Risk Management Approach for Natural Gas Condensates

Environment and Climate Change Canada

Health Canada

December 2016

(PDF Format - 157 KB)

Table of Contents

Summary of Proposed Risk Management

This document outlines the proposed risk management actions for natural gas condensates, a group of substances that share similar sources, properties and uses. To manage the environmental risks associated with natural gas condensates, the Government of Canada is considering actions available for reducing the impact and occurrence of spills. One of the actions will be the proposed addition of three natural gas condensates to the Environmental Emergency Regulations under the Canadian Environmental Protection Act, 1999 (CEPA). To manage the human health risks associated with natural gas condensates, the Government of Canada is considering a regulation under CEPA for reducing evaporative emissions from storage tanks and certain loading/unloading operations.

The risk management options outlined in this risk management approach document may evolve through consideration of assessments and risk management options published for other Chemicals Management Plan substances as required to ensure effective, coordinated, and consistent risk management decision-making.

Note: The above summary is an abridged list of actions proposed to manage natural gas condensates. Refer to section 3 of this document for more complete details in this regard.

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1. Context

The Canadian Environmental Protection Act, 1999 (CEPA) (Canada 1999) provides the authority for the Minister of the Environment and Climate Change and the Minister of Health (the Ministers) to conduct screening assessments to determine if substances are harmful to human health and/or the environment as set out in section 64 of CEPAFootnote 1, Footnote 2, and if so to manage the associated risks. Pursuant to the Act, the Ministers have conducted a screening assessment of natural gas condensates, which are included in Stream 4 of the Petroleum Sector Stream Approach under the Government of Canada's Chemicals Management Plan.

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2. Issue

2.1 Final Screening Assessment Conclusion

Health Canada and Environment and Climate Change Canada conducted a joint scientific assessment of natural gas condensates in Canada. A notice summarizing the scientific considerations of the final screening assessment for these substances was published in the Canada Gazette, Part I, on December 31, 2016 (Canada 2016).

The final screening assessment concludes that natural gas condensates, as defined in the final screening assessment, meet the criteria under paragraph 64(a) of CEPA as they are entering or may enter the environment in a quantity or concentration or under conditions that have or may have an immediate or long-term harmful effect on the environment or its biological diversity. However, it is concluded that natural gas condensates do not meet the criteria under paragraph 64(b) of CEPA as they are not entering the environment in a quantity or concentration or under conditions that constitute or may constitute a danger to the environment on which life depends.

In addition, the final screening assessment concludes that natural gas condensates, as defined in the final screening assessment, meet the criteria under paragraph 64(c) of CEPA as they are entering or may enter the environment in a quantity or concentration or under conditions that constitute or may constitute a danger in Canada to human life or health.

The exposure sources of concern identified in the final screening assessment are based on spills, as well as evaporative emissions from storage tanks and certain loading/unloading operations. As such, this document will focus on these exposure sources of concern (refer to section 5).

For further information on the final screening assessment for natural gas condensates, refer to the final screening assessment.

2.2 Recommendation under CEPA

When a substance is found to meet one or more of the criteria under section 64 of CEPA, the Ministers can propose to take no further action with respect to the substance, to add the substance to the Priority Substances List for further assessment, or to recommend the addition of the substance to the List of Toxic Substances in Schedule 1 of the Act. Based on the findings of the final screening assessment conducted as per CEPA, the Ministers proposed to recommend that natural gas condensates be added to the List of Toxic Substances in Schedule 1 of the Act.

The Ministers have taken into consideration comments made by stakeholders during the 60-day public comment period on the draft screening assessment and risk management scope document. As the Ministers finalize the recommendation to add natural gas condensates to Schedule 1, risk management instruments must be proposed and finalized within a set period of time, as outlined in sections 91 and 92 of CEPA (see section 8 for publication timelines applicable to natural gas condensates).

