Natural Resources Committee on Feb. 15th, 2011

[Douglas P. Bloom]

I can't give you a specific timeline that we could generalize across all regulatory applications. Some are more complex than others. At the National Energy Board, we've seen that simpler and smaller regulatory applications can be decided within a certain timeframe. Larger, more complex ones could require a little longer timeline, perhaps with a public hearing.

The important things are that the timeline be competitive from the standpoint of other jurisdictions with which we're competing, and that the process be certain within that timeline.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

So more certainty in determining the simple ones would be helpful to you.

[Douglas P. Bloom]

More certainty and shorter timelines are important, but the most important thing is to establish a regulatory process that accurately and effectively brings in the input from the applicant as well as the various stakeholders, deals with it efficiently, and is known and certain to the applicant in advance. The outcome is a function of the process and is up to the regulator, but the certainty of the process is what's important for investment decisions.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

You also talked about $60 million in estimates of royalties in B.C. from natural gas. Where do you see these royalties going with the development of shale gas in the Horn River Basin?

[Douglas P. Bloom]

The $60 million I referred to was the annual property tax payment that Spectra Energy makes in British Columbia. Those property tax payments generally find their way back into the communities through which our facilities run. As a result, those moneys go back into local infrastructure and running the local governments and meeting the local needs.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thanks for clarifying.

This question is for the Cenovus people. You talked about a 30,000-barrel-a-day in situ, which would have a ratio of perhaps four acres to about 185 acres as a ratio of drill pad size to the area. Would that typical four-acre size bring in the 30,000 barrels, or can that vary by drill pad size?

[Jim Campbell]

That's referring to two different things. We build our projects in increments of 30,000 to 40,000 barrels per day. With our well pads, which are four to six acres of surface footprint, seeing 185 acres underground, there would typically be about nine well pairs on one of those well pads. Each of those pairs of wells, depending on where it might be—Foster Creek, Christina Lake—might produce between 1,000 and 2,000 barrels of oil per day, so you could have anywhere from 9,000 to 18,000 barrels per well pad.

John, would you like to supplement?

[Jon Mitchell, Team Lead, Environment Policy and Strategy, Cenovus Energy Inc.]

Sure. There's a rule of thumb that we tend to use from our production perspective, and that's about an acre of land for each hundred barrels of production.

[Mike Allen, Conservative, Tobique—Mactaquac, NB]

Thank you.

I have one more quick question. What are you seeing with respect to some of the new technological development that you're doing? What increases have you seen in the recovery rates? You have the steam-oil ratio of 2.3:1. Are you seeing any better utilization of steam, or are you seeing better recovery rates for the wells you're actually drilling?

[Jim Campbell]

We have two examples of actually lowering the steam-oil ratio.

I referred earlier to wedge well. I believe we have about 36 of these wedge wells now working in Foster Creek. Each of these wedge wells is producing about 800 barrels per day of incremental oil with little or no incremental steam, so that helps to reduce the amount of steam we produce as we're producing oil.

I also referenced in my remarks our solvent-aided process. We have one test well operating right now, I believe. We think we can get the steam-oil ratio down below 2 by using butane in place of some steam.

[The Chair, Conservative, Leon Benoit]

Thank you very much.

We have the bells going for votes now, so we have to end the meeting a little bit early.

I want to once again thank all of the witnesses: Garry Flett, from the Athabasca Chipewyan First Nation Business Group; Douglas Bloom, from Spectra Energy Transmission West; and by video conference, Jim Campbell and Jon Mitchell, from Cenovus.

I apologize for the technical difficulties. Hopefully we won't see those in the future.

Your input today has been very helpful indeed. I thank you for that.

Thank you, members of the committee.

The meeting is adjourned.