24 Oil and Gas Regulators
Oil and gas in Canada represents a significant contribution to the Canadian economy. NRCan’s 2021-2022 Energy Fact Book states that energy accounts for 8.1% of Canada’s GDP (NRCan, 2022). It also states that energy production and consumption represents 81% of Canada’s GHG emissions.
So whether you consider the economics or the environmental impacts of the sector, regulations are needed. In Canada, major oil and gas operations occur in Alberta and Saskatchewan and British Columbia. Newfoundland is also an important producer, with Manitoba and the Northwest Territories having more modest productions.
So it is not surprising that there are several dedicated regulators for oil and gas in Canada. Many organizations are changing their names to be energy regulators. The challenge of course is what is included in the scope of “energy”, as each jurisdiction is defining it differently.
Federal
Federally the constitution considers Indigenous issues and inter-provincial transportation in context of oil and gas in pipelines as a federal responsibility. Federally there are two regulators dedicated to oil and gas.
Canadian Energy Regulator (CER)
The Canadian Energy Regulator (CER) replaced the National Energy Board in 2018. The CER is a life cycle regulator and considers energy regulations in interprovincial pipelines and inter-provincial power lines. It also considers oil and gas activities in the frontier areas of Canada. The CER’s responsibilities and areas in frontier areas gets a bit complicated as geographic areas, local considerations, and different acts are complicating factors. Its areas of responsibility include (CER, n.d.).
- In Nunavut and northern Canadian territorial waters the CER is the regulator operating under COGOA (Canada Oil and Gas Operations Act R.S.C., 1985, c. O-7)
- In the Northwest Territories of the Inuvialuit Settlement Region (ISR) the CER regulates under agreement with the ISR and under the OGOA.
- In the Norman Wells Proven Area of the Northwest Territories the CER regulates and operates under COGOA
- In the St. Lawrence river mouth the CER is regulator under the Canadian Quebec Joint Accord Area and under COGOA.
- On the west coast of British Columbia the CER regulates any offshore activities. Although technically there is a moratorium on exploration (CER, n.d.).
The CER is based in Calgary, Alberta.
Indian Oil and Gas Canada (IOGC)
The Indian Oil and Gas Canada (IOGC) is a division under the federal department of Indigenous Services. It is considered a separate employer (IOGC, 2022). It is dedicated to regulating oil and gas activities on First Nations lands. The IOGC has a joint role to ensure the industry is regulated but also to ensure fair royalties are paid to the First Nations on whose land the oil and gas is produced (IOGC, n.d.).
Technically the IOGC environmental regulations mirror Alberta regulations fairly closely. The IOGC is located on Tsuut’ina First Nation lands near Calgary.
Joint Provincial Federal Boards
Offshore, on Canada’s east coast, there are several major oil and gas developments. Offshore is generally the responsibility of the CER, but in the cases of Nova Scotia and Newfoundland, joint provincial and federal administration boards have been appointed.
Offshore Newfoundland: Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB)
The Offshore Newfoundland: Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB ) is an independent agency that makes and enforces regulations for the offshore of Newfoundland and Labrador. It was created in 1986 and has representation from both federal governments and provincial government. While it is an independent agency, it operates within authorities created by several acts and also reviews selected decisions with government ministers (C-NOLPB, n.d.).
A search, using the C-NLOPB website, looking for greenhouse gases rules results in no links (C-NLOPB, n.d.).
Canada-Nova Scotia Offshore Petroleum Board (CNSOPB)
The Canada-Nova Scotia Offshore Petroleum Board (CNSOPB) is similar to Newfoundland’s C-NLOPB in that its responsibility is the safe management of oil and gas assets offshore of Nova Scotia. It too is a joint board of the federal and provincial governments and was established in 1990. It operates under a variety of acts that were established to provide the board with its authorities.
There is a difference though between Nova Scotia and Newfoundland industries in that the Nova Scotia oil and gas industry is largely decommissioned. Also, land sales in recent years have resulted in no bids.
In April of 2022 a joint announcement by the federal and provincial governments have indicated the boards jurisdiction will be extended to include offshore wind turbines. Offshore wind has largely been absent from Canada’s shores but it is expected that this will change in the near future. The board will be “modernized” and change its name to Canada-Nova Scotia Offshore Energy Board (CNSOEB) to reflect this new mandate (CNSOPB, 2022)
Provincial and Territorial Dedicated Regulators
British Columbia, Alberta, and the Northwest Territories have dedicated oil and gas regulators. Similar to the offshore and the federal regulators, these are independent regulators.
Alberta Energy Regulator (AER)
The Alberta Energy Regulator is an independent life cycle regulator of the “crude oil, natural gas, oil sands, and coal resources, and an extensive pipeline” (AER, n.d.). It covers a range of resources from oilsands to conventional oil and gas. The AER does not regulate renewable energy and as would be expected it does not regulate inter-provincial pipelines or operations on Indigenous land. Although in the latter case there is cooperation between the IOGC and AER.
The AER has long historical roots in the Province and has evolved over the years. Arguably the most sophisticated regulators of oil and gas in Canada. The AER has a series of regulations, which are called directives, that cover almost every aspect of the industry.
And in an effort to be transparent, the author has participated in the development of Directive 058, Waste Management as an industry representative on the committee reviewed the directive in the 1990s.
Alberta has extensive regulatory coverage from waste to flaring, with two areas being currently problematic;
- Abandonment liabilities. Technical directives exist on how to abandon facilities and reclaim the land, but there is still controversy over the timing.
- Climate change. Two initiatives that are requiring the attention of the AER are carbon capture systems and fugitive methane emissions.
