Liability Reduction Program Support

Updated August 2022 to reflect changes to IOGC team lead and Alberta period six timing

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Overview

The Government of Canada committed to providing up to $1.72 Billion to the governments of Alberta, Saskatchewan, and British Columbia, and to the Alberta Orphan Well Association, to clean up orphan and inactive oil and gas infrastructure through these provincial programs:

Our partner organizations, Indian Resource Council and Saskatchewan First Nations Natural Resource Centre of Excellence, were instrumental in ensuring $113 Million in Alberta and $20 Million in Saskatchewan from the total funding was set aside for the closure of inactive and abandoned infrastructure on First Nation lands, and have continued to establish and administer the process to have First Nation-developed plans submitted to the provincial programs.

We encourage First Nations and industry (contract holders, licencees, service providers, contractors) with inactive infrastructure on First Nation lands to work collaboratively with each other, our partners, and us to ensure mutual program benefits.

Note: Provincial program dates were set independently from IOGC. First Nations and industry are encouraged to note and monitor important dates such as:

  • the Alberta project work, including period six, must be completed and invoices submitted by February 14, 2023
  • the British Columbia project work is to be completed by December 31, 2022
  • the Saskatchewan program is scheduled to run until February 28, 2023

Reclamation-exempt and grandfathered wells

Well licences with a status of "Reclamation Exempt" (rec-exempt) or "Grandfathered" are excluded from the Alberta and Saskatchewan programs respectively. As such, IOGC is reviewing these wells on First Nation lands to determine their current state and working with provincial regulators to reclassify them to a more appropriate status, such as abandoned or reclaimed.

Orphan wells

Wells deemed as orphan by provincial regulators are outside the scope of the provincial programs and their oversight will remain with the provincial regimes. For further information, First Nations can contact an IOGC Environmental Analyst.

Note: Alberta's Orphan Well Association (OWA) is receptive to coordinating OWA site closures with those funded under the provincial program, including the possible use of the same contractor to complete provincial program site closures. First Nations are encouraged to contact the project team by email aadnc.lrp-prp.aandc@canada.ca for more information.

IOGC's role

While IOGC does not have authority over the provincial program criteria, eligibility, or awarding of funding, we've established a dedicated project team to provide focused support to First Nation and industry efforts with site closure work.

This team is currently led by Mariedke Gibson, Senior Land Advisor, mariedke.gibson@canada.ca, and their goals are to:

The team works closely with our Business Units to ensure readiness to meet the following key regulatory requirements:

In addition to supporting First Nation and industry efforts, the team supports coordinated efforts with the Indian Resource Council, Saskatchewan First Nations Natural Resource Centre of Excellence, and provincial governments and regulators.

First Nation support

First Nations who haven't accessed funding under the provincial programs are encouraged to contact the project team by email aadnc.lrp-prp.aandc@canada.ca, who can:

First Nations working under the provincial programs

We encourage you to contact the project team by email aadnc.lrp-prp.aandc@canada.ca to discuss and prepare for the various regulatory administrative requirements that will be triggered throughout the process.

For example, First Nations should consider IOGC's timing for some or all of the following steps when developing project schedules to ensure they align with the provincial program dates:

First Nation and Indigenous owned businesses and contractors

Indigenous owned businesses and contractors are encouraged to contact First Nations, the Indian Resource Council, Saskatchewan First Nations Natural Resource Centre of Excellence, industry companies to provide information on potential services related to site closure.

Orphan well coordination in Alberta

Indigenous owned businesses and contractors completing provincial program site closures could be selected by Alberta's Orphan Well Association (OWA) to coordinate nearby OWA site closures. Contact the project team by email aadnc.lrp-prp.aandc@canada.ca for more information.

Industry support

Companies who haven't accessed funding under the provincial programs are encouraged to contact the project team by email aadnc.lrp-prp.aandc@canada.ca, who can:

Important note: companies are encouraged to assess their inventory of inactive sites and commence site closure activities to help them comply with section 78 of the Indian Oil and Gas Regulations, SOR/2019-196.

Companies working under the provincial programs

We encourage you to contact the project team by email aadnc.lrp-prp.aandc@canada.ca to discuss and prepare for regulatory administrative requirements that will be triggered throughout the process.

For example, surface contract holders should incorporate IOGC's timing for some or all of the following to ensure they align with the provincial program dates:

IOGC's remediation and reclamation requirements differ from provincial requirements. Surface contract holders are responsible for:

  • ensuring the land is in a state that is equivalent to the pre-disturbance state or to a state desired by the First Nation
  • contacting the First Nation to discuss end land use and reclamation goals
  • obtaining a First Nation Band Council Resolution (BCR) for any changes to land use or facilities to be left in place

Submissions for review can be sent to:

First Nation owned businesses or contractors

Industry is encouraged to work with the First Nation to identify First Nation economic opportunities.

Provincial landowner notifications

Provincial landowner notification requirements and considerations on First Nation lands for provincial program sites should be sent once engagement with the First Nation is complete and adhere to IOGC's information and submission requirements.

Pipeline rights-of-way

Most rights-of-way issued prior to 2002 contain "compensation review" and "termination" clauses, which are described below. We encourage surface contract holders to review their contracts and confirm their compliance with these clauses.

Compensation review

Compensation for the initial construction and damages is recalculated at regular intervals (typically every 5 or 10 years) using current compensation rates; if the recalculated amount is higher than the amount calculated for a previous interval the difference between the two amounts is remitted to IOGC.

Termination

This provision allows a surface contract holder to provide notice in writing aadnc.LRP-PRP.aandc@canada.ca of their intent to terminate the right-of-way, which will take effect 90-days after the notice. All materials and installations, including pipelines, must be removed during the notice period unless IOGC, in consultation with the First Nation, provides written consent to leave them in place.

Removal requirements

A reclamation application is required in advance of removing a pipeline, with a surrender application to follow. When only a portion of the pipeline within the right-of-way is removed, a right-of-way amendment is also required.

A Phase I Environmental Site Assessment (ESA) for a pipeline must be consistent with the Canadian Council for Ministers of the Environment (CCME) standard 'Guidance Manual for Environmental Site Characterization in Support of Environmental and Human Health Risk Assessment' and CSA Z768-01 (R2016) Phase 1 Environmental Site Assessment.

When there is a lack of information to support a determination regarding the presence of contamination, we will require an electromagnetic (EM) survey to accompany any regulatory submissions to support the surrender of the right-of-way.

Damages

Unless the right-of-way states otherwise, compensation for damages that result from remediation and reclamation activities are payable to the Receiver General for Canada and are to be submitted to IOGC, which collects the funds on behalf of the First Nation.

Future considerations

IOGC is in the process of requiring complete wellsite reclamation applications within 5 years of well abandonment. Prior to implementing any changes in our current site closure timing requirements, we continue to encourage industry to coordinate proactively with First Nations to complete closure activities and to access available funding through the provincial programs.

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