The Energy Resources Conservation Board (ERCB) is inviting public feedback until March 20, 2009, on a draft directive that outlines requirements for oil and gas development within or near water bodies. The directive is meant to address recurrent concerns about oil and gas development near water bodies. It aims to provide a consistent methodology to delineate water bodies on proposed sites and assess site sensitivities from new and existing oil and gas developments within 100 metres of a water body. This draft directive is a significant improvement on the existing Directive 56. Yet, gaps remain for addressing how oil and gas development affect water bodies in Alberta.

To read the draft directive, Oil and Gas Development Within or Proximal to Water Bodies, and provide feedback, visit the ERCB website.

According to the ERCB and Alberta Environment, there is a recurring problem of non-compliance with setback distances by oil and gas activity as outlined in the Oil and Gas Conservation Regulations. The current Regulations specify that a well, or a pit for containing mud, oil, water, and other fluid must not be closer that 100 metres from normal high mark of a water body without approval from the ERCB (section 2.120(1)). However, according to the draft directive, some companies have not obtained approval as required from Alberta Environment or the ERCB for development in or within 100 metres of a water body.

A cross-ministry committee of ERCB, Alberta Environment, Sustainable Resource Development (SRD), and the Special Areas Board (SAB) was formed to address companies' non-compliance. The committee chose to address the issue by more clearly defining the boundary of water bodies in this draft directive.

Under the new directive, oil and gas development must undergo specific assessment if within 100 metres of the ecological boundaries of the water body. The draft directive outlines the steps to perform a site assessment, including hiring a qualified environmental professional to assess the site and interviewing landowners to verify gathered information. The site assessment provides the opportunity for the oil and gas development to avoid sensitive areas and find better options.

This directive applies to specific types of oil and gas development including wells and facilities, oilfield waste management facilities and activities (under Directive 58), drilling waste disposal (under Directive 50), and storage of material (under Directive 55). However, it does not apply to pipelines, which cross thousands of water bodies in Alberta.

Improvements on Directive 56

The new draft directive improves upon the existing directive, Directive 56, because it specifically focuses on oil and gas development within or near water bodies. Therefore, it explicitly recognizes the importance of water bodies, their riparian areas, and their protection, and provides a clearer definition for water body boundaries.

The draft clarifies that the setback distance for oil and gas development must be 100 metres from the ecological boundary of the water body. The ecological boundaries are "the farthest landward extent of the feature directly influenced by and ecologically part of the water body" including the outer limit of wetland or lake (ERCB 2009, 6). Furthermore, the ecological boundary is defined by soil composition and the transition to permanent vegetation.

The draft directive clarifies the inclusion of seasonal and intermittent water bodies as well as ephemeral wetlands and flood plains. Flood plains determine the setback distance for rivers and streams.

The new directive also requires a qualified environmental professional to confirm presence of water body, assess site sensitivities if the development is to be within 100 metres of the water body, and develop plans to address sensitivities. Site sensitivities include local drainage patterns; local hydrologic conditions and potential for site to flood; soil characteristics and texture in terms of both changes from upland conditions and potential infiltration or transportation of contaminants and sediments in surface or groundwater; presence of native or rare plant communities; wildlife use of the area; and relationship of the site to adjacent upland habitats.

Under the new directive, applications for oil and gas activities within 100 metres of a water body are not necessarily considered non-routine and therefore subject to a closer review. According to the Directive, all applications are considered routine unless the site is to be within 30 metres of the water body, in which case the applicant would have to submit a non-routine application. According to the Environmental Law Centre, there are generally two types of energy licensing applications: routine and non-routine applications. A routine application can be processed quickly and occurs when there are no outstanding landowner objections and the applicant has met all technical, safety, public consultation and environmental requirements. By contrast, non-routine applications include all applications made where there are landowner objections, community concerns or objections from competing companies.

The Directive is retroactive requiring all existing operations to meet the new requirements by September 30, 2014. If existing operations do not currently meet the 100 metre setback distance, the owner must assess site sensitivities and implement strategies to mitigate impact to sensitive areas of the site.

Because the definition for a water body boundary is now clearer in the draft directive, there are likely some oil and gas developments that were determined to not be within the 100 m but now will be determined to be within the 100 m of the ecological boundary of the water body. If a water body is deemed to be at high risk and immediate remedial action is needed, the ERCB, Alberta Environment, Sustainable Resources Development, or Special Areas Board can intercede before 2014. If development owners do not meet the 2014 deadline, the abovementioned agencies can begin compliance processes-Directive 19 outlines the ERCB compliance process.

Gaps in the directive

There is concern that the Directive does not require these developments to undergo a non-routine application within the 100 metre boundary - only if it is within 30 metres of a water body.

In addition, the Directive does not apply to the thousands of pipeline waterway crossings in Alberta and the fairly high occurrence of pipeline leaks on land and in water (see the ERCB Provincial Surveillance add Compliance Summary 2007 for detailed information). Pipelines near water deserve a high degree of scrutiny and stringent mitigation measures if absolutely necessary to place them within or near water bodies. A recent enforcement order by Alberta Environment to Shell Canada Limited, Talisman Energy Incorporated, and West Fraser Mills Limited for failing to comply with requirements for watercourse and pipeline crossings over water bodies as well as two pipeline leaks last spring illustrate the need for stronger or clearer regulations for activities in water bodies that are not covered by the draft directive. Guidance for pipeline development within or near water bodies exists in the Water (Ministerial) Regulation and the Code of Practice for Pipelines and Telecommunication Lines Crossing a Water Body.

And, finally, the grace period of five year for companies to come into compliance could be shortened. Where it is apparent that the development owner failed to conduct due diligence in identifying water bodies or chose to ignore required setbacks, enforcement should be more immediate.