Directive 060 Upstream Petroleum Industry Flaring ...

1 Directive 060 Revised edition November 16, 2006 (Formerly Guide 60) Upstream Petroleum Industry Flaring , incinerating , and Venting The Alberta Energy and Utilities Board (EUB/Board) has approved this Directive on November 16, 2006. <original signed by> M. N. McCrank, , Chairman Contents 1 Purpose of This What s New in This Flaring , incinerating , and Venting Management Hierarchy and Access to Production Flaring , incinerating , and Venting How to Use This 2 Solution Gas Management (Crude Oil/Bitumen Battery Flaring , incinerating , and Venting)..8 Solution Gas Flaring Reduction Solution Gas Venting Solution Gas Flaring and Venting Decision Conservation at New Oil and Bitumen Conservation at Existing Oil and Bitumen Power Generation Using Otherwise-Flared/Vented Economic Evaluation of Gas Economic Evaluation EUB Economic Evaluation Audit Consultation and Public Information Dealing with Public Nonroutine Flaring , incinerating , and Venting at Solution Gas Conserving Limitations on Nonroutine Flaring , incinerating , and Venting During Solution Gas Conserving Facility Planned Shutdown (Turnaround) Alternatives to Solution Gas Shut-in Royalty Treatment of Flared and Vented EUB Directive 060.

2 Upstream Petroleum Industry Flaring , incinerating , and Venting (November 2006) 1 Solution Gas Reporting Requirements and Data Solution Gas Reporting Data Cooperating with Third 3 Temporary and Well Test Flaring and Temporary Flaring and incinerating Decision Oil and Gas Well Test Flaring , incinerating , and Venting Duration Limits ..22 Temporary Flaring / incinerating Conditions That Require a Temporary Flaring / incinerating Permit ..24 Conditions That Do Not Require a Temporary Flaring / incinerating Permit ..26 Flaring and incinerating Permits for Underbalanced Permit Requirements for Temporary Flares and General Permit Requests to Exceed the Volume Allowance Blanket Flaring / incinerating EUB Review of Permit Requests (Operations Group)..30 Ambient Air Quality Evaluation (Dispersion Modelling)..30 Site-Specific Requirements Related to Well Flaring and Temporary Facilities for In-Line Notification and Consultation Addressing Resident EUB Flaring / incinerating /Venting Notice Reporting Gas Well Test Zero Flaring 4 Gas Battery, Dehydrator, and Compressor Station Flaring , incinerating , and Gas Battery, Dehydrator, and Compressor Station Flaring , incinerating , and Venting Decision 5 Gas Plant Flaring , incinerating , and Gas Plant Flaring , incinerating , and Venting Decision Gas Plant Flaring / incinerating /Venting Volume Limits.

3 42 Frequent Nonroutine Flaring / incinerating /Venting Measurement and 6 Pipeline Flaring , incinerating , and Pipeline Systems Flaring , incinerating , and Venting Decision Additional Requirements for Gas Gathering Systems ..47 Natural Gas Transmission 7 Performance Conversion Heating Value and Exit Velocity for Flares ..50 Minimum Residence Time and Exit Temperature for Smoke Requests to Extinguish Flare Pilots at All Stack Nonroutine Sour and Acid Gas Flaring /Incineration 2 EUB Directive 060: Upstream Petroleum Industry Flaring , incinerating , and Venting (November 2006) Liquid Exceptions to Separator Backflash Flare and Incinerator Spacing Compliance with Fire Flare Dispersion Modelling Requirements for Sour and Acid Gas Modelling Individual SO2 Cumulative Emissions 8 Venting and Fugitive Emissions Management General Limitations of Venting Gas Containing H2S or Other Odorous Limitations on Venting Gas Containing Venting in Heavy Oil/Oil Sands Venting of Noncombustible Gas Coalbed Methane Fugitive Emissions Management.

4 66 9 Sulphur Recovery Requirements and Sour Gas Sulphur Recovery Exemption at Solution Gas Conservation 10 Measurement and Metering Requirements and Estimating Flared, Incinerated, and Vented Gas Flaring , incinerating , and Venting Records (Logs)..71 11 Industry Performance 12 Compliance and Noncompliance Figures 1 Solution Gas Flaring /Venting Management 2 Solution Gas Flaring /Venting Decision Tree (adapted from CASA)..9 3 Temporary Flaring and incinerating Decision Tree (adapted from CASA)..22 4 Temporary Flaring / incinerating Permit 5 Facility Flaring , incinerating , and Venting Decision Tree (adapted from CASA)..39 6 Facility Flaring , incinerating , and Venting Decision Tree (adapted from CASA)..42 7 Pipeline Flaring , incinerating , and Venting Decision Tree (adapted from CASA)..47 Tables 1 Limitations and notification requirements for nonroutine Flaring , incinerating , and venting during solution gas conserving facility 2 Temporary Flaring , venting, and incinerating notification 3 Major Flaring event 4 Cumulative facility or lease site benzene emission 5 Noncompliance EUB Directive 060: Upstream Petroleum Industry Flaring , incinerating , and Venting (November 2006) 3 Appendices 1 Summary of 2 Background to Directive 3 References and Contacts 4 Definitions of Terms as Used in Directive 5 6 Information for Permit Request to Flare or Incinerate in Exceedance of Flared or Incinerated Volume Allowance Threshold (600, 400, or 200 103 m3 Exceedance).

