3rd edition
Authors:	Duncan Kenyon, Nikki Way, Andrew Read, Barend Dronkers, Benjamin Israel, Binnu Jeyakumar, Nina Lothian
Publisher:	Pembina Institute
Publish Date:	October 2016
PDF Download:	[Landowners' Guide]              [Landowners' Primer]
Initiation Phase
Exploration Phase
Development Phase
Pipelines and Other Infrastructure
Environmental Impacts
Abandonment and Reclamation
Compensation, Rights, and Hearings
Appendices                 Alberta Energy Regulator                 Other Alberta Departments                 Other Resources                 Legal Assistance                 Energy Industry Associations                 Provincial Non-profit Organizations                 Surface Rights and Local Groups                 Responsible Energy Development Act                 AER Oil and Gas Related Legislation                 AER Energy Related Legislation                 Other Provincial Acts                 Documenting Costs                 Glossary of Terms

Energy Resource Laws Administered by the AER

The Responsible Energy Development Act (see Responsible Energy Development Act above) tasks the Alberta Energy Regulator with the duties set out in all environmental laws (known as specified enactments) and all associated regulations, when the statute is relevant to the energy activities. These laws and regulations aren’t limited to just the oil and gas industry; they apply to many other industries and individuals and their activities. Other government bodies such as Alberta Environment and Parks have jurisdiction under these acts for activities that fall outside the scope of energy resource development. As such, REDA defines specified enactments as:

• the Environmental Protection and Enhancement Act (EPEA)
• the Water Act
• the Public Lands Act (PLA)
• Part 8 of the Mines and Minerals Act

These environmental laws should be read in conjunction with REDA, as REDA specifies the AER’s decision-making process and application process that will be used in place of the decision-making processes described in each specified enactment (the AER’s Rules of Practice describes the specifics of the decision-making process). Additionally, the Specified Enactment (Jurisdiction) Regulation (above) outlines how the AER should interpret these environmental laws when they are relevant to the energy resource activities under the Regulator’s authority. Therefore, we will refer to these two regulations often in the outline of the specified amendments below.

In all cases where an environmental law refers to a “inspector”, “investigator”, “officer”, or “director”, if it is under the AER’s authority set out in the Specified Enactment (Jurisdiction) Regulation, it is to be read to be referring to an individual authorized by the Regulator (section 11). For simplicity sake, we substitute the language in each case to simply read as ‘the Regulator’ or the AER.

Environmental Protection and Enhancement Act (EPEA)

Relevant sections of the Environmental Protection and Enhancement Act

Several sections of the Environmental Protection and Enhancement Act (RSA 2000, c E- 12) are relevant to the regulation of the energy industry. Part 2 of EPEA outlines the environmental assessment and approval process. In addition to licensing by the AER, some large oil and gas facilities, pipelines and oilsands operations also require environmental approvals (see AR 276-2003 Activities Designation Regulation, below). Some projects only need an approval but others require an environmental impact assessment before they can obtain an approval. As this section will only briefly review the Act, for a more thorough overview of issuing a statement of concern, the hearing process, or applying for an appeal, see When the Application is Filed: Submitting a Statement of Concern and Alberta Energy Regulator Hearings of this guide.

Part 2 Division 1: The Environmental Assessment Process

The Environmental Assessment Process is set out in EPEA sections 40–59. An environmental assessment is mandatory for some activities (see AR 111/93 Environmental Assessment (Mandatory and Exempted Activities) Regulation, in conjunction with section 11 of Schedule 2 of the AR 201/2013 Specified Enactments (Jurisdiction) Regulation, above).

Even where an environmental impact assessment is not mandatory, the Regulator may decide that such an assessment is required (EPEA sections 41–43). Section 44(3) of EPEA sets out the factors that the Regulator must consider when deciding whether an environmental assessment is needed.

The Regulator must provide public notice of its decision on whether an environmental assessment is needed to all those who submitted a statement of concern (EPEA section 45(5) and AR 112/93 Environmental Assessment Regulation, section 5).

