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A Non-Conventional Approach to Oil & Gas Regulation in Alberta Aboriginal Relationship Building at the Energy Resources Conservation Board (ERCB) Treaty 8 First Nations of Alberta Regional Session November 28, 2011 Grande Prairie, Alberta Slide 2 Introduction Presentation themes: The ERCB Today - regulatory ways we talk to each other Applications and Participant Involvement as ways of talking to each other Slide 3 Slide 4 Outline The Oil & Gas Story The ERCB Story The Regulatory Story ERCB Aboriginal Relations Story Albertas Consultation Story ERCB Objection Management Story Slide 5 The Oil & Gas Story Slide 6 How is oil & gas formed? RECIPE FOR A SEDEMENTARY SANDWICH Ingredients millions of years body of water prehistoric creatures sand and mud pressure and heat Directions 1. The oceanic creatures and dinosaurs die and get buried under lots of sand and mud where they decompose 2. Apply the earths heat and pressure for millions of years 3. The fossils turn into oil & gas, the Sedimentary Sandwich is complete! Slide 7 How do we know where to find oil & gas? SEISMIC EXPLORATION A special tool drills holes into the ground and puts explosives in them After it explodes the sound waves hit the different layers in the ground and bounce back to special jugs which are connected to wires on a recording truck. Slide 8 What kinds of oil & gas do we have in Alberta? Crude OilNatural GasCBMOil Sands Slide 9 How does the oil & gas get out of the ground? Drilling RigDrill PipesDrill Bits Slide 10 Drilling Surface Hole Running Surface Casing Cementing Surface Casing Drilling Main Hole Running Production Casing Cementing Production Casing Drilling Animation Slide 11 Perforating the FormationFracturing the Formation Perf & Frac Animation Slide 12 What happens after the well is drilled? Gas well with compressor station Pumpjack Sour gas well with flare stack Slide 13 How do they get oil out of the oil sands? Mining SAGD THAI Slide 14 WHERE DOES THE OIL & GAS GO? Transportation PipelinesOil Tanks OTHEROTHER Slide 15 Once the oil & gas is treated (refined), it is ready to be sold to and used by us. WHERE DOES THE OIL & GAS GO? Refinery Slide 16 What do we use oil & gas for? Crude oil is used in:Natural gas is used to: Gasoline, diesel fuel, heating oil, jet fuel, candles Heat our homes Fertilizers, pesticidesSometimes run our dryers and stoves Plastics, synthetic rubberRun our vehicles Detergent, synthetic fibersSulfur (extracted from sour gas) is used to make fertilizers, paper, steel and pharmaceuticals Dyes, paint, makeup Medicine Slide 17 The ERCB Story Slide 18 1940s minimal rules Competitive exploration Industry wanted regulation Why was the ERCB formed? Slide 19 2007 1995 1971 1957 1938 ERCB History Over 70 years experience Slide 20 Who We Are The ERCB is: An independent & quasi-judicial regulator Responsible for regulating Albertas upstream oil & gas resources Lead by a Board consisting of 8 members Slide 21 What We Do The ERCB: Serves all Albertans citizens, industry & government Ensures that the discovery, development and delivery of Albertas energy resources take place in a manner that is fair, responsible and in the public interest Slide 22 The ERCB Today Chairman: Dan McFayden Same Mission New Vision Our new vision is about embracing change, responsible and informed risk taking, taking accountability and promoting innovation to consistently find ways to evolve our regulatory strategy, regulations and processes. Slide 23 The Regulatory Story Slide 24 Oil & Gas Regulatory Interfaces SRB Compensation Right-of-entry orders SRD Seismic Crown land FN consultation AENV Water, air quality, waste Reclamation, remediation Public Social license to operate Enables government ERCB Regulates oil, gas, coal AE Mineral leases NEB Big pipe Nuclear E&I Land agent license Energy Industry FAO Rural gas Education Municipal Gov & Counties Weeds, roads Emergency response Slide 25 LIFE CYCLE OF OIL & GAS AGREEMENTS ON FIRST NATION RESERVE LANDS Indian Oil & Gas Act Slide 26 Life CycleOff ReserveOn Reserve, post-FNOGMMA 1. Land for LeasingSRDFN 2. Subsurface AgreementsAEFN 3. Seismic ProgramsSRDFN 4. Surface AgreementsSRD; AENVFN 5. Drilling WellsERCB 6. ProductionERCB 7. Well AbandonmentERCB 8. Surrenders of Subsurface AgreementsAEFN 9. Surrenders of Surface Agreements (Remediation & Reclamation) AENVFN Life Cycle of Oil & Gas Agreements Off- Reserve and on First Nation Reserve Lands Post FNOGMMA Slide 27 OUR ENERGY DEVELOPMENT First Nation Reserves Slide 28 Current Legislation Governing the ERCB Eight pieces: Energy Resource Conservation Act Oil & Gas Conservation Act Coal Conservation Act Oil Sands Conservation Act Gas Resource Preservation Act Pipeline Act Turner Valley Unit Operations Act Administrative Procedures and Jurisdiction Act Slide 29 ERCB Governing Legislation and Regulations ERCBs administrative obligations are defined by legislation: Section 26 of ERC Act basic administrative law rights for ERCB hearings Administrative Procedures and Jurisdiction Act for all other ERCB decisions that affect the rights of a person (including a corporation) Specific rules in the ERCB Rules of Practice Slide 30 ERCB Role in the Energy Industry Government Sets Policy LEGISLATION Regulators Administer Policy Public Other Government Departments REGULATIONS Industry Develops Projects Slide 31 ERCB Major Functions Regulation Development Licensing Quasi-judicial Slide 32 Regulation Development Energy Resource Conservation Regulations