Law:Canada Oil and Gas Operations Act

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R.s.c., 1985, c. O-7

An Act respecting oil and gas operations in Canada


Contents

Short Title

Short title

1. This Act may be cited as the Canada Oil and Gas Operations Act.

R.S., 1985, c. O-7, s. 1; 1992, c. 35, s. 2.


Interpretation

Definitions

2. In this Act,

“Accord Acts”

« lois de mise en oeuvre »

“Accord Acts” means

(a) the Canada-Newfoundland Atlantic Accord Implementation Act, and

(b) the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act;

“Chief Conservation Officer”

« délégué à l’exploitation »

“Chief Conservation Officer” means the person designated as the Chief Conservation Officer under section 3.1;

“Chief Safety Officer”

« délégué à la sécurité »

“Chief Safety Officer” means the person designated as the Chief Safety Officer under section 3.1;

“Committee”

« Comité »

“Committee” means the Oil and Gas Committee established by section 6;

“federal Ministers”

« ministres fédéraux »

“federal Ministers” means the Minister of Natural Resources and the Minister of Indian Affairs and Northern Development;

“field”

« champ »

“field”

(a) means a general surface area underlain or appearing to be underlain by one or more pools, and

(b) includes the subsurface regions vertically beneath the general surface area referred to in paragraph (a);

“former regulations”

« anciens règlements »

“former regulations” means the Canada Oil and Gas Land Regulations made pursuant to the Public Lands Grants Act and the Territorial Lands Act and includes orders made pursuant to those Regulations;

“gas”

« gaz »

“gas” means natural gas and includes all substances, other than oil, that are produced in association with natural gas;

“lease”

pan class="DefinedTermLink" lang="fr" x« concession »

“lease” means an oil and gas lease issued pursuant to regulations made in accordance with the Territorial Lands Act and the Public Lands Grants Act and includes a production licence issued under the Canada Petroleum Resources Act;

“Minister”

« ministre »

“Minister” means

(a) in relation to any area in respect of which the Minister of Indian Affairs and Northern Development has administrative responsibility for the natural resources therein, the Minister of Indian Affairs and Northern Development, and

(b) in relation to any area in respect of which the Minister of Natural Resources has administrative responsibility for the natural resources therein, the Minister of Natural Resources;

“oil”

« pétrole »

“oil” means

(a) crude petroleum regardless of gravity produced at a well-head in liquid form, and

(b) any other hydrocarbons, except coal and gas, including hydrocarbons that may be extracted or recovered from surface or subsurface deposits, including deposits of oil sand, bitumen, bituminous sand, oil shale and other types of deposits;

“permit”

« permis »

“permit” means an exploratory oil and gas permit issued pursuant to regulations made in accordance with the Territorial Lands Act and the Public Lands Grants Act and includes an exploration agreement entered into under the Canada Oil and Gas Land Regulations and any exploration agreement or licence that is subject to the Canada Petroleum Resources Act;

“pipeline”

« pipeline »

“pipeline” means any pipe or any system or arrangement of pipes by which oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas is conveyed from any well-head or other place at which it is produced to any other place, or from any place where it is stored, processed or treated to any other place, and includes all property of any kind used for the purpose of, or in connection with or incidental to, the operation of a pipeline in the gathering, transporting, handling and delivery of the oil, gas or substance and, without restricting the generality of the foregoing, includes offshore installations or vessels, tanks, surface reservoirs, pumps, racks, storage and loading facilities, compressors, compressor stations, pressure measuring and controlling equipment and fixtures, flow controlling and measuring equipment and fixtures, metering equipment and fixtures, and heating, cooling and dehydrating equipment and fixtures, but does not include any pipe or any system or arrangeent of pipes that constitutes a distribution system for the distribution of gas to ultimate consumers;

“pool”

« gisement »

“pool” means a natural underground reservoir containing or appearing to contain an accumulation of oil or gas or both oil and gas and being separated or appearing to be separated from any other such accumulation;

“prescribed”

Version anglaise seulement“prescribed” means prescribed by regulations made by the Governor in Council;

“Provincial Minister”

« ministre provincial »

“Provincial Minister” means the Provincial Minister within the meaning of either of the Accord Acts;

“well”

« puits »

“well” means any opening in the ground, not being a seismic shot hole, that is made, to be made or is in the process of being made, by drilling, boring or other method,

(a) for the production of oil or gas,

(b) for the purpose of searching for or obtaining oil or gas,

(c) for the purpose of obtaining water to inject into an underground formation,

(d) for the purpose of injecting gas, air, water or other substance into an underground formation, or

(e) for any purpose, if made through sedimentary rocks to a depth of at least one hundred and fifty metres.

R.S., 1985, c. O-7, s. 2; R.S., 1985, c. 36 (2nd Supp.), s. 118; 1992, c. 35, s. 3; 1994, c. 41, s. 37; 2007, c. 35, s. 145.

Previous Version

Purpose

Purpose

2.1 The purpose of this Act is to promote, in respect of the exploration for and exploitation of oil and gas,

(a) safety, particularly by encouraging persons exploring for and exploiting oil or gas to maintain a prudent regime for achieving safety;

(b) the protection of the environment;

(c) the conservation of oil and gas resources;

(d) joint production arrangements; and

(e) economically efficient infrastructures.

1992, c. 35, s. 4; 2007, c. 35, s. 146.

Previous Version

Application

Application

3. This Act applies in respect of the exploration and drilling for and the production, conservation, processing and transportation of oil and gas in

(a) the Northwest Territories, Nunavut and Sable Island, and

(b) submarine areas, not within a province, in the internal waters of Canada, the territorial sea of Canada or the continental shelf of Canada,

other than of oil and gas in the adjoining area, as defined in section 2 of the Yukon Act.

R.S., 1985, c. O-7, s. 3; 1993, c. 28, s. 78; 1996, c. 31, s. 93; 1998, c. 5, s. 11, c. 15, ss. 36(E), 49.


Chief Safety Officer And Chief Conservation Officer

Designation

3.1 The National Energy Board may, for the purposes of this Act, designate a member, officer or employee of the Board to be the Chief Safety Officer and the same or another member, officer or employee of the Board to be the Chief Conservation Officer.

1992, c. 35, s. 5; 1994, c. 10, s. 1.


Statutory Instruments Act

Orders

3.2 For greater certainty, an order made by a safety officer, the Chief Safety Officer, a conservation officer, the Chief Conservation Officer, the Committee or the National Energy Board is not a statutory instrument as defined in the Statutory Instruments Act.

1992, c. 35, s. 5; 1994, c. 10, s. 1.


Prohibition

Prohibition

4. No person shall carry on any work or activity related to the exploration or drilling for or the production, conservation, processing or transportation of oil or gas in any area to which this Act applies unless

(a) that person is the holder of an operating licence issued under paragraph 5(1)(a);

(b) that person is the holder of an authorization issued, before the commencement of operations, under paragraph 5(1)(b) for each such work or activity; and

(c) where it is required, that person is authorized or entitled to carry on business in the place where that person proposes to carry on the work or activity.

R.S., 1985, c. O-7, s. 4; R.S., 1985, c. 36 (2nd Supp.), s. 119; 1992, c. 35, s. 6.

Previous VersionLimitations on pipelines

4.01 (1) A holder of an authorization under paragraph 5(1)(b) to construct or operate a pipeline shall not, without the leave of the National Energy Board,

(a) sell, transfer or lease to any person its pipeline, in whole or in part;

(b) purchase or lease any pipeline from any person;

(c) enter into an agreement for amalgamation with any person; or

(d) abandon the operation of a pipeline.

Definition of “pipeline”

(2) For the purposes of paragraph (1)(b), “pipeline” includes a pipeline as defined in section 2 or any other pipeline.

Exception

(3) Despite paragraph (1)(a), leave shall only be required if the holder sells, transfers or leases any part of its pipeline that is capable of being operated for the transmission of oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas.

2007, c. 35, s. 147.


Delegation

Delegation

4.1 The National Energy Board may delegate any of its powers under section 5, 5.02, 5.03, 5.11, 5.12 or 27 to any person, and the person shall exercise those powers in accordance with the terms of the delegation.

1992, c. 35, s. 7; 1994, c. 10, s. 2.


Licences And Authorizations

Operating Licences and Authorization for Work

Licences and authorizations

5. (1) The National Energy Board may, on application made in the form and containing the information fixed by the National Energy Board, and made in the prescribed manner, issue

(a) an operating licence; and

(b) an authorization with respect to each work or activity proposed to be carried on.

Term and renewals

(2) An operating licence expires on the thirty-first day of March immediately after the day on which it is issued and may be renewed for successive periods not exceeding one year each.

Requirements for operating licence

(3) An operating licence shall be subject to such requirements as the National Energy Board determines or as may be prescribed and to such fees and deposits as are prescribed.

Requirements for authorization

(4) An authorization shall be subject to such approvals as the National Energy Board determines or as may be granted in accordance with the regulations and such requirements and deposits as the National Energy Board determines or as may be prescribed, including

(a) requirements relating to liability for loss, damage, costs or expenses;

(b) requirements for the carrying out of environmental programs or studies; and

(c) requirements for the payment of expenses incurred by the National Energy Board in approving the design, construction and operation of production facilities and production platforms as those terms are defined in the regulations.

Suspension or revocation

(5) The National Energy Board may suspend or revoke an operating licence or an authorization for failure to comply with, contravention of or default in respect of

(a) a requirement, approval, fee or deposit subject to which the licence or authorization was issued;

(b) a requirement undertaken in a declaration referred to in subsection 5.11(1) or (2);

(c) subsection 5.11(3), 5.12(2) or 27(1.1); or

(d) any applicable regulation.

Variation

(6) The terms of an operating licence or authorization may be varied under section 28.3 of the National Energy Board Act.

R.S., 1985, c. O-7, s. 5; R.S., 1985, c. 36 (2nd Supp.), s. 120; 1992, c. 35, s. 8; 1994, c. 10, ss. 3, 15.

Previous VersionRight of entry

5.01 (1) Subject to subsection (2), any person may, for the purpose of exploring for or exploiting oil or gas, enter on and use the surface of the land in any area in which this Act applies in order to carry on a work or activity authorized under paragraph 5(1)(b).

Restriction

(2) Where a person occupies land in an area to which this Act applies under a lawful right or title, other than an authorization under paragraph 5(1)(b) or an interest as defined in section 2 of the Canada Petroleum Resources Act, no person may enter on or use the surface of that land for a purpose mentioned in subsection (1) without the consent of the occupier or, where consent has been refused, except in accordance with the terms and conditions of

(a) in the case of land within Nunavut, a decision of the Nunavut Surface Rights Tribunal made in accordance with the Nunavut Waters and Nunavut Surface Rights Tribunal Act; and

(b) in any other case, a decision of an arbitrator made in accordance with the regulations.

Exception

(3) Subsections (1) and (2) do not apply in respect of Inuit-owned land as defined in subsection 2(1) of the Nunavut Waters and Nunavut Surface Rights Tribunal Act.

(4)�(Repealed, 1998, c. 5, s. 12)

1992, c. 35, s. 8; 1994, c. 43, s. 90; 1998, c. 5, s. 12; 2002, c. 10, s. 190.


Safety of Works and Activities

Safety

5.02 The National Energy Board shall, before issuing an authorization for a work or activity referred to in paragraph 5(1)(b), consider the safety of the work or activity by reviewing, in consultation with the Chief Safety Officer, the system as a whole and its components, including its installations, equipment, operating procedures and personnel.

