Minister of the Legislative Building Economy Regina, Saskatchewan S48 033 sasmraawm March 1, 2013 INSTRUCTION LETTER TO: ALL SASKATCHEWAN OIL AND GAS OPERATORS H28 EMISSION REGULATORY CONIPLIANCE REQUIRNIENTS This letter will serve as a reminder to those Operating in southeast Saskatchewan that they may encounter elevated concentrations of hydrogen sulphide (H28) in the producing ?elds and facility operations. The Ministry of the Economy (ECON) reminds all operators to actively monitor and take measures to prevent H28 emissions and ensure compliance obligations under the applicable regulations are adhered to. Investigations conducted by ECON have determined that there have been emissions from certain single-oil?well batteries (SWB) and multi?oil?well facilities operated in southeast Saskatchewan that exceeded the regulated limits. ECON has immediately shut-in the operation(s) Where there were risks to public and worker safety or the environment The emission problems are attributed to fugitive emissions from improperly sealed or operated processing and storage equipment; loading, unloading and transportation of the production ?uid via tanker trucks; inadequately designed and improperly operated vapour recovery unit and ?are stack; and inexperienced or inadequately trained operators and contractors. Saskatchewan has well established emission control regulations and directives speci?ed in The Clean Air Act, The Oil and Gas Conservation Act, The Oil and Gas Conservation Regulations, 2012, Directive Saskatchewan Upstream Petroleum Industry Associated Gas Conservation Directive, Directive Saskatchewan Upstream Flarng and Incineration and 8?01: Saskatchewan Upstream Industry Storage Standards. All operators are responsible to read, understand and comply with these requirements. Instructional Letter Page 2 March 1 201 3 Emissions exceeding the regulatory limit is considered to be a critical violation under The Oil and Gas Conservation Act. ECON will order shut-in and immediate application of remedial measures of any wells and facilities that are found to be emitting in excess of the regulated limits. Where warranted, especially in case of serious infractions or repeated offenses, ECON may sanction escalated enforcement, penalty andfor prosecution. - Over past months, ECON has been working with industry associations and related provincial regulatory agencies to develop practicable and permanent solutions to abate the H28 emission problems in southeast Saskatchewan This issue is of the highest priority for both government and industry to take immediate actionto mitigate and correct the problem. The Govermnent of Saskatchewan intends to introduce further actions in the coming weeks which may include speci?c action plans, operational standards, regional and site-speci?c air monitoring programs and requirements and regulatory directives. Regional Of?ce contact information: Lloydminster Regional Office Swift Current Regional Of?ce Phone: (306) 825-6434 (24 Hours) Phone: (306) 778?8252 (24 Hours) Fax: (306) 825-6433 Fax: (306) 778-8256 Regional Manager: Gary Ericson Regional Manager: Ron Dolter Phone: (3 06) 825-6436 Phone: (306) 778?8252 gary.ericson@gov.sk.ca ron.dolter@gov.sk.ca Kindersley Regional Of?ce Estevan Regional Of?ce Phone: (306) 463-5400 (24 Hours) Phone: (306) 63 7-4541 (24 Hours) Fax: (306) 463-5405 Fax: (306) 637-4547 Regional Manager: Kirk Hogarth - Regional Manager: Dean Phone: (306) 463-5400 Phone: (306) 637-4542 kirk.hogarth@gov.sk.ca Instructional Letter Page 2 March 1, 2013 If you have further questions with regards to the aforementioned regulations, directives or this letter, please contact Mr. Todd Han, Director, Petroleum Development, ECON at (306)787-2221. im McMillan Minister Responsible for Energy and Resources cc: Kent Campbell, Deputy Minister, ECON Ed Dancsok, Assistant Deputy Minister, ECON Todd Han, Director, Petroleum Development, ECON