Like her friends and neighbours, farmer Marie Scott remembers vividly the notice in the mail that changed all of their lives.
What happened over the next two years is reflected in a decision issued recently by the Alberta Energy and Utilities Board.
The regulatory agency, in a rare move, denied Shell Canada Limited’s application to drill a $12-million sour-gas well near Rocky Mountain House in west-central Alberta.
Industry observers say the decision will change the way the sour-gas industry approaches development in rural Alberta.
The notice in Scott’s mail, arriving in December 1998 just before Christmas holidays, came from Shell. It informed 40 families living along the picturesque Clearwater River valley that Shell planned to drill a large, exploratory natural-gas well in their community.
The company predicted the sour-gas well would contain nearly 36 per cent hydrogen sulphide, a poisonous gas even at low concentrations measured in parts per million. Shell had already obtained a lease for the drilling site from a co-operative landowner. Drilling was to start in less than a month.
“There was no public consultation whatsoever to begin with,” says Scott, whose family raises cattle and sheep in the valley northwest of Calgary.
Lori Courtright and her partner Barney Bertagnolli had just bought a property and moved into their house when Shell’s plan arrived. The Bertagnolli family has lived in the area for more than 50 years. Barney’s mother Marcella’s home would be directly downwind from Shell’s gas well.
“Shell sent us an emergency evacuation plan that had a target (drawn) around our place,” Courtright recalls. “But our home wasn’t even on there. They’d missed several homes, including homes that had been here for quite a while.”
The “target” was Shell’s emergency response planning zone, a four-kilometre circle within which the 40 families resided. If something serious went wrong at the well, the company advised, everyone within that zone would be safely evacuated.
Many people in the valley, however, live on dead-end roads. Their only escape route in the event of a well blowout, as they later told a public hearing, would be to drive toward a high-pressure, high-volume sour-gas well spewing potentially lethal hydrogen sulphide.
The river valley also is a popular recreation area used year round. How, the residents wondered, would Shell locate, let alone evacuate, such a transient population if there was an accident?
Several permanent residents of the valley also have serious health conditions that weren’t addressed in Shell’s plans.
Marc and Barbara Tougas live on a dead-end road. Every second day and on weekends, Marc has to drive to nearby Rocky Mountain House to receive kidney dialysis. “If I were to breathe in any toxins . . . they’d get into the bloodstream and I have no kidneys to cleanse them until I go on dialysis,” he says.
Some residents, offended at getting Shell’s notice, refused to have any dealings with the company, says Chuck Shipley, a game warden who retired to the valley. “They (Shell) did screw up, there’s no question about that.”
Over the Christmas holidays, the families quickly organized into the Clearwater Coalition, to challenge Shell’s assumption that the well would go in. Shell postponed the drilling and hired a cadre of community consultants to try to repair the damage.
But, as the EUB noted in its decision, the company’s failure to consult the community, coupled with giving residents short notice of the drilling plans, resulted in “a serious erosion in public trust in Shell from the outset. The Board accepts the (residents’) views that these initial errors very likely made future effective consultation almost impossible, despite Shell’s subsequent efforts.”
For several months, the company and the Clearwater Coalition tried mediation in an effort to reach a compromise.
But the playing field for such a process isn’t level, complains Colin Manuel, a retired schoolteacher who moved to the river valley to raise beef cattle.
Without a mechanism that allows a united community to reject an energy project, “any decision, even if it goes through mediation, is basically an imposed risk,” Manuel says.
Residents were especially upset that Shell, without public consultation, had reduced its emergency response planning zone from an original 19.2-kilometre circle to four kilometres.
Shell based its original zone on calculations of the well’s predicted volume, pressure and release of hydrogen sulphide in the event of a worst-case scenario — a full-scale blowout.
Environmentalist Martha Kostuch, a Rocky Mountain house veterinarian who advised the coalition, says the 19.2-km zone “would have extended pretty near all the way to Rocky Mountain House.” Evacuation, in other words, would have been impossible.
Laurieanne Lynne, a spokesperson for Shell, says is not unusual for an oil and gas company to reduce the size of its calculated emergency response zone in its final plans.
