a preliminary review of surface disturbance in the great

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A Review of Provincial/Municipal Regulations and Guidelines applicable to Surface Disturbance associated with Natural Gas Developments on Crown Lands in the Great Sand Hills, Saskatchewan Prepared by: Bob MacFarlane, Canadian Plains Research Center, University of Regina Report prepared for Scientific Advisory Committee Great Sand Hills Regional Environmental Study November 21, 2006 Background The Great Sand Hills Regional Environmental Study, as part of the impact assessment and scenario phase, is reviewing natural gas development with the perspective of potentially reducing surface disturbance. Earlier related work was completed for the Scientific Advisory Committee (SAC) and this included Harriman. J.L. et. al. (2006) which describes governance instruments and institutional arrangements in the Great Sand Hills. Golder Associates Ltd. (2006) prepared, for SAC, a report on a review of gas technology and practices in the Great Sand Hills. As well, B.F. Noble (2006) prepared a spreadsheet database of reported spills from gas and oil developments covering the period of 1991 to 2005 for the Great Sand Hills. Gauthier D. et. al. (2006) received a gas industry perspective on surface disturbance and regulations/guidelines as part of the Participatory GIS Survey conducted with the Canadian Association of Petroleum Producers. This report now focuses on identifying what current practices are most likely to be potential causes of surface disturbance resulting from gas development. Further, the review seeks to determine what current provincial and municipal regulations and guidelines apply to the practices of concern and their respective environmental review and approval. Approach The process of gas development was segmented into environmental reviews and approval, exploration, drilling and operations. With SAC liaison support from Saskatchewan Environment employees, Robin Hilts, Land Use Planner, Swift Current and Fred Beek, Manager of Strategic Environmental Studies Section at Regina, the segments were further refined into specific practices. Provincial and Municipal responsibilities were identified for each practice. Government representatives were identified to discuss each practice, contact made and personal interviews were held on October 12, 16 and 30th in Swift Current and/or Regina, Saskatchewan. Discussions were linked to each practice as well as a general review of where there were opportunities to improve. Interviews were held with Daniel Buye, Administrator, Rural Municipality of Fox Valley; Todd Han, Assistant Director, Petroleum Development, Petroleum and Natural Gas, Saskatchewan Industry and Resources; Conrad Olson, Habitat Protection Manager, Saskatchewan Environment; Lorne Veitch, Regional Manager, South Regional Office, Agriculture and Food; and Graham Mutch, Project Manager, Environmental Assessment Branch, Saskatchewan Environment. Web pages for Saskatchewan Environment, Industry and Resources and Agriculture and Food were searched for related guidelines and regulations.

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Page 1: A Preliminary Review of Surface Disturbance in the Great

A Review of Provincial/Municipal Regulations and Guidelines applicable to Surface Disturbance associated with Natural Gas Developments on Crown Lands in the Great Sand Hills, Saskatchewan Prepared by: Bob MacFarlane, Canadian Plains Research Center, University of Regina Report prepared for Scientific Advisory Committee

Great Sand Hills Regional Environmental Study November 21, 2006

Background The Great Sand Hills Regional Environmental Study, as part of the impact assessment and scenario phase, is reviewing natural gas development with the perspective of potentially reducing surface disturbance. Earlier related work was completed for the Scientific Advisory Committee (SAC) and this included Harriman. J.L. et. al. (2006) which describes governance instruments and institutional arrangements in the Great Sand Hills. Golder Associates Ltd. (2006) prepared, for SAC, a report on a review of gas technology and practices in the Great Sand Hills. As well, B.F. Noble (2006) prepared a spreadsheet database of reported spills from gas and oil developments covering the period of 1991 to 2005 for the Great Sand Hills. Gauthier D. et. al. (2006) received a gas industry perspective on surface disturbance and regulations/guidelines as part of the Participatory GIS Survey conducted with the Canadian Association of Petroleum Producers. This report now focuses on identifying what current practices are most likely to be potential causes of surface disturbance resulting from gas development. Further, the review seeks to determine what current provincial and municipal regulations and guidelines apply to the practices of concern and their respective environmental review and approval. Approach The process of gas development was segmented into environmental reviews and approval, exploration, drilling and operations. With SAC liaison support from Saskatchewan Environment employees, Robin Hilts, Land Use Planner, Swift Current and Fred Beek, Manager of Strategic Environmental Studies Section at Regina, the segments were further refined into specific practices. Provincial and Municipal responsibilities were identified for each practice. Government representatives were identified to discuss each practice, contact made and personal interviews were held on October 12, 16 and 30th in Swift Current and/or Regina, Saskatchewan. Discussions were linked to each practice as well as a general review of where there were opportunities to improve. Interviews were held with Daniel Buye, Administrator, Rural Municipality of Fox Valley; Todd Han, Assistant Director, Petroleum Development, Petroleum and Natural Gas, Saskatchewan Industry and Resources; Conrad Olson, Habitat Protection Manager, Saskatchewan Environment; Lorne Veitch, Regional Manager, South Regional Office, Agriculture and Food; and Graham Mutch, Project Manager, Environmental Assessment Branch, Saskatchewan Environment. Web pages for Saskatchewan Environment, Industry and Resources and Agriculture and Food were searched for related guidelines and regulations.

