technology Workshop, Unconventionals Update, November 4-5, 2014, Austin, Texas