Petroleum and Natural Gas Act [RSBC 1996] Chapter 361 (BC Petroleum and Gas Act)

Jurisdiction(s)
Instrument Date
1996
Effective Date
Instrument Type
Primary
Relevant Regulatory Authority
Energy Resources Division within the Ministry of Energy and Mines
Purpose and Context
The BC Petroleum and Gas Act regulates certain aspects of CO2 transport and storage processes, as part of a broader regulatory focus on petroleum and oil and gas activities. Specifically, the Act addresses permitting processes for reservoir exploration and CO2 injection and storage, as well as property rights, land access and site closure.  It also includes general administrative provisions, for example in relation to enforcement.
Relevant links
Associated instruments

Mines Act [RSBC 1996] Chapter 293

Oil and Gas Activities Act [SBC 2008] Chapter 36

Instrument Access Date
15 August 2012
I. Regulatory scope and definitions
Definitions

Article/Section No.

Section 1

Instrument Text

Part 1 — Definitions

Definitions

1

In this Act:

 

"board" means the Surface Rights Board continued under section 146 (1);

 

"boundary" means a location's surface boundary and its vertical extension;

 

"certificate of restoration" means a certificate of restoration issued by the commission under section 41 of the Oil and Gas Activities Act;

 

"commission" means the commission continued under section 2 of the Oil and Gas Activities Act;

 

"commissioner" means the commissioner appointed under section 2 of the Oil and Gas Activities Act;

 

"Crown land" means ungranted Crown or public land that belongs to the government, whether or not any water flows over or covers it;

 

"cubic metre" means, for a volume of

 

(a) natural gas, that volume measured at 101.325 kPa and 15°C, and

 

(b) petroleum, that volume measured at 15°C;

 

"director" means an officer or employee of the ministry who is designated as the Director of Petroleum Lands by the minister;

 

"division" means the Energy Resources Division of the ministry;

 

"division head" means the assistant deputy minister designated in writing by the minister as having charge of the division;

 

"field" means

 

(a) the surface area underlaid or appearing to be underlaid by one or more pools, and

 

(b) the subsurface regions vertically beneath that surface area;

 

"freehold land" means land, including land comprising a right of way, station ground, yard or terminal of a railway but not including Crown land, in respect of which

 

(a) petroleum and natural gas is, or may be, situated, or

 

(b) a person has the right to work, win or carry away petroleum or natural gas;

 

"gas well" means a well in which casing is run and that, in the opinion of the commission, is producing or is capable of producing from a natural gas bearing zone;

 

"geophysical exploration" means investigation of the subsurface by seismic, gravimetric, magnetic, electric and geochemical operations and by any other method approved by the commission, but does not include the use of geophysical well logs, vertical seismic profile surveys or other surveys obtained from a well;

 

"holder of a location" means, in accordance with the context, a permittee, licensee or lessee;

 

"interest" means an undivided interest in a location;

 

"lease" means a subsisting lease issued under this Act;

 

"lessee" means a person in whose name a lease is recorded in the division records;

 

"licence" means, in accordance with the context, a drilling licence or a licence to explore for a storage reservoir under this Act;

 

"licensee" means a person in whose name a licence is recorded in the division records;

 

"location" means the land described in a permit, licence or lease;

 

"natural gas" means all fluid hydrocarbons, before and after processing, that are not defined as petroleum, and includes hydrogen sulphide, carbon dioxide and helium produced from a well;

 

"officer of the division" means a person employed in the division and authorized by the division head to give an approval under this Act;

 

"oil and gas activity" has the same meaning as in the Oil and Gas Activities Act;

 

"oil sand" means sand or other petroliferous substance from which oil sand products can be produced and includes any other substance defined by the Lieutenant Governor in Council as oil sand;

 

"oil sand products" or "oil shale products" means petroleum or natural gas and all other minerals and substances that can be produced from oil sand or oil shale in association with the production of petroleum or natural gas;

 

"oil shale" means shale or other petroliferous substance from which oil shale products can be produced and includes any other substance defined by the Lieutenant Governor in Council as oil shale;

 

"owner" means, except in Part 17,

 

(a) the government for land so owned,

 

(b) a person registered in the land title office as the registered owner of the land surface or as its purchaser under an agreement for sale, and

 

(c) a person to whom a disposition of Crown land has been issued under the Land Act,

 

and, in relation to a well, includes a person entitled to produce and dispose of petroleum or natural gas from the well;

 

"permit" means a subsisting exploration permit issued under this Act;

 

"permittee" means the person in whose name an exploration permit is recorded in the division records;

 

"petroleum" means crude petroleum and all other hydrocarbons, regardless of gravity, that are or can be recovered in liquid form from a pool through a well by ordinary production methods or that are or can be recovered from oil sand or oil shale;

 

"petroleum well" means a well in which casing is run and that, in the opinion of the commission, is producing or is capable of producing from a petroleum bearing zone;

 

"pipeline" has the same meaning as in section 1 (2) of the Oil and Gas Activities Act;

 

"plant liquids" means hydrocarbon liquids recovered from natural gas other than by normal field 2 phase separation;

 

"pool" means an underground reservoir containing an accumulation of petroleum or natural gas, or both, separated or apparently separated from another reservoir or accumulation;

 

"production" means the flowing of petroleum fluid, natural gas or brine from a well to the surface for the purpose of sale or trade but does not include the flowing of petroleum fluids, natural gas or brine from a well to the surface for the purpose of evaluation of the fluid or formation properties if the petroleum fluid, natural gas or brine is not gathered and stored or shipped for sale or trade;

 

"recycling" means the injection and subsequent production of natural gas in a field or pool, if petroleum recovery from the natural gas is the primary mode of liquid hydrocarbon production from the field or pool;

 

"related activity" has the same meaning as in the Oil and Gas Activities Act;

 

"restricted land" means any of the following:

 

(a) Crown land that is used or occupied by or on behalf of the government;

 

(b) land granted by the government to a railway company under an Act that is used or occupied by or on behalf of the railway company;

 

(c) Crown land to which access is restricted or prohibited under another Act;

 

"spacing area" means an area of the land surface or subsurface as prescribed by regulation;

 

"storage reservoir" means a naturally occurring underground reservoir that is capable of being used for the introduction, disposal, storage or recovery of petroleum, natural gas, water produced in relation to the production of petroleum or natural gas, waste or any other prescribed substance;

 

"storage well" means a well in which casing is run and that, in the opinion of the commission, is used or is capable of being used to dispose of or produce petroleum or natural gas, water produced in relation to the production of petroleum or natural gas, waste or any other prescribed substance into or from a storage reservoir;

 

"unitized operation" means

 

(a) the development or production of petroleum and natural gas, the implementation of a program for the conservation of petroleum and natural gas, or the coordinated management of interests in them, or

 

(b) the development and operation of a storage reservoir

 

in, on or under a location, part of a location or a number of locations combined for that purpose under a unitization agreement under this Act;

 

"unoccupied Crown land" means Crown land, other than restricted land,

 

(a) in respect of which there has been no disposition of an interest in the surface of the land under the Land Act, or

 

(b) that is subject to

 

(i)  a permit under section 14 of the Land Act, or

 

(ii)  a licence under section 39 of the Land Act

 

under which a person is granted

 

(iii)  non-intensive occupation or use of the land, or

 

(iv)  occupation and use of an extensive area of Crown land for commercial recreational purposes;

 

"waste" in addition to its ordinary meaning, means waste as that term is understood in the petroleum and natural gas industry, and includes wasteful operations and the underground or surface loss of potentially recoverable petroleum or natural gas;

 

"water source well" means a hole in the ground drilled to obtain water for the purpose of injecting water into an underground formation in connection with the production of petroleum or natural gas;

 

"well" means a hole in the ground

 

(a) made or being made by drilling, boring or any other method to obtain petroleum or natural gas,

 

(b) made or being made by drilling, boring or any other method to explore for, develop or use a storage reservoir for the storage or disposal of petroleum, natural gas, water produced in relation to the production of petroleum or natural gas, waste or any other prescribed substance,

 

(c) used, drilled or being drilled to inject natural gas, water produced in relation to the production of petroleum or natural gas or other substances into an underground formation in connection with the production of petroleum or natural gas,

 

(d) used to dispose of petroleum, natural gas, water produced in relation to the production of petroleum or natural gas, waste or any other prescribed substance into a storage reservoir, or

 

(e) used, drilled or being drilled to obtain geological or geophysical information respecting petroleum or natural gas,

 

and includes a water source well;

 

"zone" means a stratum or strata designated by the commission as a zone generally or for a designated area or a specific well, or a stratum or strata designated by the director for the purposes of the administration of petroleum and natural gas rights or storage and disposal rights.