If an environmental assessment is mandatory, or if the Regulator has decided to require an environmental assessment on a non-mandatory project, the company has to draw up the terms of reference for the preparation of the assessment report. These terms of reference are submitted to the Regulator for review (EPEA section 48(1)) and are also available for public review and comment (EPEA section 48(2) and AR 112/93, section 6). The company is also required to make a copy of the proposed terms of reference available to anyone who requests them.

When an environmental assessment is being done — whether it’s mandatory or at the discretion of the Regulator — there is an opportunity for public input. The company is required to issue a public notice that an environmental assessment is to be conducted (EPEA section 44(5); AR 112/93 Environmental Assessment Regulation, section 3, see below; and the AER’s Rules of Practice, section 8). Any member of the public who is “directly and adversely affected by the proposed activity” can submit a statement of concern (see EPEA section 44(6), subject to the AER’s standard of “directly and adversely affected”, in the AER Rules of Practice), which the Regulator is required to consider before issuing a decision (EPEA section 46; AER’s Rules of Practice, section 5.2). Although you are required to show that you are “directly and adversely affected” you can still submit a statement of concern even if you are not and hope that, taken with submissions of others who are eligible persons, it may help persuade the Regulator of the need to exercise its discretion to conduct an environmental assessment. Following any public input, the Regulator issues the final terms of reference and publishes a notice in at least one newspaper in the project area indicating where they can be viewed (AR 112/93 Environmental Assessment Regulation, section 6). Section 49 of EPEA states that an environmental impact assessment must be prepared in accordance with the terms of reference and also lists information that the report must include.

When an environmental impact assessment report is complete, the company sends it to the Regulator, who can request supplementary information if there are gaps in the report (EPEA, sections 50–51). The company is also required within ten days to publish a notice stating that the report, or a summary of it, can be obtained free of charge from the company and can be viewed at an address given in the notice (EPEA, section 52 and AR 112/93, section 8).

More information about the Environmental Impact Assessment Process is available on AER’s website at https://www.aer.ca/protecting-what-matters/protecting-the-environment/environmental-assessments.html. This link has been updated since the 2016 publication; the updated link may no longer contain the original information.

Part 2 Division 2: The Approval and Registration Processes

The approval and registration processes are set out in EPEA sections 60–86 and in regulation AR 113/93 Approvals and Registrations Procedure Regulation. Even if no environmental assessment has been required, there is an opportunity for public input in the approval process (AER Rules of Practice, section 6 (1)). The approval process applies to all projects that require an approval under AR 276/2003 Activities Designation Regulation (see below). This includes sweet and sour gas processing plants, pipelines over a certain size, syngas plants and oil production sites. While some projects require approvals, other, mostly smaller, projects only require registration (registrations are defined in EPEA Activities Designation Regulation, Schedule 2). No opportunity for public input is provided in the registration process (AER Rules of Practice, section 5.2 (2)(j)).

EPEA states that an application for an approval or registration must be made according to the regulations (section 66), described below. The Regulator can issue an approval or reject an application (section 68) and, in making a decision, they may consider any evidence that was submitted to the AER. The Regulator can also amend or cancel an approval (section 70).

When a company applies for an approval (or an amendment to an existing approval), the Regulator or the company has to provide public notice of the application (EPEA section 72). Any person who is “directly and adversely” by an energy resource project can submit a statement of concern to the AER (REDA section 32, and described in more detail in Filing a Statement of Concern). If you send a written statement of concern objecting to an approval, you should explain in detail all the concerns you have with the application. Provide as much relevant information as possible to support your arguments and indicate in what way you consider yourself to be directly affected, and specifically how it adversely affects you. The Regulator must receive this statement of concern within the time specified in the notice, usually 30 days from the last date that the notice is published. The Regulator then decides whether to grant an approval or amend an existing one, and what conditions the approval should include to protect the environment. The Regulator then sends a copy of the decision to anyone who submitted a statement of concern (EPEA section 74(4)).

See Post-Decision Follow-Up of this guide for more information on Regulatory Appeals, and the criteria for an eligible person. For more information on the Regulator’s approvals process, see the AER website at https://www.aer.ca/regulating-development/project-application/regulatory-appeal-process.html.

Part 4 The Environmental Appeals Board

Part 4 of EPEA describes how the Environmental Appeals Board is to handle appeals relating to decisions made under EPEA by a delegated authority. The Environmental Appeals Board still operates and performs its existing role, except on decisions related to energy resource development.

