Policy and Regulations

As an emerging industry, unconventional resource development involves the introduction of new technologies and practices. This has raised awareness about what it might mean to Alberta’s water resources, environment, public health and safety.

Alberta is a leader in resource management with an effective policy and regulatory framework in place for more than 75 years. The province works hard to review and update its rules and regulations in light of new issues, risks, opportunities and challenges to adapt as technology, experiences and social expectations have evolved.

The Government of Alberta provides policy direction to the Alberta Energy Regulatorexternal link icon (AER), which regulates all oil, natural gas, oil sands and coal development activity in the province. Through this collaboration, Alberta Environment and Parks (E&P), Alberta Energy and the AER have identified policy and regulatory enhancements related to:

     Water Management
The amount of water used for hydraulic fracturing varies widely, from a few cubic meters to tens of thousands of cubic meters per well.

The Government of Alberta has an established water policy and legislation that protects the quality and quantity of water in upstream oil and gas operations.

The Water for Life: Alberta’s Strategy for Sustainabilityexternal link icon sets the overall direction for managing Alberta’s water resource.  The strategy has three main goals:

  • Safe, secure drinking water
  • Healthy aquatic ecosystems
  • Reliable, quality water supplies for a sustainable economy

In 2013, the Government of Alberta held consultations with Albertans, stakeholders, First Nations, and Metis organizations about management of our province’s water resources. The Water Conversation engaged participants for their views about enhancements that might be needed to ensure Alberta’s water resources will continue to meet our current and future needs. Hydraulic Fracturing and Water was one of the specific topic areas. Based on the input received through this initiative, the Government of Alberta has identified a numbers of strategic actions in each of the main topic areas that are outlined in the Water Conversation Action Planexternal link icon PDF icon .

For oil and gas operations, E&P has a water conservation policy for projects that conduct long-term water injection to enhance the recovery of oil. The Water Conservation and Allocation Policy for Oilfield Injection, 2006external link icon PDF icon is applicable to conventional water flooding and oil sands thermal in-situ operations. It requires industry to seek deep saline groundwater sources and technological alternatives to minimize use of fresh water. Building on these, a proposed direction to expand the policy and apply water conservation principles to other water-intensive subsectors of the upstream oil and gas industry, including hydraulic fracturing, has been identified as a short-term action plan to respond to immediate priorities identified by Albertans.

To monitor groundwater, E&P manages the Groundwater Observation Well Networkexternal link icon that consists of over 250 active monitoring wells installed to monitor groundwater quality and water levels throughout the province. Over 40 of these wells are equipped with satellite devices that transmit near real-time water level data. Regional technologists maintain the wells, collect the data, sample the wells and archive the data into departmental databases. Current and historical groundwater level information for the active and inactive wells in the network can also be accessed.

In 2013, E&P added 13 new observation wells in emerging unconventional oil and gas plays. This will help extend coverage of groundwater monitoring, and enhance understanding of the potential effects of unconventional resource development, particularly through use of multiple-stage hydraulic fracturing, on groundwater.

     Groundwater Protection

The fluid used in hydraulic fracturing operations has raised concerns about toxicity and groundwater contamination, both during and after the fluid has been injected into the resource reservoir. The Government of Alberta, through the AER, has regulatory requirements that are designed to prevent hydraulic fracturing fluid from mixing into groundwater and surface water.

AER Directive 083: Hydraulic Fracturing – Subsurface Integrityexternal link icon mandates licensees demonstrate that operational risks have been considered in the selection and design of the wellbore construction, and to monitor and test to ensure that well integrity is maintained.

To address risks of interwellbore communication, whereby fluid and/or pressure from hydraulic fracturing operations impact a nearby oil or gas well, Directive 83 requires licensees to carry out a risk assessment and prepare a well control plan to manage unintended interwellbore communications and reduce the impacts if a communication does occur.

Current regulatory requirements for shallow fracturing operations, outlined in Directive 027, focus on shallow zones up to 200 metres below the surface. Zones between 200 and 600 metres (depths above the base of groundwater protection in many areas) may be subject to future development and current requirements may be extended to these zones. Under Directive 83, all licensees carrying out hydraulic fracturing operations in this zone must:

  • Conduct a risk assessment.
  • Observe prescribed setbacks for water wells and top of bedrock.
  • Use environmentally friendly chemical additives or fluid compositions above the base of groundwater protection.

Directive 59: Well Drilling and Completion Data Filing Requirementsexternal link icon , the AER requires disclosure of hydraulic fracturing fluid composition, water source and volume data on a well-to-well basis. Once reported, information about what chemicals are used can be obtained from Fracfocus.caexternal link icon , a chemical disclosure registry specifically for hydraulic fracturing operations.

Any fluid that is returned to the surface from hydraulic fracturing operations must be handled under strict guidelines mandated and enforced by the AER. Even if the fluid is treated, it cannot be released back into a natural water body. The following directives refer to the storage and management of fluids:

Directive 055: Storage Requirements for the Upstream Petroleum Industryexternal link icon
Directive 058: Oilfield Waste Management Requirements of the Upstream Petroleum Industryexternal link icon

Alberta’s Baseline Water Well Testing for Coalbed Methane (2006) program implemented through the AER’s Directive 35: Baseline Water Well Testing Requirement for Coalbed Methane Wells Completed Above the Base of Groundwater Protectionexternal link icon , captures baseline conditions for water wells, prior to the drilling of nearby Coalbed methane wells are captured. Baseline water well reportsexternal link icon are available, the Government of Alberta and the Alberta Energy Regulator will be expanding this program to include baseline water well testing in proximity to multi-stage hydraulic fracturing operations in horizontal wells.

