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December 22, 2005: Oilpatch welcomes new B.C. licensing plan

B.C.

Oilpatch welcomes new B.C. licensing plan

Industry backs 'one-window' permit process

 

By Monte Stewart - Business Edge

Published: 12/22/2005 - Vol. 5, No. 44

The B.C. government plans to introduce a new one-window oil and gas regulatory approval agency designed to reduce application delays and increase investment.

If all goes according to plan, the Fort St. John-based Oil and Gas Commission (OGC) will have legal authority to issue a single permit for wells, seismic activities, pipelines not covered by federal regulations, and facilities such as electrical plants used to power operations.

Currently, depending on the project, producers apply to several ministries ranging from environment to energy before the commission grants the final approval.

"Certainly, we would be supportive of the premise," says Dave Pryce, vice-president of Canadian operations for the Canadian Association of Petroleum Producers. "Anything we could do to reduce the regulatory-time burden is important."

The B.C. Energy Ministry and Oil and Gas Commission have collaborated on a discussion paper that outlines the plan and will hold talks with producers and service companies, local governments, landowners, First Nations, environmental organizations and other stakeholders until Feb. 24. The province is also inviting written comments from stakeholders until Feb. 24.

Producers often cite delays in the regulatory approval process, fees associated with multiple applications to several ministries on the same project and lack of communication between government agencies as deterrents to new projects.

"The regulatory process is a cost of doing business, so it boils down to a competitiveness (issue)," says Pryce.

The industry contends multi-agency approvals are only necessary for large projects and most applications are routine. According to the paper, B.C. may follow Alberta's example and introduce incentives for voluntary disclosure of non-compliance with regulations.

But Pryce stressed a one-window approach will not minimize the B.C. Energy Ministry's responsibilities when it comes to enforcing regulations. "We don't want that (non-compliance) tag with this. We want to make sure that people are comfortable with the product, that it's the outcome that we're all looking for - and that's being efficient in the regulatory process."

Ken Sinclair, vice-president of business development for Calgary-based Canadian Spirit Resources Inc., which is exploring for coalbed methane in northeastern B.C., says his company will provide feedback on the discussion paper to the B.C. government.

"It's a very good move for the B.C. government to do this and cut down on the red tape," says Sinclair. "In reality, they still have to keep involved in the stakeholder (consultation process.)" According to the discussion paper, commission staff are often required to develop their own rules and interpretations of laws because statutes are defined for other industries or too general in scope. Sinclair commends the province for making the effort to revise legislation.

"It's good to try to get things done," he says. "The (approval) process is time-consuming right now."

Applications for seismic permits can take anywhere from 30 days to six months, while some drilling permits take 35 to 40 days to more than three months, says Sinclair.

"It makes sense, so why not go for it?" he says.

Will Yakymyshyn, Devon Canada Corp.'s vice-president of exploitation - which has ongoing drilling programs in northeastern B.C. - says both the industry and government will benefit from the one-window approach. A producer will be able to drill more wells in a given quarter and, as a result of the increased well count, the province will be able to earn more royalty revenue.

The provincial Liberal government will have to change a number of laws to give the OGC sole permitting power, which could still take several months, if not longer. The commission falls under the OGC Act, Petroleum and Natural Gas Act, Pipeline Act and six other laws related to forestry, heritage conservation and the environment.

Yakymyshyn notes he's not a lawmaker, but he believes the Liberals will be able to make the legislative changes and still remain accountable to landowners and other stakeholders. "Obviously, the government is not going to do anything to compromise the environment or safety," he says.

The province wants to introduce results-based regulations rather than prescriptive regulations. Under results-based regulations, a company would have to meet the target that it specifies in its application for a project.

The province contends current prescriptive regulations, in place in most parts of Canada, impose rules for conducting activities, but they can be misapplied and often become outdated. They can also require the use of older technology after new technology becomes available.

"This (one-window approval process) will involve better definition and clarification of OGC regulatory responsibilities and those of other ministries and Crown agencies," says the discussion paper.

The provincial government plans to introduce new legislation to consolidate laws that empower the Oil and Gas Commission to make approvals, and to incorporate "defined regulatory roles."

"The new legislative framework will be more transparent, comprehensive, relevant and effective in terms of guiding industry behaviour towards achieving results specified by government," states the discussion paper.

The new system is to be designed according to three specific guidelines - no reductions in health, safety and environmental outcomes, improved regulatory efficiency and better conditions for industry to invest. The province maintains a one-window approach will maximize the effectiveness of government resources, but some environmental groups are opposed to the idea of the OGC having exclusive powers and contend more ministries need to be involved to ensure adequate protection of the environment.

The new regulatory process will exclude a new fiscal and royalty regime, tenure, offshore oil and gas, federally regulated pipeline issues and the oil and gas commission's funding and organization. The commission is currently funded 100 per cent by the oil and gas industry, but the industry would like to see companies and the province share the commission's operating costs.

(Monte Stewart can be reached at monte@businessedge.ca)

http://www.businessedge.ca/article.cfm/newsID/11453.cfm

Topic(s): Energy News, policy news

Posted By EcoBC

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