1992, c. 35, s. 8; 1994, c. 10, s. 15.


Financial Responsibility

Compliance with subsection 27(1)

5.03 The National Energy Board shall, before issuing an authorization for a work or activity referred to in paragraph 5(1)(b), ensure that the applicant has complied with the requirements of subsection 27(1) in respect of that work or activity.

1992, c. 35, s. 8; 1994, c. 10, s. 15.


Development Plan Approval

Approval of general approach of development

5.1 (1) No approval that is

(a) applicable to an authorization under paragraph 5(1)(b) to carry on work or activity in relation to developing a pool or field, and

(b) prescribed for the purposes of this subsection

 shall be granted unless the National Energy Board, on application submitted in accordance with subsection (2), has approved a development plan relating to the pool or field pursuant to subsection (4).

Application and submission of development plan

(2) For the purposes of subsection (1), an application for the approval of a development plan shall be submitted to the National Energy Board in the form and containing the information fixed by the National Energy Board, at such time and in such manner as may be prescribed, together with the proposed development plan in the form and containing the information described in subsection (3).

Development plan in two parts

(3) A development plan relating to the proposed development of a pool or field submitted pursuant to this section shall be set out in two parts, containing

(a) in Part I, a description of the general approach of developing the pool or field, and in particular, information, in such detail as may be prescribed, with respect to

(i) the scope, purpose, location, timing and nature of the proposed development,

(ii) the production rate, evaluations of the pool or field, estimated amounts of oil or gas proposed to be recovered, reserves, recovery methods, production monitoring procedures, costs and environmental factors in connection with the proposed development, and

(iii) the production system and any alternative production systems that could be used for the development of the pool or field; and

(b)  in Part II, all technical or other information and proposals, as may be prescribed, necessary for a comprehensive review and evaluation of the proposed development.

Approval of development plan

(4) After reviewing an application and development plan submitted pursuant to this section, the National Energy Board may approve the development plan, subject to the consent of the Governor in Council in relation to Part I of the development plan and any requirements that the Board considers appropriate or that may be prescribed.

Approval of amendment to plan

(5) Where a development plan has been approved pursuant to subsection (4),

(a) no amendment of the development plan shall be made unless it is approved by the National Energy Board and, in the case of an amendment to Part I of the development plan, the Governor in Council consents to the approval; and

(b) any requirement that the approval is subject to may be amended by the National Energy Board but, if the requirement relates to Part I of the development plan, it may only be amended with the consent of the Governor in Council.

Application of certain provisions

(6) Subsections (1) to (5) apply, with such modifications as the circumstances require, with respect to a proposed amendment to a development plan or to any requirement that the approval of the plan is subject to.

R.S., 1985, c. 36 (2nd Supp.), s. 121; 1992, c. 35, s. 9; 1994, c. 10, ss. 4, 15.

class ="PITLink" href="/eng/acts/O-7/section-5.1-200212Previous Version

Declarations

Declaration by applicant

5.11 (1) Subject to subsection (2), no authorization under paragraph 5(1)(b) shall be issued unless the National Energy Board has received, from the applicant for the authorization, a declaration in the form fixed by the National Energy Board that states that

(a) the equipment and installations that are to be used in the work or activity to be authorized are fit for the purposes for which they are to be used, the operating procedures relating to them are appropriate for those uses, and the personnel who are to be employed in connection with them are qualified and competent for their employment; and

(b) the applicant shall ensure, so long as the work or activity that is authorized continues, that the equipment and installations continue to be fit for the purposes for which they are used, the operating procedures continue to be appropriate for those uses, and the personnel continue to be so qualified and competent.

Declaration by owner

(2) The National Energy Board may accept, in respect of equipment that is to be used in the work or activity to be authorized, a declaration from the owner of the equipment in lieu of a declaration from the applicant for the authorization, and such a declaration shall be in a form fixed by the National Energy Board and shall state that

(a) the equipment is fit for the purpose for which it is to be used, the operating procedures relating to it are appropriate for that use, and the personnel who are to be employed by the owner in connection with it are qualified and competent for their employment; and

(b) the owner shall ensure that, so long as the equipment is used in the work or activity that is authorized, that the equipment continues to be fit for the purpose for which it is used, the operating procedures continue to be appropriate for that use, and the personnel continue to be so qualified and competent.

Changes

(3) Where the equipment, an installation, the operating procedures or any of the personnel specified in the declaration changes and no longer conforms to the declaration, the holder of the authorization shall provide the National Energy Board with a new declaration as soon as possible after the change occurs.

Immunity

(4) The National Energy Board or any delegate of the National Energy Board is not liable to any person by reason only of having issued an authorization in reliance on a declaration made under this section.

1992, c. 35, s. 10; 1994, c. 10, s. 15.


Certificates

Certificate

5.12 (1) No authorization under paragraph 5(1)(b) shall be issued with respect to any prescribed equipment or installation, or any equipment or installation of a prescribed class, unless the National Energy Board has received, from the applicant for the authorization, a certificate issued by a certifying authority in the form fixed by the National Energy Board.

Continuing obligation

(2) The holder of an authorization shall ensure that the certificate referred to in subsection (1) remains in force for so long as the equipment or installation to which the certificate relates is used in the work or activity in respect of which the authorization is issued.

Contents of certificate

(3) A certificate referred to in subsection (1) shall state that the equipment or installation in question

(a) is fit for the purposes for which it is to be used and may be operated safely without posing a threat to persons or to the environment in the location and for the time set out in the certificate; and

(b) is in conformity with all of the requirements and conditions that are imposed for the purposes of this section by subsection 5(4), whether they are imposed by regulation or by the National Energy Board.

Validity of certificate

(4) A certificate referred to in subsection (1) is not valid if the certifying authority

(a) has not complied with any prescribed procedure or any procedure that the National Energy Board may establish; or

(b) is a person or an organization that has participated in the design, construction or installation of the equipment or installation in respect of which the certificate is issued, to any extent greater than that prescribed.

Access

(5) An applicant shall permit the certifying authority to have access to the equipment and installation in respect of which the certificate is required and to any information that relates to them.

Definition of “certifying authority”

(6) For the purposes of this section, “certifying authority” has the meaning assigned by the regulations.

Immunity

(7) The National Energy Board or any delegate of the National Energy Board is not liable to any person by reason only of having issued an authorization in reliance on a certificate issued under this section.

1992, c. 35, s. 10; 1994, c. 10, s. 15.


Benefits Plan Approval

Definition of "benefits plan"

5.2 (1) In this section, "benefits plan" means a plan for the employment of Canadians and for providing Canadian manufacturers, consultants, contractors and service companies with a full and fair opportunity to participate on a competitive basis in the supply of goods and services used in any proposed work or activity referred to in the benefits plan.

Benefits plan

(2) No approval of a development plan shall be granted under subsection 5.1(1) and no authorization of any work or activity shall be issued under paragraph 5(1)(b), until the Minister has approved, or waived the requirement of approval of, a benefits plan in respect of the work or activity.

Affirmative action programs

(3) The Minister may require that any benefits plan submitted pursuant to subsection (2) include provisions to ensure that disadvantaged individuals or groups have access to training and employment opportunities and to enable such individuals or groups or corporations owned or cooperatives operated by them to participate in the supply of goods and services used in any proposed work or activity referred to in the benefits plan.

R.S., 1985, c. 36 (2nd Supp.), s. 121; 1992, c. 35, s. 11.

Previous Version

Guidelines and Interpretation Notes

Board guidelines and interpretation notes

5.3 (1) The National Energy Board may issue and publish, in any manner the Board considers appropriate, guidelines and interpretation notes with respect to the application and administration of section 5, 5.1 or 13.02 or any regulations made under section 13.17 or 14.

Ministerial guidelines and interpretation notes

(2) The Minister may issue and publish, in any manner the Minister considers appropriate, guidelines and interpretation notes with respect to the application and administration of section 5.2.

Not statutory instruments

(3) For greater certainty, guidelines and interpretation notes issued pursuant to subsections (1) and (2) are not statutory instruments as defined in the Statutory Instruments Act.

R.S., 1985, c. 36 (2nd Supp.), s. 121; 1994, c. 10, s. 5; 2007, c. 35, s. 148.

Previous Version

Jurisdiction and Powers of the National Energy Board

Jurisdiction

5.31 (1) The National Energy Board has full and exclusive jurisdiction to inquire into, hear and determine any matter

(a) if it appears to the National Energy Board that any person failed to do any act, matter or thing required to be done by this Act, any regulation, order or direction made under this Act, or an operating licence or authorization issued under section 5, or that any person has done or is doing any act, matter or thing contrary to or in contravention of this Act, any regulation, order or direction made under this Act, or an operating licence or authorization issued under section 5; or

(b) if it appears to the National Energy Board that the circumstances may require the Board, in the public interest, to make any order or give any direction, leave, sanction or approval that by law it is authorized to make or give, or with respect to any act, matter or thing that is prohibited, sanctioned or required to be done by this Act, any regulation, order or direction made under this Act, or an operating licence or authorization issued under section 5.

Of its own motion

(2) The National Energy Board may, of its own motion, inquire into, hear and determine any matter or thing that under this Act it may inquire into, hear and determine.

Matters of law and fact

(3) For the purposes of this Act, the National Energy Board has full jurisdiction to hear and determine all matters, whether of law or of fact.

2007, c. 35, s. 149.

Mandatory orders

5.32 The National Energy Board may

(a) order and require any person to do, without delay, or within or at any specified time and in any manner set by the Board, any act, matter or thing that the person is or may be required to do under this Act, any regulation, order or direction made under this Act or an operating licence or authorization issued under section 5; and

(b) prohibit the doing or continuing of any act, matter or thing that is contrary to this Act, any regulation, order or direction made under this Act or an operating licence or authorization issued under section 5.

2007, c. 35, s. 149.

Committee’s decisions and orders

5.33 Sections 5.31 and 5.32 do not apply to any act, matter or thing required by or contrary to any decision or order of the Committee.

2007, c. 35, s. 149.

Confidentiality

5.34 In any proceedings with respect to Part 0.1, the National Energy Board may take any measures and make any order that it considers necessary to ensure the confidentiality of any information likely to be disclosed in the proceedings if the Board is satisfied that

(a) disclosure of the information could reasonably be expected to result in a material loss or gain to a person directly affected by the proceedings, or could reasonably be expected to prejudice the person’s competitive position; or

(b) the information is financial, commercial, scientific or technical information that is confidential information supplied to the National Energy Board and

(i) the information has been consistently treated as confidential information by a person directly affected by the proceedings, and

(ii) the Board considers that the person’s interest in confidentiality outweighs the public interest in disclosure of the proceedings.

2007, c. 35, s. 149.

Confidentiality — security

5.35 In respect of any order, or in any proceedings, of the National Energy Board with respect to Part 0.1, the Board may take any measures and make any order that it considers necessary to ensure the confidentiality of information that is contained in the order or is likely to be disclosed in the proceedings if the Board is satisfied that

(a) there is a real and substantial risk that disclosure of the information will impair the security of pipelines, buildings, structures or systems, including computer or communication systems, or methods employed to protect them; and

(b) the need to prevent disclosure of the information outweighs the public interest in disclosure of orders and proceedings of the National Energy Board.

2007, c. 35, s. 149.

Conditional orders, etc.

