On Monday, October 4, 2010, the British Columbia Oil and Gas Activities Act ("OGAA") and Regulations came into effect. The Pipeline Act, the Oil and Gas Commission Act and the regulatory provisions currently found in the Petroleum and Natural Gas Act will be repealed and activities previously regulated under those statutes will now be governed under the singular framework of the OGAA.

The implementation of the OGAA represents an overhaul of oil and gas regulation in British Columbia, revamping roughly 90% of B.C.'s nearly 50‐year‐old oil and gas regulatory framework. The OGAA actually received Royal Assent in 2008, but it was not until October 4th that it came into force, following extensive consultation and refinement. According to the Ministry of Energy, the new legislation is intended to modernize the regulation of the dynamic petroleum industry, account for new technological developments and changes in societal norms and standards with respect to the environment and environmental protection, and recognize growth in the sector in a way that makes sense for industry, stakeholders, the environment and all British Columbians.

Among the major changes brought about by the OGAA is a clarification and expansion of the role of the provincial Oil and Gas Commission ("OGC"), the regulatory agency responsible for overseeing petroleum and natural gas operations in B.C. This is coupled with the creation of a new appeal tribunal created to respond to challenges to OGC decisions. Included in the OGC's new mandate are:

  • increased powers to consider stakeholder comments and concerns;
  • an expanded suite of Compliance and Enforcement tools, including:
    • the ability to levy penalties in accordance with the nature and severity of the individual contravention and the operator's compliance history,
    • new administrative and monetary penalties,
    • expanded powers to amend, cancel, or suspend permits; and
  • increased powers at the outset with respect to issuance of permits, including refusal to issue, or attaching conditions on issuance.

There is also an increased role for Ministries connected to oil and gas activity, including the introduction of a formal say on planning and permitting from the Ministers responsible for Forestry, Agriculture and Environment.

The OGAA also includes increased consultation requirements, mandating that an applicant for a permit must notify and consult with nearby land owners, First Nations and other stakeholders prior to applying. Further, private land owners can appeal a decision of the OGC regarding the issuance or amendment of a permit covering their land.

In some respects, the OGAA also simplifies and streamlines procedures as it reduces the amount of prescriptive and detailed requirements by utilizing accepted industry standards and, in certain instances, incorporating results‐based requirements. In an effort to enable innovation, the OGAA allows that, following a review by the OCG, innovative new technologies or methodologies may qualify for designation as a "Special Project".

Obviously, the impacts of this new regulatory regime on the oil and gas sector remain to be seen. Extensive consultation in the drafting and implementation of the OGAA involved an attempt to address the concerns of all stakeholders, including industry and interest groups impacted by petroleum sector developments.

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