Hoole Grand Rapids Project Application
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Hearing Order OH-001-2014 2-12 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project 2.7 Regional Initiatives As a new in-situ oil sands operator in the Wabasca region Cavalier has focused on developing relationships with Project stakeholders (aboriginal, government, industry). Cavalier’s participation in regional initiatives to date reflects this focus. Since November 2011, Cavalier has participated with other oil sands developers, Bigstone and the Municipal District of Opportunity No. 17 in the Wabasca Workforce Strategy. This Strategy is examining how the entire community, including governments, companies and support agencies, can work together to facilitate the training and development of local workers. To date, the participants have been gathering information from community studies, workshops and discussions to identify both barriers and solutions to accessing training and employment opportunities. Cavalier intends to actively participate and support the development of the Wabasca Workforce Strategy. Cavalier also recognizes the importance of regional cooperation with other industries and oil sands developers. Cavalier has, and will continue to ensure the FMA holder in the region understands Cavalier’s current development plans, so that the Project footprint can be managed in accordance with the principles of Integrated Land Management. Cavalier has also contacted area oil sands operators regarding development planning. As projects are implemented the importance of regional environmental initiatives to address the management of cumulative effects will become increasingly relevant. Cavalier’s Hoole property is located within the Land-use Framework’s Lower Peace Regional Plan area. Cavalier’s intention is to participate as the Lower Peace Regional Plan is developed, and to be involved as regional initiatives for environmental management are progressed in response. Baseline environment data (water well data, wildlife, soil, vegetation, aquatic resources, etc.) is currently being collected for the Hoole property to assist in development planning. This data will be collected in a manner that will facilitate its use in regional environmental management initiatives. Cavalier is a member of the Canadian Association of Petroleum Producers (CAPP). CAPP membership and involvement provides a mechanism for tracking oil sands development initiatives related to marketing, environment and regulatory. Cavalier plans to become a member of the Western Canadian Spill Services Cooperative (WCSS) and will contribute and participate in Zone 4 Area D activities accordingly. Section 6.6.1.4 provides additional information with respect to WCSS membership. CAVALIER ENERGY INC. 3-1 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project 3 APPLICATION FOR APPROVAL 3.1 Existing Approvals To date, Cavalier has received ESRD approval for oil sands exploration (OSE) programs in Townships 81 to 82, Ranges 24 to 23 W4M, which includes the PDA. 3.2 Request for Approval Cavalier is seeking approval of the Project from: 1. The ERCB to: construct and operate a bitumen recovery scheme, in accordance with Section 10 of the Oil Sands Conservation Act (OSCA); and 2. ESRD to: a. construct, operate and reclaim the Project, in accordance with Division 2 of Part 2 and Section 66 of the Environmental Protection and Enhancement Act (EPEA); and b. construct, operate and reclaim components of the Project in accordance with Division 2 of Part 2 and Part 6 of the EPEA. Under the EPEA Activities Designation Regulation (AR 276/2003) the scope of the Project meets the criteria set out in Schedule 1 and is, therefore, designated as an activity for which an approval is required under the EPEA. Cavalier received written confirmation from ESRD (June 19, 2012) that an environmental impact assessment report is not required for the Project (Appendix A). This application satisfies the requirements for joint ERCB and ESRD approval as described in ERCB Directive 023 - Guidelines Respecting an Application for a Commercial Crude Bitumen Recovery and Upgrading Project (ERCB 1991a) and Alberta Environment Guide to Content for Industrial Approval Applications (AENV 1999a). Concordance tables for these two documents are presented in Appendix B. Comments on this application can be submitted to: Peter Millman, B.A., M.E.Des. Environment and Regulatory Specialist Cavalier Energy Inc. 2500, 255 -5th Avenue SW Calgary, Alberta T2P 3G6 Tel: 403-268-3950 E-mail: [email protected] 3.3 Associated Applications Cavalier will file applications for other aspects of the Project under applicable legislation. The provincial application and approval requirements applicable to the Project that will be submitted under separate