5 88 7 Sour Gas Flaring /Incineration Data Summary 8 Air Quality Management Plans for Temporary SO2 9 Screening Dispersion Modelling Using EUB 10 EUB Flaring / incinerating /Venting Notice 11 Resident Flaring /Venting/ incinerating Notification Sample 12 Agreement on Zero 13 Request to Extinguish Sour Gas Flare 4 EUB Directive 060: Upstream Petroleum Industry Flaring , incinerating , and Venting (November 2006) 1 Introduction Purpose of This Directive The Alberta Energy and Utilities Board (EUB) Directive 060: Upstream Petroleum Industry Flaring , incinerating , and Venting provides regulatory requirements and guidelines for Flaring , incinerating , and venting in Alberta, as well as procedural information for flare permit requests, dispersion modelling, and the measuring and reporting of flared, incinerated, and vented gas. In addition to Upstream Petroleum Industry facilities, the Directive also applies to gas transmission facilities licensed by the EUB.

6 For the purpose of this Directive , the term operator is used to designate the responsible duty holder ( , operator, licensee, company, applicant, approval holder, or permit holder) as specified in legislation. Effective January 31, 2007, this revised Directive supersedes the previous edition of Guide 60 (1999) and all editions of Guide 60: Updates and Clarifications (1999 and 2001). As a result, Interim Directive (ID) 99-06, which introduced Guide 60 (1999), is also rescinded. Until April 30, 2007, the EUB will work with operators by providing education in cases where noncompliance with these new requirements is identified and corrective actions are taken. After April 30, 2007, in cases where operators are in the process of implementing changes to comply with the new requirements in Directive 060 but have not yet achieved compliance, operators must have the following material available for audit if requested by the EUB: a detailed plan and schedule for complying with new Directive 060 requirements before June 30, 2007, and justification for not complying with new Directive 060 requirements by April 30, 2007.

7 After April 30, 2007, if no effort has been made to achieve compliance with the new requirements in Directive 060 or the material described above is not available for audit, enforcement will apply. After June 30, 2007, enforcement of all requirements will take place. Requirements that are unchanged from previous versions of Directive 060 (formerly Guide 60) must be complied with immediately. What s New in This Edition A summary of key revisions in this edition is contained in Appendix 1. This Directive incorporates new requirements for the evaluation of solution gas venting and the reporting of economic evaluation data on solution gas flares and vents as described in General Bulletin (GB) 2002-05: EUB Requirements for Evaluation of Solution Gas Vent Gas Conservation. Some of the most significant changes are as follow: EUB Directive 060: Upstream Petroleum Industry Flaring , incinerating , and Venting (November 2006) 5 The economic evaluation criterion for solution gas conservation is no longer a net present value (NPV) greater than zero.

8 Conservation is now required if the evaluation yields an NPV greater than -$50 000 Cdn. See Section Applying the decision tree and conducting an economic evaluation is no longer required for solution gas flares and vents less than 900 m3/day unless specifically requested by the EUB. See Section The decision tree process that was originally developed for solution gas Flaring has now been extended to solution gas venting and nonassociated gas Flaring and venting. See Sections , , , , , and Time limits have been developed for well test Flaring and venting. There are time limits specific to each type of well. For conventional oil and gas wells, for example, the time limit is 72 hours. The time limits were developed based on data gathered by the EUB and reviewed by the CASA FVPT. See Section Upon completion of testing, conventional oil and gas wells and dry coalbed methane wells must be shut in until conservation is in place (unless it is demonstrated that conservation is not required or is not required to be evaluated).

9 See Section (6). Additional gas plant Flaring requirements have been developed. These include reduced flare volume limits on larger gas plants and a requirement to not exceed six major nonroutine Flaring events in any consecutive six-month period. See Sections and It is now a requirement that programs be developed and implemented to address fugitive emissions. See Section Flaring , incinerating , and Venting Management Hierarchy and Framework Flaring , incinerating , and venting are associated with a wide range of energy development activities and operations, including disposal of gas associated with oil, bitumen, and gas well drilling, oil, bitumen, and gas well completion or well servicing (well cleanup ), gas well testing to estimate reserves and determine productivity, routine oil or bitumen production (solution gas), planned nonroutine depressuring of processing equipment and gas pipelines for maintenance, unplanned nonroutine depressuring of process equipment and gas pipelines due to process upsets or emergency, and Upstream Petroleum Industry waste management facilities.

10 Two multistakeholder teams from the Clean Air Strategic Alliance (CASA see ) have made recommendations on Flaring , incinerating , and venting for the Upstream Petroleum Industry upon which the EUB has based this Directive (see Appendix 2 for background on Directive 060). In particular, the EUB has adopted CASA s objective hierarchy and its framework for the management of routine solution gas flares (Figure 1) and has extended its application to include Flaring , incinerating , and venting of gas in general (see also CASA s 1998 Management of Routine Solution Gas Flaring in Alberta: Report and Recommendations of the Flaring Project Team). In accordance with the objective hierarchy, operators must evaluate the following three options: 6 EUB Directive 060: Upstream Petroleum Industry Flaring , incinerating , and Venting (November 2006) Can Flaring , incinerating , and venting be eliminated? Can Flaring , incinerating , and venting be reduced?