The Alberta Energy
Regulator ("AER") will pilot a "play-based"
regulatory framework for unconventional oil and gas development in
part of the Duvernay shale play in west-central Alberta this
fall.
The Duvernay shale play is a large, developing shale play covering
much of western and northern Alberta and eastern British Columbia.
It is particularly rich in light oil and petroleum liquids such as
propane and butane. Hydraulic fracturing has been key in developing
the vast underground rock formation that covers an area the size of
South Korea.
"Play-based" regulation involves implementing a single
application and decision-making process for multiple wells,
pipelines and facilities under different pieces of legislation. It
will require all of the operators in the pilot area to collaborate
and jointly bring a single application for a single regulatory
approval which will be used for regulating all of their
unconventional oil and gas activities in the pilot area.
Presently, each activity by a company, such as building a road,
diverting water, drilling a well, constructing a pipeline and so
forth, requires its own separate AER regulatory approval. This
current approach makes it difficult to reduce the cumulative
environmental impacts of the additional roads, well pads and
pipelines required by each company in the area. Extracting oil and
gas out of shale requires many more wells, more pipelines and much
more water usage than conventional oil and gas production. Area
landowners and communities are expected to benefit with play-based
regulation as it is hoped that they will get a sense of the full
scope of all development in the play area and have earlier input
into how the play is developed on the surface.
Area operators will have to submit the single application to the
AER by January 31, 2015. The pilot is scheduled to run until March
31, 2015.
The Duvernay shale play was chosen for the pilot as it is just
starting to be developed and extensive drilling and production is
expected over the next several years.
The AER intends to implement play-based regulation more broadly
throughout Alberta in the future.
Review a copy of the AER's Play-Based Regulation Pilot Application
Guide.
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