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On February 10, 2015, the Alberta Energy Regulator (AER) released Bulletin 2015-05: Oil and Gas Conservation Rules Change Introducing Subsurface Orders announcing changes to the Oil and Gas Conservation Rules (OGCR) and the creation of the new subsurface orders regulatory instrument. Subsurface orders allow the AER to adapt subsurface regulatory requirements for specific geological zones over specified areas to better suit the resource development practices being used.
The AER has completed an internal review of the Cardium Formation and has issued Subsurface Order No. 5 (order), effective October 7, 2016. The order sets out specific AER subsurface rules and regulatory processes for well spacing, production rate limitation, well testing and deliverability, and drill cutting controls for designated areas of the Cardium Formation (see map below).
Where a conflict arises between the order and a term or condition of an approval or licence, the term or condition of the approval or licence prevails. For example, the order’s spacing provisions will only apply to lands that are not subject to other previously issued special well spacing approvals. Licensees may apply to vary or rescind related approvals if they wish to take advantage of the terms of the order. The applications must be filed in accordance with Directive 065: Resources Applications for Oil and Gas Reservoirs.Overview of Subsurface Order No. 5
Existing rules and requirements that are not specified in the order remain in effect as prescribed in the OGCR and other AER directives. The above rules apply only when operators avoid wasteful operations as defined in section 1(1)(ddd) of the Oil and Gas Conservation Act.
Licensees subject to this order may be required by the AER at any time to conduct and provide data, reports, tests, interpretations, or other information, including performance reports, to enable sufficient review of the licensee’s activity, resource characterization, and reservoir management pursuant to sections 11.005 and 11.006 of the OGCR.
Scope of Subsurface Orders
The order only addresses regulatory matters that are under the AER’s jurisdiction. The order does not in any way predetermine regulatory approval of wells, pipelines, other production facilities, access roads, and other surface disturbances that may be associated with energy resource development of the zone defined in the order. Surface energy resource activities and related land access are regulated separately under Alberta legislation administered by the AER and other provincial departments and municipal governments and must comply with the Alberta Land Stewardship Act regional plans.
Similarly, the order does not vary or alter mineral rights, tenure rules, or royalty matters under the authority of Alberta Energy.
Assessment of Performance
T he AER will assess performance and monitor activity within the zone defined in the order. Participating operators may be required to submit resource management performance reports and meet with the AER, which could include providing a presentation on performance.
This assessment is required in order to
The order, as well as additional information, is available on the AER website, www.aer.ca, under Data & Publication > Orders > Subsurface Orders. It is also available on the AER order system at http://mapview.aer.ca/bos.
Questions about this bulletin may be directed to Industry Relations by phone at 403-662-3981 or by email to IndustryRelations@aer.ca.
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Executive Vice President