Classification of CO2

Summary

The BC Petroleum and Gas Act CO2 includes the following definitions of relevance to CO2 sequestration acitivities:

  1. CO2 produced from a well is included in the definition of “natural gas” given in section 1; and  
  2. "eligible disposal well" is defined in section 61.1 as “a well that is used or planned to be used to dispose of water, carbon dioxide or other waste fluids associated with petroleum or natural gas exploration, production or processing”, which may indicate that CO2 associated with petroleum or natural gas exploration, production or processing may be considered as waste for the purposes of the Act. 

Article/Section No.

Section 1
Section 61.1

Instrument Text

"board" means the Surface Rights Board continued under section 146 (1);

 

"boundary" means a location's surface boundary and its vertical extension;

 

"certificate of restoration" means a certificate of restoration issued by the commission under section 41 of the Oil and Gas Activities Act;

 

"commission" means the commission continued under section 2 of the Oil and Gas Activities Act;

 

"commissioner" means the commissioner appointed under section 2 of the Oil and Gas Activities Act;

 

"Crown land" means ungranted Crown or public land that belongs to the government, whether or not any water flows over or covers it;

 

"cubic metre" means, for a volume of

 

(a) natural gas, that volume measured at 101.325 kPa and 15°C, and

 

(b) petroleum, that volume measured at 15°C;

 

"director" means an officer or employee of the ministry who is designated as the Director of Petroleum Lands by the minister;

 

"division" means the Energy Resources Division of the ministry;

 

"division head" means the assistant deputy minister designated in writing by the minister as having charge of the division;

 

"field" means

 

(a) the surface area underlaid or appearing to be underlaid by one or more pools, and

 

(b) the subsurface regions vertically beneath that surface area;

 

"freehold land" means land, including land comprising a right of way, station ground, yard or terminal of a railway but not including Crown land, in respect of which

 

(a) petroleum and natural gas is, or may be, situated, or

 

(b) a person has the right to work, win or carry away petroleum or natural gas;

 

"gas well" means a well in which casing is run and that, in the opinion of the commission, is producing or is capable of producing from a natural gas bearing zone;

 

"geophysical exploration" means investigation of the subsurface by seismic, gravimetric, magnetic, electric and geochemical operations and by any other method approved by the commission, but does not include the use of geophysical well logs, vertical seismic profile surveys or other surveys obtained from a well;

 

"holder of a location" means, in accordance with the context, a permittee, licensee or lessee;

 

"interest" means an undivided interest in a location;

 

"lease" means a subsisting lease issued under this Act;

 

"lessee" means a person in whose name a lease is recorded in the division records;

 

"licence" means, in accordance with the context, a drilling licence or a licence to explore for a storage reservoir under this Act;

 

"licensee" means a person in whose name a licence is recorded in the division records;

 

"location" means the land described in a permit, licence or lease;

 

"natural gas" means all fluid hydrocarbons, before and after processing, that are not defined as petroleum, and includes hydrogen sulphide, carbon dioxide and helium produced from a well;

 

"officer of the division" means a person employed in the division and authorized by the division head to give an approval under this Act;

 

"oil and gas activity" has the same meaning as in the Oil and Gas Activities Act;

 

"oil sand" means sand or other petroliferous substance from which oil sand products can be produced and includes any other substance defined by the Lieutenant Governor in Council as oil sand;

 

"oil sand products" or "oil shale products" means petroleum or natural gas and all other minerals and substances that can be produced from oil sand or oil shale in association with the production of petroleum or natural gas;

 

"oil shale" means shale or other petroliferous substance from which oil shale products can be produced and includes any other substance defined by the Lieutenant Governor in Council as oil shale;

 

"owner" means, except in Part 17,

 

(a) the government for land so owned,

 

(b) a person registered in the land title office as the registered owner of the land surface or as its purchaser under an agreement for sale, and

 

(c) a person to whom a disposition of Crown land has been issued under the Land Act,

 

and, in relation to a well, includes a person entitled to produce and dispose of petroleum or natural gas from the well;

 

"permit" means a subsisting exploration permit issued under this Act;

 

"permittee" means the person in whose name an exploration permit is recorded in the division records;

 

"petroleum" means crude petroleum and all other hydrocarbons, regardless of gravity, that are or can be recovered in liquid form from a pool through a well by ordinary production methods or that are or can be recovered from oil sand or oil shale;

 

"petroleum well" means a well in which casing is run and that, in the opinion of the commission, is producing or is capable of producing from a petroleum bearing zone;

 

"pipeline" has the same meaning as in section 1 (2) of the Oil and Gas Activities Act;

 

"plant liquids" means hydrocarbon liquids recovered from natural gas other than by normal field 2 phase separation;

 

"pool" means an underground reservoir containing an accumulation of petroleum or natural gas, or both, separated or apparently separated from another reservoir or accumulation;

 

"production" means the flowing of petroleum fluid, natural gas or brine from a well to the surface for the purpose of sale or trade but does not include the flowing of petroleum fluids, natural gas or brine from a well to the surface for the purpose of evaluation of the fluid or formation properties if the petroleum fluid, natural gas or brine is not gathered and stored or shipped for sale or trade;

 

"recycling" means the injection and subsequent production of natural gas in a field or pool, if petroleum recovery from the natural gas is the primary mode of liquid hydrocarbon production from the field or pool;

 

"related activity" has the same meaning as in the Oil and Gas Activities Act;

 

"restricted land" means any of the following:

 

(a) Crown land that is used or occupied by or on behalf of the government;

 

(b) land granted by the government to a railway company under an Act that is used or occupied by or on behalf of the railway company;

 

(c) Crown land to which access is restricted or prohibited under another Act;

 

"spacing area" means an area of the land surface or subsurface as prescribed by regulation;

 

"storage reservoir" means a naturally occurring underground reservoir that is capable of being used for the introduction, disposal, storage or recovery of petroleum, natural gas, water produced in relation to the production of petroleum or natural gas, waste or any other prescribed substance;

 

"storage well" means a well in which casing is run and that, in the opinion of the commission, is used or is capable of being used to dispose of or produce petroleum or natural gas, water produced in relation to the production of petroleum or natural gas, waste or any other prescribed substance into or from a storage reservoir;

 

"unitized operation" means

 

(a) the development or production of petroleum and natural gas, the implementation of a program for the conservation of petroleum and natural gas, or the coordinated management of interests in them, or

 

(b) the development and operation of a storage reservoir

 

in, on or under a location, part of a location or a number of locations combined for that purpose under a unitization agreement under this Act;