5.36 (1) Without limiting the generality of any provision of this Act that authorizes the National Energy Board to impose terms and conditions in respect of any operating licence or authorization issued under section 5 or any of its orders, the Board may direct in any operating licence, authorization or order that it or any portion or provision of it shall come into force at a future time or on the happening of any contingency, event or condition specified in the operating licence, authorization or order or on the performance to the satisfaction of the Board of any conditions or requirements that the Board may impose in the operating licence, authorization or order, and the Board may direct that the whole or any portion of the operating licence, authorization or order shall have force for a limited time or until the happening of a specified event.

Interim orders

(2) The National Energy Board may, instead of making an order final in the first instance, make an interim order, and may reserve its decision pending further proceedings in connection with any matter.

2007, c. 35, s. 149.


Documents

Documents

5.37 (1) A holder of an authorization to construct or operate a pipeline issued under paragraph 5(1)(b) shall keep, in a form and manner determined by the National Energy Board, any documents, including any records or books of account, that the Board requires and that contain information that is determined by the Board to be necessary for the administration of this Act and any regulations made under it.

Production and inspection

(2) The holder shall produce those documents to the National Energy Board, or make them available to the Board or its designated representative, for inspection or copying at a time and under conditions set by the Board.

2007, c. 35, s. 149.


Oil And Gas Administration Advisory Council

Council established

5.4 (1) There is established a council, to be known as the Oil and Gas Administration Advisory Council, consisting of the following six members, namely, the Chairman of the Canada — Nova Scotia Offshore Petroleum Board, the Chairman of the Canada — Newfoundland Offshore Petroleum Board, the Chairman of the National Energy Board, a person designated jointly by the federal Ministers, a person designated by one of the Provincial Ministers and a person designated by the other Provincial Minister.

Duty of Council

(2) The Council shall promote consistency and improvement in the administration of the regulatory regime in force under this Act and Part III of the Accord Acts and provide advice respecting those matters to the federal Ministers, the Provincial Ministers and the Boards referred to in subsection (1).

1992, c. 35, s. 12; 1994, c. 10, s. 6.


Offshore Oil And Gas Training Standards Advisory Board

Board established

5.5 (1) The federal Ministers, with the approval of the Provincial Ministers, may establish a board, to be known as the Offshore Oil and Gas Training Standards Advisory Board, consisting of not more than nine members, each of whom has special knowledge respecting offshore oil and gas operations or respecting training for such operations.

Purpose

(2) The Board shall inquire as to existing training standards and, where necessary, develop or encourage the development of training standards and shall recommend the adoption of training standards to the federal and Provincial Ministers and to the Boards referred to in subsection 5.4(1).

1992, c. 35, s. 12.


Extended Formation Flow Tests

Title

5.6 (1) Subject to subsection (2), title to oil and gas produced during an extended formation flow test vests in the person who conducts the test in accordance with an authorization under section 5, with every approval and requirement subject to which such an authorization is issued and with any applicable regulation, whether or not the person has a production licence issued under the Canada Petroleum Resources Act.

Conditions

(2) Title to oil and gas referred to in subsection (1) is conditional on compliance with the terms of the authorization, approval or regulation, including the payment of royalties or other payment in lieu of royalties.

Limitation

(3) This section applies only in respect of an extended formation flow test that provides significant information for determining the best recovery system for a reservoir or for determining the limits of a reservoir or the productivity of a well producing oil or gas from a reservoir and that does not adversely affect the ultimate recovery from a reservoir.

1992, c. 35, s. 12.


Oil And Gas Committee

Constitution

Oil and Gas Committee

6. (1) The Governor in Council may establish a committee to be known as the Oil and Gas Committee, which shall consist of five members, not more than three of whom shall be employees in the federal public administration.

Ministerial direction

(2) The Committee shall be under the direction of

(a) the Minister of Indian Affairs and Northern Development in relation to any area in respect of which that Minister has administrative responsibility for the natural resources therein; and

(b) the Minister of Natural Resources in relation to any area in respect of which that Minister has administrative responsibility for the natural resources therein.

Appointment of members and chairman

(3) The members of the Committee shall be appointed by the Governor in Council to hold office for a term of three years, and one member shall be designated as chairman for such term as may be fixed by the Governor in Council.

Re-appointment permitted

(4) A retiring chairman or retiring member may be re-appointed to the Committee in the same or another capacity.

R.S., 1985, c. O-7, s. 6; 1994, c. 41, s. 37; 2003, c. 22, s. 224(E).

Previous VersionQualification of members

7. (1) The Governor in Council shall appoint as members of the Committee at least two persons who appear to the Governor in Council to have specialized, expert or technical knowledge of oil and gas.

Departmental personnel and assistance

(2) Persons employed in any division, branch or bureau of the Department of Indian Affairs and Northern Development, or the Department of Natural Resources, that is designated by order of the Minister concerned as the division, branch or bureau charged with the day-to-day administration and management of oil and gas resources for the Department, are not eligible to be members of the Committee, but the Ministers concerned may each designate one officer from any such division, branch or bureau who shall act as secretaries to the Committee.

Staff

(3) The Minister of Indian Affairs and Northern Development and the Minister of Natural Resources shall provide the Committee with such officers, clerks and employees as may be necessary for the proper conduct of the affairs of the Committee, and may provide the Committee with such professional or technical assistance for temporary periods or for specific work as the Committee may request, but no such assistance shall be provided otherwise than from the federal public administration except with the approval of the Treasury Board.

Remuneration

(4) The members of the Committee who are not employees in the federal public administration shall be paid such remuneration as may be authorized by the Governor in Council.

Expenses

(5) The members of the Committee are entitled to be paid reasonable travel and living expenses while absent from their ordinary place of residence in the course of their duties.

R.S., 1985, c. O-7, s. 7; 1994, c. 41, ss. 37, 38; 2003, c. 22, s. 224(E).

Previous VersionInterest in oil and gas properties

8. No member of the Committee shall have a pecuniary interest of any description, directly or indirectly, in any property in oil or gas to which this Act applies or own shares in any company engaged in any phase of the oil or gas industry in Canada in an amount in excess of five per cent of the issued shares thereof, and no member who owns any shares of any company engaged in any phase of the oil or gas industry in Canada shall vote when a question affecting such a company is before the Committee.

R.S., c. O-4, s. 6.

Quorum

9. (1) A majority of the members, including one member who is not an employee in the federal public administration, constitutes a quorum of the Committee.

Powers of Committee

(2) The Committee may make general rules regulating its practice and procedure and the places and times of its sittings.

R.S., 1985, c. O-7, s. 9; 2003, c. 22, s. 127(E).

Previous Version

Jurisdiction and Powers

Jurisdiction

10. (1) Where, under this Act, the Committee is charged with a duty to hold an inquiry or to hear an appeal, the Committee has full jurisdiction to inquire into, hear and determine the matter of the inquiry or appeal and to make any order or give any direction that pursuant to this Act the Committee is authorized to make or give or with respect to any matter, act or thing that by this Act may be prohibited or approved by the Committee or required by the Committee to be done.

Powers of Committee

(2) For the purpose of any inquiry, hearing or appeal or the making of any order pursuant to this Act, the Committee has, regarding the attendance, swearing and examination of witnesses, the production and inspection of documents, the entry on and inspection of property, the enforcement of its orders and regarding other matters necessary or proper for the due exercise of its jurisdiction pursuant to this Act, all such powers, rights and privileges as are vested in a superior court of record.

Finding of fact conclusive

(3) The finding or determination of the Committee on any question of fact within its jurisdiction is binding and conclusive.

R.S., c. O-4, s. 8.

Deputing member to hold inquiry

11. (1) The Committee may authorize and depute any member thereof to inquire into such matter before the Committee as may be directed by the Committee and to report the evidence and findings, if any, thereon to the Committee, and when the report is made to the Committee, it may be adopted as a finding of the Committee or otherwise dealt with as the Committee considers advisable.

Powers of deputed member

(2) Where an inquiry is held by a member under subsection (1), the member has all the powers of the Committee for the purpose of taking evidence or acquiring information for the purposes of the report to the Committee.

R.S., c. O-4, s. 9.

Advisory functions

12. The Minister may at any time refer to the Committee for a report or recommendation any question, matter or thing arising under this Act or relating to the conservation, production, storage, processing or transportation of oil or gas.

R.S., c. O-4, s. 10.


Enforcement

Enforcement of Committee orders

13. (1) Any order made by the Committee may, for the purpose of enforcement thereof, be made an order of the Federal Court and shall be enforced in like manner as any order of that Court.

Procedure for enforcement

(2) To make an order of the Committee an order of the Federal Court, the usual practice and procedure of that Court in such matters may be followed or in lieu thereof the secretary or another officer of the Committee may file in the Registry of the Federal Court a certified copy of the order and thereupon the order becomes an order of the Federal Court.

When order rescinded or replaced

(3) When an order of the Committee has been made an order of the Federal Court, any order of the Committee, or of the Governor in Council under section 51, rescinding or replacing the first mentioned order of the Committee, shall be deemed to cancel the order of the Court and may in like manner be made an order of the Court.

R.S., c. O-4, s. 11; R.S., c. 10(2nd Supp.), ss. 64, 65.


Part 0.1. Traffic, Tolls And Tariffs

Interpretation

Definitions

13.01 The following definitions apply in this Part.

“holder”

« titulaire »

“holder” means a holder of an authorization to construct or operate a pipeline issued under paragraph 5(1)(b).

“tariff”

« tarif »

“tariff” means a schedule of tolls, terms and conditions, classifications, practices or rules and regulations applicable to the provision of a service by a holder and includes rules respecting the calculation of tolls.

“toll”

« droit »

“toll” includes any rate, charge or allowance charged or made

(a) for the shipment, transportation, transmission, care, handling or delivery of oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas that is transmitted through a pipeline, or for storage or demurrage or the like;

(b) for the provision of a pipeline when the pipeline is available and ready to provide for the transmission of oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas; and

(c) in respect of the purchase and sale of gas that is the property of a holder and that is transmitted by the holder through its pipeline, from which is subtracted the cost to the holder of the gas at the point where it enters the pipeline.

2007, c. 35, s. 150.


Powers of Board

Regulation of traffic, etc.

13.02 The National Energy Board may make orders with respect to all matters relating to traffic, tolls or tariffs.

2007, c. 35, s. 150.


Filing of Tariff

Tolls to be filed

13.03 (1) A holder shall not charge any tolls except tolls that are

(a) specified in a tariff that has been filed with the National Energy Board and is in effect; or

(b) approved by an order of the Board.

Tariff — gas

(2) If gas transmitted by a holder through its pipeline is the property of the holder, the holder shall file with the National Energy Board true copies of all the contracts it makes for the sale of the gas, at the time they are made, and any amendments to those contracts made from time to time, and the true copies constitute, for the purposes of this Part, a tariff under subsection (1).

2007, c. 35, s. 150.

Commencement of tariff

13.04 If a holder files a tariff with the National Energy Board and the holder proposes to charge a toll referred to in paragraph (b) of the definition “toll” in section 13.01, the Board may establish the day on which the tariff is to come into effect and the holder shall not begin charging the toll before that day.

2007, c. 35, s. 150.


Just and Reasonable Tolls

Tolls to be just and reasonable

13.05 All tolls shall be just and reasonable and shall always, under substantially similar circumstances and conditions with respect to all traffic of the same description carried over the same route, be charged equally to all persons at the same rate.

2007, c. 35, s. 150.

National Energy Board determinations

13.06 The National Energy Board may determine, as questions of fact, whether or not traffic is or has been carried out under substantially similar circumstances and conditions referred to in section 13.05, whether in any case a holder has or has not complied with the provisions of that section, and whether there has, in any case, been unjust discrimination as set out in section 13.1.

