Effective January 5, 2015, the BC Oil and Gas Commission (the “OGC”) will begin using “Area-based Analysis” in considering applications for oil and gas activities in northeastern BC.

The stated intention of Area-based Analysis is to integrate the requirements of existing statutes and regulations and allow the OGC to better and more consistently take into account the cumulative impact of industrial development when assessing applications for oil and gas activities. The combined footprint impact of all industrial development on the selected “values” will be taken into account. This includes all surface land use disturbance associated with oil and gas activity, geophysical activity, cutblocks and non-oil activity (such as mining, recreation, hydro, wind power, transmission lines).

The OGC and the Ministries of Forests and Lands and Natural Resource Operations have been collaboratively developing this new approach since 2012. The process is similar to the current cumulative impact assessments carried out by the Environmental Assessment Office, but will apply to all applications for oil and gas activities, not just major projects. It will cover the entire Western Canadian Sedimentary Basin in northeastern BC, including all four key development basins (Liard; Horn River; Montney; and Cordova).

The OGC has identified eight “values” that will be considered in the process.  Only the first two will be used at the outset.  The others are expected to be implemented over time. 

  • hydro-riparian ecosystems;
  • old growth forest;
  • high priority wildlife;
  • private land;
  • cultural heritage values;
  • water quality;
  • ground water; and
  • air quality

The OGC has stated that it is working with First Nations communities to identify additional values that could be included within Area-based Analysis. Therefore, the above list should not be considered exhaustive.

For each value, a baseline analysis will be conducted and areas of the province (the precise number and nature of these areas depends on the value being considered) will be associated with an “indicator” and two “triggers” that are derived from current policy/legislation. The “indicator” will dictate the level of review that an application will face and the type of permit conditions that may be considered.​

Generally, the OGC’s goal is to return indicators to a level below that of the relevant triggers. However, this does not mean that applications in areas where the indicator exceeds a trigger will necessarily be rejected, just that they will face greater scrutiny. Of course, with any increased scrutiny comes timing concerns and the possibility of delay. 

From an industry perspective, it remains unclear how significant the new approach will be. We note that the analysis results for old growth forest and hydro-riparian ecosystems (the first two values to come into effect) state that all six “natural disturbance units” for old growth forest and 42 out of 69 “water management basins” are below the applicable triggers. None of the remaining 27 water management basins exceed the threshold for the second trigger. This may indicate that in many areas little change in operating practices is currently required. Though as additional values are added, it is likely that one or more of the thresholds will have been exceeded in areas with significant industrial activity.

Readers interested in learning more should refer to the OGC’s FAQs and Overview.