Transparency and Public Accountability

Confidentiality in the Petroleum Resources Act and the Oil and Gas Operations Act

The issue

The broadly-drafted confidentiality provisions in Section 91 of the Petroleum Resources Act (PRA) and Sections 22 and 23 of the Oil and Gas Operations Act (OGOA) (collectively, the Confidentiality Provisions) should be amended to better balance the need to protect confidential information with the need for increased transparency.

Currently, all information provided for the purposes for the PRA or the OGOA is deemed privileged and is kept confidential pursuant to the Confidentiality Provisions, subject to a limited number of exceptions.

How is it being addressed?

Amendments to the Confidentiality Provisions have been proposed to ensure both the PRA and the OGOA better align with global standards and best practices in relevant petroleum legislation.

If passed, the amendments would reverse the process of today – all information that is required to be provided to the Minister or Regulator under the PRA or the OGOA will be made available to the public in accordance with the Confidentiality Provisions, unless:

  • the recipient of the information – either the Minister or the Regulator - determines that the information meets the criteria for confidentiality outlined in the Confidentiality Provisions; or
  • subsection (9) of the applicable Confidentiality Provision provides special rules about when certain types of information must be made available to the public.

In order for information to meet the criteria for confidentiality under subsection (2) of the Confidentiality Provisions, all of the following four conditions would need to be met:

  • it must contain financial, commercial, scientific or technical information;
  • it must be treated as confidential information by the person providing the information;
  • the need for confidentiality must outweigh the public interest in the disclosure of the information; and
  • it must not already be publicly available.

If all four of these conditions are met, the confidential information will not be disclosed without the written consent of the person who provided the information.

Subsection (9) of the Confidentiality Provisions also provides special rules about when certain types of information must be made available to the public. Many of the time periods have been carried over from the old subsection 91(8) of the PRA but there are some notable differences.

There is now a distinction between "non-exclusive survey" - which is a survey conducted to collect data about the physical properties of rocks for the purposes of selling that data to the public – and other types of information in respect of geological work or geophysical work. Non-exclusive surveys now must be made available to the public 15 years after completion.

The periods for the disclosure of information in respect of an environmental study have been shortened, with the information now required to be made available to the public:

  • once completed if the study was funded by the Environmental Studies Research Fund (the Fund);
  • after 90 days if related to a drilled well; or
  • after two years if not related to a drilled well.

There is also a requirement that information in respect of hydraulic fracturing fluid information be made available to the public 30 days after the well termination date. This would include information on the fluid ingredients and a description of the purpose of each, when and where the hydraulic fracturing took place, how deep the drilling was, and how much water was injected during the hydraulic fracturing treatment.

Rationale

These amendments will create a more transparent and open regulatory process by better balancing the need to protect the confidentiality of proprietary information with the need for increased transparency to better serve the interests of NWT residents.

 Greater transparency adds another layer of accountability for both government and companies. It also increases access to information related to oil and gas activity, which in turn enables stakeholders to better understand the potential of NWT natural resources and builds public awareness about the governance of those resources.

Environmental Studies Management Board Composition

The Environmental Studies Research Fund (ESRF) is established under the Petroleum Resources Act. It supports environmental and social studies relating to oil and gas exploration, development and production in the NWT. It is fully funded through levies paid by oil and gas companies with interests in the NWT’s onshore.

The ESRF is directed by a Management Board which considers government, industry and public information requirements and determines the research priorities that the Fund will be used for — and who will complete them.

The Issue

Membership on the Board is currently unbalanced. The Board consists of two government members, two industry members, and one public member.  It’s clear that today’s context in the NWT calls for more public representation.

Engagement also highlighted concerns with the lack of Indigenous input on the appointment of members to the Board and the exercise of the Board’s duties and functions.

How is it being addressed?

An amendment to subsection 70(5) of the PRA allows the Minister to appoint another public member to balance industry, government and public representation on the Board.

There are two amendments designed to enhance Indigenous input.

An amendment to subsection 70(4) of the PRA allows persons with Indigenous traditional knowledge and expertise relevant to the purpose of the Fund to be considered for appointment to the Board by the Minister.

An amendment to subsection 70(3) of the PRA allows IGOs, in addition to interest holders, to nominate members for appointment to the Board.

Rationale

Adding a second public member will help ensure a stronger public voice on Board decisions, including what research activities are supported by the Fund.

These amendments also increase Indigenous input into Board activities and help ensure that decisions related to those activities incorporate Indigenous traditional knowledge and experience. This helps ensure the Board is consistent with the Northwest Territories’ broader move towards incorporating this vital perspective alongside science in public policy considerations.

Environmental Studies Research Fund

The Issue

The Fund is defined as a special purpose fund, meaning disbursements from the Fund do not need budgetary approval and the Fund’s activities are not subject to the same disclosure requirements as GNWT department spending.

The PRA requires the Board to provide the Minister an annual report respecting the Fund and that report has voluntarily been published over the last three years. However, the PRA does not require that report to be published. It also does not require the report to contain any information other than “such financial and other information as may be required by the Minister”.

Furthermore, the PRA lacks measures to prevent conflict of interest by Board members or staff or to align expenses with GNWT standards found in legislation governing other boards and councils in the NWT.

How is it being addressed?

Several changes are being suggested to address these issues.

An amendment to subsection 70(7) of the PRA will help ensure that reimbursement of Board members’ expenses is consistent with GNWT standards.

Subsection 70(8) is being added to the PRA to clarify that the Conflict of Interest Act applies to Board members.

