IL 94-04

IL 94-04: Storage of Hydrocarbons in Underground Formations

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Storage of Hydrocarbons in Underground Formations

Apr 07, 1994

The Energy Resources Conservation Board (ERCB), under Section 26(l)(b) of the Oil and Gas Conservation Act, is responsible for approving schemes for the storage of hydrocarbons in underground formations as they pertain to the wells and formations used for such storage. This informational letter (IL) addresses the ERCB's approach towards implementation and adoption of the Canadian Standards Association (CSA) Standard "CSA Z341-93; Storage of Hydrocarbons in Underground Formations" issued in July 1993.

Background

CSA Z341-93 addresses three distinct types of underground storage of hydrocarbons (reservoir or aquifer, salt cavern, and mined cavern storage). Mined cavern storage is not currently practised in Alberta and is therefore not specifically referenced further in this IL.

The standard was developed in recognition of a need for a consistent regulatory approach towards underground hydrocarbon storage across Canada, and includes location, design and construction, operation, monitoring, integrity testing, and abandonment. The standard was developed by a technical committee including regulatory, industry, and associate (i.e. consulting) members from across Canada and included the ERCB.

Implementation

The purpose and intent of the standard is to provide for public and environmental safety in underground storage operations. The ERCB endorses both the intent and direction of the standard. The ERCB believes that current Oil and Gas Conservation Regulations (OGCR) meet or exceed the CSA standard. Exceptions to this are clauses 5.2.1.2 and 5.2.1.4 of the standard for open-hole logging requirements for reservoir storage wells. These clauses require logging for natural radioactivity, lithology, and hole size (clause 5.2.1.2), and porosity, fluid types and saturations, fluid contacts, and bottom-hole temperature (clause 5.2.1.4). Although this is a common logging suite, these requirements exceed those of section 11.140 of the OGCR which require a minimum of resistivity and spontaneous potential logs. The ERCB believes it appropriate to retain the minimum requirements of the OGCR, but would encourage operators to also consider clauses 5.2.1.2 and 5.2.1.4 of the standard when developing a logging program.

The ERCB expects all operators of underground hydrocarbon storage schemes in Alberta to be aware of the standard and to design, construct, operate, monitor, and abandon such facilities in a manner consistent with the standard. Notwithstanding this, the ERCB recognizes variances may be appropriate under certain circumstances and would be prepared to consider such variances where supported by appropriate technical data or operational history.

Retroactivity

Existing storage schemes with acceptable operating histories are considered grandfathered as it relates to location, design, and construction but are expected to comply with the monitoring requirements by 1 June 1994.

Regulatory Modifications

The ERCB recognizes the current standard is a new document and addresses areas where comprehensive design and operating requirements have not been previously required, particularly relating to salt cavern storage. Accordingly, it is recognized that modifications may be needed to the standard over the next several years as it is implemented. The ERCB therefore believes it is appropriate to defer any regulatory revisions to the OGCR until after a 2-year implementation period in order to incorporate operational experience and input from storage scheme operators over this period. Therefore, the current application requirements for scheme development, operation, and abandonment will remain in effect with the CSA Standard used as a baseline for evaluation of applications.

Questions or concerns related to salt cavern storage and reservoir storage should be directed to the ERCB's Drilling and Production Department (297-8474) and the ERCB's Gas Department (297-8553) respectively.

<original signed by>

N.G. Berndtsson, P.Eng.
Board Member