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Caroline gas field assets will be environmentally managed, company says

Concern raised that environmental liability could “become the financial responsibility of both provincial and federal taxpayers”
MVT Caroline2
Pieridae Energy Ltd. bought a number of assets from Shell in 2019 including the former Shell Caroline Complex and other assets in the Caroline sour gas field. File photo

MOUNTAIN VIEW COUNTY - Calgary-based Pieridae Energy Ltd. has the finances to ensure its recently purchased Caroline gas field assets will be operated in an environmentally and economically sustainable way going forward, says James Millar, director of external relations.

The company purchased Caroline sour gas field assets along the Eastern Slopes west of Sundre from Shell, and the licence transfer process is now under way with the Alberta Energy Regulator (AER).

“Fundamentally our financial situation is sound,” said Millar. “With the acquisition of the Foothills assets, we added close to 29,000 barrels of oil equivalent per day of production, which had an immediate, positive impact on our financial outlook. 

“This continuation of the transformational growth demonstrated at the end of 2019 will provide Pieridae the financial strength we need to operate our assets.”

Nearly half of the company’s $45 million to $55 million upstream capital budget is comprised of investments for the “safe and reliable operation” of its assets, he said. 

Millar’s comments come in response to recent comments by a consultant representing several landowners in the district. 

Michael Sawyer is the principal with Hayduke & Associates Ltd., a Calgary-based environmental and regulatory consulting company. He has voiced concerns about the future clean-up of some the Shell Canada Limited assets in the Caroline sour gas recently sold to Pieridae. 

Sawyer says the sale of the assets has created possible future financial concerns for Mountain View County and residents. 

He has requested to appear as a delegation at an upcoming county council meeting and provided a summary of the comments he intends to make at that meeting.

He said he intends to “alert the county of Mountain View County to the economic and environmental risks to the county and its ratepayers that may arise” from the sale of the Caroline sour gas field, as well as assets at Waterton and Jumping Pound, all of which he refers to as the Foothills assets.

“While Shell has not made public the total environmental and reclamation liability for the Foothills Assets, conservative estimates put the environmental and reclamation liability at over $1 billion,” he said.

There is a risk that the current environmental liability could “become the financial responsibility of both provincial and federal taxpayers” and that there could end up being a “significant shortfall in tax revenues to the county that ratepayers would have to make up by paying higher taxes,” he said.

Shell Canada media relations manager Tara Lemay provided the following statement to The Albertan:

“A notable distinguishing factor of the Caroline plant is that the underlying geology is significantly different at the Caroline Plant than the Waterton and Jumping Pound gas plants, with a thick clay layer that is acting as a barrier between the plant and the underlying groundwater,” said Lemay. 

“As a result, the sulfolane identified at Caroline is contained on-lease and there is no evidence of impacts to offsite groundwater to date. For these reasons, Shell has not retained contractual liability and financial responsibility for remediation of impacts at the Caroline plant.” 

Sawyer has not yet appeared before Mountain View council.