Short Title

Marginal note:Short title

1 This Act may be cited as the Canada Oil and Gas Operations Act.

Interpretation

Marginal note:Definitions

2 In this Act,

Accord Acts

lois de mise en oeuvre

Accord Acts means

• (a) the Canada-Newfoundland Atlantic Accord Implementation Act, and

• (b) the Canada-Nova Scotia Offshore Petroleum Resources Accord Implementation Act; (lois de mise en oeuvre)

Chief Conservation Officer

délégué à l’exploitation

Chief Conservation Officer means the person designated as the Chief Conservation Officer under section 3.1; (délégué à l’exploitation)

Chief Safety Officer

délégué à la sécurité

Chief Safety Officer means the person designated as the Chief Safety Officer under section 3.1; (délégué à la sécurité)

Committee

Comité

Committee means the Oil and Gas Committee established by section 6; (Comité)

federal Ministers

ministres fédéraux

federal Ministers means the Minister of Natural Resources and the Minister of Indian Affairs and Northern Development; (ministres fédéraux)

field

champ

field

• (a) means a general surface area underlain or appearing to be underlain by one or more pools, and

• (b) includes the subsurface regions vertically beneath the general surface area referred to in paragraph (a); (champ)

former regulations

anciens règlements

former regulations means the Canada Oil and Gas Land Regulations made pursuant to the Public Lands Grants Act and the Territorial Lands Act and includes orders made pursuant to those Regulations; (anciens règlements)

gas

gaz

gas means natural gas and includes all substances, other than oil, that are produced in association with natural gas; (gaz)

lease

concession

lease means an oil and gas lease issued pursuant to regulations made in accordance with the Territorial Lands Act and the Public Lands Grants Act and includes a production licence granted under the Canada Oil and Gas Act; (concession)

Minister

ministre

Minister means

• (a) in relation to any area in respect of which the Minister of Indian Affairs and Northern Development has administrative responsibility for the natural resources therein, the Minister of Indian Affairs and Northern Development, and

• (b) in relation to any area in respect of which the Minister of Natural Resources has administrative responsibility for the natural resources therein, the Minister of Natural Resources; (ministre)

oil

pétrole

oil means

• (a) crude petroleum regardless of gravity produced at a well-head in liquid form, and

• (b) any other hydrocarbons, except coal and gas, including hydrocarbons that may be extracted or recovered from surface or subsurface deposits, including deposits of oil sand, bitumen, bituminous sand, oil shale and other types of deposits; (pétrole)

permit

permis

permit means an exploratory oil and gas permit issued pursuant to regulations made in accordance with the Territorial Lands Act and the Public Lands Grants Act and includes an exploration agreement entered into under the Canada Oil and Gas Act or the former regulations; (permis)

pipeline

pipeline

pipeline means any pipe or any system or arrangement of pipes by which oil, gas or water incidental to the drilling for or production of oil or gas is conveyed from any well-head or other place at which it is produced to any other place, or from any place where it is stored, processed or treated to any other place, and includes all property of any kind used for the purpose of, or in connection with or incidental to, the operation of a pipeline in the gathering, transporting, handling and delivery of oil or gas, and, without restricting the generality of the foregoing, includes offshore installations or vessels, tanks, surface reservoirs, pumps, racks, storage and loading facilities, compressors, compressor stations, pressure measuring and controlling equipment and fixtures, flow controlling and measuring equipment and fixtures, metering equipment and fixtures, and heating, cooling and dehydrating equipment and fixtures, but does not include any pipe or any system or arrangement of pipes that constitutes a distribution system for the distribution of gas to ultimate consumers; (pipeline)

pool

gisement

pool means a natural underground reservoir containing or appearing to contain an accumulation of oil or gas or both oil and gas and being separated or appearing to be separated from any other such accumulation; (gisement)

prescribed

Version anglaise seulement

prescribed means prescribed by regulations made by the Governor in Council; (Version anglaise seulement)

Provincial Minister

ministre provincial

Provincial Minister means the Provincial Minister within the meaning of either of the Accord Acts; (ministre provincial)

well

puits

well means any opening in the ground, not being a seismic shot hole, that is made, to be made or is in the process of being made, by drilling, boring or other method,

• (a) for the production of oil or gas,

• (b) for the purpose of searching for or obtaining oil or gas,

• (c) for the purpose of obtaining water to inject into an underground formation,

• (d) for the purpose of injecting gas, air, water or other substance into an underground formation, or

• (e) for any purpose, if made through sedimentary rocks to a depth of at least one hundred and fifty metres. (puits)

Purpose

Marginal note:Purpose

2.1 The purpose of this Act is to promote, in respect of the exploration for and exploitation of oil and gas,

• (a) safety, particularly by encouraging persons exploring for and exploiting oil or gas to maintain a prudent regime for achieving safety;

• (b) the protection of the environment;

• (c) the conservation of oil and gas resources; and

• (d) joint production arrangements.

Application

Marginal note:Application

3 This Act applies in respect of the exploration and drilling for and the production, conservation, processing and transportation of oil and gas in

• (a) the Northwest Territories, Nunavut and Sable Island, and

• (b) submarine areas, not within a province, in the internal waters of Canada, the territorial sea of Canada or the continental shelf of Canada,

other than of oil and gas in the adjoining area, as defined in section 2 of the Yukon Act.

Chief Safety Officer and Chief Conservation Officer

Marginal note:Designation

3.1 The National Energy Board may, for the purposes of this Act, designate a member, officer or employee of the Board to be the Chief Safety Officer and the same or another member, officer or employee of the Board to be the Chief Conservation Officer.

Statutory Instruments Act

Marginal note:Orders

3.2 For greater certainty, an order made by a safety officer, the Chief Safety Officer, a conservation officer, the Chief Conservation Officer, the Committee or the National Energy Board is not a statutory instrument as defined in the Statutory Instruments Act.

