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Resolved Issues
Capstone's water application
Update on this issue: (published by the Central Alberta LIFE)
Water pumping plans may be scrapped
A Calgary oil company may flush plans to pump water from the Red Deer River after buying the firm at the heart of the controversial project.
Rick Marshall, vice-president of operations and chief operating officer with Chamaelo Energy, said the company was uncertain whether the plan to pump fresh water from river into oil well near Innisfail was worth pursuing.
Capsone Energy Ltd. had received conditional approval from Alberta Environment to draw the water in February 2004. Mayors from nine Central Alberta communities, a water commission and ranchers opposed the plan. Chamaelo recently bought Capstone. Marshall saeid Chamaelo had more profitable projects on its agenda.
"It is so far down on our list of projects, it is hardly on the radar", he said. "We had a very cursory look at it and we decided we are not that excited."
Marshall said the company would hate to lose all the work put into the plan by Capstone. Chamaelo would evaluate the project in March and April 2005. It might simply cancel the project or ask for a further one-year extension on its conditional certificate to remove water from the river, he said.
The following text is about the history of this issue:
Capstone Energy Ltd applied to divert 328,500 cubic metres of water for the Red Deer River annually to five wells it owns about six kilometres from the river NW of Innisfail. The water would be used to maintain pressure in an underground oil reservoir that is almost empty. Opponents have taken their case to the Alberta Environmental Appeal Board because they don't agree with how the water is being used. Excerpts of an Article published by The Calgary Herald on February 23, 2004
What's special about the Capstone case is municipalities are now opposing the process and there's a public hearing. So far the actions of some other oilpatch companies to use brackish water and even carbon dioxide instead of fresh water for enhanced oil recovery have been dismissed by Capstone. The Company, in the best interest of the company, has signaled that it wants to go the cheapest route possible. While they may legally be allowed to do this, it's not environmentally responsible to use fresh water this way. About six barrels of injected water would be needed to pump out one barrel of oil. Which is more valuable?
Excerpts of an Article published by Red Deer Advocate on February 24, 2004
Well injection must stop
The Capstone decision reflects a failure of imagination and a failure of the legislative process. The Alberta Environmental Appeal Board announced on Tuesday that Capstone Energy Ltd. will be allowed to draw 219,000 cubic metres of water out of the Red Deer River in the coming year and pump it deep underground to flush out petroleum from its oil lease.
Capstone didn't get as much water as it asked for, but more than it deserves. The Appeal Board reduced Capstone's requested allocation by 30 per cent. Its bid was opposed by nine municipalities that are counting on water from the Red Deer River and fear that diverting it underground will put a severe crimp on their ability to grow and to service the myriad needs of residential and business users.
The hearings marked the first time that towns and cities have banded together to collectively oppose a water use application. The profile they received through extensive media coverage may mark a watershed in the way water is treated in Alberta.
Even though they lost, municipal spokesmen expressed some degree of satisfaction at the way the deal went down.
Apart from reducing its water allocation, the appeal board limited Capstone's license to one year and required the company to look at other ways to get more oil from under the ground.
Capstone must wonder, to some degree, what hit it. For years, oil companies in Alberta have been applying for and receiving permission to use water to flood oil wells. The amount of water it was asking for represents less than one per cent of the river's annual flow, an amount that Capstone argued was insignificant to other users.
But it's not insignificant. If you look at the Red Deer River in the city today, it's as low as most of us can ever remember. Meteorologists are predicting another year of drought. Snowmelt is down again and the glacier at the source of the river is shrinking. That melting adds to the river's flow and gives an illusory picture of what's really happening. When the glacier is gone, we are hooped. As David Schindler, the world renowned water expert, told an audience in Red Deer in March, the heat that is melting the mountain glaciers is also evaporating that water as it flows east, so it never reaches its traditional destination.
Around the world, rivers are drying up before they reach the sea. Western Canada is not immune to that dreaded trend, which is driven by global warming. Water is the staff of life. It's needed for every significant human endeavour. Without it, crops die, businesses die, cities die, people die.
Pumping water deep underground, out of the hydrological cycle for tens of thousands of years, is about the worst use of water we can imagine as supplies shrink and demands for water grow.
It has been allowed in the Alberta oilpatch for years, because water has been treated as a free good. It's not a free good and that kind of misuse cannot continue. There are alternatives to fresh water for building up pressure underground to force petroleum resources to the surface. They are more costly, but that's a price that must be paid.
There are no alternatives to fresh water for animal and plant consumption.
Alberta law must be changed to reflect these unassailable facts. Right now, Provincial law does not permit a water license to be rejected on the basis of use. In The Government's mind, then, all uses are valid, which means that even if the Environmental Appeal Board had wanted to deny Capstone's application outright, it would have been severely hamstrung.
This is a preposterous and unsustainable proposition. A spokesman for the Alberta Environment department told the Advocate on Tuesday that Environment Minister Lorne Taylor would like to see the eventual elimination of the practice of injecting fresh water down oilwells. That can't happen soon enough. Our water is running out.
Published by the Red Deer Advocate May 26, 2004
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