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B.C. Reg. 112/2019
Oil and Gas Commission
Deposited May 30, 2019
This consolidation is current to August 15, 2019.
Link to consolidated regulation (PDF)

Oil and Gas Activities Act

Dormancy and Shutdown Regulation

Contents
Part 1 — Definitions and Interpretation
Division 1 — Definitions
1Definitions
Division 2 — Dormant Sites
2Dormant sites
3When wells are dormant
4Classifying dormant sites
5Identifying priority sites
Division 3 — Shutdown Activities
6Decommissioning
7Assessment
8Remediation
9Restoration
Part 2 — Dormant Sites
Division 1 — Default Requirements
10Application of this Division
11Annual work plan
12Annual report
13Notification of annual work plan
14Notification of intention to begin work
15Type A sites
16Type B sites
17Type C sites
18Priority sites
Division 2 — Liability Reduction Plans
19Liability reduction plans
20Eligibility to submit liability reduction plan
21Notification of liability reduction plan
22Basic requirements
23Annual work plan
24Annual report
25Notification
Division 3 — General
26Records
Part 3 — Final Shutdown
27Application of this Part
28Wells

Part 1 — Definitions and Interpretation

Division 1 — Definitions

Definitions

1   In this regulation:

"Act" means the Oil and Gas Activities Act;

"assess", in relation to a dormant site, has the meaning given to it in section 7 [assessment];

"decommission" has the meaning given to it in section 6 [decommissioning];

"interested person", in relation to a dormant site, means

(a) the land owner of the site,

(b) a local Indigenous nation that is identified for the site,

(c) a municipality, if all or part of the site is in the municipality, and

(d) a regional district, if all or part of the site is in the regional district;

"local Indigenous nation", in relation to a dormant site, means an Indigenous nation that is identified for the dormant site in a manner specified by the commission;

"priority site" means a dormant site identified under section 5 [identifying priority sites];

"reference year", in relation to a type B or C site, means the following:

(a) if the site became a dormant site under section 3 (1) (a), the last of the 5 calendar years referred to in that section;

(b) if the site became a dormant site under section 3 (1) (b), the calendar year in which the notice referred to in that section was received;

"remediate" has the meaning given to it in section 8 [remediation];

"restore" has the meaning given to it in section 9 [restoration];

"specified work" means work to decommission, assess or restore a dormant site;

"type A site" means a dormant site classified as a type A site under section 4 (1);

"type B site" means a dormant site classified as a type B site under section 4 (2);

"type C site" means a dormant site classified as a type C site under section 4 (3);

"well permit" means a permit that includes permission to drill or operate a well.

Division 2 — Dormant Sites

Dormant sites

2   (1) In this section, "dormant well" means a well that is dormant in accordance with section 3.

(2) Subject to subsection (3), the operating area for a well permit is a dormant site for the purposes of the definition of "dormant site" in section 43.1 [definitions] of the Act if

(a) the well permitted by the permit is a dormant well, and

(b) in the case of a well on a multi-well pad, the other wells on the pad are also dormant wells.

(3) A portion of an operating area is not a dormant site if any of the following is located on the portion:

(a) a facility not solely associated with a dormant well;

(b) a pipeline not solely associated with a dormant well;

(c) an oil and gas road not solely associated with a dormant well.

When wells are dormant

3   (1) Subject to subsection (2), a well is dormant for the purposes of section 2 if

(a) none of the following events has occurred for the well over the last 5 calendar years:

(i) production from or injection or disposal into the well occurs for a total of 720 or more hours in a calendar year;

(ii) a zone is completed;

(iii) a drilling event occurs;

(iv) in the case of an observation well, the well is active on at least one day, or

(b) the commission has received a written notice from the permit holder that the well is dormant.

(2) A well is not dormant for 2 years after the date on which the commission gives to the permit holder for the well a written notice under subsection (3).