Prohibition

Marginal note:Prohibition

4 No person shall carry on any work or activity related to the exploration for or the production of oil or gas in any area to which this Act applies unless

• (a) that person is the holder of an operating licence issued under paragraph 5(1)(a);

• (b) that person is the holder of an authorization issued, before the commencement of operations, under paragraph 5(1)(b) for each such work or activity; and

• (c) where it is required, that person is authorized or entitled to carry on business in the place where that person proposes to carry on the work or activity.

Delegation

Marginal note:Delegation

4.1 The National Energy Board may delegate any of its powers under section 5, 5.02, 5.03, 5.11, 5.12 or 27 to any person, and the person shall exercise those powers in accordance with the terms of the delegation.

Licences and Authorizations

Marginal note:Licences and authorizations

• 5 (1) On application made in the manner prescribed by the regulations, the National Energy Board

  • (a) may issue an operating licence, renewable annually, subject to such requirements as he determines and to such fees and deposits as are prescribed by the regulations; and

  • (b) may authorize in writing each work or activity proposed to be carried on, subject to such approvals, requirements and deposits as he determines or as may be prescribed by the regulations, including

    • (i) requirements relating to liability for loss, damage, costs or expenses,

    • (ii) requirements for the carrying out of environmental programs or studies, and

    • (iii) requirements for the payment of expenses incurred by the National Energy Board in approving the design, construction and costs of production facilities and production platforms as those terms are defined in the regulations.

• Marginal note:Employment of Canadians and use of Canadian goods and services

  (2) Before authorizing any work or activity under paragraph (1)(b), the National Energy Board shall require the submission of a plan satisfactory to the National Energy Board for the employment of Canadians and for providing Canadian manufacturers, consultants, contractors and service companies with a full and fair opportunity to participate on a competitive basis in the supply of goods and services used in that work or activity.

• Marginal note:Affirmative action programs

  (3) The National Energy Board may require that any plan submitted pursuant to subsection (2) include provisions to ensure that disadvantaged individuals or groups have access to training and employment opportunities and to enable those individuals or groups or corporations owned or cooperatives operated by them to participate in the supply of goods and services in the work program for which the plan was submitted.

• Marginal note:Requirements for authorization

  (4) An authorization shall be subject to such approvals as the National Energy Board determines or as may be granted in accordance with the regulations and such requirements and deposits as the National Energy Board determines or as may be prescribed, including

  • (a) requirements relating to liability for loss, damage, costs or expenses;

  • (b) requirements for the carrying out of environmental programs or studies; and

  • (c) requirements for the payment of expenses incurred by the National Energy Board in approving the design, construction and operation of production facilities and production platforms as those terms are defined in the regulations.

• Marginal note:Rights of licence holders

  (5) Subject to this Act and the regulations, and to section 52 of the Canada Oil and Gas Act and the regulations made thereunder for the purposes of that section, the holder of an operating licence may, for the purpose of exploring for oil or gas, enter on and use the surface of the lands in any area in which this Act applies in order to carry on the work or activity authorized under paragraph (1)(b).

• Marginal note:Variation

  (6) The terms of an operating licence or authorization may be varied under section 28.3 of the National Energy Board Act.

Marginal note:Right of entry

• 5.01 (1) Subject to subsection (2), any person may, for the purpose of exploring for or exploiting oil or gas, enter on and use the surface of the land in any area in which this Act applies in order to carry on a work or activity authorized under paragraph 5(1)(b).

• Marginal note:Restriction

  (2) Where a person occupies land in an area to which this Act applies under a lawful right or title, other than an authorization under paragraph 5(1)(b) or an interest as defined in section 2 of the Canada Petroleum Resources Act, no person may enter on or use the surface of that land for a purpose mentioned in subsection (1) without the consent of the occupier or, where consent has been refused, except in accordance with the terms and conditions of

  • (a) in the case of land within Nunavut, a decision of the Nunavut Surface Rights Tribunal made in accordance with the Nunavut Waters and Nunavut Surface Rights Tribunal Act; and

  • (b) in any other case, a decision of an arbitrator made in accordance with the regulations.

• Marginal note:Exception

  (3) Subsections (1) and (2) do not apply in respect of Inuit-owned land as defined in subsection 2(1) of the Nunavut Waters and Nunavut Surface Rights Tribunal Act.

• (4) [Repealed, 1998, c. 5, s. 12]

Safety of Works and Activities

Marginal note:Safety

5.02 The National Energy Board shall, before issuing an authorization for a work or activity referred to in paragraph 5(1)(b), consider the safety of the work or activity by reviewing, in consultation with the Chief Safety Officer, the system as a whole and its components, including its installations, equipment, operating procedures and personnel.

Financial Responsibility

Marginal note:Compliance with subsection 27(1)

5.03 The National Energy Board shall, before issuing an authorization for a work or activity referred to in paragraph 5(1)(b), ensure that the applicant has complied with the requirements of subsection 27(1) in respect of that work or activity.

5.1 [Not in force]

Declarations

Marginal note:Declaration by applicant

• 5.11 (1) Subject to subsection (2), no authorization under paragraph 5(1)(b) shall be issued unless the National Energy Board has received, from the applicant for the authorization, a declaration in the form fixed by the National Energy Board that states that

  • (a) the equipment and installations that are to be used in the work or activity to be authorized are fit for the purposes for which they are to be used, the operating procedures relating to them are appropriate for those uses, and the personnel who are to be employed in connection with them are qualified and competent for their employment; and

  • (b) the applicant shall ensure, so long as the work or activity that is authorized continues, that the equipment and installations continue to be fit for the purposes for which they are used, the operating procedures continue to be appropriate for those uses, and the personnel continue to be so qualified and competent.