 

"unoccupied Crown land" means Crown land, other than restricted land,

 

(a) in respect of which there has been no disposition of an interest in the surface of the land under the Land Act, or

 

(b) that is subject to

 

(i)  a permit under section 14 of the Land Act, or

 

(ii)  a licence under section 39 of the Land Act

 

under which a person is granted

 

(iii)  non-intensive occupation or use of the land, or

 

(iv)  occupation and use of an extensive area of Crown land for commercial recreational purposes;

 

"waste" in addition to its ordinary meaning, means waste as that term is understood in the petroleum and natural gas industry, and includes wasteful operations and the underground or surface loss of potentially recoverable petroleum or natural gas;

 

"water source well" means a hole in the ground drilled to obtain water for the purpose of injecting water into an underground formation in connection with the production of petroleum or natural gas;

 

"well" means a hole in the ground

 

(a) made or being made by drilling, boring or any other method to obtain petroleum or natural gas,

 

(b) made or being made by drilling, boring or any other method to explore for, develop or use a storage reservoir for the storage or disposal of petroleum, natural gas, water produced in relation to the production of petroleum or natural gas, waste or any other prescribed substance,

 

(c) used, drilled or being drilled to inject natural gas, water produced in relation to the production of petroleum or natural gas or other substances into an underground formation in connection with the production of petroleum or natural gas,

 

(d) used to dispose of petroleum, natural gas, water produced in relation to the production of petroleum or natural gas, waste or any other prescribed substance into a storage reservoir, or

 

(e) used, drilled or being drilled to obtain geological or geophysical information respecting petroleum or natural gas,

 

and includes a water source well;

 

"zone" means a stratum or strata designated by the commission as a zone generally or for a designated area or a specific well, or a stratum or strata designated by the director for the purposes of the administration of petroleum and natural gas rights or storage and disposal rights.

 

[…]

 

Continuation of leases for certain disposal well purposes

61.1 

(1) In this section:

 

"eligible disposal well" means a well that is used or planned to be used to dispose of water, carbon dioxide or other waste fluids associated with petroleum or natural gas exploration, production or processing;

 

"eligible lease" means a lease for a location that includes all or part of an eligible spacing area;

 

"eligible spacing area" means a spacing area, other than a spacing area that is subject to a special project under section 75 of the Oil and Gas Activities Act, that

 

(a) contains an eligible disposal well,

 

(b) is, in the opinion of the director, planned to contain an eligible disposal well, or

 

(c) is, in the opinion of the director, likely to be needed in relation to an existing or planned eligible disposal well that is situated on a nearby spacing area.

 

(2) If an eligible lease expires, whether after its initial term or after a continuation under this section or under section 58, 61 or 62, on application by the lessee made not later than 60 days after the expiry of the lease, the director may continue that lease for one year in respect of one or more zones in the eligible spacing area that the director considers are appropriate in relation to the relevant existing or planned eligible disposal well.

 

(3) If all or part of an eligible lease is continued under this section, the petroleum and natural gas rights granted by the lease that are stratigraphically outside the zone or zones identified by the director under subsection (2) revert to the government when that continuation begins, subject to any continuation under section 58.

II. The scope and management of rights
Property rights

Summary

Section 128 of the BC Petroleum and Gas Act provides that ninety days after designation of a storage area under section 127, a right, title and interest in a storage reservoir in or under the storage area and in any water inside the storage reservoir vests without encumbrance in the government of British Columbia unless, before the expiry of the ninety days, the designation is rescinded.

However:

  1. this vesting does not itself confer on the government any right, title or interest in anything other than water that is found, naturally occurring, inside the storage reservoir (see section 128(2)); and
  2. a person who had a right, title or interest in land that vested in the government under section 128 may apply for arbitration in respect of compensation (see section 129(1)).

Article/Section No.

Section 127
Section 128
Section 129

Instrument Text

Designation of storage area

127 

(1) On the recommendation of the minister, the Lieutenant Governor in Council may by regulation designate land as a storage area.

(2) Notice of the designation under subsection (1) must be published in 2 consecutive issues of a newspaper circulated in the area in which the storage area is situated.

Vesting of storage reservoir

128

(1) Ninety days after designation of land as a storage area, a right, title and interest in a storage reservoir in or under the storage area and in any water inside the storage reservoir is vested in the government free of encumbrances unless, before the expiry of the 90 days, the Lieutenant Governor in Council rescinds the designation.

(2) A right, title or interest in anything other than water that is found, naturally occurring, inside the storage reservoir is not vested in the government merely because of the vesting under subsection (1).

(3) If a right, title or interest in land has vested in the government under subsection (1), that interest, for the purposes of the application of section 23 (2) (a) of the Land Title Act, is deemed to be held by the government pursuant to a subsisting exception and reservation contained in the original grant of that land from the government.

Compensation

129 

(1) A person who had a right, title or interest in land that vested in the government under section 128 may apply to the board for arbitration in respect of compensation for the loss of that right, title or interest.

(2) Part 17 applies to an application under subsection (1).

Competition with other Interests

Summary

Section 126(4) of the BC Petroleum and Gas Act prohibits licensees from carrying out exploration within 3 km of a mine as defined in the Mines Act, or of a storage reservoir, unless the Commission (as defined in section 1) authorises that exploration under the Oil and Gas Activities Act.

Article/Section No.

Section 126

Associated legislation:
Mines Act
Oil and Gas Activities Act

Instrument Text

Exploration licence for underground storage area

126 

(1) A person must not explore for a storage reservoir unless

 

(a) either

 

(i)  the person is licensed by the division head under subsection (3), or

 

(ii)  the exploration consists only of geophysical exploration, and

 

(b) the exploration is carried out in accordance with the Oil and Gas Activities Act.

 

(2) An applicant for a licence under subsection (3) must make the application to the division head in a form suitable to the division head.

 

(3) The division head may grant a licence to a person to explore for a storage reservoir, grant the licence for a period of time he or she determines and subject to conditions he or she determines, or the division head may refuse to grant the licence.

 

(4) A licensee under this section must not carry out exploration under the licence within 3 km of a mine as defined in the Mines Act or of a storage reservoir unless the commission authorizes that exploration under the Oil and Gas Activities Act.

Preferential rights between CCS operators

Summary

Under section 130(1) of the BC Petroleum and Gas Act, only holders of petroleum or natural gas permits, drilling licences or leases, or exploration licences granted under section 126, may apply to the minister to lease a storage reservoir owned by the government.

As a result, holders of such titles effectively have preferential rights in securing such leases, as the Act does not provide for other parties to apply for them. 

Article/Section No.

Section 130

Instrument Text

Lease of storage reservoir

130

(1) The holder of a petroleum or natural gas permit, drilling licence or lease or an exploration licence granted under section 126 may apply to the minister for a lease of a storage reservoir that is owned by the government.

(2) An applicant for a lease under subsection (3) must make the application to the minister in a form suitable to the minister.

(3) The minister may lease a storage reservoir that is owned by the government to a person who applies under subsection (1), and the minister may grant a lease that is different than the one applied for or may refuse to grant a lease.

Third party access to storage sites

Summary

Under section 142 of the BC Petroleum and Gas Act, persons may not enter, occupy or use land in order to operate or use a storage reservoir unless these activities are authorised under:

  1. a surface lease entered into with the landowner; or
  2. an order of the Surface Rights Board.

Similarly, under section 144 persons may not enter, occupy or use land to carry out geophysical exploration (as defined in section 1) unless the person has entered into an agreement with the landowner authorising such entry, occupation or use.

