Oil and gas commissioner: no problems with Shell yet

COMMENT: A comment worth highlighting here is this, from OGC Commissioner Alex Ferguson:

This statement confirms the concerns that other communities have had where small, ad hoc companies show up to develop coalbed methane. Companies in which it's clear they have no expertise, no financial capacity. Yet the OGC gives them drilling permits, too.

Terrace Standard
July 22, 2008

THE PROVINCIAL government's oil and gas regulator so far hasn't had any issues with Shell's plans to drill for coalbed methane natural gas in the Klappan area, its representatives say.

Approvals for three wells drilled in 2004 and approvals to drill up to 14 more starting this fall in the area north and to the east of here all met guidelines, says Alex Ferguson, the commissioner with the provincial regulator known simply as the Oil and Gas Commission.

"There's no hydrogen sulphide here, which is extremely dangerous, and there's no high pressure gas issues here," he said.

"The equipment footprint here is smaller [than with other drilling] and it's the same drilling equipment that you would use to drill a water well with," Ferguson added.

Shell's plans, so far, haven't come close to triggering more comprehensive environmental assessments that would be required by, for example, mining companies or other resource users.

As for Shell itself, Ferguson said the commission prefers dealing with large companies who already know the rules and regulations.

"They have pretty sophisticated planning. At least we know they've got the ability. It's a matter of reminding them of that," he said.

Ferguson and another commission official, Steve Simons, were in Terrace July 14 at the invitation of Terrace city council to explain how the commission works.

That was the first day of a two-day Shell open house here explaining its Klappan plans and the day before a anti-Klappan drilling rally was held here.

Environmental groups, individuals and some Tahltan whose traditional territory takes in the Klappan say the prospects of environmental damage from drilling aren't worth the risk.

Ferguson and Simons said the timing of their meeting with council was a coincidence.

And, they said, the commission has no part in the discussions or approvals as to whether Shell should be in the Klappan or not.

"That tenure's been sold," said Ferguson of the deal struck back in 2004 in which Shell bought drilling rights from the provincial government. "We get involved after tenure's been sold."

Simons said the commission makes sure the applications are technically sound and working within the laws of the province, as well as ensuring that oil and gas exploration are done in a safe manner.

"We act on the public's behalf," Simons said.

Ferguson said the commission's level of involvement will increase if and when Shell's drilling turns up enough information for it to think it could have a commercially viable venture on its hands.

If Shell does find enough natural gas to justify a large-scale project, that means it'll need to build a pipeline south.

That'll trigger another response by the commission since it has the responsibility for pipelines that start and end in B.C.

Pipelines that cross provincial borders generally fall under the jurisdiction of the federal National Energy Board.

There are about 300 companies involved with oil and gas exploration operating in the province.