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The National Pollutant Release Inventory Oil and Gas Sector Review

Environment Canada is undertaking a review of National Pollutant Release Inventory (NPRI) reporting requirements for oil and gas facilities in order to achieve appropriate rates of reporting coverage for pollutants of concern, as well as simplified data reporting/data collection processes for industry and Environment Canada. The review will be completed in two phases. Phase 1 is intended to respond to the environmental petition submitted to the Auditor General of Canada, requesting Environment Canada to address NPRI reporting for shale gas and in-situ oil sands extraction. Phase 2 will build on Phase 1, and examine NPRI reporting requirements and remaining issues for the sector as a whole.


Discussion Document: Scope and Approach

1. Introduction

NPRI Overview

The NPRI is Canada's legislated, publicly accessible inventory of pollutant releases (to air, water and land), disposals and transfers for recycling. It is used for identifying pollution prevention priorities; supporting the assessment and risk management of chemicals and air quality modeling; helping develop targeted regulations for reducing releases of toxic substances and air pollutants; encouraging actions to reduce the release of pollutants into the environment; and improving public understanding. It captures data on over 300 substances of concern, including many substances declared toxic under the Canadian Environmental Protection Act, 1999 (CEPA 1999) and key air pollutants from a wide variety of industrial sectors.

Under section 46 of CEPA 1999, the Minister of the Environment issues notices to require facilities to report information each year for the purpose of creating an inventory of data. The NPRI reporting requirements, as published in the Canada Gazette, Part I Notice with respect to substances in the National Pollutant Release Inventory, specify the chemicals which need to be reported and set minimum quantities for reporting. As such, the NPRI does not capture data on all pollutant emissions in Canada. The reporting requirements are intended to create a balance between the level of effort required from reporting facilities and the overall quality of information in the NPRI. For the 2011 reporting year, 346 substances or substance groups were listed on the NPRI and approximately 8,000 facilities submitted reports on the substances that they released, disposed of, or sent to other facilities for recycling.

Background

Facilities from the oil and gas sector are required to report their releases, disposals and transfers of all substances listed on the NPRI for which they meet the reporting criteria, as published in the Canada Gazette notice. For the most recent reporting year (2011), close to 4,000 oil and gas extraction facilities reported to the NPRI, representing over 40% of all facilities reporting to the NPRI. All producing Canadian oil sands operations and off-shore oil and gas extraction facilities reported, as did most natural gas processing plants. Reporting coverage is lower for conventional oil and gas batteries, compressor stations and gas-gathering systems. Many facilities of these types were not required to report based on NPRI thresholds. Current NPRI reporting requirements capture most combustion-related emissions from the sector, but do not require reporting of fugitive or venting emissions (e.g. volatile organic compounds and hydrogen sulphide) from oil and gas extraction facilities with fewer than the equivalent of 10 full-time employees, or releases from oil and gas drilling and exploration activities.

Environment Canada is undertaking a review of NPRI reporting requirements for oil and gas facilities in order to achieve appropriate rates of reporting coverage for pollutants of concern, as well as simplified data reporting/data collection processes for industry and Environment Canada. This review also responds to the environmental petition Shale Gas Fracking and In Situ Oil Sands Chemicals and the National Pollutant Release Inventory: Public Disclosure Needed (petition 317) which was submitted to the Auditor General of Canada on June 22, 2011. Environment Canada responded to the petition on October 25, 2011, indicating that it will be undergoing a review of NPRI reporting from the oil and gas sector and would consider NPRI reporting for shale gas and in-situ oil sands extraction as part of that review.Footnote1 See Section 3 for more information.


2. Scope

The NPRI Oil and Gas Sector Review will primarily examine NPRI reporting requirements for oil and gas extraction and for support activities for oil and gas extraction (North American Industry Classification System (NAICS) codes 211 and 213). However, it should be noted that the review is not limited to facilities and activities with these two NAICS codes and may examine other facilities or activities from the oil and gas sector.

The scope of this review will look at the known gaps with NPRI data for the oil and gas industry and the potential contributing factors. The issues have been identified based on input from stakeholders and departmental needs. It should be noted that as this review progresses and discussions and consultations take place, other issues and contributing factors may be identified. However, for the time being, Environment Canada will be reviewing the impacts of the nine issues identified below and considering changes that would capture additional information on oil and gas activities and facilities. The review will be completed in two phases and the issues will be considered as part of Phase 1 and/or Phase 2, as applicable.

1. The exemption for oil and gas exploration or drilling (Phases 1 & 2)

This exemption has two main implications. First, it exempts facilities that are solely involved in these activities from reporting to the NPRI. Due to this reporting exemption, most pre-production facilities (e.g. those in pilot phase or in exploration or drilling phase) are not currently required to report to the NPRI. Second, for facilities that engage in other activities, the oil and gas exploration and drilling portion of their operations are exempt from reporting. Consideration of possible changes to this exemption will also need to take into account that exploration and drilling are not usually ongoing activities.

2. The 20,000 employee-hour (i.e. the equivalent of 10 full-time employees) threshold for reporting (Phases 1 & 2)

Many oil and gas facilities (such as wells, batteries and compressor stations) are unmanned or have few employees, and are therefore not required to report to the NPRI, except for criteria air contaminants (CACs) (see issue #3 below). It should be noted that the employee threshold does not apply to facilities that are engaged in certain specified activities (e.g. incineration). The review will consider whether certain oil and gas activities should be added to the list of activities for which reporting is required regardless of the number of employee hours.