The AER restricts fracturing within a 200-metre lateral distance of water wells to reduce the potential impact on or interference with domestic use aquifers or water wells.

     Wellbore Integrity
The AER has strict requirements for cemented casing (wellbore construction includes the use of steel casing that is cemented into the wellbore) in wells to provide a barrier between the wellbore and any nearby water sources.

Directive 008: Surface Casing Depth Requirementsexternal link icon
Directive 009: Casing Cementing Minimum Requirementsexternal link icon
Directive 083: Hydraulic Fracturing – Subsurface Integrityexternal link icon

     Air Quality
Air quality is important to the quality of life and the health of all Albertans. The Alberta Ambient Air Quality Objectives and Guidelinesexternal link icon sets out acceptable minimal levels to ensure safety and environmental protection related to air quality. Air quality is monitored at over 110 continuous permanent monitoring stations and over 25 additional continuous temporary monitoring stations. These monitoring stations are operated by industry, airshed zones, E&P and Environment Canada. As regional plans are developed throughout the province, air quality management frameworks will be created for common air pollutants. These air quality management frameworks will describe the amount of pollutants that can be released from industrial developments in various regions of the province from multiple emission sources while ensuring that air quality objectives continue to be met.

The AER uses Directive 60: Upstream Petroleum Industry Flaring, Incinerating and Ventingexternal link icon to regulate flaring and incineration through performance and reporting requirements, permits and data collection.

     Noise and Light
During the drilling of wells and hydraulic fracturing activity, some operations may be undertaken for extended periods of time which may impact the local community. Residents close to operations may experience noise and light impacts. To mitigate this, the AER’s Directive 56: Energy Development Applications and Schedulesexternal link icon sets notification and consultation requirements and determines proximity requirements for oil and gas wells from residential structures.

As well, AER Directive 38: Noise Controlexternal link icon sets out requirements for noise control for all operations and facilities under the jurisdiction of the AER, and outlines an approach to deal with noise problems. AER also works closely with municipalities and communities by providing information about potential developments to support their preparation for increased traffic and/or other concerns.

     Induced Seismicity
Induced seismicity (IS) refers to earthquakes (seismic events) resulting from human activity. Typically, IS events have been low in magnitude and have rarely been felt at the surface. Historically, IS events have been associated with some aspects of energy development, particularly oil and gas extraction activities and deep well disposal of waste-water. As the use of hydraulic fracturing has increased, it has been linked as a potential cause of IS in North America and elsewhere in a limited number of cases. The AER notes that there has been no evidence that harm from IS has occurred to the public, workers, property, structures, surface and/or groundwater in Alberta.

The AER monitors seismic activity across Alberta using the Regional Alberta Observatory for Earthquakes Studies Network (RAVEN) and networks operated by Natural Resources Canada, the University of Alberta, University of Calgary, Montana Bureau of Mines and Geology and the University of Western Ontario. The Alberta Geological Surveyexternal link icon (AGS) under the AER collects data from these stations to document natural and induced earthquakes which are compiled into a comprehensive earthquake catalogueexternal link icon , or seismic database for Alberta.

In February 2015, the AER released new seismic and monitoring requirements for hydraulic fracturing operators in Fox Creek. Bulletin 2015-07: Subsurface Order No 2external link icon : Monitoring and Reporting of Seismicity in the Vicinity of Hydraulic Fracturing Operations in the Duvernay Zone, Fox Creek, Alberta, mandates that operators must monitor for seismic activity within five kilometers of their wells if hydraulic fracturing operations are being conducted. In addition, operators must have a response plan in place to address potential events and must follow a ‘traffic light’ process with staged action thresholds. Under this process, seismic activity of 2.0 local magnitude (ML) or greater within their area must be reported to the AER, and addressed through the operator’s response plans. If seismic events of 4.0ML are observed, operators must immediately cease operations and report to the AER.

The Government of Alberta, through the AER and AGS, is working with various public and private sector research organizations towards furthering understanding of the linkages between resource development and induced seismicity.

     Regulatory Projects and Frameworks
In 2012, the AER developed a discussion paper titled Unconventional Oil and Gas in Albertaexternal link icon . The paper outlined a new framework that considers the advancements in technology, greater scale, duration and intensity of development, and its cumulative effects on water, air quality, surface disturbance, and the public.

Building on the Unconventional Regulatory Frameworkexternal link icon , the AER is piloting a new framework called the Play-Based Regulation Pilotexternal link icon to govern unconventional oil and gas development. Play-Based Regulation (PBR) is designs regulatory requirements and processes to suit the risks and desired outcomes for a specific resource play. It incorporates a unique regional assessment of projects which is currently different than what is done for conventional oil and gas development. In September 2014, the AER launched the limited scale PBR pilot project.  
The pilot will help improve the broader scale evaluation of;

  • surface infrastructure needs and impacts
  • wellbore integrity
  • water impacts
  • and air impacts

Key to PBR is the enhanced disclosure of development plans, which will present opportunities for improved stakeholder input and collaboration among operators to optimize infrastructure development.