2.3 Public Comment Period on the Risk Management Scope

The risk management scope document for natural gas condensates, which summarized the proposed risk management actions under consideration at that time, was published on October 11, 2014. Industry and other interested stakeholders were invited to submit comments on the risk management scope document during a 60-day comment period. Comments received on the risk management scope document were taken into consideration in the development of this document. A summary of responses to public comments received is available.

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3. Proposed Risk Management

3.1 Proposed Environmental Objective

Proposed environmental objectives are quantitative or qualitative statements of what should be achieved to address environmental concerns. For natural gas condensates, the proposed objective is focused on addressing the exposure sources of concern identified in the final screening assessment, as outlined in section 5 of this document. Specifically, the objective is to reduce the impact and occurrence of spills of natural gas condensates.

3.2 Proposed Human Health Objective

Proposed human health objectives are quantitative or qualitative statements of what should be achieved to address human health concerns. For natural gas condensates, the proposed objective is focused on addressing the risks identified in the final screening assessment, as outlined in section 5 of this document. As such, the proposed human health objective for natural gas condensates is to minimize human exposure to the greatest extent practicable.

3.3 Proposed Risk Management Objective and Actions

Proposed risk management objectives set quantitative or qualitative targets to be achieved by the implementation of risk management regulations, instrument(s) and/or tool(s) for a given substance or substances. The proposed risk management objectives for natural gas condensates are 1) to reduce spills from facilities that store or use natural gas condensates, and 2) to reduce fugitive and evaporative emissions from these facilities.

To achieve the first proposed risk management objective and to work towards achieving the proposed environmental objective, the proposed risk management actions being considered for natural gas condensates will focus on actions available for reducing the occurrence and impact of spills. This will include the proposed addition of three natural gas condensates (Chemical Abstracts Service Registry NumbersFootnote 3 [CAS RNs] 64741-47-5, 64741-48-6 and 68919-39-1) to the Environmental Emergency Regulations under CEPA, which will enable emergency prevention, preparedness, response, and recovery requirements to be put in place for fixed industrial facilities that store or use large quantities. In 2014, Environment and Climate Change Canada conducted preliminary consultations, under the Environmental Emergencies Program, on potential amendments to the Environmental Emergency Regulations under CEPA. These three natural gas condensates were included in the proposed list of substances to be added to the Regulations (Environment Canada 2014)Footnote 4.

To achieve the second proposed risk management objective and to work towards achieving the proposed human health objective, the risk management being considered for natural gas condensates is a regulation under CEPA for reducing evaporative emissions from storage tanks and certain loading/unloading operations.

Following the publication of this risk management approach document, additional information obtained from the public comment period and from other sources will be considered, along with the information presented in this document, in the instrument selection and development processFootnote 5. The risk management options outlined in this document may evolve through consideration of assessments and risk management options published for other CMP substances to ensure effective, coordinated, and consistent risk management decision-making.

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4. Background

4.1 General Information on Natural Gas Condensates

NGCs are defined as complex combinations of hydrocarbons that condense or are separated from the gaseous phase into the liquid phase: during production at wellheads; in natural gas processing plants; in gas pipelines for production, gathering, transmission and distribution; and/or in straddle plants along the main gas pipelines. NGCs consist of hydrocarbons mostly falling within, but not necessarily spanning, a carbon range of C2 to C30, with predominant hydrocarbons typically falling between C5 and C15. In addition, this definition encompasses all liquids derived from natural gas distillates, except those with predominant hydrocarbon fractions below C5.

The largest use of natural gas condensates in Canada is as a diluent for bitumen or heavy crude oils. About 23% of the NGCs used for this purpose can be recovered from the diluted materials in petroleum refineries and/or upgraders for reuse; this recovered NGC is also considered within the context of this assessment. Other uses are as industrial feedstocks and as gasoline blending stocks. NGCs were included in the Petroleum Sector Stream Approach (PSSA) because they are related to the petroleum sector and are considered to be of Unknown or Variable composition, Complex reaction products or Biological materials (UVCBs).