“It’s actually quite common for a well of this type in industry to have four kilometres” as the zone, she says.
The EUB categorized Shell’s well as a Level 4 critical sour-gas well, because of its large volume, high pressure, substantial hydrogen sulphide content and close proximity to a densely populated area. The Level 4 designation reflects the highest concern possible for public safety.
The EUB does allow a company to reduce the size of an emergency response zone for a well located near densely populated areas — only, however, if the company meets stringent conditions.
Typically, one condition is that in the event of an “uncontrolled release” of sour gas at the well, the gas must be ignited immediately. That usually means incinerating an $8- to $10-million drilling rig.
Setting the well on fire converts the heavier-than-air hydrogen sulphide to sulphur dioxide.
Sulphur dioxide also is poisonous, but igniting the well forces the gas high into the air where it’s dispersed.
Immediate well ignition became a condition imposed on many critical sour-gas wells after the disastrous Lodgepole blowout in 1982.
The rogue well killed two well-control workers and spewed the rotten-egg stench of hydrogen sulphide as far as Calgary before it was finally set on fire and tamed after 68 days.
Shell, however, didn’t agree to immediate ignition for its well.
The EUB, in its decision, said it doubted whether the company would be able to identify and evacuate all the residents and transients in the area if the well blew out of control. Shell’s proposal not to go with immediate ignition as the EUB defines it, “is unacceptable,” the board said.
Lynne says Shell reasoned that with such a deep well, the company would have several hours at least to safely evacuate people before any hydrogen sulphide gas — including what might be only a small release — reached the surface. “We always said that if there was any question that the public would be in danger or unable to be evacuated in an uncontrolled release, we would ignite right away.”
And so the arguments and discussions continued through mediation. In the end, Shell and the Clearwater Coalition marshalled their respective experts and squared off last November in an EUB public hearing. Not one resident, including the landowner who signed the well lease deal, spoke in support of the development.
“The community really spoke very strongly with one voice,” say Eric Tait, chair of the Clearwater Coalition. “The opposition to the well was as close to unanimous as you’re going to get within a community.”
Last week, more than two years after Shell mailed its fateful drilling notice, the EUB issued its decision. The well’s size and predicted hydrogen sulphide release rate, the valley’s restricted evacuation route, the residents with health conditions who live close to the well “all lead to the conclusion that in the event of the reasonable worst-case scenario, the Emergency Response Plan as currently proposed by Shell cannot assure public safety.”
Environmentalist Kostuch says it’s only the second time in her 20 years-plus involvement in sour-gas issues that she has seen a well rejected outright. “It certainly shows that new projects that aren’t well designed or well thought out or that have significant impacts can be denied by the EUB.”
Richard Secord, an Edmonton environmental lawyer who represented the residents’ coalition, says: “There’s no question that this is a major decision which will be carefully studied by all oil companies that have the desire to drill critical sour-gas wells near residences . . . it’s the precedent right now.”
The EUB stresses that each project has specific characteristics and circumstances, and the board’s decisions are made on a case-by-case basis.
Secord, however, says this decision raises the bar for companies in terms of what the EUB expects on public consultation even prior to receiving a drilling application. It also puts the onus on industry to present the potentially most dangerous worst-case scenario for a critical sour-gas well, as opposed to less conservative risk assessments that downplay the hazard, he says.
Shell’s Lynne says the decision indicates that the EUB now expects to see, in the earliest stages of a proposed development, a site-specific emergency response plan that has undergone public consultation.
Shell is disappointed with the decision, Lynne adds. “We thought we had a plan that was safe and responsible.”
The EUB left the door open for Shell to reapply, although some hurdles cited in the decision — including the river valley’s topography — appear insurmountable. It is unlikely that the company’s plan to drill and test the well “would happen in this year if we had to begin again,” Lynne says.
Coalition chair Tait says the community is celebrating — cautiously. Shell has spent an enormous amount of money on the project already, he notes. “They believe that they’ve got a substantial find down there. It would tend to fly in the face of common sense to assume that they’re not somehow going to try to exploit that resource.”