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Key Observations The Provincial regulatory approval process for petroleum and natural gas exploration and drilling is documented in a series of on-line bulletins available through Saskatchewan Agriculture & Food, Environment and Industry and Resources web pages (Saskatchewan Economic and Co-operative Development, 2001A, B, C & D). Project developers work individually with Provincial Departments including: Saskatchewan Agriculture and Food (SAF) for the surface lease agreement; Saskatchewan Environment (SE) for environmental assessment; Saskatchewan Industry and Resources (SIR) for lease of crown mineral rights and the issuing of licenses for exploration and development; Government Relations (GR) for heritage resources and Saskatchewan Watershed Authority (SWA) for water use. Individual Rural Municipalities approve development permits under their zoning by-law. With consideration of this background, an initial meeting (September 25, 2006) of Bob MacFarlane, Fred Beek and Robin Hilts resulted in the decision to segment the process of gas development and to specifically focus attention on the following practices of concern:

• Gas leases and Pads o Spacing of pads o Location of pad on the gas lease o Equipment on the lease site o Recovery and disposal of materials associated with

• Gas Flow line

o Flow types o Installation procedures and time of construction o Construction of Bell holes

• Roads and Trails

o Placement o Maintenance

• General Operating Procedures

o Environmental Monitors: qualifications and reporting relationships o Well decommissioning o Spills associated with exploration and development o Reclamation of well sites, roads and flow lines/pipelines

Understanding first the regulatory process and the various check points for environmental review helped identify where each practice was linked to municipal or specific government department regulations and guidelines. Our attention is principally on crown lands, managed by Saskatchewan Agriculture and Food (SAF). Specifically these crown lands comprise the majority of land holdings in the Study Area. Such lands, principally native prairie grasslands are leased to ranchers and grazing co-ops under long term lease. On Saskatchewan agricultural crown lands, SAF supports gas exploration based on the following principles: “orderly and efficient resource management through proper planning and development; environmental conservation and protection as an integral component in the planning and development process; conservation of Saskatchewan’s remaining rangelands; minimal environmental (specifically soil) disturbance; restoration of the land to pre-development conditions; and the use of native species when re-seeding is a part of the site restoration” (Prairie Conservation Action Plan, 2005)