All appeals to AER decisions are heard by the AER and subject to its rules and regulations. Persons who are otherwise permitted to submit a notice of appeal under EPEA (Section 91) are eligible to submit an appeal to the AER if the decision is made without a hearing. There are several instances where appeals are subject to the rules under REDA, so Part 4 should be read in conjunction with section 19 (4) of the Specified Enactment (Jurisdiction) Regulation.

Part 5 Division 1: Release of Substances Generally

Division 1 is of general application. Sections 108 and 109 make it illegal to release substances in concentrations or amounts that could significantly damage the environment. Anyone who discovers that a release of this type is occurring or has occurred is required to report it immediately to the Regulator and, where known, to the owner, the person responsible for the substance, and anyone else who may be directly affected (section 110).

The person responsible for the substance must take any action necessary to stop the release and repair any damage (section 112) but the AER can also issue an Environmental Protection Order (or an Emergency Environmental Protection Order in the case of an immediate and significant adverse effect, regardless if an approval or registration was ever granted) to require that the necessary work be done (sections 113– 115) should the responsible party fail to address the release in a timely way. Section 116 allows the Regulator to issue an Environmental Protection Order to deal with offensive odours.

Part 5 Division 2: Contaminated Sites

This section is directly relevant to the Regulator’s powers with respect to the cleanup of designated contaminated sites. Where “a substance may cause, is causing or has caused a significant adverse effect” on the environment, the AER can designate the area as a contaminated site (section 125(1)). A site can be designated even when a reclamation certificate has been issued (section 125(2)(a)), the substance was released even in accordance with the EPEA or any other law (section 125(2)(c)), or if the substance came from another source or site (section 125(2)(e)). Any person who is directly and adversely affected by the designation can submit a statement of concern to the Regulator within 30 days of receipt of the notice of designation (section 127; AER Rules of Practice, section 6.21 (1)(b)). This enables landowners and occupants to present their views on what remedial measures should be taken to deal with the situation. The person responsible for the site may prepare a remedial action plan that the AER must approve (section 128). If necessary, the Regulator can issue an Environmental Protection Order to require the person to whom it is addressed to clean up or secure the contaminated site (section 129). The Regulator must consider a number of things when issuing an Order, including whether the former owner of the site was responsible in any way. In the Order, the Regulator may apportion costs for the work to be done and may regulate or prohibit the use of the site or of any product from the site.

The Regulator has power to pay compensation to any person who suffers loss or damage as a direct result of any actions taken under Division 2 (section 131).

Part 6 Conservation and Reclamation

EPEA Part 6 deals with the conservation and reclamation of specified land. This includes land that is being or has been used for the construction, operation or reclamation of a well, oil production site, battery or pipeline. A company may be required to provide financial security for its operations (section 135). A company is required to conserve and reclaim the land (section 137). Once land is satisfactorily reclaimed, an inspector authorized by the Regulator can issue a reclamation certificate (section 138). Once a reclamation certificate is issued, the Regulator will provide notice to anyone who filed a statement of concern, the registered owner of the land, and anyone who is considered directly and adversely affected by the activity related to the reclamation certificate (AER Rules of Practice, section 2 (i)). If the Regulator makes an amendment, deletion or an addition to the condition of the reclamation certificate on its own initiative, it is an appealable decision (EPEA, section 91(1)(i)(j)(k)). The Regulator will provide notice in this case to anyone who is considered directly and adversely affected, who submitted a statement of concern, or who is the registered owner of the land (AER Rules of Practice, section 7.2(6)(a)(iii)). Where operations are damaging the environment, the company may be issued an environmental protection order (sections 140 and 141); this can happen up to 25 years after a reclamation certificate has been issued if it becomes evident that further work is needed on the site (section 142 and AR 115/93 Conservation and Reclamation Regulation, section 15).

Part 10 Enforcement

Penalties can be imposed for the more serious contravention of an Enforcement Order or an Environmental Protection Order (sections 227 and 228).