(3) The commission may give to a permit holder a written notice for the purposes of subsection (2) in relation to a well if the commission is satisfied, having regard to the following factors, that an event referred to in subsection (1) (a) will occur for the well within a reasonable period of time:

(a) available reserves;

(b) economic factors, including, without limitation,

(i) the cost to bring the well online, and

(ii) forecasted production and prices;

(c) safety factors, including, without limitation, well integrity.

Classifying dormant sites

4   (1) A dormant site is a type A site if the site became a dormant site under section 3 (1) (a) and the last of the 5 calendar years referred to in that section is 2018.

(2) A dormant site is a type B site if

(a) the site became a dormant site under section 3 (1) (a) and the last of the 5 calendar years referred to in that section is after 2018 and before 2024, or

(b) the site became a dormant site under section 3 (1) (b) and the notice referred to in that section was received before 2024.

(3) A dormant site is a type C site if

(a) the site became a dormant site under section 3 (1) (a) and the last of the 5 calendar years referred to in that section is 2024 or a later calendar year, or

(b) the site became a dormant site under section 3 (1) (b) and the notice referred to in that section was received in 2024 or a later calendar year.

Identifying priority sites

5   The commission may identify a type A, B or C site as a priority site, by giving to a permit holder for the site a written notice, if the commission considers, having regard to the following factors, that it is in the public interest that the site be decommissioned, assessed and restored on an expedited basis:

(a) the age of the site;

(b) public safety, including human health;

(c) the environment;

(d) social and agricultural values;

(e) impacts on local communities;

(f) cultural and environmental values of local Indigenous nations;

(g) the capacity and portfolio of the permit holder.

Division 3 — Shutdown Activities

Decommissioning

6   A dormant site is decommissioned for the purposes of this regulation if the permit holder for the site

(a) complies with the applicable requirements in section 26 (1) (a) to (c) [plugging requirements for wells] of the Drilling and Production Regulation in relation to the well on the site, and

(b) removes any facilities and other equipment on the site.

Assessment

7   A dormant site is assessed for the purposes of this regulation if the permit holder for the site

(a) has the following assessment carried out by or under the supervision of a professional satisfactory to the commission:

(i) both stages of a preliminary site investigation described in section 58 (1) (a) and (b) [preliminary site investigations] of the Contaminated Sites Regulation;

(ii) unless the preliminary site investigation shows that the site meets the numerical standards under section 17 [numerical standards] of the Contaminated Sites Regulation, a detailed site investigation described in section 59 (1) and (2) [detailed site investigations] of that regulation, and

(b) submits to the commission a report that

(i) describes the assessment carried out, and

(ii) includes the following:

(A) the information required to be included in a report under section 58 (5) (c) and (d) of the Contaminated Sites Regulation;

(B) if a detailed site investigation is required under paragraph (a) (ii) of this section, the information required to be included in a report under section 59 (3) of the Contaminated Sites Regulation;

(C) any other information required by the commission;

(D) any signed statement, of the professional referred to in paragraph (a) or the permit holder, required by the commission.

Remediation

8   (1) A dormant site is remediated for the purposes of this regulation if the commission gives written notice to the permit holder for the site that

(a) the commission is satisfied that the site and any neighbouring lands to which contamination has migrated from the site meet the numerical standards under section 17 [numerical standards] of the Contaminated Sites Regulation,

(b) the commission is satisfied that

(i) the site and any neighbouring lands to which contamination has migrated from the site meet the risk-based standards under section 18 (3) (a) and (b) or (5) [risk-based standards], as applicable, of the Contaminated Sites Regulation, and

(ii) the permit holder has taken any actions identified under subsection (3), or

(c) the commission is satisfied that

(i) the site and any neighbouring lands to which contamination has migrated from the site have been remediated to an extent that provides a permanent solution to the maximum extent practicable, having regard to the following factors:

(A) the risks to human health and the environment posed by contamination at the site and any neighbouring lands to which contamination has migrated from the site;

(B) the local background concentration of any substances at the site and any neighbouring lands to which contamination has migrated from the site;

(C) the potential effects on the environment of remediation to the standards referred to in paragraph (a) or (b);

(D) the technical feasibility, risks and costs associated with remediation to the standards referred to in paragraph (a) or (b), and

(ii) the permit holder has taken any actions identified under subsection (3).

