The Energy Resource Conservation Board (“ERCB”) is seeking public input on new rules designed to address growing development of unconventional resources in the province of Alberta. Regulating Unconventional Oil and Gas in Alberta – a Discussion Paper outlines a new approach by the ERCB to regulate horizontal drilling and hydraulic fracturing in unconventional oil and gas production in the province. According to the ERCB, the technology used to develop unconventional resources, mainly horizontal drilling and hydraulic fracturing, are not new in Alberta. However, the scale of the development of unconventional resources has increased significantly. To address the associated challenges with large scale developments, the discussion paper suggests a new regulatory approach that includes moving from well-by-well regulation to regulation focused on development within a defined area. This “play-focused” regulation is intended to be performance-based to achieve specific outcomes in water protection, air quality, waste management, surface impacts, resource conservation and orderly development.

According to the ERCB, feedback on the discussion paper will be accepted until March 31, 2013.

In Addition, the ERCB is currently seeking feedback on a draft directive that addresses sub-surface issues related to the increasing use of hydraulic fracturing and horizontal drilling (the “Proposed Directive”). The Proposed Directive will rescind Directive 027: Shallow Fracturing Operations – Restricted Operations and Bulletin 2012-02: Hydraulic Fracturing; Interwellbore Communication Between Energy Wells. The Proposed directive is intended to prevent interwellbore communication, and ensure well integrity during hydraulic fracturing operations.

Specifically, the Proposed Directive includes: (i) requirements to prevent loss of well integrity; (ii) requirements for a licensee to asses, plan for, and mitigate the risks of interwellbore communication with offset wells; (iii) requirement to protect nonsaline aquifers from hydraulic fracturing; (iv) requirements increasing vertical setback distances for hydraulic fracturing operations near water wells; (vi) requirements for pumping volume restrictions and exemptions to setback distances for nitrogen fracturing operations for coalbed methane; and (vii) requirements relating to notification of hydraulic fracturing operations.