4.2 Current Uses and Identified Sectors

In Canada, natural gas is produced in several regions, most notably the Western Canada Sedimentary Basin, which includes Alberta, as well as parts of north-eastern British Columbia and western Saskatchewan. Other natural gas production fields are found in southern Ontario, a small region of New Brunswick, southeast Yukon and the Northwest Territories. Off-shore natural gas production is located off the east coast of Nova Scotia.

According to information submitted under section 71 of CEPA (Environment Canada 2012), the total quantity of natural gas condensates manufactured in the year 2010 under CAS RNs 64741-47-5, 64741-48-6 and 68919-39-1 was between 100 million and 1 billion metric tonnes. The quantity of natural gas condensates imported under these three CAS RNs was between 100 000 and 1 million tonnes.

Natural gas condensates can be used as industrial feedstocks, or as blending constituents in the production of gasoline, and may also be used as a fluid component in oil and gas well drilling operations. As well, natural gas condensates used as a diluent for bitumen or heavy crude oils can be recovered from the diluted materials in petroleum refineries and/or upgraders for reuse.

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5. Exposure Sources and Identified Risks

An analysis of spills data from Canada and Alberta indicates that spills of natural gas condensates may cause harm to aquatic organisms dwelling in muskeg/stagnant waters, and to soil organisms. Given the small size and low frequency of spills to marine water, releases of natural gas condensates have low potential to cause harm to marine species.

The potential for general population exposure to natural gas condensates was also evaluated. Benzene was selected as a high-hazard component of natural gas condensates to characterize potential exposure and risk to the general population from evaporative emissions. It has been identified by Health Canada (Canada 2000) and several international regulatory agencies (US EPA 2004) as a carcinogen, and was added to the List of Toxic Substances in Schedule 1 of CEPAFootnote 6.

When potential exposures in the vicinity of natural gas condensate storage tanks and certain loading/unloading operations were compared to relevant critical health effect levels, margins were deemed inadequate for inhalation exposures to evaporative emissions.

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6. Risk Management Considerations

6.1 Alternatives and Alternate Technologies

No alternative substances or technologies were identified that would minimize or eliminate the production of natural gas condensates. However, technologies and practices for reducing releases of these substances exist. Examples include equipment selection such as leak-proof valves and fittings, use of vapour recovery systems during loading/unloading operations, use of floating roof storage tanks with appropriate seal systems, as well as work practices such as leak detection and repair programs for equipment leaks.

6.2 Socio-economic and Technical Considerations

Socio-economic factors will be considered in the selection and development of regulations, instrument(s) and/or tool(s) as identified in the Cabinet Directive on Regulatory Management (TBS 2012a) and the guidance provided in the Treasury Board document Assessing, Selecting, and Implementing Instruments for Government Action (TBS 2007).

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7. Overview of Existing Risk Management

7.1 Related Canadian Risk Management Context

7.1.1 Federal Measures

Transportation of natural gas condensates in Canada is regulated under the National Energy Board Act (Canada 1985a) and the Pipeline Safety Act (Canada 2015a)(for onshore pipelines), the Canada Shipping Act, 2001 (Canada 2001) (for ship transport) the Transportation of Dangerous Goods Act, 1992 (Canada 1992) (for truck and train transport) and the Railway Safety Act (Canada 1985b) (for train transport).

The National Energy Board is responsible for pipelines that cross provincial and international boundaries. In 2013, federal regulations affecting pipeline damage prevention such as the National

Energy Board Onshore Pipeline Regulations were amended to strengthen requirements for management systems regarding safety, pipeline integrity, security, environmental protection and emergency management. The Pipeline Safety Act, which received royal assent on June 18, 2015, required that new regulations be in place by the Act's entry into force on June 19, 2016. The updated damage prevention regulations were published in June 2016, which included modernizing regulatory language, building in damage prevention best practices and clarifying safety practices. In addition, the National Energy Board Processing Plant Regulations (Canada 2003)govern the design, construction, operation and abandonment of certain facilities used for the processing, extraction or conversion of fluids, including natural gas condensates.