2007, c. 35, s. 150.

Interim tolls

13.07 If the National Energy Board has made an interim order authorizing a holder to charge tolls until a specified time or the happening of a specified event, the Board may, in any subsequent order, direct the holder

(a) to refund, in a manner satisfactory to the Board, any part of the tolls charged by the holder under the interim order that is in excess of the tolls determined by the Board to be just and reasonable, together with interest on the amount so refunded; or

(b) to recover in its tolls, in a manner satisfactory to the Board, the amount by which the tolls determined by the Board to be just and reasonable exceed the tolls charged by the holder under the interim order, together with interest on the amount so recovered.

2007, c. 35, s. 150.


Disallowance of Tariff

Disallowance of tariff

13.08 The National Energy Board may disallow any tariff or any portion of any tariff that it considers to be contrary to any of the provisions of this Act or any order of the Board and may require a holder, within a time fixed by the Board, to substitute for it a tariff satisfactory to the Board or may establish other tariffs in lieu of the tariff or the portion so disallowed.

2007, c. 35, s. 150.

Suspension of tariff

13.09 The National Energy Board may suspend any tariff or any portion of any tariff before or after the tariff goes into effect.

2007, c. 35, s. 150.


Discrimination

No unjust discrimination

13.1 A holder shall not make any unjust discrimination in tolls, service or facilities against any person or locality.

2007, c. 35, s. 150.

Burden of proof

13.11 If it is shown that a holder makes any discrimination in tolls, service or facilities against any person or locality, the burden of proving that the discrimination is not unjust lies on the holder.

2007, c. 35, s. 150.

No rebates, etc.

13.12 (1) No holder or shipper or an officer or employee, or an agent or mandatary, of a holder or shipper shall

(a) offer, grant, give, solicit, accept or receive a rebate, concession or discrimination whereby a person obtains transmission of oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas by a holder at a rate less than that named in the tariffs then in force; or

(b) knowingly be party or privy to a false billing, false classification, false report or other device resulting in a rate being charged that is less than that named in the tariffs then in force.

Prosecution

(2) No prosecution shall be instituted for an offence under this section without leave of the National Energy Board.

2007, c. 35, s. 150.


Contracts Limiting Liabilities

Contracts limiting liability

13.13 (1) Except as provided in this section, no contract, condition or notice made or given by a holder impairing, restricting or limiting its liability in respect of the transmission of oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas relieves the holder from its liability, unless that class of contract, condition or notice is included as a term or condition of its tariffs as filed or has been first authorized or approved by order of the National Energy Board.

National Energy Board may determine limits

(2) The National Energy Board may determine the extent to which the liability of a holder may be impaired, restricted or limited as provided in this section.

Terms and conditions

(3) The National Energy Board may establish the terms and conditions under which oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas may be transmitted by a holder.

2007, c. 35, s. 150.


Transmission of Oil or Gas

Duty of holder of an operating licence or authorization under subsection 5(1)

13.14 (1) Subject to any exemptions or conditions that the National Energy Board may establish, a holder operating a pipeline for the transmission of oil shall, according to its powers, without delay and with due care and diligence, receive, transport and deliver all oil and any other substance, including water, incidental to the drilling for or production of oil offered for transmission by means of its pipeline.

Orders for transmission of commodities

(2) The National Energy Board may, by order, on any terms and conditions that it may specify in the order, require a holder operating a pipeline for the transmission of gas to receive, transport and deliver, according to its powers, gas and any other substance, including water, incidental to the drilling for or production of gas offered for transmission by means of its pipeline.

Extension of facilities

(3) If the National Energy Board finds that no undue burden will be placed on the holder by requiring the holder to do so and if it considers it necessary or desirable to do so in the public interest, the Board may require a holder operating a pipeline for the transmission of oil or gas to provide adequate and suitable facilities for

(a) the receipt, transmission and delivery of the oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas offered for transmission by means of its pipeline;

(b) the storage of the oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas; and

(c) the junction of its pipeline with other facilities for the transmission of the oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas.

2007, c. 35, s. 150.


Transmission and Sale of Gas

Extension of services of gas pipeline companies

13.15 (1) If the National Energy Board considers it necessary or desirable to do so in the public interest, it may direct a holder operating a pipeline for the transmission of gas to extend or improve its transmission facilities to provide facilities for the junction of its pipeline with any facilities of, and sell gas to, any person or municipality engaged or legally authorized to engage in the local distribution of gas to the public, and for those purposes to construct branch lines to communities immediately adjacent to its pipeline, if the Board finds that to do so will not place an undue burden on the holder.

Limitation on extension

(2) Subsection (1) does not empower the National Energy Board to compel a holder to sell gas to additional customers if to do so would impair its ability to render adequate service to its existing customers.

2007, c. 35, s. 150.

Holder’s powers

13.16 A holder may, for the purposes of its undertaking and subject to the provisions of this Act, transmit oil, gas or any substance, including water, incidental to the drilling for or production of oil or gas by pipeline and regulate the time and manner in which it shall be transmitted and the tolls to be charged for the transmission.

2007, c. 35, s. 150.


Regulations

Regulations

13.17 The Governor in Council may make regulations for the purposes of this Part, designating as oil or gas any substance resulting from the processing or refining of hydrocarbons or coal if that substance

(a) is asphalt or a lubricant; or

(b) is a suitable source of energy by itself or when it is combined or used in association with something else.

2007, c. 35, s. 150.


Part I. Regulation Of Operations

Regulations

Regulatory power of Governor in Council

14. (1) The Governor in Council may, for the purposes of safety and the protection of the environment as well as for the production and conservation of oil and gas resources, make regulations

(a) defining "oil" and "gas", for the purposes of Parts I and II, "installation" and "equipment" for the purposes of sections 5.11 and 5.12 and "serious" for the purposes of section 28;

(b) concerning the exploration and drilling for, and the production, processing and transportation of, oil or gas in any area to which this Act applies and works and activities related to such exploration, drilling, production, processing and transportation;

(c) authorizing the National Energy Board, or any person, to make such orders as may be specified in the regulations and to exercise such powers and perform such duties as may be necessary for

(i) the management and control of oil or gas production,

(ii) the removal of oil or gas from the areas to which this Act applies, and

(iii) the design, construction, operation or abandonment of pipeline within the areas to which this Act applies;

(d)  concerning arbitrations for the purposes of subsection 5.01(2) including the costs of or incurred in relation to such arbitrations;

(e) concerning the approvals to be granted as conditions of authorizations issued under paragraph 5(1)(b);

(f) concerning certificates for the purposes of section 5.12;

(g) prohibiting the introduction into the environment of substances, classes of substances and forms of energy in prescribed circumstances;

(h) authorizing the discharge, emission or escape of oil or gas for the purposes of subsection 24(1), in such quantities, at such locations, under such conditions and by such persons as may be specified in the regulations; and

(i) prescribing anything that is required to be prescribed for the purposes of this Act.

Incorporation of standards or specifications

(2) Unless otherwise provided in this Act, regulations made under subsection (1) may incorporate by reference the standards or specifications of any government, person or organization, either as they read at a fixed time or as amended from time to time.

R.S., 1985, c. O-7, s. 14; R.S., 1985, c. 36 (2nd Supp.), s. 122; 1992, c. 35, s. 14; 1994, c. 10, s. 7.

Previous VersionPublication of proposed regulations

15. (1) Subject to subsection (2), a copy of each regulation that the Governor in Council proposes to make under this Act shall be published in the Canada Gazette and a reasonable opportunity shall be afforded to interested persons to make representations to the Minister with respect thereto.

Single publication required

(2) No proposed regulation need be published more than once under subsection (1) whether or not it is altered or amended after that publication as a result of representations made by interested persons as provided in that subsection.

1980-81-82-83, c. 81, s. 78.

Equivalent standards and exemptions

16. (1) Subject to subsection (2), the Chief Safety Officer and Chief Conservation Officer may

(a) authorize the use of equipment, methods, measures or standards in lieu of any required by regulation, where those Officers are satisfied that the use of that other equipment and those other methods, measures or standards would provide a level of safety, protection of the environment and conservation equivalent to that provided by compliance with the regulations; or

(b) grant an exemption from any regulatory requirement in respect of equipment, methods, measures or standards, where those Officers are satisfied with the level of safety, protection of the environment and conservation that will be achieved without compliance with that requirement.

One officer authorizations

(2) The Chief Safety Officer alone may exercise the powers referred to in paragraph (1)(a) or (b) if the regulatory requirement referred to in that paragraph does not relate to protection of the environment or conservation, and the Chief Conservation Officer alone may exercise those powers if that regulatory requirement does not relate to safety.

No contravention

(3) No person contravenes the regulations if that person acts in compliance with an authorization or exemption under subsection (1) or (2).

R.S., 1985, c. O-7, s. 16; 1992, c. 35, s. 15.

Emergency situations

16.1 (1) In a prescribed emergency situation, where the Minister is of the opinion that there is a conflict between the provisions of this Act or the regulations and the provisions of another federal law, other than provisions implementing an international treaty or convention to which Canada is a party, and that compliance with that law and this Act or the regulations is likely to create a situation that would seriously endanger the safety of persons or equipment, the Minister may issue a written declaration to that effect.

Contents of declaration

(2) A declaration made under subsection (1) must

(a) describe the emergency situation;

(b) specify the provisions that conflict and describe the nature of the conflict;

(c) describe the consultation that has taken place pursuant to subsection (4);

(d) describe the geographical area, person, work or activity affected by the declaration; and

(e) specify the time the declaration comes into effect.

Effect of declaration

(3) From the time specified in a declaration made under subsection (1), the provisions of this Act or the regulations specified therein prevail, in respect of the geographical area, person, work or activity described therein, over the provisions of the other federal law specified therein until such time as the Minister or the Governor in Council revokes the declaration.

Consultation

(4) Before the Minister makes or revokes a declaration under this section, the minister responsible for the federal law that, in the Minister’s opinion, is in conflict with this Act or the regulations shall be consulted.

Submission for revocation

(5) The minister responsible for a federal law that is specified in a declaration made under subsection (1) may submit the declaration to the Governor in Council for revocation.

Not a statutory instrument

(6) A declaration or a revocation made under this section is not a regulation within the meaning and for the purposes of the Statutory Instruments Act, but shall be published in the Canada Gazette within seven days after it is made.

1992, c. 35, s. 15.


Production Orders

Production orders

17. (1) Where the Chief Conservation Officer, on reasonable grounds, is of the opinion that, with respect to an interest in any area to which this Act applies, the capability exists to commence, continue or increase production of oil or gas and that a production order would stop waste, the Chief Conservation Officer may order the commencement, continuation or increase of production of oil or gas at such rates and in such quantities as are specified in the order.

Ceasing production

(2) Where the Chief Conservation Officer, on reasonable grounds, is of the opinion that an order under this section would stop waste, the Chief Conservation Officer may order a decrease or the cessation or suspension of production of oil or gas for any period specified in the order.

Investigation and appeal

(3) Subsections 19(2) to (4) and section 21 apply, with such modifications as the circumstances require, to an order under subsection (1) or (2) as if it were an order under subsection 19(1).

Access to files and records

(4) A person subject to an order under subsection (1) or (2) shall, on request, afford the Chief Conservation Officer or a person designated by the Chief Conservation Officer access to his premises, files and records for all reasonable purposes related to the order.

R.S., 1985, c. O-7, s. 17; 1992, c. 35, s. 16.


Waste

Waste prohibited

18. (1) Subject to section 63, any person who commits waste is guilty of an offence under this Act, but a prosecution may be instituted for such an offence only with the consent of the National Energy Board.

