October 2016 Regulatory Bulletin for the Oil and Gas Industry in Western Canada

BRITISH COLUMBIA

BC Oil and Gas Commission (OGC) – Change of Suspension Requirements for Inactive Wells

Federal Government Announces Carbon Plan

The Federal Government’s plan to implement nationwide carbon pricing was introduced on October 3, 2016. Beginning in 2018, a minimum price of $10/tonne will be applied to all provinces and territories; the price will increase by $10/year until 2022. Provinces have the choice of implementing either a carbon tax or cap-and-trade system, however, the minimum price must be achieved or an additional tax will be implemented to make up the difference. All revenues will be returned to the provinces.

The Canadian Taxpayer’s Federation estimates that the average family will pay an additional $2,500 tax per year by 2022.

British Columbia and Alberta already have carbon plans that call for $30/tonne by 2018. Premiers Clark and Notley are gen-erally in support of the federal approach, however Alberta’s premier says the $50 price is too high for today’s economy. She suggests that her support is contingent on federal cooperation for pipeline approvals.

Saskatchewan Premier Brad Wall has been vocally opposed to federal carbon pricing and is reviewing options for a constitu-tional challenge of the tax. He is concerned that an economic impact assessment has not been completed for the plan, and would rather see federal investment in carbon-capture and renewable energy sources.

FEDERAL

Commencing January 1, 2017, the BC OGC expects well permit holders to follow new guidelines for the suspension of inactive wells. These guidelines are updated in Chapter 9 of the Oil and Gas Activity Operations Manual and the purpose of the change is to comply with Section 25 of the Drilling and Production Regulation. Wells that have been inactive or suspended for 10 consecutive years, and that are classified as low risk, will need to be suspended in accordance with Option A or B of the guide. Option C will apply to non-perforated wells, and permit holders may no longer suspend wells by having two master valves.

https://www.bcogc.ca/node/13517/download

BC OGC – Pipeline Safety and Security Advisory

The BC OGC has issued an advisory for permit holders to review their security management plans and processes, specifically to prevent unauthorized access to sites. This is in response to a number of incidents in the United States where unauthorized persons accessed and interfered with pipeline operations. Unauthorized access has the potential to endanger public safety, impact the environment and damage infrastructure.

https://www.bcogc.ca/node/13530/download

ALBERTA

Jennifer Keturakis, P.Eng.Manager, Environment & Regulatory

403-619-9650Jennifer.Keturakis@IntegratedSustainability.ca

www.IntegratedSustainability.ca

Changes to Industrial Activity Within Caribou Zones

Caribou are a threatened species federally and provincially, and their populations are declining. The federal Species At Risk Act requires the Province of Alberta to manage 65% of critical caribou habitat by October 2017.

On September 27, 2016 Alberta Energy placed an interim restriction (effective immediately) on the sale of mineral rights within all caribou ranges in Alberta, which applies to petroleum, natural gas, oil sands, coal, metallic and industrial mineral rights.

On October 1, 2016 the Alberta Government announced a partnership to restore caribou habitat in the Little Smoky and A La Peche caribou rangelands. The government will work with the oil and gas industry to restore 10,000 linear km of seismic lines as part of a draft range plan. Work is expected to begin during the spring of 2017.

For more information on the partnership to restore caribou habitat, and updates on the Alberta Energy interim restriction, please visit the links below:

Alberta Governmenthttp://www.alberta.ca/release.cfm?xID=43520DF995704-A388-8795-4DABA92A9A87EEE4

Alberta Energy Electronic Transfer Systemhttps://ets.energy.gov.ab.ca/logon.aspx?ReturnUrl=%2f

Did You Know?Recent changes to guidelines for operations in Green Zone wetlands affect the

requirements for wetland assessment, regulatory approvals and potential compensation. Integrated Sustainability is positioned to support operations in wetlands, with our

Professional Agrologist, Amanda Jardine, meeting required competencies for assessments and approvals. Please contact us if you would like further information about the

requirements for working in wetland environments.

Contact Us

Amanda Jardine, P.Ag.Environment & Regulatory Advisor

Oil Spills and Penalties

On October 25, 2013, Apache Canada Ltd. (Apache) reported a release of just over 1 800 m3 of produced water, affecting about 3.8 hectares of land near Zama city. The release was due to physical damage of a composite pipeline, possibly caused by wildlife (bison). On September 30, 2016, Apache pleaded guilty to two counts of failing to operate its pipeline in a manner compliant with the Pipeline Act. Apache was ordered to pay a total of $350,000 in penalties, with a portion of the penalties to be used in a creative sentencing project.

http://www.aer.ca/about-aer/media-centre/news-releas-es/news-release-2016-10-04

Trilogy Energy Corp. (Trilogy) reported a crude oil emulsion release on October 6, 2016. An estimated 250 m3 of oil and produced water, spilled into a non-fish bearing, flowing marsh area. The cause and duration of the release are under investigation, and Trilogy is conducting a site clean-up and remediation work. On October 25, 2016, the Alberta Energy Regulator issued a formal notice of investigation to Trilogy.

http://www.aer.ca/about-aer/media-centre/news-releas-es/news-release-2016-10-25