If landowner and a person requiring a right of entry are unable to agree on the terms of a surface lease, either party may apply to the Surface Rights Board for mediation and arbitration under section 158.

If an order granting a right of entry is made:

  1. the person granted the right may be required under section 160 to provide security, in order to ensure that any amount to be paid to the landowner will be paid as required;
  2. the Board is required under section 162 to determine the amount of rent, if any, or compensation to be paid to the landowner; and
  3. the order may be enforced in the same manner as a writ of possession issued by a court (see section 174).

A person may apply to the Board for mediation and arbitration under section 163, and the Board may order payment of compensation, if:

  1. the person is a landowner or occupant of land subject to a right of entry, and exercise of the right of entry causes damage to the land or other land of the owner or occupant, or causes loss to the owner or occupant; or
  2. the person is the owner or occupant of land immediately adjacent to land that is subject to a right of entry, and the exercise of the right of entry causes damage to the adjacent land or causes loss to the owner or occupant.

Article/Section No.

Section 142
Section 143
Section 144
Section 145
Section 157
Section 158
Section 159
Section 160
Section 161
Section 162
Section 163
Section 164
Section 165
Section 166
Section 167
Section 168
Section 169
Section 170
Section 171
Section 172
Section 173
Section 174
Section 175
Section 176
Section 177
Section 178
Section 179
Section 180
Section 181

Instrument Text

Division 2 — Authority to Enter Private Land

Authority to enter, occupy or use land

142 

Subject to section 39 of the Oil and Gas Activities Act, a person may not enter, occupy or use land

 

(a) to carry out an oil and gas activity,

 

(b) to carry out a related activity, or

 

(c) to comply with an order of the commission,

 

unless the entry, occupation or use is authorized under

 

(d) a surface lease with the landowner in the form prescribed, if any, or containing the prescribed content, if any, or

 

(e) an order of the board.

 

Rent and compensation

143 

(1) In this section:

 

"orphan site" has the same meaning as in section 44 of the Oil and Gas Activities Act;

 

"termination date", in relation to a right of entry, means

 

(a) if the right of entry has not been exercised, the date of termination of the right of entry under section 167 (3) (c) or section 176 (1) (c),

 

(b) if the right of entry relates to an orphan site, the date determined by the commission under section 45 (5) (c) of the Oil and Gas Activities Act, and

 

(c) in all other cases, the date on which the commission has issued, under the Oil and Gas Activities Act, a certificate of restoration for the land.

 

(2) Subject to subsections (3) and (4), a right holder is liable

 

(a) to pay compensation to the landowner for loss or damage caused by the right of entry, and

 

(b) except where the right of entry relates to a right of way for a flow line, to pay rent to the landowner for the duration of the right of entry.

 

(3) If the term of a surface lease or order of the board granting a right of entry ends before the termination date, the rental provisions of the surface lease or order continue to apply until the termination date unless the landowner and the right holder otherwise agree or the board otherwise orders under this Part.

 

(4) Subsection (3) applies despite the terms of the surface lease or order granting the right of entry, whether made before or after the coming into force of this section, and subsection (3) and this subsection are retroactive to the extent necessary to give effect to their provisions.

 

Authority to enter, occupy or use land for geophysical exploration

144 

A person may not enter, occupy or use land to carry out geophysical exploration unless the person has entered into an agreement with the owner of the land authorizing the entry, occupation or use.

 

Exclusion from application of Part

145 

(1) This Part, except section 144, does not apply to the entry, occupation or use of land relating to geophysical exploration.

 

(2) This Part does not apply to the entry, occupation or use of land relating to a pipeline, other than a flow line.

 

[…]

 

Division 5 — Authority to Enter Land

Interpretation for Division

157

In this Division, "right of entry order" means an order under section 159 (1).

Application for mediation and arbitration

158 

A person who requires a right of entry or the landowner may apply to the board for mediation and arbitration if the person and the landowner are unable to agree on the terms of a surface lease.

 

Right of entry order

159 

(1) If an application is made under section 158, the board or a designated mediator referred to in section 152 (3) may make an order authorizing a right of entry, subject to the terms and conditions specified in the order, if the board or the mediator, as applicable, is satisfied that an order authorizing the right of entry is required for a purpose described in section 142 (a) to (c).

 

(2) A mediator who has made an order under subsection (1) may continue mediation in order to assist in resolving any issues between the parties to the mediation.

 

(3) A right of entry order may be conditional on the person who is seeking the right of entry receiving approval from the commission to undertake an activity for a purpose described in section 142 (a) to (c).

 

(4) A right of entry order made by a mediator must, as a condition of the order, require the person who is seeking the right of entry to pay to the landowner, on account of rent, if any, or compensation that may be ordered under section 162 (1) (a), an amount of money ordered by the mediator.

 

(5) If a right of entry order is granted, the right holder must serve a certified copy of the order on the landowner, the occupant, if any, and the commission in accordance with the rules of the board.

 

(6) If a right of entry order is granted on application by the person seeking the right of entry, the right holder must not exercise the right of entry until

 

(a) the right holder has served a certified copy of the order on the landowner under subsection (5), or

 

(b) the board has made an order under section 156 that the requirements for service of the order on the landowner are deemed to have been met.

 

Security deposit

160

(1) A right of entry order may, as a condition of the order, require the person who is seeking the right of entry to deposit with the board security in the amount, form and manner that the mediator or the board considers necessary for the purpose of ensuring that the landowner will be paid any amount that is subsequently ordered by the board to be paid by the person to the landowner.

 

(2) In determining the amount, form and manner of security to be deposited under subsection (1), the mediator or the board must consider any practice directive issued by the board with respect to security deposits.

 

(3) Subject to subsection (4), the board, on application, may determine the disposition of security, or any part of it, as between the person who deposited the security and the current landowner.

 

(4) If the board is satisfied that a person who deposited security with the board subsequently transferred, in accordance with this Act or the Oil and Gas Activities Act, the right to explore, develop or produce petroleum or natural gas in the land to which the security deposit relates, the board, on application, may determine the disposition of the security, or any part of it, as between the person to whom the right was transferred and the current landowner.

 

Order when landowner does not participate

161

(1) If a landowner does not attend the proceedings in respect of an application under section 158, the board, after hearing representation by or on behalf of the applicant and persons other than the landowner that are likely to be directly affected by an order, may make a right of entry order if

 

(a) a copy of the application has been served on the landowner in accordance with the rules of the board, or

 

(b) the board has made an order under section 156 that the requirements for service of the application on the landowner are deemed to have been met.

 

(2) A landowner whose land is subject to a right of entry order under subsection (1) of this section may apply to the board for an order under subsection 162 (1) (a).

 

Determination of money payable and security

162 

(1) Unless the parties to an application otherwise agree, if the board or a mediator has made a right of entry order, the board, by order,

 

(a) must determine the amount of rent, if any, or compensation to be paid to the landowner, and

 

(b) may make a determination in relation to security deposited or any portion of it remaining on deposit under section 160, and may distribute the security or a portion of it in accordance with that determination.

 

(2) An amount determined under subsection (1) (a) may include, without limitation, compensation to the landowner relating to negotiation with the right holder before the application was made to the board.

 

(3) The board may order that interest is payable on an amount determined under subsection (1) (a).

 

(4) If a mediator has made an order under section 159 (4), the following apply:

 

(a) if the amount paid under section 159 (4) is less than or equal to the amount determined under section 162 (1) (a), the landowner is entitled to receive the difference, if any;

 

(b) if the amount paid under section 159 (4) exceeds the amount determined under section 162 (1) (a), the board, on application, may order the landowner to pay the excess to the right holder.