Definition of “waste”

(2) In this Act, “waste”, in addition to its ordinary meaning, means waste as understood in the oil and gas industry and in particular, but without limiting the generality of the foregoing, includes

(a) the inefficient or excessive use or dissipation of reservoir energy;

(b) the locating, spacing or drilling of a well within a field or pool or within part of a field or pool or the operating of any well that, having regard to sound engineering and economic principles, results or tends to result in a reduction in the quantity of oil or gas ultimately recoverable from a pool;

(c) the drilling, equipping, completing, operating or producing of any well in a manner that causes or is likely to cause the unnecessary or excessive loss or destruction of oil or gas after removal from the reservoir;

(d) the inefficient storage of oil or gas above ground or underground;

(e) the production of oil or gas in excess of available storage, transportation or marketing facilities;

(f) the escape or flaring of gas that could be economically recovered and processed or economically injected into an underground reservoir; or

(g) the failure to use suitable artificial, secondary or supplementary recovery methods in a pool when it appears that those methods would result in increasing the quantity of oil or gas, or both, ultimately recoverable under sound engineering and economic principles.

R.S., 1985, c. O-7, s. 18; 1994, c. 10, s. 15.

Prevention of waste

19. (1) Where the Chief Conservation Officer, on reasonable grounds, is of the opinion that waste, other than waste as defined in paragraph 18(2)(f) or (g), is being committed, the Chief Conservation Officer may, subject to subsection (2), order that all operations giving rise to the waste cease until he is satisfied that the waste has stopped.

Investigation

(2) Before making any order under subsection (1), the Chief Conservation Officer shall hold an investigation at which interested persons shall be given an opportunity to be heard.

Peremptory order

(3) Notwithstanding subsection (2), the Chief Conservation Officer may, without an investigation, make an order under this section requiring all operations to be shut down if in the opinion of the Chief Conservation Officer it is necessary to do so to prevent damage to persons or property or to protect the environment, but as soon as possible after making such an order and in any event within fifteen days thereafter, the Chief Conservation Officer shall hold an investigation at which interested persons shall be given an opportunity to be heard.

Order after inquiry

(4) At the conclusion of an investigation under subsection (3), the Chief Conservation Officer may set aside, vary or confirm the order made or make a new order.

R.S., 1985, c. O-7, s. 19; 1992, c. 35, s. 17.

Taking over management

20. (1) For the purpose of giving effect to an order made under section 19, the Chief Conservation Officer may authorize and direct such persons as may be necessary to enter the place where the operations giving rise to the waste are being carried out and take over the management and control of those operations and any works connected therewith.

Controlling operations and costs thereof

(2) A person authorized under subsection (1) to take over the management and control of operations shall manage and control the operations and do all things necessary to stop the waste, and the cost thereof shall be borne by the person who holds the permit or the lease and until paid constitutes a debt recoverable by action in any court of competent jurisdiction as a debt due to Her Majesty in right of Canada.

R.S., 1985, c. O-7, s. 20; 1992, c. 35, s. 18(F).

Appeal to the National Energy Board

21. A person aggrieved by an order of the Chief Conservation Officer under section 17 or 19 after an investigation under subsection 19(2) or (3) may appeal to the National Energy Board to have the order reviewed under section 28.4 of the National Energy Board Act.

R.S., 1985, c. O-7, s. 21; 1992, c. 35, s. 19(F); 1994, c. 10, s. 8.

Application for show cause order in respect of waste

22. When the Chief Conservation Officer, on reasonable grounds, is of the opinion that waste, as defined in paragraph 18(2)(f) or (g), is occurring in the recovery of oil or gas from a pool, that Officer may apply to the National Energy Board for an order under section 28.5 of the National Energy Board Act requiring the operators within the pool to show cause why the Board should not make a direction in respect of the waste.

R.S., 1985, c. O-7, s. 22; 1992, c. 35, s. 20(F); 1994, c. 10, s. 8.

23. (Repealed, 1994, c. 10, s. 8)


Spills and Debris

Definition of “spill”

24. (1) In sections 25 to 28, “spill” means a discharge, emission or escape of petroleum, other than one that is authorized under the regulations or any other federal law or that constitutes a discharge from a vessel to which Part 8 or 9 of the Canada Shipping Act, 2001  applies or a ship to which Part 6 of the Marine Liability Act  applies.

Definition of “debris”

(2) In sections 26 and 28, "debris" means any installation or structure that was put in place in the course of any work or activity required to be authorized under paragraph 5(1)(b ) and that has been abandoned without such authorization as may be required by or pursuant to this Act, or any material that has broken away or been jettisoned or displaced in the course of any such work or activity.

Definition of “actual loss or damage”

(3) In section 26, “actual loss or damage” includes loss of income, including future income, and, with respect to any aboriginal peoples of Canada, includes loss of hunting, fishing and gathering opportunities.

Immunity

(4) Her Majesty in right of Canada incurs no liability whatever to any person arising out of the authorization by regulations made by the Governor in Council of any discharge, emission or escape of oil or gas.

R.S., 1985, c. O-7, s. 24; R.S., 1985, c. 36 (2nd Supp.), s. 123, c. 6 (3rd Supp.), s. 92; 1992, c. 35, s. 22; 2001, c. 6, s. 117, c. 26, ss. 315, 324.

Previous VersionSpills prohibited

25. (1) No person shall cause or permit a spill on or from any area to which this Act applies.

Duty to report spills

(2) Where a spill occurs in any area to which this Act applies, any person who at the time of the spill is carrying on any work or activity related to the exploration for or development or production of oil or gas in the area of the spill shall, in the manner prescribed by the regulations, report the spill to the Chief Conservation Officer.

Duty to take reasonable measures

(3) Every person required to report a spill under subsection (2) shall, as soon as possible, take all reasonable measures consistent with safety and the protection of the environment to prevent any further spill, to repair or remedy any condition resulting from the spill and to reduce or mitigate any danger to life, health, property or the environment that results or may reasonably be expected to result from the spill.

Taking emergency action

(4) Where the Chief Conservation Officer, on reasonable grounds, is satisfied that

(a) a spill has occurred in any area to which this Act applies and immediate action is necessary in order to effect any reasonable measures referred to in subsection (3), and

(b) such action is not being taken or will not be taken under subsection (3),

he may take such action or direct that it be taken by such persons as may be necessary.

Taking over management

(5) For the purposes of subsection (4), the Chief Conservation Officer may authorize and direct such persons as may be necessary to enter the place where the spill has occurred and take over the management and control of any work or activity thereat.

Managing work or activity

(6) A person authorized and directed to take over the management and control of any work or activity under subsection (5) shall manage and control that work or activity and take all reasonable measures in relation to the spill that are referred to in subsection (3).

Costs

(7) Any costs incurred under subsection (6) shall be borne by the person who obtained an authorization under paragraph 5(1)(b) in respect of the work or activity from which the spill emanated and until paid constitute a debt recoverable by action in any court of competent jurisdiction as a debt due to Her Majesty in right of Canada.

Recovery of costs

(7.1) Where a person, other than a person referred to in subsection (7), takes action pursuant to subsection (3) or (4), the person may recover from Her Majesty in right of Canada the costs and expenses reasonably incurred by that person in taking the action.

Appeal

(8) A person aggrieved by any action or measure taken or authorized or directed to be taken under subsections (4) to (6) may appeal to the National Energy Board to have the order reviewed under section 28.4 of the National Energy Board Act.

Personal liability

(9) No person required, directed or authorized to act under this section or section 28.4 of the National Energy Board Act is personally liable, either civilly or criminally, in respect of any act or omission in the course of complying with this section unless it is shown that the person did not act reasonably in the circumstances.

R.S., 1985, c. O-7, s. 25; 1992, c. 35, s. 23; 1994, c. 1, s. 9.

Recovery of loss, damage, costs or expenses

26. (1) Where any discharge, emission or escape of oil or gas that is authorized by regulation, or any spill, occurs in any area to which this Act applies,

(a) the person who is required to obtain an authorization under paragraph 5(1)(b) in respect of the work or activity from which the spill or authorized discharge, emission or escape of oil or gas emanated is liable, without proof of fault or negligence, up to any prescribed limit of liability, for

(i) all actual loss or damage incurred by any person as a result of the spill or the authorized discharge, emission or escape of oil or gas, and

(ii) the costs and expenses reasonably incurred by Her Majesty in right of Canada or any other person in taking any action or measure in relation to the spill or the authorized discharge, emission or escape of oil or gas; and

(b) all persons to whose fault or negligence the spill or the authorized discharge, emission or escape of oil or gas is attributable or who are by law responsible for others to whose fault or negligence the spill or the authorized discharge, emission or escape of oil or gas is attributable are jointly and severally liable, to the extent determined according to the degree of the fault or negligence proved against them, for all actual loss or damage incurred by any person as a result of the spill or the authorized discharge, emission or escape of oil or gas.

Recovery of loss, damage, costs or expenses caused by debris

(2) Where any person incurs actual loss or damage as a result of debris or Her Majesty in right of Canada reasonably incurs any costs or expenses in taking any remedial action in relation to debris,

(a) the person who is required to obtain an authorization under paragraph 5(1)(b) in respect of the work or activity from which the debris originated is liable, without proof of fault or negligence, up to any prescribed limit of liability, for all such actual loss or damage and all such costs or expenses; and

(b) all persons to whose fault or negligence the debris is attributable or who are by law responsible for others to whose fault or negligence the debris is attributable are jointly and severally liable, to the extent determined according to the degree of the fault or negligence proved against them, for all such actual loss or damage and all such costs or expenses.

No double liability

(2.1) Where subsection (1) or (2) applies, no person is liable for more than the greater of the prescribed limit referred to in paragraph (1)(a) or (2)(a), as the case may be, and the amount for which the person would be liable under any other law for the same occurrence.

Claims

(3) All claims under this section may be sued for and recovered in any court of competent jurisdiction in Canada and shall rank firstly in favour of persons incurring actual loss or damage, without preference, and secondly to meet any costs and expenses described in subsection (1) or (2).

Saving

(4) Nothing in this section suspends or limits

(a) any legal liability or remedy for an act or omission by reason only that the act or omission is an offence under this Act or gives rise to liability under this section;

(b) any recourse, indemnity or relief available at law to a person who is liable under this section against any other person; or

(c) the operation of any applicable law or rule of law that is not inconsistent with this section.

class="MarginalLimitation period

(5) Proceedings in respect of claims under this section may be instituted within three years from the day when the loss, damage, costs or expenses occurred but in no case after six years from the day the spill or the discharge, emission or escape of oil or gas occurred or, in the case of debris, from the day the installation or structure in question was abandoned or the material in question broke away or was jettisoned or displaced.

R.S., 1985, c. O-7, s. 26; 1992, c. 35, s. 24.

Financial responsibility

27. (1) An applicant for an authorization under paragraph 5(1)(b) in respect of any work or activity in any area in which this Act applies shall provide proof of financial responsibility in the form of a letter of credit, a guarantee or indemnity bond or in any other form satisfactory to the National Energy Board, in an amount satisfactory to the Board.

Continuing obligation

(1.1) The holder of an authorization under paragraph 5(1)(b) shall ensure that the proof of financial responsibility remains in force for the duration of the work or activity in respect of which the authorization is issued.

Payment of claims

(2) The National Energy Board may require that moneys in an amount not exceeding the amount prescribed for any case or class of cases, or determined by the Board in the absence of regulations, be paid out of the funds available under the letter of credit, guarantee or indemnity bond or other form of financial responsibility provided under subsection (1), in respect of any claim for which proceedings may be instituted under section 26, whether or not those proceedings have been instituted.

