Bulletin 2015-05

Bulletin 2015-05: Oil and Gas Conservation Rules Change Introducing Subsurface Orders

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Oil and Gas Conservation Rules Change Introducing Subsurface Orders

Feb 10, 2015

The Alberta Energy Regulator (AER) announces changes to the Oil and Gas Conservation Rules (OGCR) that give the AER the authority to designate subsurface orders. The AER will now be able to use subsurface orders to tailor subsurface regulatory requirements for specific geological zones over specified areas to better suit both the resource being developed—particularly tight oil and gas resources—and the energy development technology and practices being employed.

Overview of Rule Changes

  • Subsurface order is defined as “an order of the Regulator prescribing requirements pertaining to subsurface development in one or more zones in a geographic area.”
  • Where the AER is satisfied that it is appropriate to do so, it may issue a subsurface development order designating one or more geological zones and prescribing requirements pertaining to spacing, target areas, multi-zone wells, allowables, production rates, and other subsurface development matters for a specific geographic area. The AER’s subsurface order assessment process will include an evaluation of risks to resource recovery and reservoir equity.
  • AER staff, as part of ongoing regulatory system performance evaluation, will assess trends in down-spacing and other resource applications to identify potential opportunities for subsurface orders. Assessments will consider input from AER stakeholders, including industry and other government entities.
  • When complete, a subsurface order will be implemented with a bulletin announcing the order, and AER information systems, including the well spacing map, will be updated accordingly.
  • Subsurface orders will only address resource regulatory matters that are under the AER’s jurisdiction. Where the orders allow increased well density, these orders will not in any way predetermine regulatory approval of wells, pipelines, other production facilities, access roads, and other surface disturbances associated with energy resource development of the geological zones 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 and regional plans.
  • Similarly, subsurface orders will not alter mineral rights, tenure, or royalty matters under the authority of Alberta Energy.

The Oil and Gas Conservation Rules is available on the AER website at aer.ca.

Questions about this bulletin may be directed to Industry Relations, Oil and Gas Branch, at 403-662-3981, or to Oil&GasIndustryRelations@aer.ca.

<original signed by>

Kirk Bailey
Executive Vice President
Operations Division