ID 96-01

ID 96-01: Hay-Zama Lake Complex – Special Requirements

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Hay-Zama Lake Complex – Special Requirements

Jan 16, 1996

This Interim Directive supersedes Interim Directive ID 85-4.

ID 85-4 sets out specific guidelines for operators proposing oil or gas developments within the Hay-Zama Lake Complex (the Complex). These guidelines were designed to recognize the unique environmental conditions within the region. A key feature of ID 85-4 was the creation of the Hay- Zama Lake Complex Committee (the Committee), a joint industry/government/public committee designed to provide advice to government and to operators within the Complex. The updating of ID 85-4 has come about largely through the recommendations resulting from the activities of the Committee.

A key change from ID 85-4 is the development of new boundaries for the Complex. Unlike the previous boundaries, which were drawn in a conservative and somewhat arbitrary fashion using township/range coordinates, the new boundaries (Attachment 1) are based on biological and hydrological criteria. As a result, these boundaries more clearly define the wetland area and vegetation of the Complex most sensitive to impacts from oil and gas development.

This Interim Directive (ID) also expands and refines the special provisions for seismic operations, drilling, production, and pipeline construction and operation in both Area 1 and Area 2 of the Complex (Attachment 2). The various provisions have been modified and new requirements added in light of acquired field experience since the issuance of ID 85-4.

The general operating philosophy has also been changed for future developments within the Complex. The Complex is one of North America's largest and most important staging areas for migratory birds. While development within the Complex has to date been carried out without serious incident, the risk of significant environmental impact from a spill or blowout remains and may be increasing as the facilities continue to age. This is particularly true for wells located within the actual wetlands portion of the Complex. Therefore, a key objective of this ID is to encourage the rapid and safe depletion of any reserves being drained by wells within Area 1 (Attachment 1) and the timely abandonment of any associated well bores, while still providing companies with a reasonable opportunity to develop their mineral leases. All future mineral leases sold within Area 1 will stipulate that no surface access will be allowed. As a result, no surface development on new mineral leases within Area 1 will be permitted. For all future mineral leases sold within Area 2, a 100 metre buffer from Area 1, due to the proximity to open water, must be observed for any new surface activity, but expedited reservoir depletion will not be required.

For existing but as yet undeveloped mineral leases within the Complex, surface access for drilling, production facilities, and pipelines may be allowed. However, operators proposing any new development within Area 1 should note the following:

Mineral surface leases for new surface access may have significant timing, design, and/or location restrictions, as per the addenda to existing mineral lease agreements. A detailed review by Alberta Environmental Protection (AEP) of any request for new surface access to Area 1 in particular should be anticipated.
Any proposed new development within the Complex, and particularly Area 1, may be subject to federal environmental review under the Canadian Environmental Assessment Act. A detailed environmental and technical assessment by provincial authorities of any new development should also be expected. Proponents are also expected to follow normal public consultation processes including contacting and discussing proposed new developments within Area 1 with the Dene Th First Nation, prior to submitting an application to the EUB.

For existing well sites within Area 1, any activities by operators to more rapidly drain reserves (e.g. recompletions, horizontal wells) will be encouraged, provided these operations are conducted as per the operating provisions of this ID and in accordance with good engineering and production practices. As noted above, expedited drainage will not be required for wells within Area 2.

To further encourage the timely depletion of reserves within Area 1, as well as to provide protection for the Orphan Abandonment Fund, the EUB will require operators to submit, within ninety (90) days of the issuance of this ID, a proposed operational plan for all producing and suspended wells. This plan should provide: the operator's best estimate of reserves for each well; an estimate of the remaining life of each well and facility; plans for the development of all undrilled mineral leases; plans for recompletion or workover of any wells; plans to accelerate depletion of reserves; plans for any associated surface facilities and/or pipelines; plans for the timely abandonment and reclamation of any wells, pipelines, and facilities which have no further productive life or potential; and any operational, economic, or other barriers to expediting the rapid depletion of reserves.

Operators will be required to update the EUB of any significant changes to this plan every two years. In addition, operators are expected to abandon any wells which have been suspended for more than 24 months following the issuance of this ID, unless an extension to the period of suspension has been obtained from the EUB. Any justification for continued suspension of the wells can be included in the plan identified in the above paragraph. Companies which fail to provide the plans described above by the scheduled dates will be required to abandon existing wells within Area 1.

For further information on this ID, contact the EUB's Edmonton field office, telephone (403) 460-3800. For information on seismic operations, contact AEP's Edmonton office, telephone (403) 427-8474.

<original signed by>

Brian F. Bietz
Board Member
Alberta Energy and Utilities Board

<original signed by>

Cliff Henderson
Assistant Deputy Minister
Alberta Environmental Protection

<original signed by>

David Smith
Assistant Deputy Minister
Alberta Energy