 

Division 6 — Board Orders Relating to Rights of Entry

Application relating to loss or damage caused by right of entry

163

(1) A person may apply to the board for mediation and arbitration if the person

 

(a) is a landowner or occupant of land that is subject to a right of entry, and the exercise of the right of entry causes damage to the land or other land of the owner or occupant or causes loss to the owner or occupant, or

 

(b) is the owner or occupant of land immediately adjacent to land that is subject to a right of entry, and the exercise of the right of entry causes damage to the adjacent land or causes loss to the owner or occupant.

 

(2) On application under subsection (1), the board may order the right holder to pay compensation to the landowner or owner or occupant for damage to the land of the landowner, owner or occupant or loss to the landowner, owner or occupant as a result of the exercise of the right of entry, including, without limitation, compensation relating to negotiation with the right holder before the application was made to the board.

 

(3) The board may order that interest is payable on an amount payable under subsection (2).

 

Board orders relating to surface leases

164

(1) A party to a surface lease may apply to the board for mediation and arbitration in respect of either or both of the following:

 

(a) a disagreement respecting the operation of or compliance with a term of the surface lease;

 

(b) a disagreement respecting whether the surface lease should be amended based on a claim by a party that the oil and gas activity or related activity as approved by the commission on the land that is subject to the surface lease is substantially different from the oil and gas activity or related activity that was proposed during the negotiation of the surface lease.

 

(2) On application under subsection (1) (a), the board may do any or all of the following:

 

(a) make an order confirming the right of entry under the surface lease, subject to the terms and conditions specified in the order, if any;

 

(b) if the board is satisfied that a party to the surface lease has failed to comply with an obligation under the surface lease, order that party to pay compensation to the other party for that failure;

 

(c) order that interest is payable on an amount payable under paragraph (b);

 

(d) order that compensation awarded under paragraph (b) is payable by a party instead of the party complying with an obligation under the surface lease.

 

(3) On application under subsection (1) (b), or in making an order under subsection (2) (d), the board may make an order amending the terms of the surface lease from the effective date set out in the order.

 

Negotiation of amendment to surface lease or order

165

(1) This section and section 166 apply despite

 

(a) the terms of a surface lease or order containing rental provisions made at any time before or after the coming into force of this section, or

 

(b) anything done under the surface lease or order before or after that time.

 

(2) Subject to subsection (3),

 

(a) a right holder who holds a right of entry under a surface lease or order of the board, or

 

(b) the landowner whose land is subject to the right of entry

 

may serve notice on the other party, in the form and manner established by the rules of the board, requiring a negotiation of an amendment to the rental provisions in the surface lease or order.

 

(3) A notice under subsection (2) may not be served before the 4th anniversary of the later of the following:

 

(a) the effective date of the surface lease or order to which the notice relates;

 

(b) the effective date of the most recent amendment to the rental provisions in the surface lease or order agreed to by the parties or ordered by the board, if any.

 

(4) A person serving notice under subsection (2) must file a copy of the notice with the board in accordance with its rules.

 

(5) If persons giving and receiving a notice under subsection (2) agree to amend the rental provisions in a surface lease, the right holder must submit a copy of the agreement to the board under section 178 (2).

 

(6) If persons giving and receiving a notice under subsection (2) agree to an amendment of the rental provisions in an order, the right holder must submit a copy of the agreement to the board and the board may amend the order to reflect the agreement of the parties.

 

(7) An amendment of the rental provisions in a surface lease or order of the board under this section is effective from the anniversary of the effective date of the surface lease or order immediately preceding the notice under subsection (2) and is retroactive to the extent necessary to give effect to this subsection.

 

Parties do not agree to amendment of surface lease or order

166

(1) If persons giving and receiving a notice under section 165 (2) do not agree to an amendment of the rental provisions in the surface lease or order to which the notice relates within 60 days after receipt of the notice, either party may apply to the board to resolve the disagreement.

 

(2) An application under subsection (1) of this section may be accompanied by an application for mediation and arbitration under section 163 (1) (a).

 

(3) On application under subsection (1) of this section, the board may make an order varying the rental provisions in the surface lease or order.

 

(4) An order under subsection (3) of this section varying the rental provisions in the surface lease or order of the board is effective from the anniversary of the effective date of the surface lease or order immediately preceding the date of the notice under section 165 (2) and is retroactive to the extent necessary to give effect to this subsection.

 

Termination of surface lease or order

167 

(1) A right holder who holds a right of entry under a surface lease or an order of the board may, on not less than 90 days' notice to the landowner, apply to the board for an order terminating the surface lease or order if at least 2 years have expired since the effective date of the surface lease or order.

 

(2) A landowner whose land is subject to a right of entry under a surface lease or an order of the board may, on not less than 90 days' notice to the right holder, apply to the board for an order terminating the surface lease or order if

 

(a) at least 2 years have expired since the effective date of the surface lease or order, and

 

(b) the right holder has not exercised the right of entry in that period.

 

(3) On application under subsection (1) or (2), the board must hear representation by or on behalf of the applicant and persons likely to be directly affected by an order resulting from the application, and may

 

(a) make an order dismissing the application with or without terms or conditions,

 

(b) if the right of entry has been exercised, make an order terminating the right of entry, subject to the terms or conditions specified in the order, including all of the following conditions:

 

(i)  the right holder removing all equipment and facilities used in respect of the exercise of the right of entry;

 

(ii)  the right holder restoring all land directly affected by the exercise of the right of entry;

 

(iii)  the receipt by the right holder of a certificate of restoration by the commission in respect of the land that is subject to the right of entry, or

 

(c) if the right of entry has not been exercised, make an order terminating the right of entry with or without terms or conditions.

 

(4) An order under subsection (3) may include an award of money for any or all of the following amounts that have not been received at the time of the order:

 

(a) rent or compensation for the right of entry that is the subject of the application;

 

(b) damages in relation to the right of entry;

 

(c) any other amounts owing under the surface lease or past orders of the board.

 

(5) An order under subsection (3) may include an order that interest is payable on an amount payable under subsection (4).

 

(6) The board may order that compensation awarded under subsection (4) is payable instead of rent or compensation provided for under a surface lease or an order of the board.

 

(7) A hearing is not required in respect of an application under subsection (1) or (2) if all persons likely to be directly affected agree to the termination of the surface lease or order.

 

(8) If any term or condition in an order under subsections (3) to (5) is not complied with, the board may order that additional money is payable as compensation for that non-compliance.

 

Division 7 — Costs

Interpretation for Division

168

In this Division:

 

"actual costs" includes, without limitation, the following:

 

(a) actual reasonable legal fees and disbursements;

 

(b) actual reasonable fees and disbursements of a professional agent or expert witness;

 

(c) other actual reasonable expenses incurred by a party in connection with a board proceeding;

 

(d) an amount on account of the reasonable time spent by a party in preparing for and attending a board proceeding;

 

"landholder" means an owner of land or occupant who is a party to an application under this Part;

 

"operator" means a party to an application under this Part in relation to a right of entry who

 

(a) requires but does not hold the right of entry, or

 

(b) is the right holder in relation to the right of entry.

 

Advance costs

169 

(1) Subject to any regulations, the board may, on application, order the operator to pay to the landholder, as advance costs, all or part of the amount that the board anticipates will be the landholder's actual costs awarded by the board under section 170.

 

(2) If the board is satisfied that an operator has failed to comply with an order under subsection (1), the board may refuse to proceed with the application until the operator complies with the order.