• Marginal note:Declaration by owner

  (2) The National Energy Board may accept, in respect of equipment that is to be used in the work or activity to be authorized, a declaration from the owner of the equipment in lieu of a declaration from the applicant for the authorization, and such a declaration shall be in a form fixed by the National Energy Board and shall state that

  • (a) the equipment is fit for the purpose for which it is to be used, the operating procedures relating to it are appropriate for that use, and the personnel who are to be employed by the owner in connection with it are qualified and competent for their employment; and

  • (b) the owner shall ensure that, so long as the equipment is used in the work or activity that is authorized, that the equipment continues to be fit for the purpose for which it is used, the operating procedures continue to be appropriate for that use, and the personnel continue to be so qualified and competent.

• Marginal note:Changes

  (3) Where the equipment, an installation, the operating procedures or any of the personnel specified in the declaration changes and no longer conforms to the declaration, the holder of the authorization shall provide the National Energy Board with a new declaration as soon as possible after the change occurs.

• Marginal note:Immunity

  (4) The National Energy Board or any delegate of the National Energy Board is not liable to any person by reason only of having issued an authorization in reliance on a declaration made under this section.

Certificates

Marginal note:Certificate

• 5.12 (1) No authorization under paragraph 5(1)(b) shall be issued with respect to any prescribed equipment or installation, or any equipment or installation of a prescribed class, unless the National Energy Board has received, from the applicant for the authorization, a certificate issued by a certifying authority in the form fixed by the National Energy Board.

• Marginal note:Continuing obligation

  (2) The holder of an authorization shall ensure that the certificate referred to in subsection (1) remains in force for so long as the equipment or installation to which the certificate relates is used in the work or activity in respect of which the authorization is issued.

• Marginal note:Contents of certificate

  (3) A certificate referred to in subsection (1) shall state that the equipment or installation in question

  • (a) is fit for the purposes for which it is to be used and may be operated safely without posing a threat to persons or to the environment in the location and for the time set out in the certificate; and

  • (b) is in conformity with all of the requirements and conditions that are imposed for the purposes of this section by subsection 5(4), whether they are imposed by regulation or by the National Energy Board.

• Marginal note:Validity of certificate

  (4) A certificate referred to in subsection (1) is not valid if the certifying authority

  • (a) has not complied with any prescribed procedure or any procedure that the National Energy Board may establish; or

  • (b) is a person or an organization that has participated in the design, construction or installation of the equipment or installation in respect of which the certificate is issued, to any extent greater than that prescribed.

• Marginal note:Access

  (5) An applicant shall permit the certifying authority to have access to the equipment and installation in respect of which the certificate is required and to any information that relates to them.

• Marginal note:Definition of “certifying authority”

  (6) For the purposes of this section, certifying authority has the meaning assigned by the regulations.

• Marginal note:Immunity

  (7) The National Energy Board or any delegate of the National Energy Board is not liable to any person by reason only of having issued an authorization in reliance on a certificate issued under this section.

5.2 and 5.3 [Not in force]

Oil and Gas Administration Advisory Council

Marginal note:Council established

• 5.4 (1) There is established a council, to be known as the Oil and Gas Administration Advisory Council, consisting of the following six members, namely, the Chairman of the Canada — Nova Scotia Offshore Petroleum Board, the Chairman of the Canada — Newfoundland Offshore Petroleum Board, the Chairman of the National Energy Board, a person designated jointly by the federal Ministers, a person designated by one of the Provincial Ministers and a person designated by the other Provincial Minister.

• Marginal note:Duty of Council

  (2) The Council shall promote consistency and improvement in the administration of the regulatory regime in force under this Act and Part III of the Accord Acts and provide advice respecting those matters to the federal Ministers, the Provincial Ministers and the Boards referred to in subsection (1).

Offshore Oil and Gas Training Standards Advisory Board

Marginal note:Board established

• 5.5 (1) The federal Ministers, with the approval of the Provincial Ministers, may establish a board, to be known as the Offshore Oil and Gas Training Standards Advisory Board, consisting of not more than nine members, each of whom has special knowledge respecting offshore oil and gas operations or respecting training for such operations.

• Marginal note:Purpose

  (2) The Board shall inquire as to existing training standards and, where necessary, develop or encourage the development of training standards and shall recommend the adoption of training standards to the federal and Provincial Ministers and to the Boards referred to in subsection 5.4(1).

Extended Formation Flow Tests

Marginal note:Title

• 5.6 (1) Subject to subsection (2), title to oil and gas produced during an extended formation flow test vests in the person who conducts the test in accordance with an authorization under section 5, with every approval and requirement subject to which such an authorization is issued and with any applicable regulation, whether or not the person has a production licence issued under the Canada Petroleum Resources Act.

• Marginal note:Conditions

  (2) Title to oil and gas referred to in subsection (1) is conditional on compliance with the terms of the authorization, approval or regulation, including the payment of royalties or other payment in lieu of royalties.

• Marginal note:Limitation

  (3) This section applies only in respect of an extended formation flow test that provides significant information for determining the best recovery system for a reservoir or for determining the limits of a reservoir or the productivity of a well producing oil or gas from a reservoir and that does not adversely affect the ultimate recovery from a reservoir.

Oil and Gas Committee

Constitution

Marginal note:Oil and Gas Committee

• 6 (1) The Governor in Council may establish a committee to be known as the Oil and Gas Committee, which shall consist of five members, not more than three of whom shall be employees in the public service of Canada.

• Marginal note:Ministerial direction

  (2) The Committee shall be under the direction of

  • (a) the Minister of Indian Affairs and Northern Development in relation to any area in respect of which that Minister has administrative responsibility for the natural resources therein; and

  • (b) the Minister of Natural Resources in relation to any area in respect of which that Minister has administrative responsibility for the natural resources therein.

