Current Regulations Affecting Well and Pipeline Abandonment in Alberta a report by Richard C Secord1
and Will S Randall II2 1. Partner, Ackroyd LLP; 2. Ackroyd LLP
In July 2009, there were 46,945 abandoned oil and gas wells in Alberta.1
Similarly, the Energy Resources Conservation Board2
(ERCB, or
‘the Board’) reported that at the end of 2005 there were over 377,000km of energy-related pipelines in Alberta.3
This discussion
paper provides the relevant ERCB directives that inform and guide abandonment, suspension and discontinuation processes. With respect to wells, ERCB directives and provincial legislation are the principal authorities governing the processes. With respect to pipelines, readers should note that the National Energy Board (NEB) regulates pipelines that cross provincial boundaries. Pipelines that are used for gathering and transmission within Alberta are subject to the authority of the ERCB. These intra-Alberta pipelines are the focus of this paper.
This discussion paper surveys the differences in the regulatory regimes that govern abandonment, suspension and discontinuance processes as between pipelines and wells. It then provides an overview of the relevant directives and legislation to be considered with respect to both wells and pipelines. Issues specific to pipelines, such as the removal of a pipeline, or the resumption of a discontinued pipeline, are also covered. Finally, the paper looks towards future developments that may have an impact on abandonment, suspension and discontinuance considerations for both wells and pipelines.
Regulatory Differences Between Pipelines and Wells with Respect to Abandonment and Discontinuance Issues While both wells and pipelines can be abandoned so as to end their use permanently, a well that has been inactive for a given period of time will be subject to suspension operations, as opposed to an inactive pipeline, which is subject to discontinuance procedures. Each of these different operations is defined and explained in this paper.
Different regulatory jurisdictions apply to these issues. A pipeline, unlike a well, can be located inter-provincially so as to acquire federal
Will S Randall II was called to the Texas Bar in 2009 and will be called to the Alberta Bar in 2011. He is currently building a practice that focuses on environmental, natural resources, and Aboriginal law in Edmonton, Canada.
E:
wrandall@ackroydlaw.com
if a water body is affected. The inter-jurisdictional potential of pipeline issues creates the need for additional regulatory caution. For intraprovincial activities with respect to wells, the legislative authority that is granted to the ERCB to oversee abandonment and suspension processes can be found in the Oil and Gas Conservation Regulations.6 With respect to pipelines, the main legislative instruments are the Pipeline Act7
and the Pipeline Regulation.8
Regulatory Overview of Well Abandonment and Suspension
The Oil and Gas Conservation Regulations provide an explanation as to when abandonment of a well is required. Section 3.012 of the Oil and Gas Conservation Regulations states that licensees shall abandon wells at the end of the lease period, when the licensee ceases business operations or by ERCB order, among others.9
The Oil and Gas Conservation Regulations
specify that abandonment will be required in any situation “as ordered to do so by the Board.”10
The Oil and Gas Conservation Regulations also
identify the main Board Directive to inform abandonment procedures. As stated in Section 3.013: “Abandonment operations, including abandonment, casing removal, zone abandonments and plug backs, shall be conducted in accordance with the current edition of Directive 020, ‘Well Abandonment’, published by the Board.“11
Board Directives with Respect to Well Abandonment The Board released a revised Directive 020: Well Abandonment Guide12
these operations: •
jurisdiction under the NEB and its associated regulations. Additionally, pipeline abandonment may trigger the provisions of other federal legislation such as the Fisheries Act4 Act5
or the Navigable Waters Protection
on 9 July 2010. Directive 020 provides descriptions of each of
An open-hole well abandonment is the downhole abandonment of a well after drilling is complete but before the rig is released.
• Surface abandonment occurs after downhole operations are complete.
• A plug back is the downhole abandonment of a portion of an open-hole well. A plugging programme describes the planned placement of a series of plugs.
•
A cased-hole well abandonment is the downhole and surface abandonment of a completed or cased well.
Richard C Secord has practised law in Edmonton since 1979. He was called to the Bar of England and Wales in 1978 and to the Alberta Bar in 1980. He was listed as a leading practitioner in the field of environmental law in the Lexpert Directory in 2000 and as one of Canada’s best environmental lawyers in the National Post’s Best Lawyers in Canada series in 2007.
• A zonal abandonment is the abandonment of a single pool completion within a cased hole or the downhole abandonment of an open hole interval in a cased hole.
Under Directive 020, routine abandonment operations do not require ERCB approval before work is started, but non-routine abandonment operations do require approval. This depends on factors including the type of well being abandoned, the well’s geographical location within the province, the impact of the well on any oilsands zones and
54 © TOUCH BRIEFINGS 2011
Subsea & Pipeline
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