(2) For the purposes of subsection (1) (a) and (b) (i), a reference to a director in sections 17 (4) and (5) and 18 (5) of the Contaminated Sites Regulation is to be read as a reference to the commission.

(3) For the purposes of subsection (1) (b) (ii) and (c) (ii), the commission may, by written notice to a permit holder for a dormant site, identify for the site or any neighbouring lands to which contamination has migrated from the site actions to be taken to prevent or mitigate risks to public safety, including human health, or to the environment posed by contamination.

(4) For certainty, remediation under this section does not relieve a person from liability under Part 4 [Contaminated Site Remediation] of the Environmental Management Act.

Restoration

9   A dormant site is restored for the purposes of this regulation if

(a) the site is remediated, and

(b) the commission gives written notice to the permit holder for the site that the commission is satisfied that the permit holder,

(i) unless otherwise ordered by the commission, has performed each obligation imposed

(A) under the Act or a specified enactment in relation to the permit, a permission specified in the permit or an authorization held by the permit holder for a related activity of an oil and gas activity that is permitted by the permit, and

(B) under the permit or an authorization referred to in clause (A), and

(ii) if the dormant site is on Crown land, has complied with section 26 (1) (d) [plugging requirements for wells] of the Drilling and Production Regulation in relation to the site or is exempted under that regulation from that section.

Part 2 — Dormant Sites

Division 1 — Default Requirements

Application of this Division

10   The requirements in this Division are prescribed for the purposes of section 43.2 [requirements to reduce liability] of the Act.

Annual work plan

11   (1) A permit holder whose portfolio includes a dormant site must, in accordance with subsection (2), develop, and submit to the commission a copy of, an annual work plan that

(a) identifies, by permit and type,

(i) the dormant sites to be decommissioned in that calendar year,

(ii) the dormant sites to be assessed in that calendar year, and

(iii) the dormant sites to be restored in that calendar year,

(b) sets out the anticipated timelines for the work referred to in paragraph (a),

(c) identifies any factors that might cause deviations from the plan, and

(d) includes the following contact information:

(i) if the permit holder is a corporation, the name, title, telephone number and, if any, email address of a director, officer or employee of the permit holder who may be contacted about the plan;

(ii) if the permit holder is an individual, the name, telephone number and, if any, email address of the permit holder.

(2) An annual work plan under subsection (1) must be developed, and a copy submitted to the commission, by the following date:

(a) in the case of an annual work plan for 2019, by August 31, 2019;

(b) in the case of an annual work plan for any other calendar year, by the earlier of

(i) January 30 of the calendar year, and

(ii) the date that is 60 days before the permit holder does specified work at a dormant site in the calendar year.

Annual report

12   Within 60 days after the end of each calendar year, a permit holder whose portfolio includes dormant sites must submit to the commission a report on the calendar year that

(a) demonstrates that the permit holder is on track to meet the applicable requirements in sections 15 to 18 [type A, B and C sites and priority sites],

(b) identifies, by permit and type,

(i) the dormant sites that were decommissioned in the calendar year,

(ii) the dormant sites that were assessed in the calendar year, and

(iii) the dormant sites that were restored in the calendar year,

(c) includes a copy of the annual work plan for the calendar year and an explanation of any deviations from that plan, and

(d) includes any other information required by the commission.

Notification of annual work plan

13   (1) Before doing specified work in a calendar year at a dormant site, the permit holder for the site must give a written notice in accordance with this section to the interested persons, if any, for the site.

