Coalbed Gas in the Crowsnest Coalfield  

How much coalbed gas is estimated to be in the Crowsnest coalfield?

The Crowsnest coalfield has a resource potential of 6 trillion cubic feet of coalbed gas (CBG).  An average northern home uses approximately 150 thousand cubic feet of natural gas per year, and this resource potential could provide the natural gas to four million such homes for 10 years.

What lands will be considered for CBG development?
CBG development can only proceed in areas where significant coal deposits exist.  Surface activity is not allowed in designated parks or other protected areas.  Existing and future land use plans and environmental considerations also guide area-specific activities. 

How will the recommendations of the Southern Rockies Sustainable Resource Management Plan influence coalbed gas development? 

These recommendations support coalbed gas development.  The East Kootenay region has been subject to extensive Crown land use planning.  The Regional Plan (approved in 1995) and the Southern Rocky Mountains Management Plan (approved in 2003), both confirmed the Crowsnest coalfield as integrated resource management lands available for coal and coalbed gas development.

Are there companies interested in developing the coalbed gas resource in the Crowsnest Coalfield?

Yes.  In 2003, the Province entered into an agreement with freehold coal owners that gives them the first opportunity to apply for the petroleum and natural gas (PNG) rights in the area of their freehold coal.  In the Crowsnest coalfield, both Elk Valley Coal Partnership (EVCP) and Tembec, the other freehold coal owner in this region, can apply for tenure through this agreement. Tenure has been issued to EVCP for the PNG rights on a portion of its freehold coal properties.  In 2007, EVCP and BP Canada Energy Company (BP) entered into a commercial agreement.  As a result of this agreement, the tenure has since been transferred into BP’s name.

In addition to freehold coal owners, there have been several companies that previously considered exploratory programs in the area.  Most recently, in 2006 BP submitted a project proposal in response to the Ministry’s 2003 Call for Proposals to acquire most of the remaining available Crown petroleum and natural gas rights in the coalfield.

Where is BP in the development process?

Since May 2007, BP has been engaging in a public consultation and disclosure process to share information and seek input from communities and First Nations regarding its proposed project. 

In December 2008, Cabinet gave the Ministry of Energy, Mines and Petroleum Resources the authority to enter into a tenure agreement with BP Canada Energy Company and Elk Valley Coal Partnership to explore for coalbed gas in the Crowsnest Coalfield.  Prior to making a decision on the tenure, the Ministry conducted a thorough review process seeking input from local governments, First Nations and provincial agencies which have either a legislated responsibility to provide comment or links to the process.

Tenure is time-limited ownership of a specific parcel of subsurface petroleum and natural gas rights.  Tenure grants the right to apply to the Oil and Gas Commission (OGC) to access, explore and develop petroleum and natural gas in accordance with applicable statutory regulations.

Are the comments received during the referral process reflected in the tenure agreements?

Terms included in the tenure agreement  and address issues such as consultation requirements with the First Nations; potential exploration and construction restrictions for environmental, recreational and watershed values; environmental monitoring, studies and reporting; and coordinating activities and road use.

The tenure terms are consistent with the BC Energy Plan to ensure that the companies:

o         Do not surface discharge produced water

o         Fully engage local communities and First Nations

o         Use the most advanced technology and practices to minimize land and aesthetic disturbances, and

o         Make information publicly available on how they will meet and be accountable for these best practices.

Was the Flathead included in the tenure?

No lands within the Flathead watershed area were included in the tenure disposition. 

Does the existing Coal Reserve affect BP’s tenure?

The tenure area does not lie within the Coal Reserve.

Can tenure be issued for the Dominion Coal Blocks?

The Dominion Coal Blocks are not being considered for development at this time.

The governments of Canada and B.C. share ownership of the resources in the Dominion Coal Blocks. Canada owns the surface and coal resources, while B.C. owns the other sub-surface resources.

What activities is BP currently undertaking?

BP is continuing to engage with local communities and First Nations and is conducting ongoing environmental studies within the Crowsnest Coalfield.  These studies are a component of a three- to five-year appraisal and design stage. Additional information on BP’s Mist Mountain project proposal and baseline studies can be found at:  http://www.bp.com/modularhome.do?categoryId=8070

BP will also conduct site-specific assessments once potential drill locations are identified.

What kind of approvals does BP require in order to drill exploration wells?

BP must obtain permits from the Oil and Gas Commission (OGC) to carry out exploration and development activities.  The OGC is responsible for ensuring that decisions are made in the public interest with respect to environmental, economic and social impacts.

Regulation of coalbed gas is a responsibility shared by the Ministry of Energy, Mines and Petroleum Resources, the Oil and Gas Commission and the Ministry of Environment.

The Ministry of Energy, Mines and Petroleum Resources sets the policy framework that guides the British Columbia Oil and Gas Commission (OGC).  The OGC is an independent regulatory agency with legislated responsibility for overseeing all oil and gas operations. 

The OGC:

o     Ensures that development is in the public interest and that companies consider environmental, economic and social effects of their projects.

o     Reviews applications in consultation with experts in archaeology, First Nations, forestry, biology, agrology, land and habitat and other government agencies. 

o     Places appropriate binding terms and conditions on gas projects to protect the environment, local values and interests. 

o     Completes field inspections after permits are granted to ensure operators meet regulations and requirements.

