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What is going on with H2S in Saskatchewan, from the ministry’s perspective?

(Editor's Note: this is the third in a series of several related stories on H 2 S in Southeast Saskatchewan. Additional stories will be posted at pipelinenews.
Doug MacKnight
Doug MacKnight is assistant deputy minister, Petroleum and Natural Gas Division, Ministry of the Economy.

(Editor's Note: this is the third in a series of several related stories on H2S in Southeast Saskatchewan. Additional stories will be posted at in the coming days)

Regina – A series of stories in posted in early October by the National Observer, Toronto Starand Global Newscast a harsh light on hydrogen sulphide (H2S, also known as sour gas), much of it focused on the province’s regulatory oversight of the industry, and an implied lack thereof. The series of stories was backed by the Corporate Mapping Project, which itself has the backing of the Canadian Centre for Policy Alternatives, Unifor, LittleSis and several universities.

On Oct. 4, Pipeline News spoke to Doug MacKnight, assistant deputy minister, Petroleum and Natural Gas Division, Ministry of the Economy. The position is a key regulatory role for upstream oil and gas. Our questions focused on broad concerns mentioned in a Facebook post by the instigator behind the stories, Dr. Emily Eaton, University of Regina geography professor, in addition to concerns in those stories. Eaton said that from seven years of research, the regulations are not enforced, the ministry is horribly understaffed and does not properly inspect industry practices.

On the question of regulation enforcement, MacKnight said, “We, of course, do enforce the regulations. We have an extensive inspection program. We think our regulations are solid and comparable to other jurisdictions.

“Sour gas is not new to southern Saskatchewan, as you well know. So we fully believe we have the regulatory systems we need to manage it. We have people doing inspections. I do want to emphasize, since 2012, when some of these compliance issues started to emerge, there’s been some significant changes. We put more inspection staff into our Estevan field offices. We bought new H2S detectors which can get us down to parts per billion, so allow us to identify sources. We acquired FLIR (infrared) cameras to look for venting. And, of course, we’ve done some fairly extensive sweeps in the area to assess levels of compliance.

“So, overall, I think that we do have the regulatory rules we need. We have the staff, now, that we feel is what we need for the challenges down there.

He added IRIS (Integrated Resource Information System) has been a major change for ministry so they now have the data systems they need to support inspections and incident response. As a result of all the above, he said that a lot of the issues that came up in 2012 have been addressed.

Regarding staffing numbers, he said they have six inspectors in Estevan. The most recent budget added another inspector in the Estevan office. One position was moved from another role into inspection, and another was transferred from another office.

MacKnight added, “We use a lot of engineering co-op students to assist in inspections. That substantially expands our work. These are not just in the summer, but throughout the year.”

The series of stories implied that a low percentage of sites inspected in any given year. “We do, province-wide, about 20,000 inspections a year, very much risk-based,” he said. “You’re going to put your priorities where you perceive the risk. That includes, if you’ve got an operator you’ve got some concerns about, or sites that are particularly large facilities. It’s very much risk-based.

“Certainly, in terms of any public complaints – 100 per cent response. Public complaints are absolutely confidential. We protect that information very carefully. But we when we get a complaint, we’re out there.”

Proximity of residences is an important consideration, but also the size of facilities is another.

As for Eaton’s assertion that the ministry does not properly inspect industry practices, MacKnight said, “We inspect wells and facilities against the regulator standards. That’s the benchmark we’re applying against. Assuming the industry practice aligns with our regulatory practice, that’s what our inspection will focus on.”

Roughly three years ago the province implemented a series of regulations, in particular, Directive S-10, meant to reduce venting and flaring. The Global story implied there was a secret map that no one had seen before about H2S hotspots. (The map was from a time before S-10 came into play). Asked about progress with venting and flaring reduction, MacKnight said, “I’m going to begin by saying you can’t vent sour gas. The S-10 directive doesn’t apply in situations where you have sour gas. You have to handle sour gas safely. You can’t just let it into the atmosphere.

“S-10 deals with gas conservation, encouraging companies to use the gas as opposed to flaring or venting it. That is fully implemented now. Companies are required to do economics on conserving the gas, and where it’s not economic, they are able to flare, under 900 cubic metres per day. That is being done. So we’re implementing, but it is a challenge. We have a lack of infrastructure in southeast Saskatchewan, and that pipe is critical. So if you’re doing economics on a well or facility, and there’s no pipeline in the area, it’s hard to make the case.”