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In the bid process to obtain a natural gas lease, the natural gas company is aware if lands are environmentally sensitive based on restrictions on the Land Sale Notice listed by Saskatchewan Industry and Resources (SIR). When the successful bidder obtains the natural gas lease, four applications/reviews are typically undertaken to move forward to development. They include: surface lease and surface access; an application for a license to drill, operate and produce; a Rural Municipal development permit; and a clearance on heritage restrictions with Government Relations. On Crown lands, surface lease and surface access is granted by Saskatchewan Agriculture and Food. The license to drill, operate and produce is granted by Saskatchewan Industry and Resources. Development permits are granted by a Rural Municipality under their zoning by-law. Both SE and SAF Regional Offices receive an EPP Project Proposal/Restoration Plan and each Department completes an environmental review. Where SAF manages the crown land, SE submits their environmental conditions to SAF for incorporation into the surface lease agreement. Relative to the Great Sand Hills, environmental clearance from SE is typically considered with respect to the following legislative Acts: The Environmental Assessment Act, The Wildlife Act, The Wildlife Habitat Protection Act, The Ecological Reserves Act and the Federal Species at Risk Act. Appendix A, sourced from the Saskatchewan Conservation Data Centre, details the activity restriction guidelines for sensitive species in natural habitats. Set back distances for gas developments are recommended for species at risk and typically range from 50 m. for flora and from 100 m to 2000 m for fauna (Saskatchewan Environment, 2003).On Crown or private lands, all seismic projects, drilling, flowline/pipeline projects, access routes and production facilities are subject to The Environmental Assessment Act. Under the latter Act, SE assesses whether there is the potential for significant impacts. All oil and gas proposals in the Great Sand Hills usually require as a minimum to have an Environmental Protection Plan (EPP) submitted for environmental assessment. Guidelines for the preparation of an EPP for oil and gas require the developer to identify potential impacts, mitigation and monitoring (Saskatchewan Environment and Resource Management, 2000 A & B). Proposals could be considered a development and thereby require an environmental impact assessment (EIA) and the preparation of an environmental impact statement. The latter would undergo a technical review, public consultation, a recommendation to the Minister of Environment and a Ministerial decision on approval. To-date, 5 EIA’s have been undertaken in the Great Sand Hills and each has approved conditions for development and environmental protection (Figure 1). These environmental approvals reside over time with the Project and subsequent new owners assume as a condition. A recent EIA condition carry over example was the Burlington Resources Canada Ltd. 2005/2006 Freefight Lake Shallow Gas Development Project (No. ES-01722-PL.02) in the Great Sand Hills (Burlington Resources Canada, 2004). Through Government Relations, applications for surface leases are considered under The Heritage Property Act that defines heritage property of interest in the GSH Study Area with respect to historical, cultural, environmental, archaeological, palaeontological, aesthetic or scientific values. A Heritage Resource Impact Statement may be required. Under The Provincial Land Regulations Saskatchewan Agriculture and Food (SAF) reviews the Project Proposal / Restoration Plan plus a survey plan and issues on Crown Land a Petroleum and Natural Gas Surface Lease agreement to the gas company. SAF is particularly concerned with adoption of and compliance with criteria outlined in the SAF publication, Restoration of Saskatchewan’s Agricultural Crown Rangelands: Guidelines and Procedures for Developers (September 1999). Surface leases in the GSH Study area are subject to all conditions that the Great Sand Hills Planning District Commission applies for the duration of the Project.

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Rural Municipalities in Saskatchewan have legislative authority to manage oil and gas developments under The Rural Municipality Act and The Planning and Development Act. Rural Municipalities typically require development permits for individual wells and compensation for road damages. The interview with Daniel Buye, Administrator for R.M. Fox Valley No. 171 provided an overview on the relationship of the gas industry and a rural municipality. Appendix B provides a detailed example of exploration/gas/oil/pipeline development policy from the R.M. of Fox Valley No. 171. Further, Municipal Planning Commissions, like the Great Sand Hills Planning District Commission are established under The Planning and Development Act. The intent is to ensure consistent bylaw administration between the participating Rural Municipalities and to similarly advise on approval and conditions for activities under zoning bylaws. Saskatchewan Industry and Resources (SIR) are the initial point of contact in the development process by receiving, reviewing and approving the gas company’s application for a license to drill, operate and produce. Regulation for the development of natural gas is under The Saskatchewan Oil and Gas Conservation Act. The interview process with Todd Han resulted in the identification of how SIR is working with the gas industry in the creation of environmental guidelines dealing with surface disturbance issues like storage standards (Saskatchewan Energy and Mines, 2002), drilling waste management (Saskatchewan Energy and Mines, 1999) and fracturing fluids (Saskatchewan Energy and Mines, 2000). The gas industry and government co-operate through the Saskatchewan Petroleum Industry and Government Environment Committee (SPIGEC). Formed in 1992, SPIGEC membership comprises SE, SIR and SAF with industry associations like the Canadian Association of Petroleum Producers (CAPP) and the Small Explorers and Producers Association of Canada (SEPAC). Examples of the cooperative work from SPIGEC include site remediation guidelines and qualification guidelines for environmental monitors (Saskatchewan Petroleum Industry and Government Environment Committee, 2000 & 2002). Industry associations research and inform membership. An example is the publication, Environmental Operating Practices for the Upstream Petroleum Industry: Saskatchewan Operations Guide (Canadian Association of Petroleum Producers, 2002). Based on the interviews and information provided on the regulatory approval processes and guidelines described above, the practices of concern were assigned by jurisdiction:

Activity SIR SAF SE GR RM Gas Leases & Pads X X X X X Gas Flow Lines X X X X Roads & Trails X X X X General Operations - Environmental Monitors X X - Well decommissioning X X X - Spills X X -Reclamation X X X X

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Discussion For gas development, industry and governments consistently recognize the Great Sand Hills as having sensitive environmental lands. Current regulations and guidelines from provincial and municipal governments and industry seek to minimize surface disturbance in gas exploration and development. The approval process is defined but it requires a gas company to work simultaneously with multiple provincial departments and rural municipalities. The provincial departments of SAF and SE work closely together as land managers in the process of granting surface access. The common link is their review of the Project’s Environmental Protection Plan or the Environmental Impact Statement. Their relationship is less direct with SIR and GR departments and individual RM governments. No one single regulatory body leads the process of approval and communication with industry. The Environmental Assessment Act (Saskatchewan) defines a development and thus the need for an environmental impact assessment. Despite the high sensitivity of the Great Sand Hills for species at risk, a qualifier for an environmental impact assessment (EIA), only 5 Projects have undergone an EIA. This is significant given over 1,500 gas wells now have been drilled in the Great Sand Hills Study. All projects are screened individually and generally all require an Environmental Protection Plan (EPP). Cumulative effects of developments in the Great Sand Hills are not particularly well documented or considered at the scale of the EPP. The need for the Great Sand Hills Regional Environmental Study is clearly evident and this represents an opportunity to re-think current environmental zoning and to work toward the establishment of an overall environmental plan for future development in the Great Sand Hills. Moreover, the precedent conditions for environmental assessment approved projects must be referenced. The overall process and enforcement of the regulations and guidelines at all government levels is limited by staffing. An example is SIR that has 16 field officers responsible province-wide for 62,000 oil and gas wells expanding at the rate of 4,000 new wells per year. In southwest Saskatchewan, 3 SIR Field Officers service this area. Implementation of and compliance with environmental protection plans and environmental impact statements is largely assumed by the gas industry. Environmental monitors working for individual gas companies provide the on-site monitoring to check compliance with conditions for drilling and other operations. The gas industry while supportive seeks consistent, reasonable and clear regulations between resource users, including ranchers and municipalities. At the local level, the zoning for development and the approval process can vary between Rural Municipalities. While there is good evidence that the regulations and guidelines are in place to ensure environmental protection, it remains unclear on the progress for compliance. Increased communication with landowners, particularly crown lessees and Rural Municipalities is an opportunity to improve working relationships for all levels of government and industry. Summarized briefly are the discussions by practice of concern and specific opportunities for improvement:

1. Well Pads and Leases: Plot plans are submitted to SIR and spacing of well pads is driven by safety issues. Location of the pad on a lease is specified by Minister’s Order and preferred to be centre to avoid interference with surrounding leases. Off-target locations are permitted to address environmental SE set back guidelines. Equipment on site is specified by SIR guidelines. Fracturing fluids and sands are employed in the Milk River formation and care is taken to store in tanks, recycle and follow guidelines for safe

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disposal offsite. Directional and slant drilling with multiple wells per pad comprise now about 16 percent of the total wells present in the GSH Study Area. This type of drilling first commenced in the late 1980s and today is implemented where a condition of an environment assessment approved project area exists or for site restrictions to overcome a sand dune as an example. Results show a reduced surface disturbance, attributed to as little as 1 pad per section with 6 directional/slant wells and 1 vertical well per pad. The corresponding reduction in length of flow lines installed and most importantly reduced length of gravelled trails and roads with these multi-well pads is a significant gain for land conservation.

