Canadian Energy Law : Lawyers & Attorneys for Environmental Energy Law

The Alberta government has announced that it will launch a single regulator for oil and gas development within the Province in an effort to improve its competitiveness.

In a statement released today, Energy Minister Ron Liepert said the provincial government has accepted a report created by the Regulatory Enhancement Task Force (Task Force). The recommendations outlined in the report include:

• Establishing a new Policy Management Office and ensuring integration of natural resource polices;
• Creating a single oil and gas regulatory body;
• Providing clear public engagement processes;
• Using a common approach to risk assessment and management;
• Adopting performance measures to enable continuous system improvement; and
• Creating a mechanism to help resolve disputes between landowners and companies, and enforce agreements where required.

Liepert stated that the recommendations will be immediately taken through the appropriate government review process for implementation and that legislation will be introduced this spring to being implementation of the report. Practically, functions that were previously the responsibility of separate ministries, such as Alberta Environment and Alberta Sustainable Resource Development, will now be co-ordinated by the Energy Resource Conservation Board.

The Task Force was created in March 2010 after a review found that the oil and gas regulatory system in Alberta had become increasingly complex and characterized by a lack of integrated policies. The goal of the task force was to perform an upstream oil and gas regulatory review and recommend system level reforms to ensure the Province has an efficient and competitive regulatory system which also maintains Alberta’s commitment to environmental management, public safety and resource conservation.

A complete copy of the report is available here.
 

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In a report released yesterday entitled "Parallel Paths: Canada-U.S. Climate Policy Choices" , the National Roundtable on the Environment and Economy (NTREE) said that, given the uncertainty over U.S. climate change policies, the Canadian government should create its own national climate change regulations and then adapt to fit U.S. policies at a later date. In this report, the NRTEE reached four conclusions with respect to the relationship between Canadian and US climate policies:

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 The Alberta Energy Resources Conservation Board (“ERCB”) has closed the comment period regarding proposed reforms to the province’s well spacing framework for conventional and unconventional oil and gas reservoirs.

At present, Part 4 of the Oil and Gas Conservation Regulations (“OGCR“) specifies that the normal drilling spacing unit (“DSU”) for an oil well is one quarter section, and the DSU for a gas well is one section. An operator may apply to the ERCB to order a special DSU which amends the normal DSU’s size, shape or target area on a case-by-case basis.
 
ERCB’s Bulletin 2010-39 outlines the following four proposed reforms to Part 4 of the OGCR:

1. Remove Well Density Controls for Unconventional Gas Reservoirs  

Well density controls will be removed for coal bed methane (“CBM”) and shale gas reservoirs, and for all gas zones to the base of the Colorado Group outlined in Schedule 13A of the OGCR. Existing holdings will require a spacing application to replace the current approved spacing.

2. Increase Baseline Well Densities for Conventional Gas Reservoirs

The baseline DSU for a gas well will be increased from one gas well to two gas wells per section. The increased baseline well density would only apply to lands that are not subject to previous spacing approvals.

3. Standardize Target Areas for Standard DSUs

Target areas for the placement of wells would increase in size so that the target area for the production of gas would be 150 metres from all boundaries of a section and the target area for oil would be 100 metres from the boundaries of a quarter section. Furthermore, references in the OGCR to corner target areas would be eliminated in favour of central target areas across the province.

4. Streamline Regulations regarding Well Spacing Applications

The special DSU application process will be eliminated in favour of operators establishing holdings under Part 5 of the OGCR to allow the operator flexibility to locate wells, increase well density, avoid surface obstructions and access seismic features outside of standard target areas.

Additionally, operators drilling on fractional tracts of land will not be required to apply for a special DSU if the fractional tract of land meets the OGCR’s criteria for a DSU. 
 
In addition to the proposed reforms, the ERCB stated that it would explore increasing the baseline well density for oil pools from one well per pool per standard DSU to two wells per pool per standard DSU.

 

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As part of their 2009 commitment to move forward with cap-and-trade legislation, the Province of Manitoba is inviting public comment on the structure of any future cap-and-trade regime. Manitoba joined the Western Climate Initiative (WCI) in 2007 and is proposing to use the WCI as a framework for their cap-and-trade system and to integrate their market with that of other WCI members. The most recent Environment Canada data indicates that Manitoba's greenhouse gas emissions come from a large number of small sources, mainly in the agricultural, transportation and stationary combustion source categories Stationary combustion sources include commercial, institutional and residential heating, manufacturing and construction sources, among others. For more information, or to submit comments, please go to the Government of Manitoba Climate Change & Green Initiatives website.

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The first phase of the U.S. Environmental Protection Agency's  (EPA) new permitting requirements under the Clean Air Act  for industrial greenhouse gas (GHG) emissions from major new and modified facilities took effect on January 2, 2011.  This first phase of the EPA's tailoring rule  applies to new sources of GHG emissions that must obtain a permit anyway based on their emission of other pollutants and will emit at least 75,000 tons per year of GHG emissions.  The second phase of these EPA GHG regulations will take effect on July 1, 2011 and will require new facilities that emit at least 100,000 tons per year of GHG emissions or major modifications to existing facilities that emit more than 75,000 tons of GHGs per year to obtain a GHG emissions permit.

Recently, the EPA took a second important step forward , introducing plans to regulate GHG emissions from all new and existing power plants and refineries. The move to establish standards for two separate source categories demonstrates that the EPA is moving forward carefully on GHGs, rather than proposing a broad cap-and-trade regime
 

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