Among other things, the Canada Shipping Act, 2001 deals with pollution prevention and response, including discharges of oil, response measures and penalties. Regulations made under the Act include the Vessel Pollution and Dangerous Chemicals Regulations (Canada 2012).

The Transportation of Dangerous Goods Regulations (Canada 2011)made under the Transportation of Dangerous Goods Act, 1992, prescribe how dangerous goods must be classified, the means of containment and safety marks that must be used as well as documentation and training requirements to increase safety during handling, offering for transport or transport. Technical standards referenced in the regulations set requirements for the design, manufacture, inspection and operation of the means of containment. The regulations include requirements for reporting releases or anticipated releases of dangerous goods and dangerous goods that have been lost, stolen or unlawfully interfered with. The Regulations also require an approved Emergency Response Assistance Plan (ERAP) before certain dangerous goods can be transported or imported. Natural gas condensates, which are classified as dangerous goods with UN number UN1268, require an ERAP if they are to be transported or imported in a tank car in a volume exceeding 10 000 L.

Storage of natural gas condensates is addressed in the National Fire Code of Canada (NRC 2010). Under the Railway Safety Act, the Railway Safety Management System Regulations, 2015 (Canada 2015b) require companies to establish a safety management system for the purpose of achieving the highest level of safety in railway operations. Railway operations may include the transport of various products, including dangerous goods such as petroleum substances.

7.1.2 Provincial, Territorial and Municipal Measures

Each province and territory has adopted the federal Transportation of Dangerous Goods Regulations, with various exceptions and additions. Measures addressing the storage of natural gas condensates include provincial fire codes, as well as more targeted regulations in some provinces and territories, such as Alberta's Directive 055: Storage Requirements for the Upstream Petroleum Industry (Alberta 2001) and Prince Edward Island's Petroleum Storage Tanks Regulations (Prince Edward Island 2007).

Provincial requirements for flaring, incinerating and venting activities at wellsites, facilities and pipelines include Alberta's Directive 060: Upstream Petroleum Industry Flaring, Incinerating, and Venting (Alberta 2011), British Columbia's Flaring and Venting Reduction Guideline (British Columbia 2013), and Saskatchewan's Upstream Petroleum Industry Associated Gas Conservation Directive ("S-10") (Saskatchewan 2011).

Provincial facility operating permits may also incorporate requirements from the Canadian Association of Petroleum Producers (CAPP)'s Best Management Practice for Fugitive Emissions Management (CAPP 2007) and the Canadian Council of Ministers of the Environment (CCME) Environmental Guidelines for Controlling Emissions of Volatile Organic Compounds (VOCs) from Aboveground Storage Tanks (CCME 1990) (details under Non-regulatory Measures). Additionally, existing provincial/territorial occupational health and safety legislation may specify measures to minimize occupational exposures to employees, and some of these measures also serve to reduce general population exposures.

7.1.3 Non-Regulatory Measures

CAPP's Best Management Practice for Fugitive Emissions Management identifies the typical key sources of fugitive emissions at upstream oil and gas facilities and presents strategies for achieving cost-effective reductions in these emissions. The CCME Environmental Guidelines for Controlling Emissions of Volatile Organic Compounds from Aboveground Storage Tanks promote consistency, uniformity and compatibility in the implementation of VOC controls for tanks storing volatile organic liquids, including natural gas condensates.

Other non-regulatory measures (e.g., guidelines, best practices, principles and methods) are also in place at many petroleum sector facilities to reduce releases. Such control measures include appropriate material selection during the setup and design process, regular inspection and maintenance of storage tanks, piping and other process equipment, the implementation of leak detection and repair or other equivalent programs, the use of vapour recovery systems during loading/unloading operations, the use of floating roofs in aboveground storage tanks to reduce the internal gaseous zone, and the minimal use of underground tanks, which can lead to undetected leaks (SENES 2009). The industry-proposed National Framework for Petroleum Refinery Emission Reductions, developed cooperatively by all levels of government, industry, and non-governmental environmental and health organizations, provides principles and methods for various jurisdictions to establish facility emission caps for air pollutants (CCME 2005).