The Ministry of the Environment is responsible for regulation and permits related to water management, land use and air quality.

What types of conditions are attached to the exploration permits?

The OGC reviews each application on an individual basis and may apply site-specific conditions requiring a company to undertake specific actions, monitor the project and alert the OGC to abnormal situations. These approvals establish legally binding enforceable conditions that the company must abide by. 

Does the OGC complete any consultation?

The OGC requires companies to carry out public engagement prior to an application being submitted and publishes A Guide to Public Engagement and Dispute Resolution, which is available on its website.

Once an application is submitted, the OGC is mandated to consult with First Nations on oil and gas applications in traditional territories. 

How will BP’s project be monitored?

The OGC is responsible for ensuring compliance, both with regulations and with project specific terms and conditions.  Compliance and enforcement inspectors have three key roles.  They:

(1) Conduct site inspections.

(2) Respond to incidents.

(3) Address complaints from landowners, First Nations, public and other stakeholders. 

The OGC ensures that oil and gas activities are conducted in accordance with regulations, standards and best business practices minimizing potential impacts on the environment and address safety issues.

Will BP be allowed to discharge wastewater into rivers or streams?

No.  The BC Energy Plan specifies that companies wanting to develop coalbed gas will not be allowed to surface discharge produced water.

Any re-injected produced water must be injected well below any domestic water aquifer.  The OGC regulates re-injection of produced water to protect other groundwater sources.

How will groundwater be protected?

In approving an application to re-inject produced water into the ground, the OGC considers information such as the location and design of the re-injection well, the geological properties of the proposed underground area, and the composition of the water being injected.  Subsurface disposal areas must be isolated from potential groundwater zones. 

To protect drinking water and the surrounding subsurface, all disposal wells are lined with steel casing that is cemented into the well bore.  The OGC also requires that there be monitoring conducted throughout the re-injection process.

The OGC requires companies to carry out water well testing within a one kilometre radius of a CBG well. Samples are taken before and after drilling to ensure that drilling does not affect groundwater wells.

At what point will a CBG project initiate the Environmental Assessment process?

An Environmental Assessment performed by the Environmental Assessment Office will be performed if the CBG project triggers certain requirements under the Environmental Assessment Act.  For example, groundwater extraction, and pipeline construction could trigger an Environmental Assessment if they cross the thresholds set out in the Act. 

The threshold for a reviewable groundwater extraction project is 75 litres per second.  A typical CBG well has water extraction rates per well ranging from 0 to more than 0.5 litres per second. 

If methane gas were to be transported to a new gas pipeline, that facility could also be reviewable, depending on its size (length vs. diameter) as follows:  

Environmental Assessments may also be performed at the request of the Minister of Environment if the minister is satisfied that the project may have a significant adverse environmental, economic, social, heritage or health effect, and that the designation is in the public interest.

All oil and gas activities (including CBG wells) undergo environmental assessment, as regulated by the Oil and Gas Commission.  The OGC requires companies to undertake assessments specific to an issue and appropriate to the phase of development.

How will wildlife habitat be protected?

In a company’s application to the OGC, it must demonstrate how it will avoid, minimize or mitigate environmental impacts.  Specifically, companies are required to submit plans to avoid or mitigate potential impacts to fish, wildlife and their habitats.  Access, exploration and well site construction restrictions may be applied to protect wildlife habitats and values.

What baseline studies have been conducted in the Crowsnest coalfield area to date?

A three-year baseline data set was collected from April 2004 to April 2007 for baseline surface water quality sampling of seven streams draining from the Crowsnest coalfield.

In 2004 and again in 2007, MOE and MEMPR undertook a baseline benthic invertebrate survey. Benthic invertebrates are organisms that live on the bottom of a water body or in the sediment; they are useful to monitor as they are relatively stationary and easy to sample, identify and count.  Changes in abundance, diversity, biomass and species composition, if any, are indicators of changing environmental conditions.  Sampling was conducted on seven streams draining from the Crowsnest coalfield at the same locations as surface water quality sites.

A literature and data review of fish and fish habitat in the vicinity of the Crowsnest coalfield and associated watershed was conducted in 2005.  Contact was made with numerous individuals, First Nations, companies and agencies to locate and catalogue fish and fish habitat surveys and assessments.  Information gathered in this project assessed 826 individual rivers and streams in the Crowsnest coalfield and was published in a final report.

Additionally, in July 2007, BP initiated company mandated environmental baseline studies and assessments.  These studies are currently in progress.

Why doesn’t B.C. complete all environmental baseline studies before tenure disposition and development?

Most coalfield regions of B.C. have been the subject of a tremendous number of environmental, wildlife, water, agricultural and other land use studies.  The Ministry’s Environmental Resource Information Project (ERIP) has compiled with over 2,000 public sources of information on past studies in B.C. coalfields.

Since CBG development usually takes several years from exploration to production, there are opportunities to identify and address baseline inventory issues parallel with regulated activity.