Written By Daron Naffin, Tim Myers, Thomas Machell and Lindsay Chapman

On December 14, 2023, Alberta's Minister of Environment and Protected Areas (EPA), Rebecca Schulz, announced the launch of two new pilot projects aimed at improving and expediting the well site reclamation process in the province.¹ According to the interim directive that EPA published alongside the announcement, the first pilot will trial well site reductions by allowing eligible operators to receive reclamation certificates for portions of their well sites.² The second pilot seeks to facilitate faster reclamation of peatlands. Both programs will commence in February 2024 and run for approximately 18 months each, with the Well Site Reduction Pilot ending on August 29, 2025. This post focuses on the Well Site Reduction Pilot.

Well Site Reduction Pilot

The Well Site Reduction Pilot will allow operators of minimal disturbance well sites to apply to the Alberta Energy Regulator (AER) for reclamation certificates in respect of a portion of those well sites located on private lands. If certain criteria are met, the well site area may be reduced down to 60 percent of its original size.

Eligibility and Program Parameters

The Well Site Reduction Pilot will allow up to one hundred operators to opt-in with landowner consent. Operators will be allowed one site reduction application per surface lease. Only minimum disturbance well leases on private land will be eligible. The pilot will be limited to well sites and will not extend to any associated infrastructure such as access roads or pipelines.

To be eligible for the program, operators must follow any relevant policy and meet regulatory requirements, including:

• Completing a Phase 1 Environmental Site Assessment (ESA), which did not trigger a Phase 2 ESA, within the last 12 months of the application submission;
• Following the 2010 Reclamation Criteria, such as completing the vegetation and landscape assessments within the last 12 months and soils assessments within the last three years of the application submission;
• No variances within the application; and
• No contamination or suspected contamination, on or off the well lease.

The Government has clarified that in the interim this pilot program will not change the legal authority of surface lease agreements between landowners and operators. Nor does it change the right of a person under the Responsible Energy Development Act, SA 2012, c R-17.3 to submit a written statement of concern about a reclamation certificate application.

Implications for Surface Rights Compensation

Section 138(4) of the Environmental Protection and Enhancement Act, RSA 2000, c E-12 [EPEA] specifically authorizes the AER to issue partial reclamation certificates. Yet since 2001, the AER and its predecessors have been following an operational policy that an entire well site must be reclaimed before it will issue a reclamation certificate.

Since section 144(1) of the EPEA provides that no surrender of a surface lease or right-of-entry order is effective or binding on any person until a reclamation certificate has been issued in respect of the specified land affected by the surrender or termination, the AER's existing approach prevents operators from surrendering unused portions of their surface leases and right-of-entry orders.

The Well Site Reduction Pilot will provide operators of minimal disturbance sites with the opportunity to obtain partial reclamation certificates in respect of their sites, such that they may be able to reduce the annual compensation payable in respect of those sites to a level that is consistent with their actual ongoing use of those sites by either:

1. surrendering a portion of those sites in accordance with the terms of the relevant surface lease, or
2. applying to the Land and Property Rights Tribunal for a partial termination of the relevant right-of-entry order pursuant to section 28 of the Surface Rights Act, RSA 2000, c S-24.

A member of the Bennett Jones Energy Regulatory group would be pleased to discuss this recent announcement by the Minister of Environment and Protected Areas.

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