2. Gas Flow Lines: The plastic buried flow lines are not licensed. This type of flow line is

governed by CSA standards. In the GSH Study Area, gas companies generally employ a lower impact installation of spider ploughing and install as per environmental guidelines in fall prior to freeze-up. There is an opportunity to have a 3rd Party complete an overall mapping of flow lines in the GSH. Opportunities exist to loop flow lines and to share lines between different companies. Environmental monitors are most focused on drilling activities and less likely to be involved in flow line installation and their maintenance. On well decommissioning, gas flow lines are sealed and left buried.

3. Roads and Trails: There is an opportunity to follow through on an interest by the GSH Planning District Commission to show the use of existing trails/roads and to establish an overall plan for permitting. Roads and trails are normally gravelled. Rural Municipalities enforce provincial road bans. Reducing the number of well pads per section and thereby directly reducing the overall amount of trails and roads may represent the most critical change that could be made to reduce surface disturbance in the Great Sand Hills Study Area. This change coupled with remote operating technology and management practices for over the grass access would significantly reduce the surface disturbance.

4. General Operating Procedures:

a. Environmental Monitors: Guidelines for qualifications are provided by SPIGEC

and SE. Gas companies recruit as employees. There is an opportunity to strengthen and expand the role of environmental monitors funded by the gas industry. Consideration could be given to change the reporting relationship directly to the Great Sand Hills Planning District Commission or the Government of Saskatchewan. Expanded roles would include all aspects of seismic exploration, drilling, maintenance and reclamation.

b. Well Decommission: Life of individual wells can range up to 50 years and well decommissioning is not expected to be significant in the near future. However, it is recognized as a growing liability to all parties. SIR with industry associations are moving forward to create an Orphan Well program that will create a financial source for funding decommissioning when a gas company does not have the funds to complete. This new initiative is nearing completion and should be endorsed as a first step in reclamation.

c. Spills: Less prevalent and of smaller magnitude when compared to oil development, there remains a concern for monitoring and reporting of spills. An effective environmental monitor is considered the most direct opportunity to manage spills.

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d. Reclamation of Well sites and Roads/Trails: SAF is particularly interested in seeing a future monitoring and research process to evaluate the best methods to reclaim lands, particularly roads and trails. There may be an opportunity to reduce the length of roads with over the grass access and use of remote technology for well operations.

Outlook The Great Sand Hills Regional Environmental Study provides an opportunity to re-think the current environmental assessment process for gas project proposals in the Great Sand Hills. Considerable gas drilling has already occurred with over 1,500 wells and most of this activity has occurred over the past 10 years. Only 5 project proposals to-date actually have qualified as developments and thus required an environmental impact assessment in the Great Sand Hills. Most gas projects are approved with an environmental protection plan. While regulations and guidelines are established for reducing surface disturbance, measuring the cumulative effects across this landscape is just now being recognized particularly in the extent of roads and trails. Monitoring and enforcing the regulations and guidelines are limited by government staffing levels and an approach where there is a reliance on industry to carry out these environmental functions. The level of compliance is not known from this preliminary review. Directional and slant drilling results in multiple wells per pad and fewer well pads per section with less accompanying roads, trails and flow lines. At the Great Sand Hills, this drilling commence in the late 1980s. It’s application is specific to prior environmental assessment approved project areas or where a site condition like avoidance of a dune made it a necessity. Representing only 16 percent of the total well inventory in the Great Sand Hills, this type of drilling could be expanded as an approval condition for new in-fill and step-out developments. Adoption could be enhanced by a reduction in royalties paid by industry adopting this technique. or it could be simply set as an environmental condition for drilling in the Great Sand Hills. There is potential to further reduce surface disturbance and build upon the current efforts of provincial and municipal governments, the Great Sand Hills Planning District Commission and the gas industry. A coordinating role by a single department should be considered along with consistent Rural Municipal by-laws. The Canadian Association of Petroleum Producers is supportive of working in a partnership with governments, lessees and individual gas companies to implement practices to further reduce surface disturbance.