 

Costs

170 

(1) Subject to any regulations, the board may order a party to an application under this Part or an intervener to pay any or all of the following:

 

(a) all or part of the actual costs incurred by another party or intervener in connection with the application;

 

(b) part of the actual reasonable legal fees and disbursements and other reasonable costs and expenses incurred by the board in connection with the application, if the board considers the conduct of a party or intervener has been improper, vexatious, frivolous or abusive.

 

(2) If actual costs are awarded under this section to a landholder who has received an amount as advance costs under section 169, the following apply:

 

(a) if the amount received as advance costs exceeds the amount of actual costs awarded under this section,

 

(i)  the operator may deduct the difference from any amounts of rent or compensation payable to the landholder in relation to the right of entry, and

 

(ii)  if all rent and compensation, if any, has been paid, the board, on application, may order the landholder to pay the excess to the operator;

 

(b) if the amount received as advance costs is less than or equal to the amount of actual costs awarded under this section, the landholder is entitled to receive the difference, if any.

 

Division 8 — Provisions Relating to Board Orders

Registration of order

171 

(1) If the board makes an order authorizing or terminating a right of entry with respect to land that is registered under the Land Title Act, the person whose right of entry is authorized or terminated by the order must file a certified copy of the order with the registrar of the appropriate land title district, who, on payment of the appropriate fees, must endorse the land title records accordingly.

 

(2) If a person fails to file a certified copy of an order in accordance with subsection (1), on application by the landowner, the board may file a certified copy of the order with the registrar of the appropriate land title district, who, on payment of the appropriate fees by the board, must endorse the land title records accordingly.

 

(3) If the board files a certified copy of an order under subsection (2), the board may order the person who failed to file the certified copy of the order under subsection (1) to pay to the government

 

(a) fees paid by the board to the registrar under subsection (2),

 

(b) reasonable costs incurred by the board with respect to the filing of the certified copy of the order under subsection (2) and the preparation of an order under this subsection, and

 

(c) a prescribed penalty.

 

Certified copy as evidence

172

A certified copy of an order of the board signed by the chair of the board, or by an employee of the board designated in writing by the chair, must be admitted as evidence of the order by the board.

 

Assignment of order

173 

(1) A right holder may assign an order of the board

 

(a) by serving notice of the assignment on the other parties named in the order,

 

(b) by filing a certified copy of the assignment with the board, and

 

(c) if the land that is subject to the order is registered under the Land Title Act, by filing the assignment with the registrar of the appropriate land title district, who, on payment of the appropriate fees, must endorse the assignment against the indefeasible or absolute title of the land that is the subject of the assignment.

 

(2) An order of the board applies to the current owner or occupant, from time to time, of the land that is the subject of the order.

 

Enforcement of right of entry

174

(1) The following orders of the board may be enforced in the same manner as a writ of possession issued by a court:

 

(a) an order under Division 5 granting a right of entry;

 

(b) an order under section 164 (2) (a) confirming a right of entry under a surface lease.

 

(2) If a landowner whose land is subject to a right of entry under a surface lease or order of the board refuses to allow the right holder to exercise the right of entry, on application by the right holder, the board may make an order permitting the right holder to deduct from any amounts of rent or compensation payable under the surface lease or order, an amount covering the cost of and incidental to enforcing the right of entry, which amount is at the sole discretion of the board.

 

Enforcement of orders

175

A certified copy of an order of the board may be filed at any time with the Supreme Court or Provincial Court, and, if filed, the order has the same force and effect, and all proceedings may be taken on it, as if it were an order of the court.

 

Failure to pay

176

(1) If a right holder fails to pay rent or compensation owing under a surface lease or order of the board granting the right holder a right of entry, on application by the person entitled to receive the rent or compensation, the board, by order, may do any one or more of the following:

 

(a) suspend the right of entry with or without terms or conditions;

 

(b) determine the unpaid amount and order that interest is payable on that amount;

 

(c) terminate the right of entry with or without terms or conditions;

 

(d) if the right of entry is terminated under paragraph (c), determine the amount of rent, if any, or compensation owing by the right holder to the date of the termination and order that interest is payable on that amount.

 

(2) If the board suspends or terminates a right of entry, the board must, in accordance with the rules of the board, serve notice of the suspension or termination on the right holder, the owner of the land, the occupant, if any, and the commission.

 

(3) If a right of entry is suspended under subsection (1) (a) of this section, the obligations of the right holder under the surface lease or order to pay rent, if any, and compensation continue during the period of the suspension.

 

(4) A suspension of a right of entry under subsection (1) (a) terminates on the date set by the board.

 

(5) If the suspension of a right of entry is terminated under subsection (4), the board must, in accordance with the rules of the board, serve notice of the termination on the persons who received notice under subsection (2).

 

Compliance with orders

177 

A person to whom an order of the board applies must comply with the order.

 

Division 9 — Surface Lease Information

Submission of surface lease information

(1) A right holder who holds a right of entry under a surface lease must submit to the board, not more than 90 days after the date the right holder acquires the right of entry,

 

(a) the right holder's name and address,

 

(b) a description of the land that is subject to the right of entry, and

 

(c) a copy of the surface lease, including the terms of the right of entry and any rental provisions.

 

(2) A right holder described in subsection (1) must submit to the board a copy of any agreement amending a surface lease not more than 90 days after the date of execution of the amending agreement.

 

(3) A surface lease or amending agreement submitted to the board must be available for public inspection at the office of the board during its regular office hours.

 

(4) The board may publish prescribed information derived from a surface lease or agreement submitted to the board in a form and manner the board considers appropriate, including on the internet or by other electronic means.

 

Administrative penalty

179 

(1) Subject to any regulations, if the board is satisfied that a right holder has failed to submit a surface lease or agreement as required under section 178 (1) or (2), the board, without prior notice, may impose an administrative penalty on the right holder in an amount that does not exceed the prescribed amount.

 

(2) If an administrative penalty is imposed on a right holder, the board must serve notice of the administrative penalty on the right holder in accordance with the rules of the board, and the notice must specify the amount of the penalty and the date by which the penalty must be paid.

 

(3) A right holder on whom an administrative penalty is imposed must pay the administrative penalty within 30 days after the date on which the notice referred to in subsection (2) is served on the right holder.

 

(4) An administrative penalty constitutes a debt payable to the government by the right holder on whom the penalty is imposed.

 

(5) If a right holder fails to pay an administrative penalty in accordance with subsection (3), the board may file with the Supreme Court or Provincial Court a certified copy of the notice imposing the administrative penalty, and, on being filed, the notice has the same force and effect, and all proceedings may be taken on the notice, as if it were a judgment of that court.

 

(6) The board must pay all amounts derived from administrative penalties into the consolidated revenue fund.

 

Suspension of right of entry under surface lease

180

(1)  If the board is satisfied that a right holder has failed to submit a surface lease or agreement as required under section 178 (1) or (2), the board, without prior notice, may suspend the right of entry under the surface lease until the surface lease or amending agreement has been submitted to the board.

 

(2) If the board suspends a right of entry, the board must, in accordance with the rules of the board, serve notice of the suspension on the right holder, the landowner, the occupant, if any, and the commission.

 

(3) A suspension of a right of entry takes effect 30 days after the date on which the notice referred to in subsection (2) is served on the right holder.

 

(4) If a right of entry is suspended, the obligations of the right holder under the surface lease to pay rent, if any, and compensation continue during the period of the suspension.

 

(5) A suspension of a right of entry terminates on the date set by the board, which date must be not later than 30 days after the right holder submits the surface lease or amending agreement to the board.

 

(6) If a suspension of a right of entry is terminated under subsection (5), the board must, in accordance with the rules of the board, serve notice of the termination on the persons who received notice under subsection (2).