• Marginal note:Appointment of members and chairman

  (3) The members of the Committee shall be appointed by the Governor in Council to hold office for a term of three years, and one member shall be designated as chairman for such term as may be fixed by the Governor in Council.

• Marginal note:Re-appointment permitted

  (4) A retiring chairman or retiring member may be re-appointed to the Committee in the same or another capacity.

Marginal note:Qualification of members

• 7 (1) The Governor in Council shall appoint as members of the Committee at least two persons who appear to the Governor in Council to have specialized, expert or technical knowledge of oil and gas.

• Marginal note:Departmental personnel and assistance

  (2) Persons employed in any division, branch or bureau of the Department of Indian Affairs and Northern Development, or the Department of Natural Resources, that is designated by order of the Minister concerned as the division, branch or bureau charged with the day-to-day administration and management of oil and gas resources for the Department, are not eligible to be members of the Committee, but the Ministers concerned may each designate one officer from any such division, branch or bureau who shall act as secretaries to the Committee.

• Marginal note:Staff

  (3) The Minister of Indian Affairs and Northern Development and the Minister of Natural Resources shall provide the Committee with such officers, clerks and employees as may be necessary for the proper conduct of the affairs of the Committee, and may provide the Committee with such professional or technical assistance for temporary periods or for specific work as the Committee may request, but no such assistance shall be provided otherwise than from the public service of Canada except with the approval of the Treasury Board.

• Marginal note:Remuneration

  (4) The members of the Committee who are not employees in the public service of Canada shall be paid such remuneration as may be authorized by the Governor in Council.

• Marginal note:Expenses

  (5) The members of the Committee are entitled to be paid reasonable travel and living expenses while absent from their ordinary place of residence in the course of their duties.

Marginal note:Interest in oil and gas properties

8 No member of the Committee shall have a pecuniary interest of any description, directly or indirectly, in any property in oil or gas to which this Act applies or own shares in any company engaged in any phase of the oil or gas industry in Canada in an amount in excess of five per cent of the issued shares thereof, and no member who owns any shares of any company engaged in any phase of the oil or gas industry in Canada shall vote when a question affecting such a company is before the Committee.

Marginal note:Quorum

• 9 (1) A majority of the members, including one member who is not an employee in the public service, constitutes a quorum of the Committee.

• Marginal note:Powers of Committee

  (2) The Committee may make general rules regulating its practice and procedure and the places and times of its sittings.

Jurisdiction and Powers

Marginal note:Jurisdiction

• 10 (1) Where, under this Act, the Committee is charged with a duty to hold an inquiry or to hear an appeal, the Committee has full jurisdiction to inquire into, hear and determine the matter of the inquiry or appeal and to make any order or give any direction that pursuant to this Act the Committee is authorized to make or give or with respect to any matter, act or thing that by this Act may be prohibited or approved by the Committee or required by the Committee to be done.

• Marginal note:Powers of Committee

  (2) For the purpose of any inquiry, hearing or appeal or the making of any order pursuant to this Act, the Committee has, regarding the attendance, swearing and examination of witnesses, the production and inspection of documents, the entry on and inspection of property, the enforcement of its orders and regarding other matters necessary or proper for the due exercise of its jurisdiction pursuant to this Act, all such powers, rights and privileges as are vested in a superior court of record.

• Marginal note:Finding of fact conclusive

  (3) The finding or determination of the Committee on any question of fact within its jurisdiction is binding and conclusive.

Marginal note:Deputing member to hold inquiry

• 11 (1) The Committee may authorize and depute any member thereof to inquire into such matter before the Committee as may be directed by the Committee and to report the evidence and findings, if any, thereon to the Committee, and when the report is made to the Committee, it may be adopted as a finding of the Committee or otherwise dealt with as the Committee considers advisable.

• Marginal note:Powers of deputed member

  (2) Where an inquiry is held by a member under subsection (1), the member has all the powers of the Committee for the purpose of taking evidence or acquiring information for the purposes of the report to the Committee.

Marginal note:Advisory functions

12 The Minister may at any time refer to the Committee for a report or recommendation any question, matter or thing arising under this Act or relating to the conservation, production, storage, processing or transportation of oil or gas.

Enforcement

Marginal note:Enforcement of Committee orders

• 13 (1) Any order made by the Committee may, for the purpose of enforcement thereof, be made an order of the Federal Court and shall be enforced in like manner as any order of that Court.

• Marginal note:Procedure for enforcement

  (2) To make an order of the Committee an order of the Federal Court, the usual practice and procedure of that Court in such matters may be followed or in lieu thereof the secretary or another officer of the Committee may file in the Registry of the Federal Court a certified copy of the order and thereupon the order becomes an order of the Federal Court.

• Marginal note:When order rescinded or replaced

  (3) When an order of the Committee has been made an order of the Federal Court, any order of the Committee, or of the Governor in Council under section 51, rescinding or replacing the first mentioned order of the Committee, shall be deemed to cancel the order of the Court and may in like manner be made an order of the Court.