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Figure 1

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Appendix A

Saskatchewan Conservation Data Centre Saskatchewan Activity Restriction Guidelines for sensitive species in natural habitats (September 2003) Sourced from http://www.biodiversity.sk.ca/ftp.htm These guidelines are to assist proponents during the planning of proposed Projects. If your project will include any activity falling within the listed setback distances, you are advised to contact the appropriate Saskatchewan Environment EcoRegion office early in the planning stage to ensure all work will be completed in a manner that will minimize impact. Discussing your project in advance with Saskatchewan Environment will reduce the chance your project will be delayed during the construction phase due to concerns with potential impacts on rare or endangered species. Activity Restriction Guidelines have been provided by the SKCDC for most species identified in Table 1 for nearly a decade through data requests and other directed queries. The SKCDC was asked to review their existing activity restriction guidelines due to changes in federal legislation regarding species at risk. (The Species At Risk Act (SARA) was proclaimed in June 2003 by the federal government.) The intent of this review was to update and integrate Saskatchewan’s guidelines with those used by Environment Canada for species at risk. For most species of provincial concern, the set back distances and times have not changed from existing guidelines that we currently distribute. There should be minimal confusion with the disturbance categories as each species has the same set back distances for medium and high disturbance categories. The procedure for distributing these guidelines will not change. To clarify, for any given data request submitted to the SKCDC, guidelines are only provided for species of known occurrence in the area of new development. The guidelines have been posted on the internet to facilitate public access. See the Committee on the Status of Endangered Wildlife in Canada (COSEWIC) website http://www.cosewic.gc.ca/index.htm for a complete listing of species at risk in Canada. These species are listed under SARA. For Environment Canada’s industry guidelines see http://www.pnrrpn.ec.gc.ca/nature/petroleum/dg00s00.en.html. D. Scobie and C. Faminow developed these guidelines for Environment Canada through consultation with more than 100 leading experts as well as industry representatives. The scope of human activities in the environment is a continuum and cannot be easily classified. Three categories of disturbance have been adopted by Environment Canada. However, these are guidelines only and should be treated as such. These Activity Restriction Guidelines reflect current knowledge of each species. Changes to the guidelines may occur as information becomes available. Please contribute your knowledge. Reports and rare species occurrences can be submitted to: http://www.biodiversity.sk.ca/submit.htm or Saskatchewan Conservation Data Centre, Rm. 436, 3211 Albert St., Regina, Saskatchewan, S4S 5W6

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AMPHIBIANS Federal guidelines were adopted for Great Plains Toad and Northern Leopard Frog which are listed under SARA. Current set back distances used by Grasslands EcoRegion for wetlands, water bodies and watercourses adopted (0-90m) for species of provincial concern (Canadian Toad and Plains Spadefoot (toad)). REPTILES The existing guidelines stated 200 m for development activities so there was no change. A major issue for snakes is road mortality. Previous reports indicate that the mean distance of movement by hognose snakes is 200 m (Wright and Didiuk 1998). BIRDS The setback distances are not only to address auditory disturbances but also permanent alteration in habitat. For Piping Plover, the high water mark is used, as it is typically the same as the outer edge of suitable habitat. This is a globally rare species, G3; therefore permanent habitat loss is of major concern. Changed Golden Eagle guidelines to meet Grasslands EcoRegion setbacks. No change was made from the existing restriction guidelines for colonial nesting birds and Osprey. Sage Grouse are critically imperiled in Saskatchewan. (Setback distances have already been increased to 1000 m on lands managed by PFRA.) Nesting habitat of bird species that use the same nest site year after year (i.e. Loggerhead Shrike, Ferruginous Hawk and colonial nesting birds) should not be destroyed at any time. MAMMALS Ord’s Kangaroo Rat inhabits highly sensitive active dune areas. This species is listed under SARA therefore federal guidelines were adopted. Swift Fox were extirpated from Saskatchewan and is still found in very low numbers. This species is listed under SARA therefore federal guidelines were adopted. PLANTS Plants make up the bulk of the species of concern and the one-size-fits-all approach is an attempt to simplify matters. The 0 m setback distance is for foot traffic only (FTO), ATV and other small vehicles would fall under a higher disturbance category.

