After completing an series of community engagement over the past six months, the Petroleum Services Association of Canada (PSAC) has released a hydraulic fracturing code of conduct for the Canadian oil and gas service sector.
The document outlines standard practices for sound technical and environmental performance when fracturing a well and defines mutual expectations for working with stakeholders.
“Working closely with stakeholders is critical to building trust in oil and gas operations,” said PSAC president and CEO Mark Salkeld. “We’ve seen public concern surrounding hydraulic fracturing operations increase over the past years.
“It was definitely time to address that in a proactive and positive way, but we knew talking to community members wasn’t going to be enough. We had to act. That’s why we created the hydraulic fracturing code of conduct.”
To gather community input into the purpose and content of the code of conduct, PSAC met with over 100 community members in seven regions in four provinces. Participants represented dozens of different community, synergy and environmental groups, as well as local governments and individual landowners.
A community engagement session was held in Carlyle, and Salkeld discussed the protocol during a speech to the Estevan Chamber of Commerce in October. He spoke in other communities, too.
Stakeholder feedback, combined with industry expertise, led to a hydraulic fracturing code of conduct that covers five key areas: water and the environment; fracturing fluid disclosure; technology development; health, safety and training; and community engagement.
Eleven leading PSAC member companies, all of which perform hydraulic fracturing, helped create the code of conduct and have voluntarily agreed to follow it, wherever they work in Canada. Those companies are: Baker Hughes Canada, Calfrac Well Services, Canyon Technical Services, Element Technical Services, Gasfrac Energy Services, Halliburton Group Canada, Iron Horse Energy Services, Millennium Stimulation Services, the Sanjel Corporation, Schlumberger Canada and Trican Well Service.
The hydraulic fracturing code of conduct exemplifies these companies’ collective goal of ensuring operational excellence, reducing environmental impacts and maximizing the development of Canada’s vast resources, while delivering long-term social benefits in a manner that supports the interests of all stakeholders.
The 11 companies are also the founding members of PSAC’s Working Energy Commitment, dedicated to opening up the lines of communication between the oil and gas service sector and the public about how PSAC members operate and the steps they take every day to improve their performance.
Given the increase in the number of wells being hydraulically fractured and the public’s concern, the Working Energy Commitment began with discussions about fracturing, but will expand to cover more oil and gas issues and operations in the near future.
PSAC also released the hydraulic fracturing code of conduct in conjunction with its 2014 Canadian Drilling Activity Forecast session. PSAC is forecasting a total of 10,800 wells drilled (rig releases) across Canada for the coming year. This is a 1.5 per cent decrease compared to the expected final tally of 10,960 wells drilled for 2013.
On a provincial basis for 2014, PSAC estimates in Saskatchewan, drilling activity is expected to decrease by 3.5 per cent, with 3,196 wells to be drilled in the upcoming year.
An estimated 6,555 wells will be drilled in Alberta, representing a decrease of less than one per cent in the province compared to last year.
Manitoba is expected to see a 7.7 per cent decrease in activity with 480 wells, while British Columbia is forecasted to drill 550 wells, a 2.2 per cent increase over 2013.
PSAC is basing its 2014 forecast on an average crude oil price of $95.00 US per barrel, and a natural gas price of $3.50 Cdn. per metric cubic foot.
“We are slightly optimistic about gas prices toward the end of 2014, however we expect little change in next year’s drilling levels for gas,” said Salkeld.
“But an even more significant factor affecting drilling activity across Canada is the widespread and growing use of technologies such as hydraulic fracturing and horizontal drilling – technologies that were once considered advanced innovations.
“Quite simply, large-scale use of these kinds of technologies is creating a trend to fewer wells overall. By maximizing our use of technology, industry can increase production from existing wells, access more and deeper zones, and restart production from wells that have been shut in.
“This means we can maintain or even increase production, while drilling fewer new wells. In fact, one well today can be the equivalent of two, three or more wells drilled just 10 years ago. That’s a game changer for our industry.”
The Petroleum Services Association of Canada is the national trade association representing the service, supply and manufacturing sectors within the upstream petroleum industry. PSAC represents a diverse range of nearly 260 member companies, employing more than 80,000 people and contracting almost exclusively to oil and gas exploration and production companies.