Relevant regulations under the Environmental Protection and Enhancement Act

AR 276/2003 Activities Designation Regulation

Section 5 of this regulation indicates which activities require an approval (in addition to a licence or permit from the Regulator) to ensure that their emissions do not pollute the environment. These include:

• Construction, operation or reclamation of sour or sweet gas processing plants (Schedule 1, Division 2, Part 8)
• Construction, operation or reclamation of oilsands processing plants (Schedule 1, Division 2, Part 8)
• Enhanced recovery in situ oilsands or heavy oil processing plants (Schedule 1, Division 2, Part 8)
• Construction, operation or reclamation of syngas plants (Schedule 1, Division 2, Part 8)
• Construction or reclamation of pipelines over a certain size (Schedule 1, Division 3)
• Construction, operation or reclamation of oil production sites (Schedule 1, Division 3).

AR 111/93 Environmental Assessment (Mandatory and Exempted Activities) Regulation

This regulation lists all activities for which an environmental assessment is mandatory. Oil and gas projects that require an assessment include commercial oilsands, heavy oil extraction, upgrading and processing plants that produce more than 2,000 cubic metres of crude bitumen or its derivatives per day, and sour gas processing plants that emit more than 2.8 tonnes of sulphur per day.

AR 112/93 Environmental Assessment Regulation

AR 112/93 sets out the process for environmental assessments. It relates to mandatory activities as set out in AR 111/93, and to all other projects for which the Regulator decides that an environmental assessment is necessary, as set out in the Environmental Protection and Enhancement Act, sections 41–43. This regulation is referred to in detail in the above section on the Environmental Protection and Enhancement Act, so it is not described further here.

AR 113/93 Approvals and Registrations Procedure Regulation

This regulation amplifies the requirements for approvals and registrations set out in the Environmental Protection and Enhancement Act, sections 60–86. It specifies the information a company must submit when applying for an approval or registration. It must include, for example, a description of the public consultation that a company has undertaken or intends to carry out (section 3(1)(q)). The regulation also states that the Regulator may request oral or written information from a person directly and adversely affected by the application. It includes a list of issues that should be considered in the review of an application (section 6), which can provide a useful checklist when submitting an objection. Section 10 requires the Regulator to publish a notice when an approval or registration is cancelled or suspended.

AR 115/93 Conservation and Reclamation Regulation

This regulation describes the procedure for the reclamation of oil and gas well sites, batteries, pipelines, oil production sites and many other types of specified land. It lists the responsibilities of inspectors who may be employed by the local authority (section 4), including when and how a reclamation inquiry must be conducted (sections 6, 8). The requirements for a reclamation certificate are listed (section 12) but the operator remains liable for any negative impacts for up to 25 years after a reclamation certificate is issued (section 15). A reclamation certificate is not required for pipelines of less than 15 cm diameter that are ploughed in (section 15.1). Division 2 deals with financial security to ensure the costs of reclamation and conservation are completed. Security must be paid where an approval is required pursuant to Schedule 1, Division 3 of the Activities Designation Regulation, and for other activities designated by the Minister of Environment. Section 17.1 lays out the exemptions for security payments, such as the approval for the construction of a pipeline, or an approval regarding the construction, operation or reclamation of an oil production site.

AR 23/2003 Administrative Penalty Regulation

An administrative penalty can be imposed if a company fails to reclaim land. This regulation describes the penalty assessment process, such as determining the base amount of the administrative penalty according to the contravention’s potential for adverse effect, and whether the contravention was major or minor. It also describes the Acts and regulations that have provisions for an administrative penalty.

AR 154/2009 Remediation Certificate Regulation

This regulation establishes the guidelines that must be followed for soil and groundwater remediation, such as in the event of soil contamination from an oil spill. It outlines all the information that an operator will include to the Regulator before it receives a remediation certificate, including a plan to “effectively monitor, mitigate or prevent any adverse effect of substance” (section 3(2r)). The registered owner of the land will receive a notice if the Regulator issues or refuses to issue a remediation certificate (section 6).