3. Facilities with few employees are only required to report specified substances and specified release sources (Phases 1 & 2)

Facilities that do not meet the 20,000 employee-hour threshold are only required to report CACs and are only required to consider these releases from stationary combustion sources. Consequently, the majority of CACs from combustion-related emissions are tracked through the NPRI, but the majority of fugitive or vented emissions are not (e.g. fugitive emissions of volatile organic compounds and hydrogen sulphide from oil and gas wells). The review will consider whether adjustment of the requirements to ensure reporting on these emissions is warranted.

4. Subterranean releases are not specifically listed as a reportable category under releases to land (Phase 1)

NPRI requires reporting of releases to air, surface water and land, with land releases reported separately by spills, leaks, or other releases to land that are not disposals. Underground injection for the purposes of waste disposal is reportable under the disposal category (either on- or off-site). Underground injection for the purpose of enhancing upstream oil and gas production (e.g. hydraulic fracturing and enhanced oil recovery) is not specifically listed as a reportable category. This results in uncertainty as to whether this injection should be categorized as subterranean releases, whether these releases need to be reported to the NPRI and how they should be reported. The review will consider whether and how to address this issue.

5. Reporting is only required for substances listed in the NPRI (Phases 1 & 2)

Reporting for a particular substance is required only if that substance is listed in the NPRI notice. Therefore, releases or disposals are not captured if the substances of concern are not listed on the NPRI. For example, hydraulic fracturing fluid is a mixture of substances that may contain specific NPRI substances. Reporting of this fluid would be based on the individual NPRI substances contained in the mixture and not on the hydraulic fracturing fluid as a whole. As part of this review, substances that are relevant to the oil and gas sector but not already listed on the NPRI may be identified, and if so will be considered for addition.

6. Reporting on NPRI substances is only required if the threshold for a particular substance is met (Phases 1 & 2)

Thresholds for amounts of a substance manufactured, processed or otherwise used (MPO), or released should be at a level that will trigger reporting of all significant releases or disposals. If the thresholds are too high, then those substances are not reported. If deemed appropriate, reduced thresholds could be considered to increase reporting.

7. NPRI facility definition (Phase 2)

Some oil and gas facilities and activities can be transient or temporary and may not be captured by the current NPRI facility definition, and thus not be required to report. In addition, data users have difficulty comparing NPRI data to other sources, such as provincially reported data. In some cases, this is due to the NPRI facility definition not being aligned with other emissions reporting programs. Changes to how oil and gas sector facilities are defined under NPRI may be considered.

8. Certain types of information that may be relevant are not collected (Phase 2)

Certain types of information that may be relevant for this sector are not collected, such as equipment-level data, information on concentration and amounts of substances used, annual production data, etc. This is a potential issue for supporting the analysis needs of Environment Canada and other data users. The potential addition of certain additional data elements, which would be required to be reported by oil and gas sector facilities, will be considered.

9. Difficulty tracking facilities over time (Phase 2)

NPRI faces difficulty in tracking and processing reports from conventional oil and gas extraction facilities (such as oil and gas batteries and natural gas gathering systems) from year to year. This is due to the large number of these types of facilities and their frequent ownership changes, name changes and closures. Solutions on how to better track oil and gas extraction facilities from year to year will be explored.


3. Approach for This Review

The NPRI Oil and Gas Sector Review will be completed in two phases. The issues listed above that are relevant to shale gas and in-situ oil sands extraction activities, will be considered in whole or in part, during the first phase of the review. The remaining issues, as well as any others that arise will be considered during the second phase.

The review will occur in line with Environment Canada’s established procedures for considering changes to the NPRI, as set out in the Guidelines for the Use of Information Gathering Authorities under Section 46 of CEPA 1999Footnote2.

Phase 1: NPRI Reporting for Shale Gas and In-situ Oil Sands Extraction

The first phase of the review will look at NPRI reporting for shale gas and in-situ oil sands extraction activities, in response to environmental petition 317. The main issue raised in the petition is the concern that the chemicals injected into the ground for these activities are not being reported to the NPRI due to the current reporting requirements. All shale gas and in-situ oil sands facilities are required to report if they meet the NPRI criteria. However, pre-production facilities (i.e. those in pilot phase or in the exploratory or drilling phase) may not meet the NPRI requirements due to the exclusion for oil and gas exploration and drilling activities. Furthermore, once in production they may not trigger the 20,000 employee-hour threshold for reporting on substances other than air pollutants.

Environment Canada will consider changes that would capture more information on oil and gas activities and facilities beyond the traditional reporting thresholds. Phase 1 will focus on aspects of the issues listed in Section 2 that are relevant to shale gas and in-situ oil sands extraction. During 2013, stakeholders and the public will be consulted on the issues raised in petition 317 and on Environment Canada’s proposed path forward and position. It is anticipated that Phase 1 of this review will be completed in 2014.


Phase 2: NPRI Reporting for Other Oil and Gas Facilities and Activities

The second phase of the review will be a broader review of reporting from the oil and gas sector with a primary focus on extraction activities. This phase will build on Phase 1 and examine NPRI reporting requirements and aspects and issues from the list in Section 2 that remain. This broader review is anticipated to begin in 2014 and be completed in 2015.


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