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Bulletin 2009-31

September 15, 2009

New Directive 075: Oilfield Waste Liability (OWL) Program Issued

The Energy Resources Conservation Board (ERCB) announces the release of Directive 075: Oilfield Waste Liability (OWL) Program, which is effective September 15, 2009. The ERCB also announces the release of revised editions of Directive 006: Licensee Liability Rating (LLR) Program and Licence Transfer Process and Directive 024: Large Facility Liability Management Program, as well as changes to Part 16.6 of the Oil and Gas Conservation Regulations resulting from the implementation of the OWL Program.

Directive 075 replaces the oilfield waste security deposit provisions of Part 16.6 of the Oil and Gas Conservation Regulations for all ERCB-approved oilfield waste management (WM) facilities except landfills. Directive 075 and changes to Directive 006 and Directive 024 provide information on the ERCB’s Liability Management Rating (LMR) assessment process, which evaluates a licensee’s liability risk based on a single combined assessment of its wells, facilities, and pipelines in the LLR, Large Facility Liability Management Program (LFP), and OWL programs.

Like the LLR and LFP, the OWL Program is a risk-based industry backstopped program that will assess a WM approval holder’s liability risk monthly and on receipt of an application to transfer a WM facility. A security deposit is required whenever a WM approval holder’s deemed liabilities in the OWL, LLR, and LFP exceed its deemed assets in these three programs plus any previously provided liability management security deposit. As well, regardless of its LMR rating, a nonproducer or eligible producer licensee holding a WM approval is required to provide a facility-specific security deposit for any difference between a facility’s deemed liability and its deemed asset,. The changes to the LLR and LFP programs resulting from the implementation of the OWL Program are described below.

Changes to Directive 006: Licensee Liability Rating (LLR) Program and Licence Transfer Process

• Clarification of the ERCB’s combined LMR assessment, which now includes assets and liabilities included in the OWL Program
• Change in structure to parallel that in Directives 075 and Directive 024
• Removal of Appendix 7: Security Deposits, as the treatment of non-program-specific security deposits is addressed in Directive 068: Security Deposits
• Removal of Appendix 9: LLR Program Performance Measures, as these were interim in nature and most are now reported monthly on the ERCB Web site www.ercb.ca in conjunction with the monthly LMR Run Summary
• Removal of Appendix 10: Enforcement, as applicable provisions are now addressed in Directive 019: ERCB Compliance Assurance—Enforcement
• Replacement of Appendix 13: Nonproducer Licensee Netback Calculation Form and Appendix 14: Producer Licensee Netback Calculation Form with a single renumbered Appendix 10: Licensee Netback Form, as the calculation and requirements are the same for both licensee types
• Removal of the transitional requirements for submission of cost estimates based on site-specific liability assessments for gas plants, as all time requirements have passed
• Minor wording changes to ensure consistency with Directive 075 and Directive 024

Changes to Directive 024: Large Facility Liability Management Program

• Clarification of the ERCB’s combined LMR assessment, which now includes assets and liabilities included in the OWL Program
• Update of Appendix 3: Liability Management Rating Formula to reflect the ERCB’s expanded liability assessment
• Minor wording changes to ensure consistency with Directive 075 and Directive 006

Any inquires regarding these directives should be directed to David Hardie at 403-297–3697 or Howard Fedorak at 403-297–8167.

<original signed by>

Dwayne Waisman, B.E.S., C.E.T.
Executive Manager
Field Surveillance and Operations Branch