Mines and Minerals Act Part 8 (Exploration)

The Mines and Minerals Act (RSA 2000, c M-17) outlines the major rules for exploring and developing mineral resources in Alberta, including oil, gas, coal, precious metals and oilsands. Part 4—Petroleum and Natural Gas Leases and Part 8—Exploration are most likely of interest to landowners and occupants. Part 4 is further discussed under Mines and Minerals Act Part 4 (Petroleum and Natural Gas) as it is under Alberta Energy’s jurisdiction. Part 8 requires a company or person to have an exploration permit before conducting exploration (section 107). The Act lists the powers of the Minister to grant and cancel licences (section 109–110) and the things to be covered in the regulations, such as fees, deposits and mineral sampling.

The Exploration Regulation, which is in part related to the Mines and Minerals Act, is described in Public Lands Act. It is enabled by Public Lands Act, Mines and Minerals Act, the Forests Act, and the Public Highways Development Act.

Public Lands Act

The Public Lands Act (RSA 2000, c P-40) governs all land that is not privately owned, held by the federal government or First Nations, or used for public parks or infrastructure. Over 60% of Alberta’s land mass is subject to the Public Lands Act, and this is where much of the province’s resource extraction occurs.

Agricultural leaseholders do not have the right to deny seismic exploration on land that they hold under an agricultural disposition. Sections 8 and 9 of the Public Lands Act permit regulations to be made with respect to public land (see Appendix E Glossary for definition of public land and Crown land). The Public Lands Administration Regulation deals with mineral leases and pipelines on public land. The Exploration Dispute Resolution Regulation deals with disputes about land use issues and compensation with respect to seismic exploration on agricultural leases on public land.

Persons who are otherwise permitted to submit a notice of appeal under the Public Lands Act (Section 121) are eligible to submit an appeal to the AER if the decision is made without a hearing.

Relevant regulations under the Public Lands Act

AR 187/2011 Public Lands Administration Regulation

The Public Lands Administration Regulation (PLAR) was created to address new concerns around public land. It effectively replaces the previous Disposition and Fees Regulation, and consolidates other relevant public land regulations. Part 3 of the PLAR summarizes the different dispositions available on public land, including Mineral Surface Leases (Division 5) and Pipeline Dispositions (Division 7). Under the PLAR,

Alberta Environment and Parks issues grazing licences (which do not give exclusive occupation rights to the holder), grazing permits (which are short term, and do not grant exclusive occupation rights to the holder) and grazing leases (which give exclusive occupation rights to the holder). The holder of the grazing licence is not entitled to compensation for loss of grazing capacity or for the entry of a separate leaseholder, such as a company extracting subsurface minerals (Division 1, Section 67). However, if there is damage to improvements or personal property on the licensed area, the holder of a grazing licence is entitled to compensation (Division 1, Section 67 (2)).

AR 227/2003 Exploration Dispute Resolution Regulation

Part 1 of the regulation deals with disputes regarding operational and land use concerns. On public land that is held under a grazing lease or a farm development lease, a company is required to notify the leaseholder, giving them a copy of the government’s exploration approval at least five days before exploration is planned (section 4). The company is not allowed on the land until the leaseholder gives consent in writing, or the company has obtained a right-of-entry order from the Surface Rights Board (see Part 2 of this regulation, below).

If the leaseholder has any concerns that relate to the planned seismic operations or land use, they can request a review by the local settlement officer. They must send a written request, explaining why they want a review and the desired outcome, within seven days of receiving a copy of the company’s exploration approval (section 5). The local settlement officer can make decisions with respect to any issues except compensation. If either the leaseholder or company do not agree with the local settlement officer’s decision, they can request a review by the Provincial Exploration Review Committee (section 8) within seven days of receiving the local settlement officer’s decision. However, the decision of the local settlement officer remains in effect until the Review Committee has made their decision (section 10). A decision by the Review Committee is binding. The Review Committee may determine who pays the costs of proceedings.

Part 2 of the regulation sets out the powers of the Surface Rights Board with respect to right-of-entry orders and compensation. If the leaseholder refuses to allow a company on their land to conduct seismic operations, the company can apply to the Surface Rights Board for a right-of-entry order (section 19). Either the leaseholder or the company can apply to the Board to resolve compensation issues with respect to access to a lease on public land (section 20–26) (see Surface Rights Board and Land Compensation Board of this guide for more information on the Surface Rights Board).

