On August 6, 2015, the B.C. Oil and Gas Commission (the “OGC”) announced that it had approved amendments to the Drilling and Production Regulation that would, among other things, regulate the reporting requirements of permit holders relating to seismic events.
Previously, the regulations did not require permit holders to report seismic events. However, some permit holders were required to report seismic activity as a term of their permit, particularly those involved in fracturing and disposal activities in the Horn River Basin.
In December 2014, the OGC released its Investigation of Observed Seismicity in the Montney Trend report (the “Seismicity Report”), which concluded that fluid injection during fracturing operations in the Montney Trend had caused low-level seismic activity. The Seismicity Report also linked waste water disposal in the area to seismic activity. These findings caused the OGC to conclude that induced seismic activity was not limited to the Horn River Basin, and that therefore “a more uniform application of regulations is appropriate”.
The recent amendments to the Drilling and Production Regulation are reportedly aimed at creating such uniformity. The new regulations apply to all permit holders who engage in fracturing or disposal operations on a well, regardless of the location, and without the need for the inclusion of an express condition in the permit. There are no exceptions for current permit holders who do not have seismic reporting obligations as a condition on their permit – the reporting obligations apply to all current and future well permit holders. The specifics of the new reporting obligation are as follows:
- If a permit holder records a seismic event within 3 km of the drilling pad during fracturing or disposal operations, the permit holder must disclose the event to the OGC if either (a) the seismic event had a magnitude of 4.0 or greater, or(b) “any person” within the 3 km radius felt ground motion.
- Following the report, the OGC will determine if the seismic activity was caused by the permit holder. If it was, and if the seismic event had a magnitude of 4.0 or greater, the permit holder must immediately suspend fracturing and disposal operations. Such operations can only continue after the permit holder implements “operational changes” that the OGC is satisfied will reduce or eliminate additional induced seismic events.
The fact that the permit holder must report any seismic activity where a person feels ground motion is significant, given that a feeling of ground motion is highly subjective. As noted in the Seismicity Report, very small “microseismic” events are common during fracturing operations but are often so insignificant that they do not warrant any action. Yet under the new regulation, if any person (including employees, contractors or even nearby landowners) reports feeling ground motion after such activity, the permit holder must report the event to the OGC.
In addition to the new seismic activity reporting requirements, other changes to the Drilling and Production Regulation include:
- Enhanced testing and analysis requirements (particularly with respect to isotope data sampling on exploratory wildcat wells and exploratory outpost wells);
- New requirements for establishing safe distances between flares/incinerators and nearby structures; and
- Liquid waste storage regulations, including requirements in respect of above-ground, lined structures used to store fluids.
These amendments came into force effective July 30, 2015. The full text of the amendments can be found here.