Word to the Wise: Challenges in H2S release rate compliance

November 21, 2022

Each week, XI Technologies scans its unique combination of enhanced industry data to provide trends and insights that have value for professionals doing business in the WCSB. If you’d like to receive our Word to the Wise in your inbox, subscribe here

Regulatory bodies have long been a prominent leader in protecting public safety while supporting the responsible management of oil and gas resources. Depending on the viewpoint and context, you’ll find ranging opinions throughout industry with respect to the difficulties adhering to the rules and regulations in place. Unwavering though, is industry’s appreciation that regulatory compliance is paramount to successful operations for any energy company operating in WCSB.

While the importance of regulatory compliance is widely understood, confidently navigating those regulations is a whole other ball game. Just as complex as the lifecycle of an oil/gas well can be, so can be the regulations governing those operations.

Though this article focuses on well design and well licensing requirements, much of what’s discussed can apply to many other directives. Among many directives outlined in the AER’s Directive 056: Energy Development Applications and Schedules, H2S Release Rate Assessment is an important piece that AER focuses on, and that operators must pay attention to.

Subject Matter Expertise – Knowing how to meet expectations

Though regulations and directives are well documented and widely accessible, the issue isn’t necessarily reading/comprehending the rules. The true challenge lies in deciphering the nuances within and knowing how to navigate areas where subjectivity and judgement are involved. Data can be interpretive, so knowing how to align your interpretation with the regulator can sometimes feel like a roll-of-the-dice.

Whenever possible, it’s always best to seek opportunities to leverage expertise and experience. If you can work with someone with insight into how to meet regulator expectations, your chance of a successful outcome is vastly improved.

Documentation and audit readiness

It’s no different than the lesson we learned in Grade 3 Math: show your work! Only good things can come from making it clear how you arrived at your conclusion.

When judgement is to be applied, it’s important to support those decisions made with clear, concise documentation. In the case of an audit, this both allows the reviewer to appreciate your reasoning and demonstrates your level of due diligence and consideration applied.

As with income taxes, audits and reviews can often happen after-the-fact, sometimes months after a well license has been approved. This documentation can prove invaluable should you be the unfortunate subject of an audit down the road.

Who to do the Work? Internal staff vs costly outsourcing

Sure…with unlimited resources, regulatory compliance is well within reach for any company. Given how far from reality this is for most (or all?) companies, the question now is how to do things properly, with limited resources?

Depending on what/where you’re drilling, the work involved in interpreting/validating data, documentation, report preparation, etc. is no small undertaking. Multiply that by the number of drilling locations in your program, and you may have a logistical challenge on your hands.

For departments with smaller teams (especially junior/mid-size operators) It would make sense to outsource tasks/operations like these. Unfortunately, this can often reveal new issues such as cost-overrun, communication breakdown, and problems with scheduling/response time.

Need more help?

Whether you’re new to the role or it’s been a while since you’ve applied for drilling licenses and done H2S release rate assessments, it’s always a good time to brush up on regulatory changes. Watch this free virtual session on The Do’s and Don’ts of H2S Release Rate Assessments hosted by Doug Long, a Professional Services Engineer with four decades of experience.

If you need a simpler way to complete your H2S release rate assessments, XI Technologies offers H2SReports, the foremost H2S research application in the industry. Click here for more information or contact us today.