Manner of payment

(3) Where payment is required under subsection (2), it shall be made in such manner, subject to such conditions and procedures and to or for the benefit of such persons or classes of persons as may be prescribed for any case or class of cases, or as may be required by the National Energy Board in the absence of regulations.

Deduction

(4) Where a claim is sued for under section 26, there shall be deducted from any award made pursuant to the action on that claim any amount received by the claimant under this section in respect of the loss, damage, costs or expenses claimed.

R.S., 1985, c. O-7, s. 27; 1992, c. 35, s. 25; 1994, c. 10, s. 10.


Inquiries

Inquiries

28. (1) Where a spill or debris or an accident or incident related to any activity to which this Act applies occurs or is found in any area to which this Act applies and results in death or injury or danger to public safety or the environment, the Minister may direct an inquiry to be made, subject to the Canadian Transportation Accident Investigation and Safety Board Act, and may authorize any person that the Minister deems qualified to conduct the inquiry.

Mandatory inquiry

(1.1) Where a spill or debris or an accident or incident related to any activity to which this Act applies occurs or is found in any area to which this Act applies and is serious, as defined by regulation, the Minister shall direct that an inquiry referred to in subsection (1) be made, subject to the Canadian Transportation Accident Investigation and Safety Board Act, and shall ensure that the person who conducts the inquiry is not employed in a part of the federal public administration for which the Minister is responsible.

Power of persons conducting inquiry

(2) For the purposes of an inquiry under subsection (1), a person authorized by the Minister under that subsection has all the powers of a commissioner under Part I of the Inquiries Act.

Compatible procedures and practices

(3) The person or persons authorized to conduct an inquiry under subsection (1) shall ensure that, as far as practicable, the procedures and practices for the inquiry are compatible with investigation procedures and practices followed by any appropriate provincial authorities, and for those purposes may consult with any of those authorities concerning compatible procedures and practices.

Report

(4) As soon as possible after the conclusion of an inquiry under subsection (1), the person or persons authorized to conduct the inquiry shall submit a report to the Minister, together with the evidence and other material that was before the inquiry.

Publication

(5) A report made pursuant to subsection (4) shall be published by the Minister within thirty days after he has received it.

Copies of report

(6) The Minister may supply copies of a report published pursuant to subsection (5) in such manner and on such terms as he considers proper.

R.S., 1985, c. O-7, s. 28; 1989, c. 3, s. 46; 1992, c. 35, s. 26; 2003, c. 22, s. 128.

Previous Version

Part Ii. Production Arrangements

Interpretation

Definitions

29. In this Part,

“pooled spacing unit”

« unité d’espacement mise en commun »

“pooled spacing unit” means the area that is subject to a pooling agreement or a pooling order;

“pooled tract”

« parcelle mise en commun »

“pooled tract” means the portion of a pooled spacing unit defined as a tract in a pooling agreement or a pooling order;

“pooling agreement”

« accord de mise en commun »

“pooling agreement” means an agreement to pool the interests of owners in a spacing unit and to provide for the operation or the drilling and operation of a well thereon;

“pooling order”

« arrêté de mise en commun »

“pooling order” means an order made under section 31 or as altered pursuant to section 35;

“royalty interest”

« droit à redevance »

“royalty interest” means any interest in, or the right to receive a portion of, any oil or gas produced and saved from a field or pool or part of a field or pool or the proceeds from the sale thereof, but does not include a working interest or the interest of any person whose sole interest is as a purchaser of oil or gas from the pool or part thereof;

“royalty owner”

« titulaire de redevance »

“royalty owner” means a person, including Her Majesty in right of Canada, who owns a royalty interest;

“spacing unit”

« unité d’espacement »

“spacing unit” means the area allocated to a well for the purpose of drilling for or producing oil or gas;

“tract participation”

« fraction parcellaire »

“tract participation” means the share of production from a unitized zone that is allocated to a unit tract under a unit agreement or unitization order or the share of production from a pooled spacing unit that is allocated to a pooled tract under a pooling agreement or pooling order;

“unit agreement”

pan cla« accord d’union »

“unit agreement” means an agreement to unitize the interests of owners in a pool or a part of a pool exceeding in area a spacing unit, or such an agreement as varied by a unitization order;

“unit area”

« secteur unitaire »

“unit area” means the area that is subject to a unit agreement;

“unit operating agreement”

« accord d’exploitation unitaire »

“unit operating agreement” means an agreement, providing for the management and operation of a unit area and a unitized zone, that is entered into by working interest owners who are parties to a unit agreement with respect to that unit area and unitized zone, and includes a unit operating agreement as varied by a unitization order;

“unit operation”

« exploitation unitaire »

“unit operation” means those operations conducted pursuant to a unit agreement or a unitization order;

“unit operator”

« exploitant unitaire »

“unit operator” means a person designated as a unit operator under a unit operating agreement;

“unit tract”

« parcelle unitaire »

“unit tract” means the portion of a unit area that is defined as a tract in a unit agreement;

“unitization order”

« arrêté d’union »

“unitization order” means an order of the Committee made under section 41;

“unitized zone”

« terrain »

“unitized zone” means a geological formation that is within a unit area and subject to a unit agreement;

“working interest”

« intérêt économique direct »

“working interest” means a right, in whole or in part, to produce and dispose of oil or gas from a pool or part of a pool, whether that right is held as an incident of ownership of an estate in fee simple in the oil or gas or under a lease, agreement or other instrument, if the right is chargeable with and the holder thereof is obligated to pay or bear, either in cash or out of production, all or a portion of the costs in connection with the drilling for, recovery and disposal of oil or gas from the pool or part thereof;

“working interest owner”

class="MarginalNoteDefi« détenteur »

“working interest owner” means a person who owns a working interest.

R.S., 1985, c. O-7, s. 29; 1992, c. 35, s. 27(F).


Pooling

Voluntary pooling

30. (1) Where one or more working interest owners have leases or separately owned working interests within a spacing unit, the working interest owners and the royalty owners who own all of the interests in the spacing unit may pool their working interests and royalty interests in the spacing unit for the purpose of drilling for or producing, or both drilling for and producing, oil and gas if a copy of the pooling agreement and any amendment thereto has been filed with the Chief Conservation Officer.

Pooling agreement by Her Majesty

(2) The Minister may, on behalf of Her Majesty, enter into a pooling agreement on any terms and conditions that the Minister deems advisable and, despite anything in this Act, the Territorial Lands Act, the Federal Real Property and Federal Immovables Act, the Canada Petroleum Resources Act or any regulations made under those Acts, the pooling agreement is binding on Her Majesty.

R.S., 1985, c. O-7, s. 30; R.S., 1985, c. 36 (2nd Supp.), s. 124; 1991, c. 50, s. 35; 2001, c. 4, s. 163.

Previous VersionApplication for pooling order

31. (1) In the absence of a pooling agreement, a working interest owner in a spacing unit may apply for a pooling order directing the working interest owners and royalty owners within the spacing unit to pool their interests in the spacing unit for the purpose of drilling for and producing, or producing, oil or gas or both from the spacing unit.

Hearing by Committee

(2) An application under subsection (1) shall be made to the Minister who shall refer the application to the Committee for the purpose of holding a hearing to determine whether a pooling order should be made and at that hearing the Committee shall afford all interested parties an opportunity to be heard.

Matter to be supplied Committee on hearing

(3) Prior to a hearing held pursuant to subsection (2), the working interest owner making application shall provide the Committee, and such other interested parties as the Committee may direct, with a proposed form of pooling agreement, and the working interest owners who have interests in the spacing unit to which the proposed pooling agreement relates shall provide the Committee with such information as the Committee deems necessary.

Order of Committee

(4) After a hearing held pursuant to subsection (2), the Committee may order that all working interest owners and royalty owners who have an interest in the spacing unit shall be deemed to have entered into a pooling agreement as set out in the pooling order.

R.S., c. O-4, s. 22.

Contents of pooling order

32. Every pooling order shall provide

(a) for the drilling and operation of a well on the spacing unit or, where a well that is capable of or that can be made capable of production has been drilled on the spacing unit before the making of the pooling order, for the future production and operation of that well;

(b) for the appointment of a working interest owner as operator to be responsible for the drilling, operation or abandoning of the well whether drilled before or after the making of the pooling order;

(c) for the allocation to each pooled tract of its share of the production of the oil or gas from the pooled spacing unit that is not required, consumed or lost in the operation of the well, which allocation shall be on a prorated area basis unless it can be shown to the satisfaction of the Committee that that basis is unfair, whereupon the Committee may make an allocation on another more equitable basis;

(d) in the event that no production of oil or gas is obtained, for the payment by the applicant therefor of all costs incurred in the drilling and abandoning of the well;

(e) where production has been obtained, for the payment of the actual costs of drilling the well, whether drilled before or after the making of the pooling order, and for the payment of the actual costs of the completion, operation and abandoning of the well; and

(f) for the sale by the operator of any oil or gas allocated pursuant to paragraph (c) to a working interest owner where the working interest owner thereof fails to take in kind and dispose of the production, and for the deduction out of the proceeds by the operator of his expenses reasonably incurred in connection with the sale.

R.S., c. O-4, s. 22; 1976-77, c. 55, s. 5.

Provision of penalty

33. (1) A pooling order may provide for a penalty for a working interest owner who does not, within the time specified in the order, pay the portion of the costs attributable to him as his share of the cost of drilling and completion of the well, but the penalty shall not exceed an amount equal to one-half of that working interest owner’s share of those costs.

Recovery of costs and penalty

(2) If a working interest owner does not, within the time specified therefor in the pooling order, pay his share of the costs of the drilling, completing, operating and abandoning of the well, his portion of the costs and the penalty, if any, are recoverable only out of his share of production from the spacing unit and not in any other manner.

R.S., c. O-4, s. 22.

Effect of pooling order

34. Where a pooling order is made, all working interest owners and royalty owners having interests in the pooled spacing unit shall, on the making of the order, be deemed to have entered into a pooling agreement as set out in the pooling order and the order shall be deemed to be a valid contract between the parties having interests in the pooled spacing unit, and all its terms and provisions, as set out therein or as altered pursuant to section 35, are binding on and enforceable against the parties thereto, including Her Majesty.

R.S., c. O-4, s. 23.

Application to alter pooling order

35. (1) The Committee shall hear any application to vary, amend or terminate a pooling order where the application is made by the owners of over twenty-five per cent of the working interests in the pooled spacing unit, calculated on a prorated area basis, and may, in its discretion, order a hearing on the application of any working interest owner or royalty owner.

Alteration of pooling order

(2) After a hearing held pursuant to subsection (1), the Committee may vary or amend the pooling order to supply any deficiency therein or to meet changing conditions and may vary or revoke any provision that the Committee deems to be unfair or inequitable or it may terminate the pooling order.

Tract participation ratios protected

(3) Where a pooling order is varied or amended, no change shall be made that will alter the ratios of tract participations between the pooled tracts as originally set out in the pooling order.

R.S., c. O-4, s. 24; 1976-77, c. 55, s. 5.

Prohibition

36. (1) No person shall produce any oil or gas within a spacing unit in which there are two or more leases or two or more separately owned working interests unless a pooling agreement has been entered into in accordance with section 30 or in accordance with a pooling order made under section 31.

Saving

(2) Subsection (1) does not prohibit the production of oil or gas for testing in any quantities approved by the Chief Conservation Officer.