Asked if you can’t vent sour gas, why can one still smell it driving down Highway 18, in particular from Oxbow to Glen Ewen, MacKnight responded, “Sour gas can be detected at a very low level. So when I say you can’t vent it, you can’t vent it at an unsafe level. So on lease, that’s 10 parts per million as the Occupational Health and Safety standard. The ambient air level is 10 parts per billion. You can still smell sour gas down at those levels, which is why, when you do see exceedances above the provincial standard, we’re pursuing that. If you will, sour gas, the human nose is extremely sensitive to it. When I refer to venting it, I’m referring to levels that are unsafe.

Todd Han, who had been director, Petroleum Development Branch, a senior bureaucrat within the ministry with regards to venting and flaring and who had been a key figure in writing regulations in that regard was let go by the ministry several years ago. Asked about that, MacKnight said, “I can’t discuss a (human resources) related matter. I will say there was a reorganization in 2015, and changes were made in and around that period while we were establishing a standalone regulatory division, which we have now.”

“What I can discuss is the nature of some of the regulations that were being considered. The one we are talking about right now, related to new penalties, contemplated penalties, that in the end, we concluded we already had penalties – half million dollar a day penalties under the Oil and Gas Conservation Act. We already had tools like suspension orders, compliance tools that were making the changes we were looking for in terms of operator compliance.”

He noted there’s even a prison term, if necessary. But such fines have not been used. “We have not pursued a prosecution. You understand that a prosecution, for that kind of penalty, is a judicial process. A lot of the times, when you have a sour gas issue, it’s a piece of equipment failed, those kinds of things. It’s not where someone knowingly went out, and did a thing that caused an emission. So those kind of large penalties and fines are needed in situations where there’s some willful action. A lot of cases with sour gas, it was a thief hatch venting or equipment not being attended to that we needed to get the company’s attention to, to get the company’s focus back in getting that work done.

“The sweeps and inspections we’ve did have had the effect. There’s evidence by the improvements we’re seeing in the field,” MacKnight said. “Penalties are there, but in fact, suspending operations, shutting in, giving direction, are extremely effective in getting compliance.”

Asked if they have any teeth, he replied, “A shut in order is pretty toothy if your in the business of producing oil and gas.”

The stories claimed there was a great deal of government secrecy about H2S. Asked about that, MacKnight said, “I would say there’s no secrecy. The access to the information, for people who don’t know where to look, can be a challenge.

“Every site with an H2S risk has to be marked. One of our inspection activities is to make sure those signs are there. If you’re a landowner in the area, you will know, quite visibly, of H2S in the area,” he said, adding that operators also need emergency response plans.

Prior to 2012, reporting focused primarily on spills, according to MacKnight. “We don’t have good data on sour gas in that pre-2012 period. With the IRIS system, we have gas reporting now. The system for publicly reporting those instances went public in June (2017). We had some transition issues from 2015.”

The information is not secret, he said. They are developing plans public release of information. There’s a weekly spreadsheet of incidents reported, but he added there hadn’t been a sour gas incident reported since the system went live in June.

Incidents like fatalities are reported via Labour Relations and Workplace Safety. “Our kind of reporting would have been the data on the nature of the incident and what had been released.”

With regards to the Ministry of Economy’s reporting not including fatalities or injuries with relation to H2S incidents, MacKnight said, “It’s a legitimate question, but right now, I struggle to think in terms of what we use that information for, why we would need to start tracking it.

MacKnight noted that data is with Labour Relations and Workplace Safety.

Regarding safety training, he said, “The oil and gas industry has done really a great job in strengthening its collective focus on workplace safety. Workplace safety goes hand-in-hand with a good wellsite and a good facility, so there’s real practical benefits on the regulatory side. H2S Alive, of course, is front and centre the basic training. But goes deeper than H2S Alive, all the best practices and training operators get in the field, through Enform as well as the engineering they put into those facilities.  

“Everybody has H2S Alive, but with H2S Alive, that’s just one component of the safety culture industry is working to develop. It’s front and centre. Sour gas management is part of that,” MacKnight said. None of his staff can get on a site without the course.

“The general trend, on workplace safety, time losses, has been on a downward trend for decades now. Again, it’s been a real focus in the industry on that, the safety culture.”

With regards to the incident reported by Shirley Galloway of Oxbow (see related story, page ???), the lead interview in the Toronto Star story, MacKnight said, “That was one of the focusing events for us. I can’t go into specifics in terms of what transpired there, in terms of the family. That kind of experience is just not acceptable. So it was investigated in terms of the source, and that was dealt with, ordering the source to be shut in and fixed, the obvious first step. After that, there was a broader response, looking at other facilities in the area, and eventually a fulsome sweep of the area, looing at wells and facilities. That kind of event is kind of a focusing event. It’s not acceptable.”

Regional air quality is also monitored, he added. The Oxbow “air pointer” monitor is being relocated.  


See related stories:

Shirley Galloway, in her own words, on H2S concerns

Craig Lothian responds to H2S concerns

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