Government of Alberta announces temporary changes for the energy industry in response to COVID-19
By Carolyn Wright, Evan W. Dixon and Mike Henry (Student-at-Law)
In response to the ongoing COVID-19 pandemic and other challenges currently facing the province's energy sector, the Government of Alberta has temporarily modified regulatory and reporting requirements for the industry.
Alberta Energy has suspended certain reporting requirements, deferred land sales and direct purchases of petroleum and natural gas rights and oil sands mineral rights, and offered one-year extensions for petroleum and natural gas agreements, oil sands agreements and industrial mineral permits. Alberta Environment and Parks has also suspended reporting requirements subject to certain exceptions.
These actions come in response to ongoing challenges for the energy industry resulting from the COVID-19 pandemic, and aim to allow the industry to focus on crucial work, maintaining jobs, and continuing to provide a safe work place.
Alberta Energy suspends reporting requirements
Alberta Energy has suspended several reporting requirements for the energy industry until August 14, 2020. Alberta Energy announced the suspension in an Information Letter, available here, which updates a previous related announcement and clarifies the terms of Ministerial Order 219/2020.
The reporting requirements have been suspended under the following Acts:
Oil and Gas Conservation Act (the OCGA)
Requirements to report information under the Oil and Gas Conservation Rules (the OGC Rules), Directives, Approvals, and Licenses:
- Initial Reservoir Pressure Surveys: all deliverability, annual and initial reservoir pressure surveys for resource conservation (including enhanced oil recovery, disposal, oil and gas production depletion strategy) and specific pool delineation required under Directive 040: Pressure and Deliverability Testing Oil and Gas Wells and section 11.102 of the OGC Rules;
- Annual Progress Reports: all annual progress reports and performance presentations required under section 126.96.36.199 of Directive 065: Resources Applications for Oil and Gas Reservoirs, and section 39 of the OGCA;
- Well Logs and Summary Reports: submission of well logs and summary reports under Section 7.2 of Directive 080: Well Logging and sections 11.005 and 11.140 of the OGC Rules.
Reporting requirements under Directive 013: Suspension Requirements for Wells, and under section 3.020 of the OGC Rules:
- Inactive wells not part of the Inactive Well Compliance Program:
- Initial suspension requirements outlined in Directive 013 for all wells considered as low-risk and medium-risk type 6;
- On-going inspection requirements outlined in Directive 013 for all wells considered as low and medium risk;
- Inactive wells in the Inactive Well Compliance Program:
- Compliance deadline for the final year of the program.
Oil Sands Conservation Act (the OSCA)
All of the following reporting requirements under the Oil Sands Conservation Rules (the OSC Rules) and approvals:
- Annual mine plans under section 30;
- Report of mining operations under section 31;
- Report of operations under section 58;
- Annual geotechnical report under section 32;
- All plans specified within approval conditions under the OSC Act except conditions related to geotechnical reporting requirements.
Coal Conservation Act
Requirements to report information under the Coal Conservation Rules:
- Annual reporting under section 65(2)(a) and (b);
- Exploration reporting requirements under section 40;
- All plans specified within approval conditions under the Coal Conservation Act except conditions related to geotechnical reporting.
These suspensions do not affect any requirements to report health or environmental impacts, or reporting required for royalty calculation and collection. Approval, registration, license and disposition holders must continue to record and retain complete information relating to these reporting requirements, as the information must be made available to the Alberta Energy Regulator (AER) upon request.
Alberta Energy defers land sales
Alberta Energy has also deferred all land sales and direct purchases of petroleum and natural gas rights and oil sands mineral rights for a minimum of 90 days. Alberta Energy announced the deferral in Information Letter 2020-14, available here.
Alberta Energy will evaluate the deferral period for renewal based on the business environment as the period is ending, providing two weeks' notice to the industry before the sales process resumes. During the deferral period, Alberta Energy will not accept new posting requests or requests for direct purchases of petroleum and natural gas, and oil sands rights. Previously published land sales scheduled for April 19, April 29, May 13, and May 27 have been deferred, and all future public offerings have been suspended. The deferral does not affect companies' ability to develop previously acquired land, or acquire land from other lessees for development.
Alberta Energy extends Crown expiries
In Information Letter 2020-09, available here, Alberta Energy announced that it will be offering one year extensions for Petroleum and Natural Gas agreements, Oil Sands agreements, and Metallic and Industrial Mineral permits expiring from March 20, 2020 up to and including December 31, 2020.
In order to qualify for these extensions, companies must submit extension applications prior to the agreement expiry date. Successful applications will extend the term one year from the expiry date.
Alberta Environment and Parks suspends AER reporting requirements
In addition to Alberta Energy's suspended reporting requirements detailed above, Alberta Environment and Parks has also suspended many AER reporting requirements in Ministerial Order 17/2020. Subject to the exceptions detailed below, Alberta Environment and Parks has suspended all reporting requirements relating to approvals or registrations in the Environmental Protection and Enhancement Act (the EPEA), licenses and approvals in the Water Act, and formal dispositions in the Public Lands Act. Although Alberta Environment and Parks has lifted many reporting obligations, companies must continue to record and retain complete documentation and make it available to the AER upon request.
The following reports are exempt from the Ministerial Order:
Environmental Protection and Enhancement Act
- Bird protection plans for the oil sands sector;
- Annual Mine Financial Security Program submissions for oil sands and coal sectors;
- Research program for Base Mine Lake and Miwasin Lake;
- Final reclamation summary reports for all sectors;
- Dam safety submissions for all high, very-high, and extreme-consequences dams;
- Baseline studies at McClelland Lake Wetland Complex;
Public Lands Act
- Annual aggregate management plan update for oil sands and coal sectors;
- Annual disclosure of area cleared for oil sands and coal sectors.
We will continue to monitor for new developments in light of the current situation, and will provide updates as additional information becomes available.
Please contact anyone in the Energy Group if you have any questions about these changes or any other impacts to your business resulting from the COVID-19 pandemic.