2010On December 3, 2010, the ERCB issued Directive 78, entitled “ Regulatory Application Process for Modifications to Commercial In Situ Oil Sands Projects”.1 Directive 78 provides clarification and further detail regarding the regulatory process that will be followed to address modifications to commercial in situ oil sands projects. In particular, Directive 78 divides the full range of project modifications into three categories, depending on their nature and scope: Category 1, Category 2 or Category 3. The category within which a particular modification is placed determines the procedure that must be followed to obtain approval of that modification. Directive 78 does not deal with approval of primary recovery schemes.

CATEGORY 1 PROJECT AMENDMENTS

Relatively simple project modifications fall into Category 1. These modifications (a) are not expected to adversely and materially affect resource conservation or alter the environmental and socioeconomic impacts predicted and assessed in the original and/or amended project applications, and (b) are not expected to directly and adversely affect the rights of stakeholders.

Examples of Category 1 modifications include:

  1. Modifications to surface pad locations that do not result in modifications to subsurface drainage areas.  
  2. The addition of portable and/or temporary equipment.  
  3. Modifications to the design of the central processing facility that do not result in significant modifications to the process flow diagrams and/or material balances.  

Category 1 modifications require a submission to the Surveillance Section, In Situ Oil Sands Group. The submission must contain a detailed description of the proposed modifications, provide the reasons for the modifications, and include sufficient technical information to demonstrate that the modifications will not adversely and materially (a) affect resource conservation, and (b) alter the environmental and socioeconomic impacts predicted and assessed in the original and/or amended project applications. The technical information must also demonstrate that the modifications will not directly and adversely affect stakeholders. Stakeholders do not have to be notified of a Category 1 submission.

Operators can generally expect a decision from the ERCB on a timely basis, usually within one month. The ERCB will notify the operator of its decision by letter. An amendment of the ERCB approval is not required.

CATEGORY 2 PROJECT AMENDMENTS

Category 2 modifications are those that (a) could adversely or beneficially affect resource conservation and/or could involve significant process modifications, but (b) are not expected to directly and adversely affect the rights of stakeholders or adversely and materially alter the environmental and socioeconomic impacts predicted and assessed in the original and/or amended project applications.

Examples of Category 2 modifications include:

  1. Expansion of the development area.  
  2. Modifications within an approved development area.  
  3. Modifications that could alter subsurface drainage areas.  
  4. Optimization of recovery processes.  

Category 2 modifications require an application to the Applications Section, In Situ Oil Sands Group. The application must contain a detailed description of the proposed modifications, provide reasons for the modifications, and include sufficient technical information to assess the effect on resource conservation. The application must also contain sufficient technical information to demonstrate that the modifications will not adversely and materially alter the environmental and socioeconomic impacts predicted and assessed in the original and/or amended project applications and that the modifications will not directly and adversely affect stakeholders. Similar to Category 1, stakeholders do not have to be notified of a Category 2 application.  

The timeline for the processing of a Category 2 application will depend on several factors, including the nature and complexity of the proposed modifications. An amendment to the ERCB approval is required.  

CATEGORY 3 PROJECT AMENDMENTS

Category 3 modifications are those that (a) may directly and adversely impact other mineral rights owners and/or may result in an adverse and material change to the environmental and socioeconomic impacts predicted and assessed in the original and/or amended project applications, and (b) could adversely or beneficially affect resource conservation.  

Examples of Category 3 modifications include:

  1. Expansion of the project area.  
  2. Increase in overall surface disturbance.  
  3. Modifications to the recovery processes.  
  4. Development of additional and/or different geological zones.  
  5. Repressurization of any associated gas or water zones.  
  6. Increase to the project’s approved bitumen production capacity.  
  7. Modifications to the design of the central processing facility that result in significant modifications to the process flow diagrams and/or material balances.  
  8. Addition of satellite steam generation facilities.  

Category 3 modifications require an application to the Applications Section, In Situ Oil Sands Group. The application must contain a detailed description of the proposed modifications, provide reasons for the modifications and include sufficient technical information to understand and assess modifications to (a) resource conservation, (b) the impacts on other mineral rights owners, and (c) the environmental and socioeconomic impacts. Stakeholders must always be notified of a Category 3 application.

The timeline for the processing of a Category 3 application will depend on several factors, including the nature and complexity of the proposed modifications, whether any objections are received from stakeholders, and whether a public hearing is required. An amendment to the ERCB approval is required.

ADDITIONAL INFORMATION

Directive 78 also describes additional ERCB regulatory processes, approvals, and licences, which are associated with commercial in situ oil sands projects and must be considered by an operator when requesting a project modification. These include (i) well, pipeline and facility licences, (ii) measurement, accounting and reporting plans, (iii) in situ oil sands project injection wells, and (iv) disposal schemes.

Of note, Directive 78 provides that stakeholder notification that has been previously completed for a new or amended project will satisfy participant involvement requirements for any related licenses for wells, pipelines, and facilities within the ERCB approved project area.