ERCB Releases Hydraulic Fracturing Directive

CALGARY, ALBERTA--(Marketwired - May 21, 2013) - The Energy Resources Conservation Board (ERCB) has today issued Directive 083: Hydraulic Fracturing - Subsurface Integrity (Directive 083) following a two-month stakeholder consultation period.

The release of ERCB Directive 083 represents a notable enhancement to existing regulatory oversight and monitoring as resources development continues and technology adapts.

The ERCB received significant feedback on the draft hydraulic fracturing directive following its issuance on December 6, 2012 through to the close of the feedback on February 4, 2013.

Further modifications were made to Directive 083 based on stakeholder feedback. Some of these modifications include:

• Additional requirements for wellbore integrity, design and testing, including the option for single- and dual-barrier design.
• Conduct comprehensive risk assessments related to interwellbore communication and nonsaline* aquifers prior to the start of hydraulic fracturing operations.
• Conduct modeling prior to hydraulic fracturing operations to reduce the likelihood of interwellbore communication and prevent nonsaline aquifers from being adversely affected.

Industry will be required to adhere to all regulatory changes and additions when the Directive comes into effect in August 2013.

Over the last 75 years, the ERCB has developed and enforced regulations to ensure the responsible development of Alberta's oil and gas resources. Constantly working to improve and ensure the relevancy of all regulations, the ERCB reviews and updates its rules in light of new issues, risks, opportunities, and challenges and adapts as technology, experience, and social expectations have evolved.

This news release, stakeholder feedback summary and ERCB responses, and an overview of the regulatory changes can be found at: ercb.ca

* Please see definition of nonsaline and saline water in Backgrounder.

BACKGROUNDER

Hydraulic fracturing directive

Hydraulic fracturing is a well completion technique used in the development and recovery of oil and gas resources.

The process consists of injecting large volumes of water and sand, as well as small volumes of chemical additives, at high pressures into oil and gas formations. The high-pressure fluid injections create fractures in the rock formation. The sand remains in these fractures, creating a pathway that enables fluids and gas to flow freely into the well. A portion of the injected fluids flow back up to the surface through the well and into storage facilities for containment, transportation, and eventual disposal.

The ERCB is committed to monitoring new oil and gas recovery methods to ensure that they are safe and responsible. For this reason, the ERCB began a review of the operational hazards and associated risks with hydraulic fracturing.

The ERCB's review identified three specific areas that required further regulatory response: maintaining well integrity, interwellbore communication, and fracturing operations at shallow depths.

A draft hydraulic fracturing directive was issued on December 6, 2012 for a two-month consultation period. During the consultation period, the ERCB received over 30 submissions to assist with the development of these regulations.

Through Directive 083, the ERCB has developed a strict and proactive regulatory response to the following identified issues related to hydraulic fracturing in Alberta.

Maintaining Well Integrity

Well integrity is lost when damage to casing, cement, or surface equipment has the potential to compromise the proper use of the well and could impact public safety or the environment.

The ERCB has observed that for hydraulic fracturing operations, there is an emerging trend toward the use of single-barrier wellbore construction, rather than dual-barrier construction, to provide a secure pathway for fluid injection and recovery from the reservoir. While the ERCB has had no reports of single-barrier well systems losing integrity, the introduction of enhanced regulations will provide an added measure of protection.

The ERCB believes that the risks to well integrity associated with single-barrier well systems can be effectively managed by an operator. The new directive requires licensees to demonstrate that operational risks have been considered in the selection and design of the wellbore construction and to monitor and test to ensure that well integrity is maintained.

These testing requirements will provide the ERCB with the appropriate information to monitor and assess the behaviour and responsiveness of single-barrier systems undergoing hydraulic fracturing and readjust requirements if required.

Interwellbore Communication

Interwellbore communication occurs when fluid and/or pressure from hydraulic fracturing operations impact a nearby oil or gas well.

To address the risks associated with interwellbore communication, the proposed directive requires licensees to carry out a risk assessment and prepare a well control plan to manage unintended interwellbore communications and reduce the impacts if a communication event occurs.

The ERCB believes that prevention and mitigation through proper planning and execution will enable licensees to effectively manage risks associated with interwellbore communication.

Fracturing Operations at Shallow Depths

Water resources are a valuable provincial asset. For this reason, the ERCB takes a cautious and conservative approach to hydraulic fracturing operations conducted at shallow depths.

Current regulatory requirements for shallow fracturing operations, outlined in Directive 027, focus on shallow zones up to 200 metres below the surface. Given a favourable economic environment, zones between 200 and 600 metres (depths above the base of groundwater protection in many areas) may also be subject to future development.

Under the directive, all licensees carrying out hydraulic fracturing operations in this zone must:

• Conduct a risk assessment.
• Observe prescribed setbacks for water wells and top of bedrock.
• Use environmentally friendly chemical additives or fluid compositions above the base of groundwater protection.

Definitions

Nonsaline Water

Water with less than 4000 mg/L of total dissolved solids. Often referred to as fresh water.

Saline Water

Water that has a total dissolved solids content exceeding 4,000 milligrams per litre (mg/L). Often referred to as brackish water.