Part 3 of this regulation includes amendments to the Exploration Regulation, section 4, and indicates exactly which public lands are affected by the new regulations on access.

AR 284/2006 Exploration Regulation

This regulation deals with everything relating to geophysical exploration — implementing not only requirements under the Public Lands Act but also provisions under the Forests Act, the Mines and Minerals Act, the Public Highways Development Act and the Public Lands Act. The Alberta Energy Regulator is responsible for the implementation of this regulation, under Part 8 of the Mines and Minerals Act. It sets out who has the right to conduct exploration and what permission is required. Exploration is not permitted on private land unless the owner/occupant gives consent (section 8(1)). In the case of public land that is subject to a grazing lease or a farm development lease, the person leasing the land is required to give consent, or access can be granted under a right-of-entry order, issued under the Exploration Dispute Resolution Regulation (section 8(1)(e) of the Exploration Regulation, and section 4 of the Exploration Dispute Resolution Regulation). Exploration may also be conducted on a leased or closed roadway (section 10).

Part 5, dealing with exploration field operations, will be of interest to landowners and occupants. It sets out the distance requirements for seismic activity (section 44 and Schedule 2) and what the company must do if water or gas is released during drilling (section 46 and 47), or if subsidence occurs (section 48). The rules for the temporary and permanent abandonment of shot holes and test holes are dealt with in sections 50, 51, and 52. Other issues covered include contamination of water (section 45), clearing land and salvage of timber (sections 56), damage to roads (section 60). The company is required to clearly display its permit number on all exploration equipment (section 41) and on all shot holes drilled (section 55).

Water Act

The Water Act (RSA 2000, c W -3) allows the province to manage and protect its water and to administer water-related processes.

Relevant sections of the Water Act

Part 4 Approvals, Licences, Preliminary Certificates, Registrations

Division 1 covers approvals, which are required to commence or continue any activity unless it is authorized elsewhere in the Water Act (section 36), such as licences or registrations. “Activity” is defined in section 1(b) and includes anything that alters the flow or level of water. Division 2 covers licences, which are required in order to divert water for any reason, except where there is an exemption in the Act or regulations (section 49). Requirements for a temporary diversion licence are set out in sections 62– 65. Further requirements are given in the Water (Ministerial) Regulation, Part 1 and Part 2.

Part 9 Appeals

All persons who are otherwise permitted to submit a notice of appeal under the Water Act (Section 115) are eligible to submit an appeal to the AER if the decision is made without a hearing.

Relevant regulations under the Water Act

AR 205/98 Water (Ministerial) Regulation

Part 1 Activities

The word “activity” is for the purposes of this regulation defined to include anything that is “conducted in or on the works that is subject of a licence and that is owned or operated by the licensee” and that “impairs or may impair the exercise of rights of any household user, traditional agriculture user or other licensee, or causes or may cause a significant adverse effect on the aquatic environment, human health, property or public safety” (section 1 (4)(b)). Activities under the Water Act (not the Water (Ministerial Regulation) are defined more broadly for the purposes of that act.

Under section 2 an approval is required for activities, except for those listed in Schedules 1 and 2 at the end of the regulation. Activities such as the construction of river crossings can be completed without an approval if they are conducted according to a Code of Practice, and provided the activity does not harm the aquatic environment.

Part 2 Diversions and Transfers

Under section 5 a licence is required for the diversion of water, except for the exemptions listed in Schedules 3 and 4. The exemptions are for small-scale diversions of water, such as for filling a dugout or watering stock. A licence is not usually required in the forested area of the province for temporary diversions for oil rig and camp water or if the volume diverted is less than 5,000 cubic metres and water diversion is made in accordance with the conditions and time specified in the applicable surface disposition issued by the Alberta government. Another exemption often applicable to oil and gas operations is an exemption for diversion of saline groundwater (defined in the regulation as water that contains more than 4,000 mg/L TDS).

Part 7 Water Wells

This part (sections 35–71) sets out the requirements for the construction and abandonment of water wells. It includes requirements for the reporting of saline groundwater or gas in the drilling of a water well (section 43). A water well must be constructed in such a way that it does not lead to multiple aquifer completions (section 47(g)(i)).

ᐸ   Previous   Next   ᐳ