7.2 Pertinent International Risk Management Context

As in Canada, international jurisdictions have also implemented regulatory regimes to manage exposures of the environment and the public to natural gas condensates. Selected international risk management measures are discussed below.

7.2.1 United States

In the United States, several regulations pertaining to natural gas production and processing have been developed under the National Emission Standards for Hazardous Air Pollutants (NESHAP) program of the Clean Air Act. Many facilities have also implemented technologies and practices under the Natural Gas STAR program (US EPA 2013) on a voluntary basis.

Transportation of substances that may pose a flammability or explosion hazard is covered under the U.S. Department of Transportation's Hazardous Materials Regulations (CFR 2005).

7.2.2 Europe

In Europe, the Directive on Industrial Emissions (Integrated Pollution Prevention and Control) (EU 2010), which entered into force in 2013, sets out the main principles for the permitting and control of industrial installations based on an integrated approach and the application of best available techniques. Operators of industrial installations conducting activities covered by the Directive (including refineries) are required to obtain an environmental permit from the national authority in their country.

Transportation of natural gas condensates in Europe is addressed by the European Agreement Concerning the International Carriage of Dangerous Goods by Road (UN 2009), the Regulations Concerning the International Carriage of Dangerous Goods by Rail (OTIF 2006), and similar measures for other modes of transportation.

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8. Next Steps

8.1 Public Comment Period

Industry and other interested stakeholders are invited to submit comments on the content of this risk management approach document or other information that would help to inform decision-making. Please submit additional information and comments prior to March 1, 2017.

Note that comments specifically on the addition of natural gas condensates to the Environmental Emergency Regulations should be submitted during the separate 60-day public comment period that will follow the publication of the Environmental Emergency Regulations amendments in the Canada Gazette, Part I (expected for fall 2016).

Comments and information submissions on the risk management approach document should be submitted to the address provided below:

Environment and Climate Change Canada
Gatineau, Quebec K1A 0H3
Telephone: 1-800-567-1999 (in Canada) or 819-938-3232
Fax: 819-938-3231
Email

Companies who have a business interest in natural gas condensates are encouraged to identify themselves as stakeholders. Stakeholders will be informed of future decisions regarding these substances and may be contacted for further information.

Following the public comment period on the risk management approach document, the Government of Canada will initiate the development of the specific risk management instrument(s), where necessary. Comments received on the risk management approach document will be taken into consideration in the selection or development of these instrument(s). Consultation will also take place as instrument(s) are developed.

8.2 Timing of Actions

 
ActionsDate
Electronic consultation on the risk management approach documentDecember 31, 2016 to March 1, 2017
Publication of responses to public comments on the risk management approach documentNo later than December 2018
Publication of the proposed instrument (s)No later than December 2018
Consultation on the proposed instrument(s)60-day public comment period starting upon publication of each proposed instrument
Publication of the final instrument(s)No later than March 2020

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9. References

Alberta. 2001. Energy Resources Conservation Board Directive 055: Storage Requirements for the Upstream Petroleum Industry.

Alberta. 2011. Energy Resources Conservation Board Directive 060: Upstream Petroleum Industry Flaring, Incinerating, and Venting.

British Columbia. 2013. BC Oil & Gas Commission Flaring and Venting Reduction Guideline.

Canada. 1985a. National Energy Board Act. R.S.C., 1985, ch. N-7. Ottawa: Queen's Printer.

Canada. 1985b. Railway Safety Act. R.S.C., 1985, ch. 32 (4th Supp.). Ottawa: Queen's Printer.

Canada. 1992. Transportation of Dangerous Goods Act, 1992. S.C., 1992, ch. 34. Ottawa: Queen's Printer.

Canada. 1999. Canadian Environmental Protection Act, 1999. S.C., 1999, ch. 33. Ottawa: Queen's Printer.

Canada. 2000. Priority substances list assessment report: Benzene.