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Appendix B

Exploration/Gas/Oil/Pipeline Field Development Policy Requirements and stipulations of the Rural Municipality of Fox Valley No. 171 (1) A development in this policy statement shall be defined as the carrying out of any building, engineering, mining or other operations on, or over land and roadways, or the making of any material change in the use of any building, land or roadway. (2) That all development applications for Council approval shall be requested in writing at least 60 days prior to the commencement of proposed undertaking, and no examination/approval fee shall apply (Council meets monthly). All requests for Council approval prior to the expiry of 60 days must be in writing and accompanied by an examination/approval fee of $1000.00. Submission of application for approval shall not be construed as assured approval. Any development commenced prior to receiving approval shall be assessed a $500.00 penalty fee and possible refusal. (3) That the Applicant/Developer shall be diligent and responsible for contacting all utility companies with regards to locating underground facilities. (4) That during activities, facility construction and/or field development, and in lieu of the issuance of overweight permits, all damage caused to roadways and all cost of dust control on roadways in the area of project, shall be assessed to and be the responsibility of Applicant/Developer; therefore, the use of low ground pressure tired vehicles is encouraged. (5) Road Damages caused from the unauthorized movement of equipment on municipal roads under unfavorable (wet/muddy) conditions will result in the following costs being assessed to the applicant/developer: Developed Road Allowances Capital Loss: $2,000 minimum charge up to ¼ mile: and $1,000 per ¼ mile for each additional ¼ mile

or portion thereof Gravel Loss: $750 per ¼ mile or any portion thereof Actual Repairs: $125 per hour – 1 hour minimum charge Administration Fee: $100 flat fee Undeveloped Road Allowances Capital Loss: Nil Gravel Loss: Nil Actual Repairs: $125 per hour – 1 hour minimum charge Administration Fee: $100 flat fee (6) That in accordance with Bylaw No. 1/91 every oil/gas well drilling contractor before undertaking well-drilling in the Municipality, shall pay to the Municipality a license fee of $450.00 per well. (7) That when and where seismic exploration, energy resource drilling or pipeline installation are considered unacceptable due to site instability, sensitivity, environmental/wildlife/flora/ecosystem concerns, alternative development options will be considered by Council in consultation with other approval and regulatory agencies (e.g.. SIR, SE, SAFRR).

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(8) That no seismic exploration, energy resource drilling or pipe installation shall be conducted within 350 meters of any household or domestic water supply prior to Applicant/Developer conducting a pre-development water quality (domestic supply, elemental) and quantity (flow) report, which shall be filed with the property owner and Municipality prior to the commencement of any development. (9) That the developer shall endeavor to reduce roadway travel and impact by obtaining supplies and services from the nearest possible location, otherwise the Municipality may require a “road haul agreement” of bulk haulers. i.e. fill dirt, gravel, water, mud spreading etc. (10) That all oil/gas wells drilled within the Municipality shall have the surface casing cemented in place to a minimum depth of 75 meters. (11) That copies of all agreements with landowners, with regards to the spreading of drilling fluids and muds, underground and/or pit disposal of wastes, stating specific land locations be filed with the Municipality prior to any development. (12) That all development activities shall be conducted during favorable surface moisture conditions so as to prevent extensive soil erosion, and should unfavorable conditions be declared by Council, development must be rescheduled or immediate remedial action be taken by the Developer. (13) That all equipment working on a development project within the “environmentally sensitive” zones be equipped with fire prevention, control and extinguishing equipment. (14) That should snow plowing of undeveloped road allowances be necessary in “environmentally sensitive” zones, equipment shall be equipped with shoes to allow at least four (4) inches of snow cover to remain and thus minimize disturbances. (15) That should the Applicant/Developer believe that some maintenance or upgrading of undeveloped road allowances is necessary, application shall be made and approval received from the Council to have municipal equipment or contracted equipment undertake work. All work shall be to municipal specification and shared as per a pre-authorized agreement. (16) Existing municipal approaches shall be used wherever possible; new approaches or relocation of existing approaches must have Divisional Councilor approval and adjacent landowner agreement, as to specific location. All approaches must have 5:1 side slopes and a minimum of 400 mm diameter culverts installed where necessary. (17) That all damages caused to adjacent property owners facilities, growing crops and/or equipment situated on/or adjacent to road allowances shall be the responsibility of Developer. (18) That all pipeline-road allowance crossings must have prior Council and Divisional Councilor approval as to specific location, depth and specific time of crossing/construction. (19) That all pipeline-road allowance crossings have a minimum cover of eight(8) feet (2.5m) at ditch bottom, and across the complete road allowance and/or municipal registered easement area as the case may be.