PART IRegulation of Operations

Regulations

Marginal note:Regulatory power of Governor in Council

14 The Governor in Council may make regulations respecting the exploration and drilling for and the production and conservation, processing and transportation of oil and gas and, in particular, but without restricting the generality of the foregoing, may make regulations

• (a) respecting the licensing, drilling, spacing, locating, completing, producing, equipping, suspending and abandoning of wells;

• (b) respecting the regulating and controlling of the rate at which oil, gas or water may be produced from any well, pool or field;

• (c) respecting the reporting of information and data obtained in the course of the exploration for, the drilling for and the production of oil and gas and the keeping of records and measurements of all oil, gas and water produced;

• (d) concerning the safety and the inspection of all operations conducted in connection with the exploration and drilling for and the production of oil and gas and prescribing the measures to be taken to ensure the safety of those operations;

• (e) requiring and prescribing the making of tests, logs, analyses and surveys, and the taking of samples;

• (f) respecting the designation of fields and pools;

• (g) prescribing the methods to be used for the measurement of oil, gas, water and other substances obtained from wells;

• (h) respecting the repressurizing, cycling and pressure maintenance in any field or pool;

• (i) authorizing the Minister, or such other person as the Governor in Council deems suitable, to exercise such powers and perform such duties as may be necessary for the management and control of oil or gas production, and authorizing the making of such orders as may be specified;

• (j) authorizing the Minister, or such other person as the Governor in Council deems suitable, to exercise such powers and perform such duties as may be necessary for the removal of oil or gas from any area referred to in section 3, and authorizing the making of such orders as may be specified;

• (k) authorizing the Minister, or such other person as the Governor in Council deems suitable, to exercise such powers and perform such duties as may be necessary for the construction of pipeline within any area referred to in section 3, and authorizing the making of such orders as may be specified;

• (l) for the prevention of waste within the meaning of this Act;

• (m) prescribing the conditions under which drilling operations may be carried out in water-covered areas and any special measures to be taken for those operations;

• (n) prescribing the measures to be adopted to confine any oil, gas or water encountered during drilling operations to the original stratum and to protect the contents of the stratum from infiltration, inundation and migration;

• (o) prescribing the minimum acceptable standards for the methods, tools, equipment and materials to be used in drilling, completing, operating, suspending and abandoning any well;

• (p) prescribing minimum acceptable standards for the construction, alteration or use of any works, fittings, machinery, plant and appliances used for the development, production, transmission, distribution, measurement, storage or handling of any oil or gas;

• (q) prescribing the measures necessary to prevent pollution of air, land or water as a result of the exploration and drilling for, or the production, storage, transportation, distribution, measurement, processing or handling of, any oil or gas or any substance obtained from or associated with oil or gas;

• (r) prescribing measures necessary for the disposal or gathering, and injection into an underground formation, of water, gas, oil or other substances produced from a pool or oil deposit;

• (s) prescribing the manner of applying for operating licences under section 5 and the fees and deposits required with those applications;

• (t) prescribing approvals, requirements and deposits applicable to authorizations under section 5 to carry on work or activity in any area to which this Act applies and applicable to that work or activity;

• (u) prescribing the manner in which spills shall be reported under subsection 25(2);

• (v) prescribing limits of liability in respect of any area for the purposes of section 26 or the manner of determining those limits; and

• (w) prescribing anything that is to be prescribed for the purposes of section 27.

Marginal note:Publication of proposed regulations

• 15 (1) Subject to subsection (2), a copy of each regulation that the Governor in Council proposes to make under this Act shall be published in the Canada Gazette and a reasonable opportunity shall be afforded to interested persons to make representations to the Minister with respect thereto.

• Marginal note:Single publication required

  (2) No proposed regulation need be published more than once under subsection (1) whether or not it is altered or amended after that publication as a result of representations made by interested persons as provided in that subsection.

Marginal note:Equivalent standards and exemptions

• 16 (1) Subject to subsection (2), the Chief Safety Officer and Chief Conservation Officer may

  • (a) authorize the use of equipment, methods, measures or standards in lieu of any required by regulation, where those Officers are satisfied that the use of that other equipment and those other methods, measures or standards would provide a level of safety, protection of the environment and conservation equivalent to that provided by compliance with the regulations; or

  • (b) grant an exemption from any regulatory requirement in respect of equipment, methods, measures or standards, where those Officers are satisfied with the level of safety, protection of the environment and conservation that will be achieved without compliance with that requirement.

• Marginal note:One officer authorizations

  (2) The Chief Safety Officer alone may exercise the powers referred to in paragraph (1)(a) or (b) if the regulatory requirement referred to in that paragraph does not relate to protection of the environment or conservation, and the Chief Conservation Officer alone may exercise those powers if that regulatory requirement does not relate to safety.

• Marginal note:No contravention

  (3) No person contravenes the regulations if that person acts in compliance with an authorization or exemption under subsection (1) or (2).

Marginal note:Emergency situations

• 16.1 (1) In a prescribed emergency situation, where the Minister is of the opinion that there is a conflict between the provisions of this Act or the regulations and the provisions of another federal law, other than provisions implementing an international treaty or convention to which Canada is a party, and that compliance with that law and this Act or the regulations is likely to create a situation that would seriously endanger the safety of persons or equipment, the Minister may issue a written declaration to that effect.

• Marginal note:Contents of declaration

  (2) A declaration made under subsection (1) must

  • (a) describe the emergency situation;

  • (b) specify the provisions that conflict and describe the nature of the conflict;

  • (c) describe the consultation that has taken place pursuant to subsection (4);

  • (d) describe the geographical area, person, work or activity affected by the declaration; and

  • (e) specify the time the declaration comes into effect.

• Marginal note:Effect of declaration

  (3) From the time specified in a declaration made under subsection (1), the provisions of this Act or the regulations specified therein prevail, in respect of the geographical area, person, work or activity described therein, over the provisions of the other federal law specified therein until such time as the Minister or the Governor in Council revokes the declaration.

• Marginal note:Consultation

  (4) Before the Minister makes or revokes a declaration under this section, the minister responsible for the federal law that, in the Minister’s opinion, is in conflict with this Act or the regulations shall be consulted.

• Marginal note:Submission for revocation

  (5) The minister responsible for a federal law that is specified in a declaration made under subsection (1) may submit the declaration to the Governor in Council for revocation.

• Marginal note:Not a statutory instrument

  (6) A declaration or a revocation made under this section is not a regulation within the meaning and for the purposes of the Statutory Instruments Act, but shall be published in the Canada Gazette within seven days after it is made.