(2) A notice under subsection (1) in relation to specified work to be done in a calendar year must be given by the following date:

(a) in the case of 2019, by August 31, 2019;

(b) in the case of any other calendar year, by the earlier of

(i) January 30 of the calendar year, and

(ii) the date that is 60 days before the permit holder does specified work at a dormant site in the calendar year.

(3) A notice under subsection (1) in relation to specified work to be done in a calendar year must include

(a) a draft of the annual work plan for the calendar year, and

(b) a statement that an interested person may do one or both of the following:

(i) request a meeting to discuss the plan;

(ii) make a written reply referred to in subsection (5).

(4) If an interested person requests a meeting to discuss the annual work plan, the permit holder must

(a) make reasonable efforts to meet with the person, and

(b) submit a report to the commission that

(i) describes the efforts made to meet with the person, and

(ii) if a meeting is held, includes minutes of the meeting that

(A) note the topics discussed and concerns raised at the meeting, and

(B) describe any changes that the permit holder has agreed to make to the annual work plan.

(5) If an interested person makes a written reply to a notice under subsection (1) within 30 days after receiving the notice, the permit holder must

(a) consider any of following that is set out in the reply:

(i) reasons why the specified work should be done on different timelines or in a particular way;

(ii) scientific, Indigenous and local knowledge,

(b) within 30 days after receiving the written reply, give to the person a further written notice that includes

(i) a description of any changes made to the annual work plan, and

(ii) a statement that the permit holder will submit a copy of the notice, reply and further notice to the commission, and

(c) as soon as practicable after giving the further notice, submit a copy of the notice, reply and further notice to the commission.

Notification of intention to begin work

14   At least 30 days before doing specified work at a dormant site, the permit holder for the site must notify in writing the interested persons, if any, for the site.

Type A sites

15   (1) A permit holder for type A sites that were not decommissioned by December 31, 2018 must decommission those sites as follows:

(a) by December 31, 2021, the permit holder must have decommissioned at least one or 30% of those sites, whichever is greater;

(b) by December 31, 2026, the permit holder must have decommissioned at least 2 or 70% of those sites, whichever is greater, unless there is only one site;

(c) by December 31, 2031, the permit holder must have decommissioned all of those sites.

(2) A permit holder for type A sites must assess each of those sites by the following date:

(a) if the site was decommissioned by December 31, 2018, by December 31, 2030;

(b) in any other case, by December 31 of the calendar year that is 2 calendar years after the calendar year in which the site is decommissioned.

(3) A permit holder for type A sites must restore those sites as follows:

(a) by December 31, 2024, the permit holder must have restored at least one or 40% of those sites, whichever is greater;

(b) by December 31, 2030, the permit holder must have restored at least 2 or 70% of those sites, whichever is greater, unless there is only one site;

(c) by December 31, 2036, the permit holder must have restored all of those sites.

(4) For the purposes of this section, if the result of taking a percentage of dormant sites is not a whole number, the result is to be rounded

(a) to the nearest whole number, or

(b) if the result is equidistant between 2 whole numbers, to the greater of those numbers.

Type B sites

16   (1) A permit holder for a type B site must decommission the site by December 31 of the calendar year that is 8 calendar years after the reference year for the site.

(2) A permit holder for a type B site must assess the site by the following date:

(a) if the site was decommissioned in or before the reference year for the site, by December 31 of the calendar year that is 10 calendar years after that reference year;

(b) in any other case, by December 31 of the calendar year that is 2 calendar years after the calendar year in which the site is decommissioned.

(3) A permit holder for a type B site must restore the site by December 31 of the calendar year that is 13 calendar years after the reference year for the site.

Type C sites

17   (1) A permit holder for a type C site must decommission the site by December 31 of the calendar year that is 5 calendar years after the reference year for the site.

(2) A permit holder for a type C site must assess the site by December 31 of the calendar year that is 2 calendar years after the calendar year in which the site is decommissioned.

(3) A permit holder for a type C site must restore the site by December 31 of the calendar year that 10 calendar years after the reference year for the site.