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(20) That all pipeline-road allowance crossings be by a “boring” method unless approved otherwise. (21) That all pipeline-road allowance crossings must be of heavy walled pipe across the complete road allowance and/or municipal registered easement area as the case may be, in order to withstand crossing by construction equipment. (22) That all costs of locating pipeline at road allowance crossings and replacing of access approaches to well leases due to road construction, shall be totally the responsibility of pipeline operating company. (23) That in the event that circumstances arise which require a pipeline to be lowered or moved, the operating company shall be responsible for the lowering or moving of pipeline, except that if the pipeline was installed in accordance with municipal specifications, then the Municipality shall be responsible for the costs involved. (24) That the placement of wellheads, above ground structures and paralleling underground pipelines be kept beyond one hundred and fifty(150) feet from the center line of any road allowance; as well as beyond three hundred(300) feet from the intersection of two or more roads or road allowances. (25) That any reclamation and/or re-vegetation plans not originally contained in application of the Applicant/Developer must receive prior Municipal Council approval. That only certified “weed-free” seed mixes approved by the municipality and appropriate agencies shall be used. (26) That the Applicant/Developer shall be diligent and responsible for informing all levels of project personnel of the required development requirements and stipulations. A development that does not comply with requirements may result in revocation of development permit, a cease work order and any other regulatory penalties. (27) Where circumstances arise that it is believed not practical or impossible to adhere to the requirements and stipulations of the Rural Municipality of Fox Valley No. 171; the Municipal Council may entertain applications to deviate from standards. (updated: October 3, 2005)

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Saskatchewan Economic and Co-operative Development. 2001 B. The Provincial Regulatory Approval Process in Saskatchewan for Petroleum and Natural Gas Drilling and Seismic Exploration. Information Bulletin, September 2001, Business Services Improvement Branch, Saskatchewan Economic and Co-operative Development, Regina, Saskatchewan, 19 pp. Saskatchewan Economic and Co-operative Development. 2001 C. The Role of Rural Municipalities in Oil and Gas Exploration and Development Projects in Saskatchewan. Information Bulletin Updated September 2001, Business Services Improvement Branch, Saskatchewan Economic and Co-operative Development, Regina, Saskatchewan, 4 pp Saskatchewan Economic and Co-operative Development. 2001 D. Applicable Acts and Regulations for Oil and Gas Exploration and Development Projects in Saskatchewan. Information Bulletin updated September 2001, Saskatchewan Economic and Co-Operative Development, Regina, Saskatchewan, 6 pp. Saskatchewan Energy and Mines. 1999. Saskatchewan Drilling Waste Management Guidelines. Information Guideline GL 99-01, December 1, 1999, Saskatchewan Energy and Mines, Petroleum Development Branch, Regina, Saskatchewan, 38 pp. Saskatchewan Energy and Mines. 2000. Saskatchewan Hydraulic Fracturing Fluids and Propping Agents Containment and Disposal Guidelines. Information Guideline GL 2000-01, October 1, 2000, Saskatchewan Energy and Mines, Petroleum Development Branch, Regina, Saskatchewan, 9 pp. Saskatchewan Energy and Mines. 2002. Saskatchewan Upstream Petroleum Industry Storage Standards. SEM Standards S-01, January 1, 2002, Saskatchewan Energy and Mines, Petroleum Development Branch, Regina, Saskatchewan, 33 pp. Saskatchewan Environment. 2003. Saskatchewan Activity Restriction Guidelines for Sensitive Species in Natural Habitats. Conservation Data Centre, Saskatchewan Environment, Regina, Saskatchewan, 3 pp. Saskatchewan Environment and Resource Management. 2000 A. The Saskatchewan Environmental Assessment Act Guide to Proposal Development – Oil and Natural Gas. Projects, Saskatchewan Environment and Resource Management, Regina, Saskatchewan, 6 pp. Saskatchewan Environment and Resource Management. 2000 B. Guidelines for Preparation of an Environmental Protection Plan (EPP) for Oil and Gas Projects. Procedures under The Environmental Assessment Act (Saskatchewan), Environmental Assessment Branch, Saskatchewan Environment and Resource Management, Regina, Saskatchewan, 11 pp. Saskatchewan Petroleum Industry / Government Environment Committee. 2000. Saskatchewan Upstream Petroleum Sites Remediation Guidelines. Guideline No. 4 –

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