 

Division 10 — Regulations for Part

Regulations

181 

Without limiting section 133, the Lieutenant Governor in Council may make regulations relating to the following:

 

(a) the form or content of a surface lease for the purpose of section 142 (d), including, without limitation, terms or conditions that must be contained in a surface lease;

 

(b) factors or criteria to be considered by the board in determining an amount for the purposes of section 154 (1) (l);

 

(c) costs or advance costs under section 169 or 170;

 

(d) prescribing the amount of the penalty referred to in section 171 (3) (c);

 

(e) prescribing information or classes of information that the board may publish under section 178 (4);

 

(f) the administrative penalty referred to in section 179, including the maximum amount of the penalty.

Public participation

Summary

<p>Under section 122 of the BC Petroleum and Gas Act, all records and instruments relating to storage reservoir leases recorded under the Act must be open to public inspection free of charge, subject to certain conditions.</p>

Article/Section No.

Section 122

Instrument Text

Reports and other instruments

122

(1) Subject to subsection (2), all records and instruments relating to petroleum and natural gas title or a storage reservoir lease recorded under this Act must, during normal office hours, be open to public inspection free of charge.

 

(2) Geological, geophysical and reports other than well reports and well data received by the ministry in the course of the administration of this Act, and designated by the minister as confidential, must not be released except under an order of the Lieutenant Governor in Council.

 

(3) With the permission in writing of the person who holds the licence, permit or lease for a location dealt with in the report, the minister may, however, at his or her sole discretion, release information contained in the report.

 

(4) The Lieutenant Governor in Council may release factual information considered confidential when it is considered in the public interest to do so.

III. Permitting storage site exploration, project development and CO2 injection
Permitting exploration activities

Summary

Under section 126(1) of the BC Petroleum and Gas Act, a person may only explore for storage reservoirs if:

  1. the person is licensed to do so under section 126(3), or only geophysical exploration (as defined in section 1) is undertaken; and
  2. the exploration is undertaken in accordance with the Oil & Gas Activities Act.

Under section 126(3), the Division Head (as defined in section 1) may grant a licence to a person to explore for a storage reservoir, subject to a term and conditions the division head determines.

Section 126(4) prohibits licensees from carrying out exploration within 3km of a mine as defined in the Mines Act, or of a storage reservoir, unless the Commission (as defined in section 1) authorises that exploration under the Oil and Gas Activities Act.

The Lieutenant Governor in Council has the power under section 132 to make regulations respecting, among other things:

  1. licences and conditions that may attach to licences; and
  2. applications for licences, including the publication of applications.

Article/Section No.

Section 126
Section 132

Associated legislation:
Mines Act
Oil & Gas Activities Act

Instrument Text

Part 14 — Underground Storage

Exploration licence for underground storage area

126

(1) A person must not explore for a storage reservoir unless

 

(a) either

 

(i)  the person is licensed by the division head under subsection (3), or

 

(ii)  the exploration consists only of geophysical exploration, and

 

(b) the exploration is carried out in accordance with the Oil and Gas Activities Act.

 

(2) An applicant for a licence under subsection (3) must make the application to the division head in a form suitable to the division head.

 

(3) The division head may grant a licence to a person to explore for a storage reservoir, grant the licence for a period of time he or she determines and subject to conditions he or she determines, or the division head may refuse to grant the licence.

 

(4) A licensee under this section must not carry out exploration under the licence within 3 km of a mine as defined in the Mines Act or of a storage reservoir unless the commission authorizes that exploration under the Oil and Gas Activities Act.

 

[…]

 

Regulations for this Part

132

Without limiting section 133, the Lieutenant Governor in Council may make regulations respecting

 

(a) [Repealed 1998-39-54.]

 

(b) and (c) [Repealed 2008-36-194.]

 

(d) licences and conditions that may attach to licences,

 

(e) the form and content of leases or classes of leases,

 

(f) applications for licences or leases including the publication of applications,

 

(g) rents charged under a lease and the payment or collection of rents,

 

(h) the non-application of any or all of the provisions of this Part to land or to a person or operation or to a class of land, person or operation, and

 

(i) the application of any or all of the provisions of the Fire Services Act or of regulations made under the Fire Services Act to a storage reservoir or to a person who explores for, develops or uses a storage reservoir.

Permitting CO2 injection and storage

Summary

Under section 130(1) of the BC Petroleum and Gas Act, the holder of a petroleum or natural gas permit, drilling licence or lease, or an exploration licence granted under section 126, may apply to the minister to lease a storage reservoir owned by the government.

 

Section 130(3) provides that the minister may grant the lease applied for, grant a different lease, or refuse the application.

 

The Lieutenant Governor in Council has the power under section 132 to make regulations respecting, among other things:

  1. the form and content of leases or classes of leases;
  2. applications for leases, including the publication of applications; and
  3. rents charged under a lease and the payment or collection of rents.

 

Under section 50, holders of petroleum and natural gas leases also have the right to store or dispose of natural gas (which is defined in section 1 to include CO2) in underground formations in lease locations, subject to any rights conferred under a storage lease issued before the relevant petroleum and natural gas lease was issued.

Article/Section No.

Section 50
Section 130
Section 132

Instrument Text

Leases and their rights

50

(1) A lease shall be a petroleum and natural gas lease.

 

(2) The holder of a petroleum and natural gas lease has

 

(a) the exclusive right to produce, in accordance with this Act and the Oil and Gas Activities Act, both the petroleum and natural gas from the location of the lease, and

 

(b) subject to any rights conferred under a storage lease issued under section 130 before the lease under this section is issued, the right to store or dispose of natural gas, water produced in relation to the production of petroleum or natural gas or other substances associated with petroleum or natural gas exploration, production or processing into an underground formation in the location of the lease.

 

(3) The issue of a lease terminates the validity of a permit for the location of the lease.

 

[…]

 

Lease of storage reservoir

130 

(1) The holder of a petroleum or natural gas permit, drilling licence or lease or an exploration licence granted under section 126 may apply to the minister for a lease of a storage reservoir that is owned by the government.

 

(2) An applicant for a lease under subsection (3) must make the application to the minister in a form suitable to the minister.

 

(3) The minister may lease a storage reservoir that is owned by the government to a person who applies under subsection (1), and the minister may grant a lease that is different than the one applied for or may refuse to grant a lease.

 

[…]

 

Regulations for this Part

132 

Without limiting section 133, the Lieutenant Governor in Council may make regulations respecting

 

(a) [Repealed 1998-39-54.]

 

(b) and (c) [Repealed 2008-36-194.]

 

(d) licences and conditions that may attach to licences,

 

(e) the form and content of leases or classes of leases,

 

(f) applications for licences or leases including the publication of applications,

 

(g) rents charged under a lease and the payment or collection of rents,

 

(h) the non-application of any or all of the provisions of this Part to land or to a person or operation or to a class of land, person or operation, and

 

(i) the application of any or all of the provisions of the Fire Services Act or of regulations made under the Fire Services Act to a storage reservoir or to a person who explores for, develops or uses a storage reservoir.

IV. Operating and closing storage facilities
Monitoring, reporting and verification

Summary

Section 76 of the BC Petroleum and Gas Act provides that:

  1. every person carrying on business in British Columbia who is required under the Act to pay royalties or other amounts must keep books or records, in a form and including information that will enable the royalties payable under the Act to be calculated; and
  2. every person required under the Act to keep books or records must retain every book or record and every account or voucher necessary to verify the information in the books or records, until written permission for their disposal is obtained from the minister.

Article/Section No.