Priority sites

18   (1) In this section, "identification year", in relation to a priority site, means the calendar year in which the site is identified by notice under section 5 [identifying priority sites] as a priority site.

(2) This section applies despite sections 15 (2) and (3), 16 and 17.

(3) A permit holder for a priority site must decommission the site by the earlier of

(a) the applicable date under section 15, 16 or 17, and

(b) December 31 of the calendar year that is 2 years after the identification year for the site.

(4) A permit holder for a priority site must assess the site by the earlier of

(a) the applicable date under section 15, 16 or 17, and

(b) December 31 of the calendar year that is 3 years after the identification year for the site.

(5) A permit holder for a priority site must restore the site by the earlier of

(a) the applicable date under section 15, 16 or 17, and

(b) December 31 of the calendar year that is 5 years after the identification year for the site.

Division 2 — Liability Reduction Plans

Liability reduction plans

19   (1) For the purpose of section 43.4 (2) [liability reduction plan] of the Act, a permit holder may submit to the commission a liability reduction plan if

(a) the permit holder is eligible under section 20 of this regulation,

(b) if applicable, the permit holder has engaged under section 21 of this regulation with local Indigenous nations in relation to the plan, and

(c) the plan meets the requirements in sections 22 to 25 of this regulation.

(2) Without limiting the authority of the commission, section 26 (2) to (4) [actions by commission respecting permit] of the Act applies to a determination of whether to approve a liability reduction plan.

Eligibility to submit liability reduction plan

20   A permit holder is eligible to submit a liability reduction plan if

(a) the portfolio of the permit holder includes more than 100 type A sites, or

(b) the permit holder has previously had a liability reduction plan approved.

Notification of liability reduction plan

21   (1) This section applies in relation to a permit holder who intends to submit under section 19 a liability reduction plan that covers a dormant site for which a local Indigenous nation is identified.

(2) The permit holder must give a written notice to the local Indigenous nation that includes

(a) a copy of the portion of the liability reduction plan that relates to the nation, and

(b) a statement that the nation may do one or both of the following:

(i) request a meeting to discuss the plan;

(ii) make a written reply referred to in subsection (4).

(3) If the local Indigenous nation requests a meeting to discuss the liability reduction plan, the permit holder must

(a) make reasonable efforts to meet with the nation, and

(b) submit a report to the commission that

(i) describes the efforts made to meet with the nation, and

(ii) if a meeting is held, includes minutes of the meeting that

(A) note the topics discussed and concerns raised at the meeting, and

(B) describe any changes that the permit holder has agreed to make to the liability reduction plan.

(4) If the local Indigenous nation makes a written reply to a notice under subsection (2) within 30 days after receiving the notice, the permit holder must

(a) consider any of following that is set out in the reply:

(i) reasons why specified work covered by the plan should be done on different timelines or in a particular way;

(ii) scientific, Indigenous and local knowledge;

(b) within 30 days after receiving the written reply, give to the nation a further written notice that includes

(i) a description of any changes made to the liability reduction plan, and

(ii) a statement that the permit holder will submit a copy of the notice, reply and further notice to the commission, and

(c) as soon as practicable after giving the further notice, submit a copy of the notice, reply and further notice to the commission.

Basic requirements

22   (1) A liability reduction plan must identify

(a) the dormant sites that are covered by the plan, and

(b) any circumstances in which the following sites will become covered by the plan:

(i) a site that becomes a dormant site after the plan is approved;

(ii) a dormant site for which the permit holder acquires the permit after the plan is approved.

(2) A liability reduction plan must

(a) cover a period of no more than 6 calendar years, and

(b) for each of those calendar years, specify, by field and type,

(i) the number of dormant sites covered by the plan to be decommissioned in the calendar year,

(ii) the number of dormant sites covered by the plan to be assessed in the calendar year, and

(iii) the number of dormant sites covered by the plan to be restored in the calendar year.