R.S., c. O-4, s. 25.


Unitization

Unit operation

37. (1) Any one or more working interest owners in a pool or part of a pool exceeding in area a spacing unit, together with the royalty owners, may enter into a unit agreement and operate their interests pursuant to the terms of the unit agreement or any amendment thereto if a copy of the agreement and any amendment has been filed with the Chief Conservation Officer.

Minister may enter into unit agreement

(2) The Minister may enter into a unit agreement binding on Her Majesty, on any terms and conditions that the Minister may deem advisable, and any of the regulations under this Act, the Territorial Lands Act, the Federal Real Property and Federal Immovables Act or the Canada Petroleum Resources Act that may be in conflict with the terms and conditions of the unit agreement stand varied or suspended to the extent necessary to give full effect to the terms and conditions of the unit agreement.

Unit operator’s relationship to parties

(3) Where a unit agreement filed under this section provides that a unit operator shall be the agent of the parties thereto with respect to their powers and responsibilities under this Act, the performance or non-performance thereof by the unit operator shall be deemed to be the performance or non-performance by the parties otherwise having those powers and responsibilities under this Act.

R.S., 1985, c. O-7, s. 37; R.S., 1985, c. 36 (2nd Supp.), s. 125; 1991, c. 50, s. 36; 2001, c. 4, s. 164.

Previous VersionRequiring unitization to prevent waste

38. (1) Notwithstanding anything in this Act, where, in the opinion of the Chief Conservation Officer, the unit operation of a pool or part thereof would prevent waste, he may apply to the Committee for an order requiring the working interest owners in the pool or part thereof to enter into a unit agreement and a unit operating agreement in respect of the pool or part thereof, as the case may be.

Hearing

(2) Where an application is made by the Chief Conservation Officer pursuant to subsection (1), the Committee shall hold a hearing at which all interested persons shall be afforded an opportunity to be heard.

Order

(3) If, after the hearing mentioned in subsection (2), the Committee is of the opinion that the unit operation of a pool or part thereof would prevent waste, the Committee may by order require the working interest owners in the pool or part thereof to enter into a unit agreement and a unit operating agreement in respect of the pool or part thereof.

Cessation of operations

(4) If in the time specified in the order referred to in subsection (3), being not less than six months after the date of the making of the order, the working interest owners and royalty owners fail to enter into a unit agreement and a unit operating agreement approved by the Committee, all drilling and producing operations within the pool or part thereof in respect of which the order was made shall cease until such time as a unit agreement and a unit operating agreement have been approved by the Committee and filed with the Chief Conservation Officer.

Permit to continue operations

(5) Notwithstanding subsection (4), the Committee may permit the continued operation of the pool or part thereof after the time specified in the order referred to in subsection (3) if it is of the opinion that a unit agreement and unit operating agreement are in the course of being entered into, but any such continuation of operations shall be subject to any conditions prescribed by the Committee.

R.S., c. O-4, s. 27.


Compulsory Unitization

Who may apply for unitization order

39. (1) One or more working interest owners who are parties to a unit agreement and a unit operating agreement and own in the aggregate sixty-five per cent or more of the working interests in a unit area may apply for a unitization order with respect to the agreements.

Application for unitization order

(2) An application under subsection (1) shall be made to the Minister who shall refer the application to the Committee for the purpose of holding a hearing thereon in accordance with section 41.

Application by proposed unit operator

(3) An application under subsection (1) may be made by the unit operator or proposed unit operator on behalf of the working interest owners referred to in that subsection.

R.S., c. O-4, s. 28.

Previous VersionContents of unitization application

40. (1) An application for a unitization order shall contain

(a) a plan showing the unit area that the applicant desires to be made subject to the order;

(b) one copy each of the unit agreement and the unit operating agreement;

(c) a statement of the nature of the operations to be carried out; and

(d) a statement showing

(i) with respect to each proposed unit tract, the names and addresses of the working interest owners and royalty owners in that tract, and

(ii) the tracts that are entitled to be qualified as unit tracts under the provisions of the unit agreement.

Details required of unit agreement

(2) The unit agreement referred to in subsection (1) shall include

(a) a description of the unit area and the unit tracts included in the agreement;

(b) an allocation to each unit tract of a share of the production from the unitized zone not required, consumed or lost in the unit operation;

(c) a provision specifying the manner in which and the circumstances under which the unit operation shall terminate; and

(d) a provision specifying that the share of the production from a unit area that has been allocated to a unit tract shall be deemed to have been produced from that unit tract.

Details required of unit operating agreement

(3) The unit operating agreement referred to in subsection (1) shall make provision

(a) for the contribution or transfer to the unit, and any adjustment among the working interest owners, of the investment in wells and equipment within the unit area;

(b) for the charging of the costs and expenses of the unit operation to the working interest owners;

(c) for the supervision of the unit operation by the working interest owners through an operating committee composed of their duly authorized representatives and for the appointment of a unit operator to be responsible, under the direction and supervision of the operating committee, for the carrying out of the unit operation;

(d) for the determination of the percentage value of the vote of each working interest owner; and

(e) for the determination of the method of voting on any motion before the operating committee and the percentage value of the vote required to carry the motion.

R.S., c. O-4, s. 29.

Previous VersionHearing on application

41. (1) Where an application made under section 39 is referred by the Minister to the Committee, the Committee shall hold a hearing thereon at which all interested persons shall be afforded an opportunity to be heard.

Unitization order

(2) If the Committee finds that

(a) at the date of the commencement of a hearing referred to in subsection (1)

(i) the unit agreement and the unit operating agreement have been executed by one or more working interest owners who own in the aggregate sixty-five per cent or more of the total working interests in the unit area, and

(ii) the unit agreement has been executed by one or more royalty owners who own in the aggregate sixty-five per cent or more of the total royalty interests in the unit area, and

(b) the unitization order applied for would accomplish the more efficient or more economical production of oil or gas or both from the unitized zone,

the Committee may order

(c) that the unit agreement be a valid contract enuring to the benefit of all the royalty owners and working interest owners in the unit area and binding on and enforceable against all such owners, and

(d) that the unit operating agreement be a valid contract enuring to the benefit of all the working interest owners in the unit area and binding on and enforceable against all such owners,

and, subject to section 42, the unit agreement and the unit operating agreement have the effect given them by the order of the Committee.

Variation by unitization order

(3) In a unitization order, the Committee may vary the unit agreement or the unit operating agreement by adding provisions or by deleting or amending any provision thereof.

R.S., c. O-4, s. 30.

Previous VersionEffective date of unitization order

42. (1) Subject to subsection (2), a unitization order becomes effective on the day that the Committee determines in the order, but that day shall be not less than thirty days after the day on which the order is made.

Effective date when unit agreement or unit operating agreement varied

(2) Where a unit agreement or unit operating agreement is varied by the Committee in a unitization order, the effective date prescribed in the order shall be a date not less than thirty days following the day the order is made, but the order becomes ineffective if, before the effective date, the applicant files with the Committee a notice withdrawing the application on behalf of the working interest owners or there are filed with the Committee statements in writing objecting to the order and signed

(a) in the case of the unit agreement, by

(i) one or more working interest owners who own in the aggregate more than twenty-five per cent of the total working interests in the area and were included within the group owning sixty-five per cent or more of the total working interests as described in subparagraph 41(2)(a)(i), and

(ii) one or more royalty owners who own in the aggregate more than twenty-five per cent of the total royalty interests in the unit area and were included within the group owning sixty-five per cent or more of the total royalty interests as described in subparagraph 41(2)(a)(ii); or

(b) in the case of the unit operating agreement, by one or more working interest owners who own in the aggregate more than twenty-five per cent of the total working interests in the unit area and were included within the group owning sixty-five per cent or more of the total working interests as described in subparagraph 41(2)(a)(i).

Revocation of order

(3) Where a unitization order becomes ineffective under subsection (2), the Committee shall forthwith revoke the order.

R.S., 1985, c. O-7, s. 42; 1992, c. 35, s. 28(E).

Previous VersionTechnical defects in unitization order

43. A unitization order is not invalid by reason only of the absence of notice or of any irregularities in giving notice to any owner in respect of the application for the order or any proceedings leading to the making of the order.

R.S., c. O-4, s. 32.

Previous VersionAmending unitization order

44. (1) A unitization order may be amended on the application of a working interest owner, but before amending a unitization order the Committee shall hold a hearing at which all interested parties shall have an opportunity to be heard.

Voluntary proposal for amendment by owners

(2) If the Committee finds that, at the date of the commencement of a hearing of an application for the amendment of a unitization order, one or more working interest owners who own, in the aggregate, sixty-five per cent or more of the total working interests and one or more royalty interest owners who own, in the aggregate, sixty-five per cent or more of the total royalty interests in the unit area have consented to the proposed amendment, the Committee may amend the unitization order in accordance with the amendment proposed.

R.S., c. O-4, s. 33.

Previous VersionProtection of tract participation ratios

45. No amendment shall be made under section 44 that will alter the ratios between the tract participations of those tracts that were qualified for inclusion in the unit area before the commencement of the hearing, and, for the purposes of this section, the tract participations shall be those indicated in the unit agreement when it became subject to a unitization order.

R.S., c. O-4, s. 34.

Previous VersionProduction prohibited except in accord with unitization order

46. After the date on which a unitization order comes into effect and while the order remains in force, no person shall carry on any operations within the unit area for the purpose of drilling for or producing oil or gas from the unitized zone, except in accordance with the provisions of the unit agreement and the unit operating agreement.

R.S., c. O-4, s. 35.

Previous VersionHow percentages of interests to be determined

47. (1) The percentages of interests referred to in subsections 39(1), 41(2), 42(2) and 44(2) shall be determined

(a) with respect to royalty interests, on a prorated area basis; and

(b) with respect to working interests, on the basis of tract participations shown in the unit agreement.

Owner deemed to be royalty owner on a prorated area basis

(2) Where a working interest in a unit tract is held as an incident of the ownership of a fee simple estate in oil or gas, the owner who holds that working interest shall, for the purposes of subsection (1), be deemed to be a royalty owner in respect of the tract on a prorated area basis under paragraph (1)(a).

R.S., c. O-4, s. 36; 1976-77, c. 55, s. 5.

Previous Version

General

Pooled spacing unit included in unit area

48. (1) A pooled spacing unit that has been pooled pursuant to a pooling order and on which a well has been drilled may be included in a unit area as a single unit tract and the Committee may make such amendments to the pooling order as it deems necessary to remove any conflict between the provisions of the pooling order and the provisions of the unit agreement, or the unit operating agreement or the unitization order, if any.

Effect of including pooled spacing unit in unit area

(2) Where a pooled spacing unit is included in a unit area pursuant to subsection (1), the provisions of the unit agreement, the unit operating agreement and the unitization order, if any, prevail over the provisions of the pooling order in the event of a conflict.

Exceptions

(3) Notwithstanding subsection (2),

(a) the share of the unit production that is allocated to the pooled spacing unit shall in turn be allocated to the separately owned tracts in the pooled spacing unit on the same basis and in the same proportion as production actually obtained from the pooled spacing unit would have been shared under the pooling order;

(b) the costs and expenses of the unit operation that are allocated to the pooled spacing unit shall be shared and borne by the owners of the working interests therein on the same basis and in the same proportion as would apply under the pooling order; and

(c) the credits allocated under a unit operating agreement to a pooled spacing unit for adjustment of investment for wells and equipment thereon shall be shared by the owners of the working interests therein in the same proportion as would apply to the sharing of production under the pooling order.