Section 76

Instrument Text

Books and records

76 

(1) Every person carrying on business in British Columbia who is required under this Act to pay royalties or other amounts, must keep books or records at his or her place of business in Canada or at another place designated by the minister, in a form and including information that will enable the royalties payable under this Act to be calculated.

 

(2) If, in the opinion of the royalty collector, a person has failed to keep adequate books or records for the purposes of this Act or the regulations, the minister may require the person to keep books or records the minister specifies, and that person must after that keep the books or records so required.

 

(3) Every person required by this Act to keep books or records must, until written permission for their disposal is obtained from the minister, retain every book or record and every account or voucher necessary to verify the information in the books or records.

Inspections

Summary

Section 4 of the BC Petroleum and Gas Act provides that:

  1. ministry employees with ministerial authorisation may enter a location to examine and inspect for the purposes of the Act; and
  2. persons must admit an authorised ministry employee to a location to examine or inspect, and provide the means and assistance necessary for this purpose.

Article/Section No.

Section 4

Instrument Text

Entry on location

4

(1) An employee of the ministry authorized by the minister may enter a location to examine and inspect for the purposes of this Act.

 

(2) A person must admit to a location an employee of the ministry, authorized under subsection (1), to examine or inspect, and must provide that employee with the means and assistance necessary for the purpose.

Enforcement

Summary

Section 134 of the BC Petroleum and Gas Act provides that contravention of a provision of the Act or regulations constitutes an offence subject to a fine of not less than $500 or more than $5 000.

 

Under section 135, if a permit, licence or lease holder fails to comply with the Act, the Oil and Gas Activities Act, or the terms and conditions of the relevant permit, licence or lease, the Minister may cancel the permit, licence or lease on sixty days’ notice.

 

Section 136 confers a right of appeal against such cancellation.

Article/Section No.

Section 134
Section 135
Section 136

Instrument Text

Offence and penalty

134

(1) Every person who contravenes a provision of this Act or the regulations commits an offence and is liable on conviction to a fine of not less than $500 or more than $5 000.

 

(2) If an offence against this Act or the regulations continues for more than one day, each day the offence continues is deemed to be a separate offence.

 

(3) If a corporation is convicted of an offence under this section, an officer, director or agent of a corporation who authorized, permitted or acquiesced in the offence also commits the offence and is liable to the punishment provided under subsection (1).

 

(4) Every person who

 

(a) makes or participates in, assents to or acquiesces in the making of false or deceptive statements in books or records in a return, certificate, statement or answer filed or made as required under this Act,

 

(b) destroys, alters, mutilates, secretes or otherwise disposes of books or records to evade payment of a royalty imposed under this Act,

 

(c) makes, or assents to or acquiesces in the making of, false or deceptive entries in books or records required under this Act,

 

(d) omits, or assents to or acquiesces in the omission of, entries in books or records required under this Act, or

 

(e) willfully, in any manner, evades or attempts to evade compliance with this Act or the regulations or payment of royalties imposed under this Act

 

commits an offence and, in addition to any penalty otherwise provided, is liable on summary conviction to

 

(f) a fine of not less than 25% and not more than double the amount of the royalty that was sought to be evaded, or

 

(g) both the fine described in paragraph (f) and imprisonment for a term not exceeding 2 years.

 

(5) A person does not commit an offence under subsection (3) or (4) (a) or (c) in respect of a false or deceptive statement or entry if the person did not know that the statement or entry was false or deceptive and, in the exercise of reasonable diligence, could not have known that the statement or entry was false or deceptive.

 

Cancellation

135

If a holder of a permit, licence or lease fails to comply with a provision of

 

(a) this Act, the regulations or a notice or an order under this Act or the regulations,

 

(b) the Oil and Gas Activities Act or the regulations under that Act, or

 

(c) a term, promise or condition of the holder's permit, licence or lease,

 

the minister may, after giving 60 days' notice to the holder of the location, cancel the permit, licence or lease.

 

Appeal

136

(1) If the minister cancels a permit, licence or lease under section 135, the holder, not more than 30 days after the date of the cancellation, may appeal the minister's decision to the Supreme Court.

 

(2) An appeal from a decision of the Supreme Court lies to the Court of Appeal with leave of a justice of the Court of Appeal.

Site closure

Summary

Section 119 of the BC Petroleum and Gas Act provides that when a “location” (defined in section 1 as the land described in a permit, licence or lease) has been cancelled, reverted or abandoned, and all applicable requirements have been satisfied (including under the Oil and Gas Activities Act), property on the location may be removed (although nothing from the location may be used for producing petroleum or natural gas).

If any such property has not been removed from the location within one year after the cancellation, reversion or abandonment, it will vest in the government under section 119(3).

Permits, drilling licences and leases can be abandoned by surrendering them to the director in accordance with section 120. Following such surrender, the permittee, licensee or lessee will have, subject to section 119, no further interest in it and will not be entitled to a refund of rental payments or fees.

Article/Section No.

Section 119
Section 120

Instrument Text

Cancelled, reverted or abandoned locations

119 

(1) When a location has been cancelled, reverted or abandoned, and all requirements under this Act and under the Oil and Gas Activities Act have been satisfied, any property on the location may be removed by the owner of it within one year after the cancellation, reversion or abandonment, but nothing from the location may be used for producing petroleum or natural gas on the location during that period.

 

(2) The director may extend the period for removal for not more than one year.

 

(3) If property has not been removed from the location of a permit, licence or lease by the end of the period specified in subsection (1) or (2), it vests in the government.

 

(4) Subsections (1) to (3) apply to anything remaining on a location at the time of its cancellation, reversion or abandonment under any former petroleum and natural gas legislation.

 

(5) The minister may dispose of property vested in the government under this section,

 

(a) if, in the minister's opinion, its value is not more than $500, as the minister sees fit,

 

(b) if, in the minister's opinion, its value is more than $500, by sale or lease by public tender after an advertisement of the intention to sell or lease the property by public tender has been posted for 14 days in the office of the director and published in not less than 2 issues of a newspaper circulating in the district in which the location is or was situated, or

 

(c) if the property is not sold or leased under paragraph (a) or (b), as the minister sees fit.

 

(6) The minister may use the proceeds of any sale or lease under this section to settle, in the manner that in his or her sole discretion the minister sees fit, just claims made against the property or the owner before the date of the sale or lease.

 

Abandonment

120

A person may abandon a permit, drilling licence or lease by surrendering it to the director and after the surrender, the permittee, licensee or lessee has, subject to section 119, no further interest in it and he or she is not entitled to a refund of rental payments or fees.

V. Management of long-term responsibilities and liabilities
VI. Additional Issues
Additional Issues

Article/Section No.

Section 114
Section 115

Instrument Text

Unit agreement

114

(1) The minister may, on behalf of the government, enter into a unitization agreement for the unitized operation of a field, pool or storage reservoir, or a part of any of them, and on its execution the unitization agreement is, subject to compliance with any applicable requirements under section 75 of the Oil and Gas Activities Act, and other relevant provisions of this Act, binding on all parties to it, including the government.

 

(2) Section 117 does not apply to an agreement entered into under this section.

 

Unitization order

115 

(1) On receiving an application for a unitization order from a working interest owner or group of working interest owners who have agreed in writing to a proposed plan of unit operations, the minister may invite submissions from interested persons to consider the advisability or necessity for an agreement.

 

(2) After reviewing the submissions, the minister may reject the application or make a unitization order requiring that the plan of unitized operations proposed by the applicant be applicable to all of the proposed unit area, or any smaller area the minister determines, and on the making of the order it is binding on all owners of interests in the unit area.