The AER has a long and fascinating history. Their web site tells the story of how things are regulated today and you can also find some of the story from 1938 until today under previous mandates as the Energy and Utilities Board (EUB) and the Energy Resources Conservation Board (ERCB).
BC Oil and Gas Commission (BCOGC)
The BCOGO is due to be changed in 2023. Currently (sic 2022) the BCOGC is an independent regulator in the province of British Columbia which cites itself as a single window regulator. This is similar to the life cycle concept of regulator found in other jurisdictions. Also, similar to other regulators, the Commission regulates all aspects of the industry in British Columbia (BCOGC, n.d.).
The BCOGC is currently concerned about trending topics include orphan liabilities, caribou recovery plans, climate change and separately methane emissions, fracking, and induced seismic events.
BC Energy Regulator
The BCEnergy Regulator will replace the BCOGC in 2023. According to the BC government (BC,2023) it will be modernized with a larger board of directors and will now include hydrogen in its mandate. In BC then energy will include oil and gas and hydrogen.
OROGO – NWT
The Office of the Regulator of Oil and Gas (OROGO) is a relatively new regulator in Canada and considers oil and gas operations in the Northwest Territories except for in the Inuvialuit Settlement Region (ISR) and the Norman Wells historical reserve. As a new regulator in an area with significant geography, the regulator has been busy establishing their unique controls (OROGO,n.d.).
One of the interesting aspects for the regulator is the combination of a vast geography and many suspended wells. The OROGO has a program where communities can provide observations on the wells in their area and should follow-up be required, the communities have a direct linkage with the OROGO.
Oil and gas activity in the NWT has gone though several surges of exploration, and today exploration or development is minimal with the exception of Norman Wells which is an active producer of oil.
Provincial and Territorial Departments
Both Saskatchewan, Manitoba and Yukon do not have separate regulators for their oil and gas activities, but regulate the industry as part of government departments..
Saskatchewan
The Ministry of Energy and Resources is responsible for the development of oil and gas in Saskatchewan. It too has many regulations of the industry (Saskatchewan, n.d.) which have parallels with Alberta’s industry. Arguably, Saskatchewan regulations are not as sophisticated as Alberta and the Ministry of Energy both regulates and promotes oil and gas which could be seen as a conflicting interest.
Manitoba
Manitoba’s oil and gas industry is the smallest of the western provinces. It is regulated by a section of the Department of Agriculture and Resource Development of the Manitoba government (Manitoba, n.d.).
Yukon
In the Yukon, oil and gas is regulated by the territorial government with the Oil and Gas Act RSY 2002, c. 162. which was empowered by the Canada–Yukon Oil and Gas Accord Implementation Act S.C. 1998, c. 5. The oil and gas industry is regulated by a division of the Yukon government. Although Yukon has produced oil and gas in the Liard region, a current listing of wells shows no active oil or gas wells currently in the Yukon (Yukon, n.d.)
Section Conclusion
Although the environmental issues do not vary much with geography, the regulatory regimes do. It is critical to learn the regulations in the jurisdiction that the oil and gas company operates in. The rules can be quite complex, and there is no defence to non compliance called “I did not know”.
Learning Questions
- Given that greenhouse gases are a problematic issue for the global environment, try the following searches on both the AER and C-NLOPB web sites: Greenhouse gases. How many hits do you get?
- Consider the role of the regulator; does it make sense to have an independent regulator?
- What are the advantages of an independent regulator?
References
Alberta Energy Regulator (AER). (n.d.) Home page. Retrieved from https://www.aer.ca/regulating-development
British Columbia Oil and Gas Commission (BCOGC). (n.d.). Home page. Retrieved from https://www.bcogc.ca/
British Columbia. (2023).B.C. making changes to advance hydrogen industry. Retrieved from https://news.gov.bc.ca/releases/2022EMLI0055-001598
Canadian Energy Regulator (CER). (n.d.) Home page. Retrieved from https://www.cer-rec.gc.ca/en/
Canada–Yukon Oil and Gas Accord Implementation Act S.C. 1998, c. 5
Canada-Nova Scotia Offshore Petroleum Board (CNSOPB). (n.d.) Home page. Retrieved from https://www.cnsopb.ns.ca/
Canada-Newfoundland and Labrador Offshore Petroleum Board (C-NLOPB). (n.d.) Home page. Retrieved from https://www.cnlopb.ca/
Indian Oil and Gas Canada (IOGC). (n.d.). Home page. Retrieved from https://www.pgic-iogc.gc.ca/eng/1100110010002/1100110010005
Manitoba Oil and Gas Unit. (n.d.). Home page. Retrieved from https://www.gov.mb.ca/iem/petroleum/role.html#:~:text=The%20Regulatory%20Services%20Section%2C%20Oil%20and%20Gas%20Unit%20of%20the,transportation%20of%20oil%20and%20gas.
Natural Resources Canada (NRCan). (2022). Factbook. Retrieved from https://www.nrcan.gc.ca/sites/nrcan/files/energy/energy_fact/2021-2022/PDF/2021_Energy-factbook_december23_EN_accessible.pdf
Office of the Regulator of Oil and Gas Operations (OROGO). (n.d.) Home page. Retrieved from https://www.orogo.gov.nt.ca/en
Oil and Gas Act RSY 2002, c. 162
Saskatchewan. (n.d). Oil and gas legislation and ministers orders,. Retrieved from https://www.saskatchewan.ca/business/agriculture-natural-resources-and-industry/oil-and-gas/oil-and-gas-legislation-regulations-and-ministers-orders
Yukon. (n.d.). Oil and gas page. Retrieved from https://yukon.ca/en/oil-and-gas
