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To: Johnny Canuck who wrote (40182)	9/3/2003 1:28:34 AM
From: Johnny Canuck	Read Replies (1) \| Respond to of 69305

Exemption requests flood Alberta's plans to shut in natural gas production 01:24 AM EDT Sep 03 JAMES STEVENSON CALGARY (CP) - Plans by Alberta's energy regulator to close 937 natural gas wells by this month were further delayed Tuesday as it became clear that exemption appeals have been filed for about 80 per cent of the wells. The Alberta Energy and Utilities Board ruled in July that the wells, all in the northeast corner of the province, had to be shut in at the beginning of September to protect the much larger oilsands reserves underneath. But the board also said affected gas producers could file for exemptions if they could prove that the gas in the wells is not in contact with the bitumen of the oilsands. As the deadline passed Monday, only about 200 wells had been shut in. Now it is up to oilsands lease holders and the regulator to process objections to the exemptions on a well-by-well basis. And while the board has promised quick hearings on exemption requests, some oilsands producers were frustrated that the acrimonious fight will continue. "Obviously we're disappointed," said Petro-Canada spokesman Chris Dawson. "We'd hoped that corporate responsibility would prevail, and obviously some of the parties have chosen otherwise." Dawson said the regulatory process will be very labour-intensive as oilsands producers fight natural gas producers in a "merry-go-round" of proceedings. "What we're going to see are more hearings, more litigation, lawyers, geologists, scientists, panelists, consultants being tied up in exemption hearing after exemption hearing, when those resources could be better utilized looking at things like a technical solution." Petro-Canada and other oilsands producers argue that their ability to exploit the vast oilsands reserves is threatened when pressure in the reservoir is reduced by removing overlying gas. "We do have geologists on staff and under contract that have fought this and will continue to fight this because we think it's a battle worth fighting," Dawson said. Energy and Utilities Board chairman Neil McCrank has said the gas-over-bitumen debate is the "most significant energy conservation issue" the board has faced in its 75 years, due to the volume of resources affected. It is believed the original shut-in order affects one trillion cubic feet of gas, or two per cent of Alberta's remaining reserves. But the oilsands underneath are believed to contain up to 600 times as much energy - about 100 billion barrels of bitumen, though how much of that is actually recoverable is up for debate. Gas producers affected by the shut-in plans range from global energy heavyweights such as BP to tiny junior companies. One of the most affected is Paramount Energy Trust, which originally expected to have more than 200 wells or nearly 50 per cent of its production affected. The Paramount trust said Tuesday it has filed exemptions for more than 200 wells and now hopes that the shut in will affect less than 10 per cent of its production. Paramount president Sue Riddell Rose said she was not surprised by the number of exemption requests and said her company may file more after doing more field work to prove that the gas is not affecting oilsands reserves. Paramount units (TSX:PMT.UN) traded at $10.06 Tuesday, down two cents, on the Toronto Stock Exchange. That's down from nearly $14 when the regulator announced its shut-in plan back in June. The Alberta energy regulator has promised affected gas producers that a complex regional geological study will be finished before the end of the year. The board then intends to decide on the status of all gas production in the area by next April 1.