ASSOCIATED NATURAL GAS CONSERVATION STANDARDS INTRODUCED

Energy and Resources Minister Bill Boyd today released new standards to improve the oil and gas industry's efficiency in how it handles associated natural gas, the gas produced in conjunction with primary production of crude oil.

The new Upstream Petroleum Industry Associated Gas Conservation Standards are designed to reduce emissions from the flaring and venting of associated gas. They establish a specified limit for the amount of natural gas that can be flared and vented from an oil well or associated facility. If that limit is exceeded, the producer is required to conserve and store the associated gas, and then either use or sell it.

"This is a significant advancement in oil and gas production in Saskatchewan," Boyd said. "There will be increased production and use of gas that previously was simply flared off into the air. There will be economic benefits from investments in new gas gathering systems and processing facilities, as well as the eventual sale of the gas."

Some of Saskatchewan's associated natural gas is rich in ethane, propane and butane. These can be processed into value-added products such as liquefied petroleum gas.

Boyd said the initiative will also help reduce Saskatchewan's greenhouse gas emissions.

"It is estimated that 68 per cent of the greenhouse gases emitted through oil and gas production is from the flaring and venting of associated natural gas," Boyd said. "The new standards will mean a significant reduction in these emissions, possibly as much as a 49 per cent reduction. This is consistent with our overall goal of working with industry to grow Saskatchewan's economy in an environmentally responsible manner."

The new standards were jointly developed by industry and the government. A steering committee was established with representatives from the Canadian Association of Petroleum Producers, the Small Explorers and Producers Association of Canada, TransGas Limited, the Ministry of Energy and Resources, the Ministry of Environment and SaskPower. The committee released draft standards for review and comment by industry and the public in 2010. This process is now complete and the comments have been incorporated into the new standards.

Implementation will be phased in. The standards will come into effect July 1, 2012, for new wells and facilities licensed on or after that date. For existing wells and facilities already licensed prior to July 1, 2012, the new standards have an implementation date of July 1, 2015.

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For more information, contact:

Bob Ellis
Energy and Resources
Regina
Phone: 306-787-1691
Email: robert.ellis@gov.sk.ca