Oil & Gas Conservation Regulations Coal Conservation Regulations Oil Sands Conservation Regulations Gas Resource Preservation Regulations Pipeline Regulations Administrative Procedures and Jurisdiction Regulations Slide 33 Applications Compliance Surveillance & Enforcement Information & Knowledge ERCB MAJOR FUNCTIONS Licensing Slide 34 Quasi-Judicial Hearings Opportunity to be heard Factual Subject to Judicial Review -Jurisdiction -Error in Law Slide 35 ERCB Aboriginal Relations Story Slide 36 ERCB Aboriginal Relations Process How we plan, learn & grow ERCB Aboriginal Working Group (AWG) -Consists of Board Member, Management and staff from across the organization -Sets ERCB Aboriginal Relations Strategy -Goal: Aboriginal relationship building through education and awareness (external & internal) ERCB Aboriginal Relations Team (ART) -8 of dedicated staff located across the province -ERCB ART Work Plan Stakeholders (External / Internal) Slide 37 Aboriginal Relations Team (ART) Activities External Initiate proactive meetings Respond to concerns Liaise between stakeholders Participate in provincial initiatives Provide resources: -Maps, data, IAR tutorial Internal Key messages Aboriginal Awareness Sessions Aboriginal Relations resource to the organization Slide 38 How are public inquiries addressed? FIELD OPERATIONS PARTICIPANT INVOLVEMENT, REACTIVE FC receives inquiry from any stakeholder FS Complaints about operational issues CAR Public issues / inquiries, education / information ADR new development / R&V mediation Slide 39 How is Field Surveillance involved in Aboriginal Relations? Each Field Center is on call 24 / 7 Complaints Air Monitoring Incident response Inspections The ERCB works towards prompt, effective resolution. Slide 40 Field Surveillance INCIDENT RESPONSE Slide 41 Notification protocols for: -Inspections -Spills -Incident Response The ERCB will notify the First Nation & IOGC prior to any of the above. Resulting reports are made available to the First Nation & IOGC. ERCB MAJOR FUNCTIONS FN Notifications Slide 42 Albertas Consultation Story Slide 43 Alberta Aboriginal Consultation Consultation Initiative Albertas commitment Consultation Policy Guiding principle Consultation Guidelines Implementation direction ERCB Directive 056: Energy Development Applications & Schedules Slide 44 ERCB Directive 056 What is the purpose of Directive 056? What are regulatory requirements? What are applicants required to do? What are applicants expected to do? Who to include in participant involvement? Slide 45 What is participant involvement? Definition of Participant Involvement (PI) Participants in involvement Why we are all involved participants PI results, principles & values Slide 46 Participant Involvement Process Stage 1: Planning oil and gas development proposal Stage 2: Identifying and engaging potentially directly and adversely affected parties Stage 3: Addressing concerns/objections Stage 4: Addressing unresolved concerns/objections Stage 5: Obtaining ERCB disposition Slide 47 Implementing the PI Program Participant involvement is intended to continue throughout the life of the project to continually address stakeholder questions and concerns. -PI Efforts (Directive 056 2.3.1) -Consultation & notification -Participant response -Note on compensation Slide 48 Routine vs Nonroutine Applications Routine company has met all Participant Involvement and Technical requirements Nonroutine company has identified there are unresolved objections/concerns or consultation/notification requirements are not met and/or where technical requirements are not met Slide 49 First Nations Consultation SRD has requirements regarding the duty to consult Industry must have met SRDs requirements regarding consultation prior to submission of an application to the ERCB This is in addition to the ERCBs Directive 056 Participant Involvement Requirements Slide 50 What is Objections Management? Evaluation Registration Non-Routine Coordinator Assignment Board/Delegate Decision Response letter issued -Two-way communication with Field Center Slide 51 ERCB Hearing Process Directive 029 explains the hearing process in detail Any person, organization, or company may show through written submission to the ERCB that its rights may be directly and adversely affected by a proposed energy development Parties are expected to resolve outstanding concerns/objections through negotiations or ADR The Board/delegates determine parties that have been granted standing; a public hearing is initiated Once a hearing has been triggered, all interested parties may participate regardless of standing Slide 52 Sections 39 and 40 ERCA allows for parties to request a Review and Variance of a Board decision based on error in law or jurisdiction R&V process is handled within our Law Branch Delegation of the Board renders its decision Slide 53 Bonnyville (780) 826-5352 Fort McMurray (780) 780-7214 High Level (780) 926-5399 Grande Prairie (780) 538-5138 St. Albert (780) 460-3800 Drayton Valley (780) 542-5182 Red Deer (403) 340-5454 Midnapore (403) 297-8303 Medicine Hat (403) 527-3385 Wainwright (780) 842-7570 Toll Free: 1-855-297-8311 ERCB Field Centers (24-hours) Slide 54 Review ERCB Role in Albertas Upstream Oil & Gas Regulatory Framework D-56 and Participant Involvement Alberta FN Consultation and ERCB Objection Management (the difference) Slide 55 PRESENTATION CONCLUSION Thank you, most sincerely, for listening to Our Collective Story today. bruce.gladue@ercb.ca esther.johnston@ercb.ca annette.ozirny@ercb.ca