Authority to Issue Guidelines and Interpretation Notes
The issue
The Oil and Gas Operations Act unnecessarily constrains the ability of the Regulator to issue guidelines and interpretation notes.
Guidelines and interpretation notes provide clarity on what different parts of legislation and regulations mean in-practice — helping reduce uncertainty for companies, and helping the public understand what is required from companies.
How is it being addressed?
The changes being proposed would allow the Regulator to issue guidelines and interpretation notes related to any section of the Oil and Gas Operations Act, as well as any regulations made under the Act.
This is being done by amending section 18 of the Act to broaden the Regulator’s authority.
Rationale
The Regulator should have the flexibility to issue guidelines and interpretation notes regarding all their responsibilities under the Oil and Gas Operations Act and its regulations. Informing stakeholders of expectations is important, and restricting that ability doesn’t serve anyone well.
Delegation Authority of the Minister
The issue
The Oil and Gas Operations Act differs from the Petroleum Resources Act by not expressly authorizing the Minister to delegate the powers, duties and functions assigned to the Minister under the Act or its regulations.
How is it being addressed?
The proposed changes would allow the Minister to delegate the powers, duties and functions assigned to the Minister under the Oil and Gas Operations Act or its regulations to any employee of the NWT public service.
In practice, this would likely be staff from the Department of Industry, Tourism and Investment because the Minister responsible for administering the Oil and Gas Operations Act is currently the Minister of Industry, Tourism and Investment.
Rationale
The Minister should have authority to delegate their powers in a way that maintains the appropriate level of accountability for the sake of effective and efficient administration.
It is common in Canadian legislation for the Minister responsible for exercising powers and performing duties and functions under the legislation to be able to give others the authority to exercise those powers and perform those duties and functions.
With these changes, those who were delegated responsibilities by the Minister could respond to issues immediately without the time-consuming process of getting the Minister’s approval on every action. At the same time, these changes ensure public accountability by restricting the authority to delegate to employees of the NWT public service.
Delegation Authority of the Regulator
The issue
The Oil and Gas Operations Act does not provide the Regulator enough authority to delegate the powers, duties or functions assigned to the Regulator under the Oil and Gas Operations Act or its regulations.
The Regulator should have more ability to delegate its various functions in in order to respond to changing circumstances.
How is it being addressed?
The proposed changes would allow the Regulator to delegate the powers, duties and functions assigned to the Regulator under the Oil and Gas Operations Act or its regulations to any person.
The Regulator handles complex technical issues and may need to delegate to outside experts to ensure these issues are fully considered. Therefore, the Regulator has been given broader authority to delegate to any person, rather than just employees of the NWT public service. This will allow the Regulator to delegate to outside experts where necessary.
Additionally, engagement identified a need for more transparency in which tasks are delegated and to whom. To that end, the Regulator will now be required to provide public notice whenever the Regulator delegates a power, duty or function. This is because the Regulator is more likely to delegate tasks to individuals and organizations outside of the territorial public service.
It is important to note that while these responsibilities could be delegated by the Regulator, the Regulator would still ultimately be held responsible for actions taken by those to whom they have delegated tasks.
Rationale
Providing the Regulator with the flexibility to delegate more of its powers under the Oil and Gas Operations Act or its regulations will increase flexibility and responsiveness in the regulatory regime.
For example, the Regulator is not currently authorized to delegate the power to make orders and issue prohibitions under section 20 of the Oil and Gas Operations Act. By providing the Regulator with the authority to delegate that power to, for example, the Chief Conservation Officer or Chief Safety Officer, the regulatory regime would be able to respond quicker to circumstances requiring a person to either do anything required under the legislation or to stop doing something contrary to the legislation.
Ensuring these delegations are communicated publicly enhances transparency.
Proof of Financial Responsibility
The issue
Subsection 64(1) of the Oil and Gas Operations Act requires an applicant for an authorization under paragraph 10(1)(b) to provide the Regulator with proof of financial responsibility. However, subsection 64(2) only requires that the holder of the authorization (i.e., the operator) ensure that the proof of financial responsibility remains in force “for the duration of the work or activity in respect of which the authorization is issued.”
This language releases operators from the obligation to provide proof of financial responsibility for suspended wells that are not subject to a current authorization under paragraph 10(1)(b).
It is important to emphasize that the proof of financial responsibility required under the Oil and Gas Operations Act is a form of security to be used by the Regulator to respond to requests for compensation for damages without having to go to court to prove the fault or negligence of the operator. This is one tool that the Regulator can use to address an issue quickly. It does not place a limit on any legal liability of the operator - where an operator is proven to be at fault for a spill, there is no legislated limit on its financial liability for rectifying the situation and compensating those affected.
How is it being addressed?
Subsection 64(2) of the Oil and Gas Operations Act is being amended so that any person authorized for oil and gas activity is required to provide the Regulator with proof of financial responsibility that remains valid until at least one year after the Regulator confirms that all work under that authorization - which includes any wells, facilities, and pipelines - has been successfully abandoned or decommissioned in accordance with the Act and its regulations.
Rationale
The amendment will help ensure that the Regulator has proof of financial responsibility for all work, regardless of whether or not an authorization is still held under paragraph 10(1)(b) of the Oil and Gas Operations Act. That proof of financial responsibility can then be used by the Regulator to respond to requests for compensation for damages from a spill or debris caused by oil and gas activities without having to go to court to prove the company is at fault.