(3) A liability reduction plan must be consistent with the assessment of the dormant sites covered by the plan within the following timelines:

(a) in the case of a type A site that was decommissioned by December 31, 2018, by December 31, 2033;

(b) in the case of a type B site that was decommissioned in or before the reference year for the site, by December 31, 2033;

(c) in the case of any other dormant site, by December 31 of the calendar year that is 2 calendar years after the calendar year in which the site is decommissioned.

(4) A liability reduction plan must be consistent with the restoration of the dormant sites covered by the plan within the following timelines:

(a) in the case of a type A or B site, by December 31, 2036;

(b) in the case of a type C site, by December 31 of the calendar year that is 10 calendar years after the reference year for the site.

(5) A liability reduction plan must include specific plans for the decommissioning, assessment and restoration of priority sites.

(6) A liability reduction plan must specify, for each type of dormant site that is covered by the plan, the maximum number of dormant sites of that type for which the permit holder may transfer the permit.

Annual work plan

23   A liability reduction plan must require the permit holder to develop and submit to the commission, in accordance with section 11 [annual work plan], an annual work plan for the calendar year.

Annual report

24   A liability reduction plan must require the permit holder to submit to the commission, within 60 days after the end of each calendar year that is covered by the plan, a report on the calendar year that

(a) identifies, by permit and type,

(i) the dormant sites covered by the plan that were decommissioned in the calendar year,

(ii) the dormant sites covered by the plan that were assessed in the calendar year,

(iii) the dormant sites covered by the plan that were restored in the calendar year, and

(iv) the dormant sites covered by the plan for which the permit holder transferred the permit in the calendar year,

(b) identifies whether the permit holder is in compliance with the plan and, if not, the measures the permit holder proposes to take to correct the non-compliance and prevent further non-compliance with the plan, and

(c) includes the following:

(i) a copy of the annual work plan referred to in section 23 for the calendar year and an explanation of any deviations from that plan;

(ii) any other information required by the commission;

(iii) a statement, signed by the permit holder or a director or officer of the permit holder, that the annual report is accurate and complete.

Notification

25   A liability reduction plan must require the permit holder to comply with

(a) section 13 [notification of annual work plan], in relation to the annual work plan referred to in section 23, and

(b) section 14 [notification of intention to begin work].

Division 3 — General

Records

26   The following records under this regulation are prescribed for the purposes of section 38 (1) (a) [records, reports and plans] of the Act:

(a) a plan required to be submitted under section 11 or 23 [annual work plan];

(b) a report required to be submitted under section 12 or 24 [annual report];

(c) a report required to be submitted under

(i) section 13 (4) (b) or 25 (a) [notification of annual work plan], or

(ii) section 21 (3) (b) [notification of liability reduction plan];

(d) a notice, reply and further notice required to be submitted under

(i) section 13 (5) (c) or 25 (a), or

(ii) section 21 (4) (c);

(e) a notice required to be given under section 14 or 25 (b) [notification of intention to begin work].

Part 3 — Final Shutdown

Application of this Part

27   The requirements in this Part are prescribed for the purposes of section 40 (e) [obligations when permit, permission or authorization expires or is cancelled or spent] of the Act.

Wells

28   (1) A well permit holder must do the following if the permit is cancelled, declared spent or expires as described in section 40 of the Act:

(a) decommission the operating area of the permit;

(b) assess the operating area of the permit;

(c) remediate the operating area of the permit.

(2) Subsection (1) does not apply in relation to a portion of the operating area of a well permit if any of the following is located on the portion:

(a) a facility not solely associated with the well permitted by the permit;

(b) a pipeline not solely associated with the well permitted by the permit;

(c) an oil and gas road not solely associated with the well permitted by the permit.

[Provisions relevant to the enactment of this regulation: Oil and Gas Activities Act, S.B.C. 2008, c. 36, ss. 106, 111.1 and 112.]