Canada. 2001. Canada Shipping Act, 2001. S.C., 2001, ch. 26. Ottawa: Queen's Printer.

Canada. 2003. National Energy Board Act: National Energy Board Processing Plant Regulations, 30 January, 2003, SOR/2003-39, Canada Gazette. Part II, Volume 137, Issue 4.

Canada. 2011. Transportation of Dangerous Goods Act, 1992: Transportation of Dangerous Goods Regulations, 3 March, 2011, SOR/2011-60, Canada Gazette. Part II, Volume 145, Issue 6.

Canada. 2012. Canada Shipping Act, 2001: Vessel Pollution and Dangerous Chemicals Regulations, 11 April, 2012, Canada Gazette. Part II, Volume 146, Issue 8.

Canada. 2013. National Energy Board Act: National Energy Board Onshore Pipeline Regulations, 10 April, 2013, SOR/2013-49. Canada Gazette. Part II, Volume 147, Issue 8.

Canada. 2015a. Pipeline Safety Act. S.C., 2015, ch. 21. Ottawa: Queen's Printer.

Canada. 2015b. Railway Safety Management System Regulations, 2015, 5 February, 2015, Canada Gazette. Part II, Volume 149, Issue 4.

Canada. 2016. Environment and Climate Change Canada, Health Canada: Final Screening Assessment for the Petroleum Sector Stream Approach: Natural Gas Condensates. Available from: INSERT LINK.

[CAPP] Canadian Association of Petroleum Producers. 2007. Best Management Practice for Fugitive Emissions Management.

[CCME] Canadian Council of Ministers of the Environment. 1990. Environmental Guidelines for Controlling Emissions of Volatile Organic Compounds from Aboveground Storage Tanks.

[CCME] Canadian Council of Ministers of the Environment. 2005. National Framework for Petroleum Refinery Emission Reductions.

[CFR] Code of Federal Regulations. 2005. Title 49, Subtitle B, Chapter I: Pipeline and Hazardous Materials Safety Administration, Department of Transportation.

Environment Canada. 2012. Data for petroleum sector stream substances collected under the Canadian Environmental Protection Act, 1999, Section 71: Notice with respect to certain high priority petroleum substances on the Domestic Substances List. Data prepared by: Environment Canada and Health Canada.

Environment Canada. 2014. Preliminary Consultation Document for Developing Potential Amendments to the Environmental Emergency Regulations.

[EU] European Union. 2010. Directive 2010/75/EU of the European Parliament and of the Council of 24 November 2010 on industrial emissions (integrated pollution prevention and control).

[NRC] National Research Council Canada. 2010. National Fire Code of Canada 2010.

[OTIF] Intergovernmental Organisation for International Carriage by Rail. 2006. Amendments to the Regulations Concerning the International Carriage of Dangerous Goods by Rail.

Prince Edward Island. 2007. Environmental Protection Act: Petroleum Storage Tanks Regulations.

Saskatchewan. 2011. Saskatchewan Upstream Petroleum Industry Associated Gas Conservation Directive.

[SENES] SENES Consultants Limited. 2009. Review of current and proposed regulatory and non-regulatory management tools pertaining to selected petroleum substances under the Chemical Management Plan. Ottawa (ON): SENES Consultants Limited.

[TBS] Treasury Board of Canada Secretariat. 2007. Assessing, Selecting, and Implementing Instruments for Government Action.

[TBS] Treasury Board of Canada Secretariat. 2012a. Cabinet Directive on Regulatory Management.

[TBS] Treasury Board of Canada Secretariat. 2012b. Red Tape Reduction Action Plan.

[UN] United Nations. 2009. European Agreement concerning the International Carriage of Dangerous Goods by Road.

[US EPA] United States Environmental Protection Agency. 2004. Health effects assessment for benzene. Washington (DC): US Environmental Protection Agency, National Center for Environmental Assessment. Report No.: EPA/540/1-86/037.

[US EPA] United States Environmental Protection Agency. 2013. Natural gas STAR program.

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