Spurred by Canada's commitment to reduce carbon emissions
under the Copenhagen Accord and the Cancun Agreements, Alberta is
leading the way in carbon capture and storage
(CCS) regulation. Alberta is the first
jurisdiction in Canada to enact comprehensive CCS legislation which
clarifies the ownership of pore space, assigns long-term liability
for post-closure injected carbon dioxide and creates a stewardship
fund for monitoring and remedial costs.
This has been achieved through the Royal Assent of the Carbon
Capture and Storage Statutes Amendments Act S.A. 2010, Chapter 14
(CCS Statutes Amendment Act). Prior to the CCS Statutes Amendment
Act there was no clear regulatory or legislative framework for CCS
projects. Project regulation occurred largely through Energy
Resources Conservation Board (ERCB) directives governing CO2
disposal, monitoring, reporting, safety, and closure for analogous
acid gas disposal projects.
The passage of the CCS Statutes Amendment Act signalled
significant amendments to existing legislation, and in particular
to the Mines and Minerals Act, the Oil and Gas Conservation Act
(OGCA), the Energy Resources Conservation Act, the Public Lands Act
and the Surface Rights Act.Amendments focus directly on CCS and
clarify the role of the Government of Alberta.
Under the CCS Statutes Amendment Act, pore space ownership has
been declared property of the Crown in right of Alberta. This does
not apply to Federal Crown land. The new legislation is
retroactive, regardless of mineral or storage rights. The CCS
Statutes Amendment Act also authorizes the Alberta Energy Minister
to enter contracts in respect of storage or disposal in subsurface
reservoirs. Changes are CCS-specific and do not affect the
activities of enhanced oil recovery. Under the new legislation, the
Province accepts long-term liability for injected carbon dioxide. A
CCS operator will be responsible for the CCS operation until it
substantiates that the stored carbon dioxide is
"contained" and a closure certificate has been issued.
Thereafter, the Alberta Government will be the owner of the
sequestered CO2 and, on an indefinite basis, will assume the
monitoring and other post-closure responsibilities. The Alberta
Government must indemnify the operator with respect to any third
party liability related to the injected carbon dioxide.
A stewardship fund financed by CCS operators will be managed by
the Government of Alberta. The fund will be controlled and
administered by the Alberta Energy Minister and is to be used for
remedial work and ongoing monitoring of post-capture CCS projects.
Third parties may be paid out of the fund in respect of monies that
remain owed from suspension, reclamation and abandonment costs.
Double recovery is not permitted. In the event that a third party
later recovers costs, they are liable to pay back monies to the
In the new regulatory regime, the ERCB has a clear oversight
role in CCS projects particularly in respect of inspections,
investigations, and inquiries. The ERCB is also responsible for
approval and licence for CCS projects, including a consideration of
the social, economic and environmental costs of each project.
On April 28, 2011, the Government of Alberta issued the Carbon
Sequestration Tenure Regulation A.R. 68/2011, O.C. 179/2011 (the CS
Tenure Regulation). The CS Tenure Regulation: (a) defines pore
space; (b) establishes the term for permits and leases; (c) limits
the size of land for permits and leases and sets the annual rental
fee; (d) establishes a minimum depth for the injection of
CO2; and (e) creates the requirement for monitoring,
measurement and verification plans, and closure plans which must be
approved by the Minister and updated every three years. Further
changes in regulation lie ahead. The Government of Alberta has
initiated a Regulatory Framework Assessment to make recommendation
on new process that should be in place for commercial scale CCS
projects. By 2012 clarity on that process is expected. Beyond the
CCS Statutes Amendment Act, emerging issues in respect of carbon
capture may include questions of jurisdiction. While the bulk of
regulatory issues for low carbon technologies occur at a provincial
level, the federal government can set emissions pricing or targets.
In addition, and notwithstanding the fact that oil and gas
conservation law is primarily provincial, the environment is a
shared responsibility between federal and provincial governments.
The federal government can make laws to protect the environment
based on a number of constitutional heads of power. Even with
greater clarity over CCS regulation provided by new legislation,
the roles of the federal and provincial governments respecting CCS
continue to develop and may ultimately be in conflict.
Ontario's Ministry of the Environment and Climate Change continues to roll out its Climate Change Action Plan with its proposed GHG guide for projects that are subject to the province's Environmental Assessment Act.
The Imperial Oil refinery pled guilty to one offence for discharging a contaminant, coker stabilizer, thermocracked gas, into the natural environment causing an adverse effect and was fined $650,000...
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