R.S., c. O-4, s. 37.


Part Iii. Appeals And Enforcement

Appeals

Orders and decisions final

49. (1) Except as provided in this Act, every decision or order of the Committee is final and conclusive.

Decision or order defined

(2) Any minute or other record of the Committee or any document issued by the Committee, in the form of a decision or order, shall for the purposes of this section be deemed to be a decision or order of the Committee.

R.S., c. O-4, s. 38; R.S., c. 10(2nd Supp.), s. 65.

Stated case for Federal Court

50. (1) The Committee may of its own motion, or at the request of the Minister, state a case, in writing, for the opinion of the Federal Court on any question that in the opinion of the Committee is a question of law or of the jurisdiction of the Committee.

Proceedings thereon

(2) The Federal Court shall hear and determine the case stated and remit the matter to the Committee with the opinion of the Court thereon.

R.S., c. O-4, s. 39; R.S., c. 10(2nd Supp.), s. 64.

Governor in Council may review orders of Committee

51. The Governor in Council may at any time, in his discretion, either on petition of any interested person or of his own motion, vary or rescind any decision or order of the Committee made under this Act, whether the order is made between parties or otherwise and any order that the Governor in Council makes with respect thereto becomes a decision or order of the Committee and, subject to section 52, is binding on the Committee and on all parties.

R.S., c. O-4, s. 40.

Appeal to Federal Court

52. (1) An appeal lies from a decision or order of the Committee to the Federal Court on a question of law, on leave therefor being obtained from the Federal Court, in accordance with the practice of that Court, on application made within one month after the making of the decision or order sought to be appealed from or within such further time as that Court may allow.

(2)�(Repealed, R.S., 1985, c. 36 (2nd Supp.), s. 1)

Staying order

(3) Where leave to appeal is granted pursuant to subsection (1), any order of the Committee in respect of which the appeal is made shall be stayed until the matter of the appeal is determined.

Powers of the Court

(4) After the hearing of the appeal pursuant to this section, the Supreme Court of Canada shall certify its opinion to the Committee and the Committee shall make any order necessary to comply with the opinion.

Order subject to section 51

(5) Any order made by the Committee pursuant to subsection (4), unless the order has already been dealt with by the Governor in Council pursuant to section 51, shall be subject to that section.

R.S., 1985, c. O-7, s. 52; R.S., 1985, c. 36 (2nd Supp.), s. 126.

Previous Version

Safety and Conservation Officers

Officers

53. The safety officers and conservation officers necessary for the administration and enforcement of this Act and the regulations shall be designated by the National Energy Board from among its officers and employees.

R.S., 1985, c. O-7, s. 53; 1992, c. 35, s. 29; 1994, c. 10, s. 11.

Powers of officers

54. For the purpose of ensuring compliance with this Act and the regulations, a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer may at any reasonable time

(a) enter any place, including lands, buildings, installations, vessels, vehicles and aircraft, used for any work or activity in respect of which this Act applies, for the purpose of carrying out inspections, examinations, tests or inquiries or of directing that the person in charge of the place carry them out, and the officer may be accompanied by any other person that the officer believes is necessary to help carry out the inspection, examination, test or inquiry;

(b) take photographs or make drawings of any place or thing referred to in this section;

(c) order that any place or thing referred to in this section not be interfered with for a specified period;

(d) require the production, for inspection or copying, of any books, records, documents, licences or permits required by this Act or the regulations;

(e) take samples or particulars and carry out, or have carried out, any reasonable tests or examinations; and

(f) require the person in charge of the place, or any other person in the place who has knowledge relevant to an inspection, examination, test or inquiry, to furnish information, either orally or in writing, in the form requested.

R.S., 1985, c. O-7, s. 54; 1992, c. 35, s. 29.

Certificate to be produced

55. The National Energy Board shall provide every safety officer and conservation officer and the Chief Safety Officer and the Chief Conservation Officer with a certificate of appointment or designation and, on entering any place pursuant to this Act, the officer shall, if so required, produce the certificate to the person in charge of the place.

R.S., 1985, c. O-7, s. 55; 1992, c. 35, s. 29; 1994, c. 10, s. 15.

Assistance to officers

56. The owner, the person in charge of any place referred to in section 54 and every person found therein shall give a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer, as the case may be, all reasonable assistance to enable the officer to carry out duties and functions under this Act or the regulations.

R.S., 1985, c. O-7, s. 56; 1992, c. 35, s. 29.

Obstruction of officers and making of false statements

57. No person shall obstruct or hinder or make a false or misleading statement, either orally or in writing, to a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer who is engaged in carrying out duties and functions under this Act or the regulations.

R.S., 1985, c. O-7, s. 57; 1992, c. 35, s. 29.

Power of safety officer when dangerous operation detected

58. (1) Where a safety officer or the Chief Safety Officer, on reasonable grounds, is of the opinion that continuation of an operation in relation to the exploration or drilling for or the production, conservation, processing or transportation of oil or gas in any area to which this Act applies is likely to result in serious bodily injury, the safety officer or Chief Safety Officer, as the case may be, may order that the operation cease or be continued only in accordance with the terms of the order.

Notice

(2) The safety officer or Chief Safety Officer who makes an order under subsection (1) shall affix at or near the scene of the operation a notice of the order in a form approved by the National Energy Board.

Expiration of order

(3) An order made by a safety officer under subsection (1) expires seventy-two hours after it is made unless it is confirmed before that time by order of the Chief Safety Officer.

Modification or revocation

(4) A safety officer who makes an order under subsection (1) shall immediately so advise the Chief Safety Officer, and the Chief Safety Officer may modify or revoke the order.

Referral for review by National Energy Board

(5) A person carrying out an operation to which an order under subsection (1) makes reference, or any person having a pecuniary interest in that operation, may, by notice in writing, request the Chief Safety Officer to refer the order to the National Energy Board to review the need for the order under section 28.6 of the National Energy Board Act and, on receiving the notice, the Chief Safety Officer shall refer the order accordingly.

Operations in respect of which order made

(6) No person shall continue an operation in respect of which an order has been made pursuant to this section, except in accordance with the terms of the order or until the order has been set aside by the National Energy Board pursuant to section 28.6 of the National Energy Board Act.

(7) to (9) (Repealed, 1994, c. 10, s. 12)

R.S., 1985, c. O-7, s. 58; R.S., 1985, c. 36 (2nd Supp.), s. 127; 1992, c. 35, s. 29; 1994, c. 10, s. 12.

Previous VersionPriority

58.1 An order made by a safety officer or the Chief Safety Officer prevails over an order made by a conservation officer or the Chief Conservation Officer to the extent of any inconsistency between the orders.

1992, c. 35, s. 29.


Installation Manager

Installation manager

58.2 (1) Every holder of an authorization under paragraph 5(1)(b) in respect of a work or activity for which a prescribed installation is to be used shall put in command of the installation a manager who meets any prescribed qualifications, and the installation manager is responsible for the safety of the installation and the persons at it.

Powers

(2) Subject to this Act and any other Act of Parliament, an installation manager has the power to do such things as are required to ensure the safety of the installation and the persons at it and, more particularly, may

(a) give orders to any person who is at the installation;

(b) order that any person who is at the installation be restrained or removed; and

(c) obtain information or documents.

Emergency

(3) In a prescribed emergency situation, an installation manager’s powers are extended so that they also apply to each operator of a vessel, vehicle or aircraft that is at the installation or that is leaving or approaching it.

1992, c. 35, s. 29.


Offences and Punishment

Offences with respect to documents and records

59. A person is guilty of an offence who

(a) knowingly makes any false entry or statement in any report, record or document required by this Act or the regulations or by any order made pursuant to this Act or the regulations; or

(b) knowingly destroys, mutilates or falsifies any report or other document required by this Act or the regulations or by any order made pursuant to this Act or the regulations.

R.S., c. O-4, s. 48.

Offences

60. (1) Every person is guilty of an offence who

(a) contravenes this Act or the regulations;

(b) produces any oil or gas from a pool or field under the terms of a unit agreement within the meaning of Part II, or any amended unit agreement, before the unit agreement or amended unit agreement is filed with the Chief Conservation Officer;

(c) undertakes or carries on a work or activity without an authorization under paragraph 5(1)(b) or without complying with the approvals or requirements of such an authorization; or

(d) fails to comply with a direction, requirement or order of a safety officer, the Chief Safety Officer, a conservation officer, the Chief Conservation Officer or an installation manager or with an order of the Committee or the National Energy Board made under this Act.

Punishment

(2) Every person who is guilty of an offence under subsection (1) is liable

(a) on summary conviction, to a fine not exceeding one hundred thousand dollars or to imprisonment for a term not exceeding one year, or to both; or

(b) on conviction on indictment, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding five years, or to both.

R.S., 1985, c. O-7, s. 60; 1992, c. 35, s. 30; 1994, c. 10, s. 13.

61. and 62. (Repealed, 1992, c. 35, s. 30)

Presumption against waste

63. No person commits an offence under subsection 18(1) by reason of committing waste as defined in paragraph 18(2)(f) or (g) unless the person has been ordered by the National Energy Board under section 28.5 of the National Energy Board Act to take measures to prevent the waste and has failed to comply.

R.S., 1985, c. O-7, s. 63; 1994, c. 10, s. 14.

64. (Repealed, 1992, c. 35, s. 31)

Order to comply

65. Where a person is guilty of an offence under this Act, the court may, in addition to any other punishment it may impose, order that person to comply with the provisions of this Act or the regulation or order for the contravention of which he has been convicted.

R.S., c. O-4, s. 50.

Continuing offences

66. Where an offence under this Act is committed on more than one day or is continued for more than one day, it shall be deemed to be a separate offence for each day on which the offence is committed or continued.

R.S., c. O-4, s. 51.

67. (Repealed, 1992, c. 35, s. 32)

Limitation period

68. A prosecution for an offence under this Act may be instituted at any time within but not later than two years after the time when the subject-matter of the complaint arose.

R.S., c. O-4, s. 53.

Evidence

69. In any prosecution for an offence under this Act, a copy of an order purporting to have been made pursuant to this Act or the regulations and purporting to have been signed by the person authorized by this Act or the regulations to make that order is evidence of the matters set out therein.

R.S., c. O-4, s. 54.

Jurisdiction of judge or justice

70. Any complaint or information in respect of an offence under this Act may be heard, tried or determined by a justice or judge if the accused is resident or carrying on business within the territorial jurisdiction of that justice or judge although the matter of the complaint or information did not arise in that territorial jurisdiction.

R.S., c. O-4, s. 55.

Action to enjoin not prejudiced by prosecution

71. (1) Notwithstanding that a prosecution has been instituted in respect of an offence under this Act, the regulations or any order made pursuant to this Act or the regulations, Her Majesty in right of Canada may commence and maintain an action to enjoin the committing of any contravention of this Act, the regulations or any order made pursuant to this Act or the regulations.

Civil remedy not affected

(2) No civil remedy for any act or omission is suspended or affected by reason that the act or omission is an offence under this Act.

R.S., c. O-4, s. 56.

72. (Repealed, 1992, c. 35, s. 33)


Application

Application

72.1 This Act applies to every interest or right in oil or gas acquired or vested before the coming into force of this section.

R.S., 1985, c. 36 (2nd Supp.), s. 128.


Her Majesty

Binding on Her Majesty

73. This Act is binding on Her Majesty in right of Canada or a province.

1980-81-82-83, c. 81, s. 85.


Coming Into Force

Commencement

R.S., c. O-4, s. 58.

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