Production Orders

Marginal note:Production orders

• 17 (1) Where the Chief Conservation Officer, on reasonable grounds, is of the opinion that, with respect to an interest in any area to which this Act applies, the capability exists to commence, continue or increase production of oil or gas and that a production order would stop waste, the Chief Conservation Officer may order the commencement, continuation or increase of production of oil or gas at such rates and in such quantities as are specified in the order.

• Marginal note:Ceasing production

  (2) Where the Chief Conservation Officer, on reasonable grounds, is of the opinion that an order under this section would stop waste, the Chief Conservation Officer may order a decrease or the cessation or suspension of production of oil or gas for any period specified in the order.

• Marginal note:Investigation and appeal

  (3) Subsections 19(2) to (4) and section 21 apply, with such modifications as the circumstances require, to an order under subsection (1) or (2) as if it were an order under subsection 19(1).

• Marginal note:Access to files and records

  (4) A person subject to an order under subsection (1) or (2) shall, on request, afford the Chief Conservation Officer or a person designated by the Chief Conservation Officer access to his premises, files and records for all reasonable purposes related to the order.

Waste

Marginal note:Waste prohibited

• 18 (1) Subject to section 63, any person who commits waste is guilty of an offence under this Act, but a prosecution may be instituted for such an offence only with the consent of the National Energy Board.

• Marginal note:Definition of “waste”

  (2) In this Act, waste, in addition to its ordinary meaning, means waste as understood in the oil and gas industry and in particular, but without limiting the generality of the foregoing, includes

  • (a) the inefficient or excessive use or dissipation of reservoir energy;

  • (b) the locating, spacing or drilling of a well within a field or pool or within part of a field or pool or the operating of any well that, having regard to sound engineering and economic principles, results or tends to result in a reduction in the quantity of oil or gas ultimately recoverable from a pool;

  • (c) the drilling, equipping, completing, operating or producing of any well in a manner that causes or is likely to cause the unnecessary or excessive loss or destruction of oil or gas after removal from the reservoir;

  • (d) the inefficient storage of oil or gas above ground or underground;

  • (e) the production of oil or gas in excess of available storage, transportation or marketing facilities;

  • (f) the escape or flaring of gas that could be economically recovered and processed or economically injected into an underground reservoir; or

  • (g) the failure to use suitable artificial, secondary or supplementary recovery methods in a pool when it appears that those methods would result in increasing the quantity of oil or gas, or both, ultimately recoverable under sound engineering and economic principles.

Marginal note:Prevention of waste

• 19 (1) Where the Chief Conservation Officer, on reasonable grounds, is of the opinion that waste, other than waste as defined in paragraph 18(2)(f) or (g), is being committed, the Chief Conservation Officer may, subject to subsection (2), order that all operations giving rise to the waste cease until he is satisfied that the waste has stopped.

• Marginal note:Investigation

  (2) Before making any order under subsection (1), the Chief Conservation Officer shall hold an investigation at which interested persons shall be given an opportunity to be heard.

• Marginal note:Peremptory order

  (3) Notwithstanding subsection (2), the Chief Conservation Officer may, without an investigation, make an order under this section requiring all operations to be shut down if in the opinion of the Chief Conservation Officer it is necessary to do so to prevent damage to persons or property or to protect the environment, but as soon as possible after making such an order and in any event within fifteen days thereafter, the Chief Conservation Officer shall hold an investigation at which interested persons shall be given an opportunity to be heard.

• Marginal note:Order after inquiry

  (4) At the conclusion of an investigation under subsection (3), the Chief Conservation Officer may set aside, vary or confirm the order made or make a new order.

Marginal note:Taking over management

• 20 (1) For the purpose of giving effect to an order made under section 19, the Chief Conservation Officer may authorize and direct such persons as may be necessary to enter the place where the operations giving rise to the waste are being carried out and take over the management and control of those operations and any works connected therewith.

• Marginal note:Controlling operations and costs thereof

  (2) A person authorized under subsection (1) to take over the management and control of operations shall manage and control the operations and do all things necessary to stop the waste, and the cost thereof shall be borne by the person who holds the permit or the lease and until paid constitutes a debt recoverable by action in any court of competent jurisdiction as a debt due to Her Majesty in right of Canada.

Marginal note:Appeal to the National Energy Board

21 A person aggrieved by an order of the Chief Conservation Officer under section 17 or 19 after an investigation under subsection 19(2) or (3) may appeal to the National Energy Board to have the order reviewed under section 28.4 of the National Energy Board Act.

Marginal note:Application for show cause order in respect of waste

22 When the Chief Conservation Officer, on reasonable grounds, is of the opinion that waste, as defined in paragraph 18(2)(f) or (g), is occurring in the recovery of oil or gas from a pool, that Officer may apply to the National Energy Board for an order under section 28.5 of the National Energy Board Act requiring the operators within the pool to show cause why the Board should not make a direction in respect of the waste.

23 [Repealed, 1994, c. 10, s. 8]

Spills and Debris

Marginal note:Definition of “spill”

• 24 (1) In sections 25 to 28, spill means a discharge, emission or escape of oil or gas, other than one that is authorized pursuant to the regulations or any other federal law or that constitutes a discharge from a ship to which Part XV of the Canada Shipping Act or Part 6 of the Marine Liability Act applies.

• Marginal note:Definition of “debris”

  (2) In sections 26 and 28, debris means any installation or structure on the seabed of those submarine areas described in paragraph 3(b) that was put in place in the course of any work or activity authorized pursuant to paragraph 5(1)(b) and that has been abandoned without the authorization of the Chief Conservation Officer or any material that has broken away or has been jettisoned, or that has been displaced from the seabed, in the course of that work or activity.