An amendment to subsection 71(3) of the PRA requires the Board to include specific details about the Fund in its annual report to the Minister, including the amount of each contribution to the Fund and a description of each project funded by the Fund. This more detailed annual report will be made available to the public in accordance with section 91 of the PRA.

Rationale

These amendments will improve the integrity of the Fund by expanding the amount of information required in the Board’s annual report on the Fund, explicitly prohibiting conflict of interest, and aligning the reimbursement of Board member expenses with GNWT standards.

Licence Transparency

The issue

There are currently few requirements in the PRA or the OGOA to make key information on petroleum exploration and production public.

There is no requirement to publish the terms and conditions of licences or the licences themselves. While the GNWT currently reports on issuances of new licences, it does not publish the signed terms of those licences.

Furthermore, section 91 of the PRA currently restricts the ability of the Minister and the Regulator from providing the public with information related to petroleum exploration and production activities under those licences.

How is it being addressed?

The amendments will provide the public with access to key information on petroleum exploration and production in the NWT.

Section 18.1 would be added to the PRA requiring the Minister to publish publicly all active exploration licences, significant discovery licences, and production licences . In practice, this would likely be done online.

An amendment to subsection 23(1) of the PRA will require exploration licences to be in the prescribed form. This is similar to the current requirements for significant discovery licences to be in the prescribed form pursuant to subsection 30(3) and production licences to be in the prescribed form pursuant to subsection 39(3).

The OGOA and its regulations outline extensive reporting requirements with respect to petroleum exploration and production activities in the NWT. The Office of the Regulator of Oil and Gas Operations (OROGO) has published guidance  entitled Reporting Requirements under the Oil and Gas Operations Act and Associated Regulations which summarizes those reporting requirements.

The information reported under these extensive reporting requirements will be subject to public release in accordance with the amended Confidentiality Provisions. Under those provisions, all information that is required to be provided to the Minister or Regulator under the PRA or the OGOA will be made available to the public in accordance with the Confidentiality Provisions, unless:

  • the recipient of the information — either the Minister or the Regulator — determines that the information meets the criteria for confidentiality outlined in the Confidentiality Provisions; or
  • subsection (9) of the applicable Confidentiality Provision provides special rules about when certain types of information must be made available to the public.

Rationale

These actions will make oil and gas activities in the NWT more transparent while maintaining legitimate company confidentiality of drilling and seismic results.

Transparency of contracts and licences is becoming more common. Many governments have a legal requirement to publish all oil and gas contracts.

Publishing licences not only allows governments to more effectively monitor companies for compliance, but also helps build trust with communities in the region where activity is happening.

Expanding and Modernizing the Publication of Notices

The issue

The PRA requires the Minister to publish notices when the Minister exercises certain powers under the Act.

These notices are a useful tool to inform relevant events within the oil and gas industry in the NWT. However, two components of the notice requirement have been identified that limit the effectiveness of this tool.

First, the requirement to publish notices is currently limited to events surrounding the initial issuance of interests or certain amendments to exploration licences.

Second, the PRA requires the notices to be published only in summary form, with the full text of the information only available for inspection upon request. This isn’t very user-friendly.

How is it being addressed?

The amendments address the first issue by expanding the list of notices that the Minister must publish. In addition to the notices currently required to be published, the Minister would now also be required to publish notices related to:

  • the issuance of significant discovery licences;
  • the amendment of significant discovery licences;
  • the extension of the term of a significant discovery licences;
  • the issuance of production licences;
  • the consolidation of production licences; and
  • the extension of the term of a production licence.

The amendments address the second issue by allowing the Minister to publish the full text of the notice rather than just a summary of what’s in the notice.

Rationale

These changes would not only make more information available to the public, it would also make that information available in a more user-friendly way.

Annual Report on the Regulator’s Activities

The issue

The Office of the Regulator of Oil and Gas Operations (OROGO) voluntarily submits an annual report on its activities. However, unlike the submission of the National Energy Board report, which is required under the National Energy Board Act, the submission of OROGO’s report is not currently a statutory requirement under either the Petroleum Resources Act or the Oil and Gas Operations Act. 

How is it being addressed?

The changes being proposed include a statutory requirement for the Regulator to submit an annual report on its activities and for the Minister to provide that report to the Legislative Assembly of the Northwest Territories at the earliest opportunity.

The amendment also allows Cabinet to make regulations outlining the required form or content for the Regulator’s annual report if it chooses to do so in the future.

Rationale

The requirement for an annual report on the Regulator’s activities will increase transparency and public accountability under the NWT’s petroleum legislative framework.

Public Hearings

The issue

The Canada Oil and Gas Operations Act provides the National Energy Board with the authority to conduct public hearings in relation to the exercise of any of its powers or the performance of any of its duties and functions under that Act.  This authority was provided after devolution and as a result, the Oil and Gas Operations Act does not include a provision providing the Regulator with a similar authority to conduct public hearings.

How is it being addressed?

The Oil and Gas Operations Act is being amended to provide the Regulator with the authority to conduct public hearings in relation to the exercise of any of its powers or the performance of any of its duties and functions under the Act.

It is also being amended to provide the Regulator with the same powers as a court when the Regulator holds an inquiry, hearing or appeal or makes an order, including the power to:

  • order witnesses to attend a hearing;
  • order the disclosure and inspection of documents;
  • enter and look at property; and
  • enforce its orders.

Rationale

The amendment will help increase transparency and public accountability under the Oil and Gas Operations Act.

This amendment also helps harmonize the Oil and Gas Operations Act with similar oil and gas legislation across Canada, such as the Canada Oil and Gas Operations Act, the Canada–Newfoundland and Labrador Atlantic Accord Implementation Act, and the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act.