The provincial government plans to step up monitoring and enforcement of regulations governing the safety of oil and gas extraction. The petroleum and natural gas division of the Ministry of Economy will receive $12.98 million in 2017-2018, an increase of $1.35 million over last year's provincial budget.
A proposed $600,000 will be allocated to establish the Pipeline Regulation Enhancement Program, while an additional $460,000 will be used to upgrade the province's spill reporting system. As well, $500,000 will go toward hiring more field inspectors, and $250,000 is earmarked for helping the ministry meet provincial targets for controlling greenhouse gas emissions.
The cost of increased monitoring will be paid by the oil and gas companies themselves through expanded fees, explained Dustin Duncan, minister responsible for the energy and resources division of the Ministry of Economy. Currently only well-site companies' pay an administrative levy. Bill 43, the Pipelines Amendment Act, will extend this levy to pipeline companies. The Bill is scheduled for assent this spring.
“It signifies a bit of a shift that pipeline companies will be treated the same as oil producing companies in that they will now be paying 90 per cent of the cost to regulate their industry,” said Duncan.
As well, secondary lines that flow into pipelines -- called flow lines -- will be brought under government scrutiny.
“As a part of a legislative change were going to be bringing the unlicensed flow lines into the licensed regulatory environment,” said Duncan.
Increased oversight means more record-keeping will be required, hence the $460,000 bump in capital spending for expanding the province's online Integrated Resource Information System.
All incident spills reports are recorded within IRIS and are updated every Wednesday. The incident reports that have been recorded go back to 1985. The ministry plans to use the extra funding to “allow for web-based pipeline licensing, including flowlines, as well as additional reporting and mapping capabilities related to pipeline regulation.”
“It provides for I think greater accountability in terms of showing that we're providing the regulatory oversight that people of Saskatchewan expects us to as the ministry,” said Duncan.
Reducing oilfield venting and flaring is another ministry goal. “ It’s really about the next step in terms of monitoring is the methane issue, and it's working with companies to be able to either capture that methane and use it more appropriately and ensuring though that what’s being vented into the atmosphere,” said Duncan. The ministry is currently working with Sask Energy to come up with a way to capture and reuse vented emissions.
A related concern is hydrogen sulphide, or sour gas, a highly toxic and flammable substance. Although the ministry has in the past acknowledged complaints about H2S leaks, recorded amounts do not appear in the IRIS database.
“Up until a couple of years ago with the directives that have now been put into place, companies never needed to record how much was captured or vented or flared and so now that recording is starting to come,” explained Duncan. “Going forward we're not going to see zeros in a lot of those boxes in the future."
An increase of 13 full-time positions in field offices will provide “more staff on the ground to do those inspections and work with the companies to ensure that they are in compliance with all of the standards that are in place and all of our regulations that are in place,” said Duncan.
Increased regulation is overdue, according to Trent Wotherspoon, interim opposition leader and critic for the ministry of economy.
“Pipelines are critical to our energy sector (and) important to our province but we need to make sure that they're managed with integrity and that they protect our lands and water,” he said.
“This is a government that has not made pipeline safety a priority and our pipelines are important to get our product market...so this is one that we need to get right. We don’t have faith or trust in this government on this front, so we are really going to be looking for the devil in the detail and consulting with the experts,” said Wotherspoon.