• Marginal note:Definition of “actual loss or damage”

  (3) In section 26, actual loss or damage includes loss of income, including future income, and, with respect to any aboriginal peoples of Canada, includes loss of hunting, fishing and gathering opportunities.

• Marginal note:Immunity

  (4) Her Majesty in right of Canada incurs no liability whatever to any person arising out of the authorization by regulations made by the Governor in Council of any discharge, emission or escape of oil or gas.

Marginal note:Spills prohibited

• 25 (1) No person shall cause or permit a spill on or from any area to which this Act applies.

• Marginal note:Duty to report spills

  (2) Where a spill occurs in any area to which this Act applies, any person who at the time of the spill is carrying on any work or activity related to the exploration for or development or production of oil or gas in the area of the spill shall, in the manner prescribed by the regulations, report the spill to the Chief Conservation Officer.

• Marginal note:Duty to take reasonable measures

  (3) Every person required to report a spill under subsection (2) shall, as soon as possible, take all reasonable measures consistent with safety and the protection of the environment to prevent any further spill, to repair or remedy any condition resulting from the spill and to reduce or mitigate any danger to life, health, property or the environment that results or may reasonably be expected to result from the spill.

• Marginal note:Taking emergency action

  (4) Where the Chief Conservation Officer, on reasonable grounds, is satisfied that

  • (a) a spill has occurred in any area to which this Act applies and immediate action is necessary in order to effect any reasonable measures referred to in subsection (3), and

  • (b) such action is not being taken or will not be taken under subsection (3),

  he may take such action or direct that it be taken by such persons as may be necessary.

• Marginal note:Taking over management

  (5) For the purposes of subsection (4), the Chief Conservation Officer may authorize and direct such persons as may be necessary to enter the place where the spill has occurred and take over the management and control of any work or activity thereat.

• Marginal note:Managing work or activity

  (6) A person authorized and directed to take over the management and control of any work or activity under subsection (5) shall manage and control that work or activity and take all reasonable measures in relation to the spill that are referred to in subsection (3).

• Marginal note:Costs

  (7) Any costs incurred under subsection (6) shall be borne by the person who obtained an authorization under paragraph 5(1)(b) in respect of the work or activity from which the spill emanated and until paid constitute a debt recoverable by action in any court of competent jurisdiction as a debt due to Her Majesty in right of Canada.

• Marginal note:Recovery of costs

  (7.1) Where a person, other than a person referred to in subsection (7), takes action pursuant to subsection (3) or (4), the person may recover from Her Majesty in right of Canada the costs and expenses reasonably incurred by that person in taking the action.

• Marginal note:Appeal

  (8) A person aggrieved by any action or measure taken or authorized or directed to be taken under subsections (4) to (6) may appeal to the National Energy Board to have the order reviewed under section 28.4 of the National Energy Board Act.

• Marginal note:Personal liability

  (9) No person required, directed or authorized to act under this section or section 28.4 of the National Energy Board Act is personally liable, either civilly or criminally, in respect of any act or omission in the course of complying with this section unless it is shown that the person did not act reasonably in the circumstances.

Marginal note:Recovery of loss, damage, costs or expenses

• 26 (1) Where any discharge, emission or escape of oil or gas that is authorized by regulation, or any spill, occurs in any area to which this Act applies,

  • (a) the person who is required to obtain an authorization under paragraph 5(1)(b) in respect of the work or activity from which the spill or authorized discharge, emission or escape of oil or gas emanated is liable, without proof of fault or negligence, up to any prescribed limit of liability, for

    • (i) all actual loss or damage incurred by any person as a result of the spill or the authorized discharge, emission or escape of oil or gas, and

    • (ii) the costs and expenses reasonably incurred by Her Majesty in right of Canada or any other person in taking any action or measure in relation to the spill or the authorized discharge, emission or escape of oil or gas; and

  • (b) all persons to whose fault or negligence the spill or the authorized discharge, emission or escape of oil or gas is attributable or who are by law responsible for others to whose fault or negligence the spill or the authorized discharge, emission or escape of oil or gas is attributable are jointly and severally liable, to the extent determined according to the degree of the fault or negligence proved against them, for all actual loss or damage incurred by any person as a result of the spill or the authorized discharge, emission or escape of oil or gas.

• Marginal note:Recovery of loss, damage, costs or expenses caused by debris

  (2) Where any person incurs actual loss or damage as a result of debris or Her Majesty in right of Canada reasonably incurs any costs or expenses in taking any remedial action in relation to debris,

  • (a) the person who is required to obtain an authorization under paragraph 5(1)(b) in respect of the work or activity from which the debris originated is liable, without proof of fault or negligence, up to any prescribed limit of liability, for all such actual loss or damage and all such costs or expenses; and

  • (b) all persons to whose fault or negligence the debris is attributable or who are by law responsible for others to whose fault or negligence the debris is attributable are jointly and severally liable, to the extent determined according to the degree of the fault or negligence proved against them, for all such actual loss or damage and all such costs or expenses.

• Marginal note:No double liability

  (2.1) Where subsection (1) or (2) applies, no person is liable for more than the greater of the prescribed limit referred to in paragraph (1)(a) or (2)(a), as the case may be, and the amount for which the person would be liable under any other law for the same occurrence.

• Marginal note:Claims

  (3) All claims under this section may be sued for and recovered in any court of competent jurisdiction in Canada and shall rank firstly in favour of persons incurring actual loss or damage, without preference, and secondly to meet any costs and expenses described in subsection (1) or (2).

• Marginal note:Saving

  (4) Nothing in this section suspends or limits

  • (a) any legal liability or remedy for an act or omission by reason only that the act or omission is an offence under this Act or gives rise to liability under this section;

  • (b) any recourse, indemnity or relief available at law to a person who is liable under this section against any other person; or

  • (c) the operation of any applicable law or rule of law that is not inconsistent with this section.

