Nothing to fear from well communication: ERCB chair

Alberta's regulatory agency is prepping for large-scale shale gas development

February 03, 2012

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Dan McFadyen is battening down the hatches. As chairman of the Energy Resources Conservation Board, he leads an effort to develop an unconventional regulatory framework as the shale gale – along with public anxiety – migrates rapidly across Western Canada and into Alberta. Alberta Oil caught up with the elusive chairman at a fall environmental symposium hosted by the Canadian Association of Petroleum Producers in Calgary.

Alberta Oil: What have you learned from other jurisdictions overrun by controversy?

Dan McFadyen: The first thing we learned is that we’ve got 74 years of regulatory history. We’ve got a lot of the fundamentals – well completion, fracturing regulations – in place that say we can manage those issues effectively. In some of the other jurisdictions, it’s crept up on them so quickly and they didn’t have some of those fundamentals in place.

AO: How has that experience shaped your approach to shale gas in Alberta?

DM: We’re looking at how we build a system that deals with the reality of this new application of a technology to a different type of source rock and a play type that’s not pool-based. That’s what we saw as the significant opportunity for change. Some of the risks we knew we had well covered, but these other risks – water management, cumulative impacts – how do we manage those? All those fundamentals are still going to be there. Companies are going to have to construct their wells according to the well completion directives.

AO: You’ve removed well-spacing controls on subsurface areas involving coalbed methane and shale gas. How do you reconcile that with the risks associated with fracture communication incidents observed in northeastern British Columbia?

DM: I think it’s a matter of understanding the zone you’re working in, and the geological permeability and porosity characteristics of the reservoir. It’s not that well-to-well communication is a particularly significant risk. It’s understanding where it may occur and then managing it. [With] typical fractures you’re looking at going out 10 or 20 meters [sideways along the horizontal portion of a well]. Occasionally you can run into a permeability streak that would allow it to reach farther, so you need to understand that.

AO: Should landowners be concerned?

DM: We don’t think there’s any significant public safety risk there. It’s more of a how do you manage [communication incidents] going forward and making sure we understand the characteristics of the play or reservoir adequately that we can define those proximity zones where you would have to maybe think about how you regulate that a little differently. When the activity is going on, what do you do in nearby wells? Are they shut in? Are they monitored in a different way? That’s really what we’re looking at.

AO: People often conflate regulatory lapses in the U.S. with policies in place here. Is that frustrating?

DM: In some ways it is. But on this development right now, I think because Albertans are generally much more comfortable with conventional oil and gas development, it’s more of an interest in the changing nature of what this development is going to look like as opposed to, I think, what we’re seeing come forward in other jurisdictions. And some of those issues in other jurisdictions were really, in our view, a function of the fact that they didn’t have some of those fundamental regulations in place.

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