Government Regulations on Oil and Gas Exploration: Stakeholders Positions - Assignment Example

Stakeholders Positions Government Regulations on Oil and Gas Exploration On September the Alberta government ordered CNRL to remove most of thewater from one of its bitumen leak sites before it could freeze. The move was as a step to restore the water body. In July, 2013, CNRL attributed a mechanical failure at an old well as the cause behind seepage at its project on the Cold Lake Air Weapons Range. 1.5 million liters of bitumen was recovered to have seeped from the four leakage points, Hudema, 2014. . The government also ordered the company to limit the amount of steam it pumps into the reservoir while the Alberta Energy Regulator investigates the situation. This is one of the mandates of the government to ensure that the companies do not impact negatively on the environment and the society that host them. The Alberta government should further put a hold on approving new underground tar sands operations until the current situation is handled and the source of the leaks established. This will stop similar problems occurring in the future. With four leakage sites already established it is wise to handle more risks rather than allowing the injection of pressure steam into the wells. The Alberta government has handled the situation well and with it stopping further operation at the site of the leakage, it will give enough time for the facts to be established and the exact extent of the leakage will be established. After that is done the government can weigh the options whether CNRL will be allowed to continue with its operation at the oil sands. My opinion on the government’s position: I totally agree with the steps though they would have come earlier. The government having the mandate to control the activities of the mining companies should always ensure that the environment is given a priority. With the reported deaths of the birds and some amphibians due to the leakage in the lake, the extent of the spillage should be assessed and if the oil has reached the aquifer then it should be confined to prevent contamination of ground water. Community’s opinion About Closing down of the Operation The community has played a big role in shaping the current situation at Cold Lake. Two years ago, before the leakages were identified; Osum Oil Sands was given a cold welcome when it tried to start their project. Their venture was aimed at Marie Lake in the Cold Lake region of Alberta. When the leakages were first identified, Greenpeace got on the calling urging oil companies and the Canadian government to stop the tar sands and also end up the industrialization of a vast area of Indigenous territories, forests and also the wetlands found in Northern Alberta. This being the general opinion of majority of the community it shows their satisfaction with the closing up of the operations in the leaking wells, Hudema, 2014. Albertans are also helping in shaping responsible growth for oil sands region. The Lower Athabasca Regional Plan has set the following goals;- 1. Setting regional environmental limits for air and surface water quality and also set a regional groundwater management. 2. It will establish six new conservation areas; this brings the total conserved land to two million hectares which is approximately twenty per cent of the land. 3. Providing certainty for industry in development of the oil sands. This is among the society’s initiatives to ensure that the operation at the oil sands is environmental friendly, Canadian Press, 2014, 10th January. The environmental concerns mainly raised by the Greenpeace movement have led to the critical evaluation of the situation by the members of the society to acknowledge the move. The closing down of operation at the Oil sands project has its benefits but the risks that it entails are too grave to be assumed. First it is a source of income to the province and with the income Alberta has grown amicably. However with the recent leakages that has led to the spills into the water body, the wisest decision was to close the operations as investigations were being conducted. Canadian Natural Resources Limited on February 4th applied for permission to begin injecting high pressure steam into the well that is just outside the one kilometer exclusion zone around the site where bitumen was found bubbling up into the lake. However the company’s request was turned down and it was ordered to stop injecting steam at this location. Furthermore it was given the task to drain the lake in order to try to stop the leak, Hudema, 2014. It is correct to conclude that the community is supporting the closing down of the operation by CNRL until a lasting solution is generated. Draining the lake is a tough task but it is important to establish how far the spillage has gone and assess whether the ground water around the area has been contaminated. Once everything has been sorted then resumption would be advised by the Alberta Energy Regulator for clearance. Canada Natural Resources Limited CNRL is oil and gas exploration, development and Production Company and it has its corporate head office in Calgary, Alberta. It is the largest heavy crude oil in Canada. In 2013 the company’s operations in the leakage sites were halted to pave way for investigations and assess how far the contamination had gone. The company was further directed to drain the Cold Lake where death of organisms had been recorded. The bubbling bitumen had been found in the lake. The company has been using pressure steam in its operation which led to the leakages reported. It is planning to invest more than $100 million to start solvents rather than the steam. This is a great idea and it will reduce the risk of leakages. In steam production the bitumen is melted by the hot water and then pushed by pressure to the surface. This increases the possibilities of leakages unlike when using solvents that will dissolve the bitumen and then push it to the surface, FPEnergy, 2013. This move is good to help in the future to avoid similar leakages that cause irreversible damage to the environment. At the moment I would recommend the new methods over the former one and also ensuring the wells are scrutinized often would prevent leakages happening for a long time without noticing. Responsibilities of the Alberta Energy Regulation The Alberta Energy Regulation ensures the safe, efficient, orderly and environmentally responsible development of hydrocarbon resources over their entire life cycle, Comtex, 2nd December, 2013. It ensures that operators comply with all regulatory requirements and that appropriate enforcement action is applied when they don’t. In the case of CNRL and the oil spillage the AER had the overall mandate of ensuring that all the operations of the company complies with the laid rules. The operations should not have a negative impact on the environment as was witnessed when there were leaks that were found bubbling in the Cold Lake. Since CNRL has defied the environmental concerns then their operations had to be stopped until a lasting solution was established. CNRL had made a request to start pressure steam operations on February but their request was declined. With the current twist of events it is important to first establish the extent of the damage that was caused by the spillage. The Alberta Energy Regulation should be more ruthless in ensuring that the companies adhere to the set standards that should govern their operations. The leakage was noticed long time after it occurred and this was a failure on the part of the Energy Regulation as well as the CNRL Company. The government of Alberta should also empower the Energy Regulation body to ensure that it stream lines the operations in gas and oil sands extraction. Environmental and Resource Development Minister Diana McQueen affirmed that Alberta is committed to building a robust and efficient regulatory system to support continued growth and environmental management, Comtex, 2013, 2nd December. This is one of the government’s regulations and steps to empower the regulation body and avert such happenings in the future. Alberta Energy Regulator was launched on June 2013 after the government of proclaimed the Responsible Energy Development Act of 2013. The new structure was meant at allowing the regulator’s boards of directors to set the direction for the organization’s business approve regulatory change and set performance expectations for the regulator, Comtex, 2013, 2nd December. This act shows the government’s dedication in handling the situation and it is bound to yield in ensuring that the operations in the industry are monitored and regulated. Read More