cover are: CAVALIER ENERGY INC. 3-2 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project • Water Act, for diversion of groundwater for potable purposes and for makeup and utility water use; • Historical Resources Act, for clearance to construct the facilities; • Pipelines Act, for the construction and operation of pipelines between the processing facilities and the production well pads, the water source pipeline, and the fuel gas tie-ins; • Oil and Gas Conservation Act, for well and facility licenses; • Public Lands Act, for Crown land surface dispositions; • Municipal Government Act, for a development permit from the Municipal District of Opportunity No. 17; and • Safety Codes Act, for use of pressure containing equipment and piping. CAVALIER ENERGY INC. 4-1 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project 4 GEOLOGY AND RESERVOIR 4.1 Lease Area and Geologic Study Area Cavalier’s Hoole leases span Townships 80 to 82 and Ranges 23 to 25 W4M. Included are fourteen Oil Sands Development Leases, covering 55.75 sections of land, with rights to the bitumen in the Mannville Formation (Table 4.1-1; Figure 4.1-1; Figure 4.1-2). The Project is located within Township 81 Range 23 and 24 on three Cavalier Energy Inc. Oil Sands Leases (No. 7496090617, No. 7497010683 and No. 7498110013). The well pads and drainage patterns are located entirely within Oil Sands Lease No. 7496090617 and No. 7497010683. The CPF site is located within Oil Sands Lease No. 7498110013 (Figure 4.1-3). These leases cover the oil sands rights over a stratigraphic interval spanning the top Cretaceous Viking Formation to the base Devonian Woodbend Group. The target oil sands reservoir for the Project is the Cretaceous Grand Rapids Formation. Cavalier has identified a Geological Study Area (GSA) that consists of 12.25 sections located within Township 81, Ranges 23 and 24 W4M, and a Project Development Area (PDA) within the GSA (Figure 4.1-4 and Table 4.1-2). All 114 well pairs for the Project will be placed within the PDA within the drainage areas indicated in Figure 4.1-5. Cavalier understands that a Project Area typically represents the boundaries within which bitumen recovery may occur over the life of the Project, and a Development Area to be the boundaries of the drainage areas for which representative geological cross sections and well trajectories are provided for at the time of application. In this application the Project Area and the Development Area will have the same boundary and will be referred to as the Project Development Area (PDA). Cavalier has reviewed in-situ applications and is aware of the ERCB’s expectation that the applicant has undertaken an appropriate level of geological evaluation work to develop a good understanding of the resource, such that the development plan will allow for the optimal recovery of the resource. Cavalier has drilled 19 wells within the two and quarter sections that comprise the PDA. This corresponds to a well density of 8.4 wells per section. The data from these wells is the basis for the development plan outlined herein. Information relevant to the applied for PDA can be found in the application as follows: • description of proposed drainage area (Section 5.2); • a net bitumen isopach map (Figure 4.5-6); • OBIP and Recoverable Volumes (Section 5.2); • horizontal well pair placements on geological cross sections for all 9 well pads (Section 5.2); and • a discussion of well pad placement (Section 6.1). CAVALIER ENERGY INC. 4-2 November 2012 Cavalier Energy Inc. Hoole Grand Rapids Project Table 4.1-1 Oil Sands Leases and Permits Agreement Term Expiry Area Type Rights Legal Description Number (years) Date (ha) AB 0747406110002|1 Oil Sands 15 years 11/2/2024 948.8847 below Top of the Viking to Base T080-23W4: 32SE,NE;33 Development Lease of the Woodbend (D00006) AB 0747408040005|1 Oil Sands 15 years 4/3/2026 1265.1796 below Top of the Viking to Base T081-24W4: 9;10 Development Lease of the Woodbend (D00006) AB 0747408040006|1 Oil Sands 15 years 4/3/2026 1265.1796 below Top of the Viking to Base T081-24W4: 15;16 Development Lease of the Woodbend (D00006) AB 0747408040007|1 Oil Sands 15 years 4/3/2026 632.5898 below Top of the Viking to Base T081-24W4: 22 Development Lease of the Woodbend (D00006) AB 0747408040008|1 Oil Sands 15 years 4/3/2026 1265.1796 below Top of the Viking to Base T081-24W4: 26;27 Development Lease of the Woodbend (D00006) AB 0747408040010|1 Oil Sands 15 years 4/3/2026 1265.1796 below Top of the Viking to Base T081-24W4: 34;35 Development Lease of the Woodbend (D00006) AB 0747408050694|1 Oil Sands 15 years 5/29/2026 5060.7186 below Top of the Viking to Base T081-24W4: 7; 8;17; 18 Development Lease of the Woodbend (D00006) T081-25W4: 11; 12; 13; 14 AB 0747410080002|1 Oil Sands 15 years 8/5/2028 3162.9491 below Top