Facilities – Oil and Gas
Application
Pure Environmental Waste Management Ltd. (“Pure”) operates the Hangingstone oilfield waste management project located about 25 kilometres (“km”) south of Fort McMurray in the Regional Municipality of Wood Buffalo (the “Hangingstone Project”). The Hangingstone Project involves solution mining or washing salt caverns and using the caverns to store waste.
Pure filed applications related to two proposed disposal wells :
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Applications 30602032, for a licence to drill the 09-19-085-09W4M (“09-19”) disposal well; 1928017, for approval of a disposal scheme using the 09-19 disposal well; 1928430, amending the existing Hangingstone oilfield waste management facility approval, 30608918, for a freshwater pipeline from a saline water well; and 30608934, for amendments to existing dispositions to accommodate the 09-19 disposal well; and
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Applications 1784753, for a licence to drill the 07-16-085-09W4M (“07-16”) disposal well; 1928016, for approval of a disposal scheme using the 07-16 disposal well; 1614037, for a mineral surface lease to operate the 07-16 disposal well; and 1809825, for an underground pipeline to the 07-16 disposal well
Decision
The AER approved Applications 30602032, for a licence to drill the 09-19 disposal well; 1928017, for approval of a disposal scheme using the 09-19 disposal well; and 1928430, amending the existing Hangingstone oilfield waste management facility approval, subject to the conditions in the approval documents. It also approved Applications 30608918, for a freshwater pipeline from a saline water well; and 30608934, for amendments to existing dispositions to accommodate the 09-19 disposal well.
The AER denied Applications 1784753, for a licence to drill the 07-16 disposal well; 1928016, for approval of a disposal scheme using the 07-16 disposal well; 1614037, for a mineral surface lease to operate the 07-16 disposal well; and 1809825, for an underground pipeline to the 07-16 disposal well.
Applicable Legislation
Oil and Gas Conservation Act, RSA 2000, c O-6.
Pipeline Act, RSA 2000, c P-15.
Public Lands Act, RSA 2000, c P-40.
Responsible Energy Development Act, SA 2012, c R-17.3.
Directive 065: Resources Application for Oil and Gas Reservoirs
Alberta Energy Regulator Rules of Practice, ss. 18 and 42.
Pertinent Issues
Disposal Capacity of the Keg River Formation and Potential Interference Between Disposal Operations
In AER Decision 2020-004, the AER determined that the Hangingstone Project is in the public interest. The AER, however, also determined that Pure would require sufficient disposal capacity to operate the Hangingstone facility and that if there is no prospect of Pure obtaining that capacity, the facility would not be in the public interest. In AER Decision 2020-005, the AER determined that Pure’s existing disposal wells did not provide sufficient injection capacity to develop and operate the Hangingstone Project. Notwithstanding this finding, the AER denied Pure’s applications for approval of two proposed disposal wells because of the proposed disposal wells’ potential to interfere with Suncor Energy Inc. (”Suncor”)’s planned or approved disposal activities.
Pure believed there was a large disposal capacity in the Keg River Formation that would support both Pure’s Hangingstone disposal operations and Suncor’s disposal needs at Suncor’s Meadow Creek projects. Suncor maintained that there was not enough capacity within the limited disposal area to accommodate the disposal needs of both the Meadow Creek and the Hangingstone projects and that the 07-16 disposal well and associated applications should therefore be denied. Suncor and Pure further disagreed about the potential of the waste injection at Pure’s 07-16 disposal well to interfere with Suncor’s disposal operations. However, in their joint submissions, the parties identified discrete operating areas for their respective disposal operations to minimize the potential for interference between them. The parties also requested that the AER deny the applications related to the 07-16 disposal well without prejudice to Pure’s ability to make future applications for injection wells and related disposal operations anywhere outside the Suncor disposal operating area.
The AER determined that the agreement reached by Suncor and Pure to observe discrete disposal operating areas provides a mutually acceptable resolution for the current applications and may assist future decision-makers in evaluating future applications.
The AER denied the applications associated with the proposed 07-16 disposal well to separate Pure’s disposal operations from Suncor’s current and conditionally approved disposal wells. This would mitigate potential impacts on Suncor’s disposal wells resulting from the volume or quality of wastewater disposed of by Pure in its disposal operating area. The AER, however, also found that while the parties intended that denial of the 07-16 disposal well would establish a precedent for denying any future applications that Pure might make within the Suncor disposal operating area, this panel of the AER’s authority over Pure’s approvals will cease with this decision. This panel could not bind future decision-makers or constrain their decisions on any future applications.
Public Interest
The AER determined that the disposition of the applications is in the public interest. The AER found that the Hangingstone Project would have low to moderate positive economic effects on the region, including reduced operating costs to local producers, increased employment, and increased government revenue through taxes. The AER determined that the proposed activities would not result in any significant adverse social or environmental effects, including on landowners.
