Canada: New Developments Aim to Improve Regulatory Regimes

National Energy Board Funds Public Participation

The enactment of the Jobs and Economic Growth Act in July 2010 provided the National Energy Board (NEB) with the authority to establish a Participant Funding Program. Launched in October 2010, the program supports public participation in the regulatory process for oral facilities hearings held under the National Energy Board Act. This includes applications for certificates of public convenience and necessity for pipelines or power lines, exemption orders respecting pipelines, and abandonment of pipelines or power lines. Detailed route hearings are excluded.

Recipients eligible for this funding may include individuals, Aboriginal groups, landowners, incorporated non-industry, not-for-profit organizations or other interest groups. Individuals and organizations with a direct commercial interest in the project are explicitly excluded from this funding.

An independent Funding Review Committee (FRC) will be established for each public hearing where participant funding is available. The FRC makes recommendations to the Chief Operating Officer who will make the final decision regarding the allocation of available funds. When making its recommendations the FRC will consider the nature and scope of the applicant's interest, the project's potential impact on the applicant's interest, the usefulness of the planned activity to the regulatory process, and reasonableness of the proposal and costs. 

The NEB has made it clear that this funding program is not intended to cover all expenses incurred by a participant throughout the process. Professional fees, legal fees and travel are considered to be high priority expenses while other expenses are considered to be medium or low priority. Some applicants may receive less than the amount for which they applied, and other applicants may not be awarded any funding at all.

Alberta Sustainable Resource Development Enhances Approval Process

The Alberta Sustainable Resource Development's (ASRD) new Enhanced Approval Process (EAP) applies to all new Mineral Surface Lease (MSL), Licence of Occupation (LOC), Pipeline Agreement (PLA), and Pipeline Installation Lease (PIL) submissions for conventional and unconventional upstream oil and gas developments. Mineable and in-situ oil sands, as well as renewals and amendments to existing dispositions approved on or before August 31, 2010 are outside the scope of the EAP.

Planning for an EAP submission will require the use of the Landscape Analysis Tool (LAT) and Integrated Standards and Guidelines (IS&G). The LAT identifies site sensitivities and operational constraints that may apply to an activity in the location being considered for development. The IS&G consolidates over 200 existing ASRD guidelines into four documents relating to: (i) pre-application information; (ii) approval standards; (iii) operating conditions; and (iv) best management guidelines.

Submissions that meet all approval standards follow an expedited approval process. Non-standard submissions will undergo the additional step of field referral and review. The target timeline for processing standard and non-standard submissions is five and 20 business days, respectively. If approved, a short term disposition will be issued, authorizing the applicant to conduct resource development activities on the land for four years. After site entry has occurred, the applicant must submit a final submission which provides an accurate record of the location of the developed site. If approved, a long term disposition will replace the short term disposition and be valid for up to 25 years for MSL, LOC and PIL dispositions and indefinitely for PLA dispositions.

The EAP is intended to provide industry with up-front planning tools, a streamlined application process, and reduced application processing timelines. The detailed compliance process which will form part of the EAP is still under development. It is worth noting that Aboriginal consultation and surface rights holder consent are not within the scope of the EAP. Furthermore, since the IS&G only identifies ASRD requirements, applicants still need to understand and meet regulatory requirements of other Alberta government ministries, the Federal Government, and municipalities.

B.C. Modernizes Regulatory Framework for Oil and Gas Activities

On October 4, 2010, B.C. revamped its regulatory scheme through the implementation of the Oil and Gas Activities Act (OGAA) and its regulations. The OGAA consolidates the regulation of all oil and gas activities in B.C. under a single Act and repeals the Pipeline Act, the Oil and Gas Commission Act and regulatory provisions of the Petroleum and Natural Gas Act. The OGAA also establishes an appeal tribunal to determine appeals of B.C. Oil and Gas Commission (OGC) determinations.

The OGAA changes the regulatory regime in terms of pre-permitting, operating, and environmental protection and management. Unlike the pre-OGAA scheme, explicit consultation and notification requirements must be met before a permit application is submitted. In addition to clarifying the role of the OGC, the OGAA also deals with aspects of unconventional oil and gas activities (i.e., coal-bed methane or shale gas extraction) that the pre-OGAA scheme did not expressly contemplate. The OGAA outlines government environmental objectives regarding water, riparian areas, wildlife, old growth ecosystems, resource features, and cultural heritage. Environmental management requirements relating to features such as wetlands, soil, and stream crossings are also prescribed. 

The new regulatory scheme grants the OGC stronger compliance and enforcement powers. For example, the OGC may now impose administrative penalties and has broader powers to refuse to issue a future permit, and cancel, suspend, or amend existing permits. The OGAA also introduces greater penalties ranging between $25,000 and $1.5 million, and imprisonment for up to three years. 

Implications

The developments described above put mechanisms in place to facilitate effective public participation, streamline the regulatory process, and strengthen regulatory requirements. Whether this will translate into actual improvements to existing regulatory regimes will depend on how these developments are implemented. For example, how much money will be made available to the public under the NEB Participant Funding Program? Will the ASRD adhere to their targeted timelines for processing submissions? Will the OGC use its compliance and enforcement powers effectively? Proponents and stakeholders should familiarize themselves with these new regulatory developments and pay close attention to how they are applied.

Shawn Denstedt QC's is a partner in Litigation. He focuses on environmental, regulatory and aboriginal law issues. Jessica Ng is an Associate in Litigation who focuses on regulatory matters including environmental, aboriginal consultation, facilities applications and climate change issues in the energy sector.

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