• Marginal note:Limitation period

  (5) Proceedings in respect of claims under this section may be instituted within three years from the day when the loss, damage, costs or expenses occurred but in no case after six years from the day the spill or the discharge, emission or escape of oil or gas occurred or, in the case of debris, from the day the installation or structure in question was abandoned or the material in question broke away or was jettisoned or displaced.

Marginal note:Financial responsibility

• 27 (1) An applicant for an authorization under paragraph 5(1)(b) in respect of any work or activity in any area in which this Act applies shall provide proof of financial responsibility in the form of a letter of credit, a guarantee or indemnity bond or in any other form satisfactory to the National Energy Board, in an amount satisfactory to the Board.

• Marginal note:Continuing obligation

  (1.1) The holder of an authorization under paragraph 5(1)(b) shall ensure that the proof of financial responsibility remains in force for the duration of the work or activity in respect of which the authorization is issued.

• Marginal note:Payment of claims

  (2) The National Energy Board may require that moneys in an amount not exceeding the amount prescribed for any case or class of cases, or determined by the Board in the absence of regulations, be paid out of the funds available under the letter of credit, guarantee or indemnity bond or other form of financial responsibility provided under subsection (1), in respect of any claim for which proceedings may be instituted under section 26, whether or not those proceedings have been instituted.

• Marginal note:Manner of payment

  (3) Where payment is required under subsection (2), it shall be made in such manner, subject to such conditions and procedures and to or for the benefit of such persons or classes of persons as may be prescribed for any case or class of cases, or as may be required by the National Energy Board in the absence of regulations.

• Marginal note:Deduction

  (4) Where a claim is sued for under section 26, there shall be deducted from any award made pursuant to the action on that claim any amount received by the claimant under this section in respect of the loss, damage, costs or expenses claimed.

Inquiries

Marginal note:Inquiries

• 28 (1) Where a spill or debris or an accident or incident related to any activity to which this Act applies occurs or is found in any area to which this Act applies and results in death or injury or danger to public safety or the environment, the Minister may direct an inquiry to be made, subject to the Canadian Transportation Accident Investigation and Safety Board Act, and may authorize any person that the Minister deems qualified to conduct the inquiry.

• Marginal note:Mandatory inquiry

  (1.1) Where a spill or debris or an accident or incident related to any activity to which this Act applies occurs or is found in any area to which this Act applies and is serious, as defined by regulation, the Minister shall direct that an inquiry referred to in subsection (1) be made, subject to the Canadian Transportation Accident Investigation and Safety Board Act, and shall ensure that the person who conducts the inquiry is not employed in a part of the public service of Canada for which the Minister is responsible.

• Marginal note:Power of persons conducting inquiry

  (2) For the purposes of an inquiry under subsection (1), a person authorized by the Minister under that subsection has all the powers of a commissioner under Part I of the Inquiries Act.

• Marginal note:Compatible procedures and practices

  (3) The person or persons authorized to conduct an inquiry under subsection (1) shall ensure that, as far as practicable, the procedures and practices for the inquiry are compatible with investigation procedures and practices followed by any appropriate provincial authorities, and for those purposes may consult with any of those authorities concerning compatible procedures and practices.

• Marginal note:Report

  (4) As soon as possible after the conclusion of an inquiry under subsection (1), the person or persons authorized to conduct the inquiry shall submit a report to the Minister, together with the evidence and other material that was before the inquiry.

• Marginal note:Publication

  (5) A report made pursuant to subsection (4) shall be published by the Minister within thirty days after he has received it.

• Marginal note:Copies of report

  (6) The Minister may supply copies of a report published pursuant to subsection (5) in such manner and on such terms as he considers proper.

PART IIProduction Arrangements

Interpretation

Marginal note:Definitions

29 In this Part,

pooled spacing unit

unité d’espacement mise en commun

pooled spacing unit means the area that is subject to a pooling agreement or a pooling order; (unité d’espacement mise en commun)

pooled tract

parcelle mise en commun

pooled tract means the portion of a pooled spacing unit defined as a tract in a pooling agreement or a pooling order; (parcelle mise en commun)

pooling agreement

accord de mise en commun

pooling agreement means an agreement to pool the interests of owners in a spacing unit and to provide for the operation or the drilling and operation of a well thereon; (accord de mise en commun)

pooling order

arrêté de mise en commun

pooling order means an order made under section 31 or as altered pursuant to section 35; (arrêté de mise en commun)

royalty interest

droit à redevance

royalty interest means any interest in, or the right to receive a portion of, any oil or gas produced and saved from a field or pool or part of a field or pool or the proceeds from the sale thereof, but does not include a working interest or the interest of any person whose sole interest is as a purchaser of oil or gas from the pool or part thereof; (droit à redevance)

royalty owner

titulaire de redevance

royalty owner means a person, including Her Majesty in right of Canada, who owns a royalty interest; (titulaire de redevance)

spacing unit

unité d’espacement

spacing unit means the area allocated to a well for the purpose of drilling for or producing oil or gas; (unité d’espacement)

tract participation

fraction parcellaire

tract participation means the share of production from a unitized zone that is allocated to a unit tract under a unit agreement or unitization order or the share of production from a pooled spacing unit that is allocated to a pooled tract under a pooling agreement or pooling order; (fraction parcellaire)

unit agreement

accord d’union

unit agreement means an agreement to unitize the interests of owners in a pool or a part of a pool exceeding in area a spacing unit, or such an agreement as varied by a unitization order; (accord d’union)

unit area

secteur unitaire

unit area means the area that is subject to a unit agreement; (secteur unitaire)

unit operating agreement

accord d’exploitation unitaire

unit operating agreement means an agreement, providing for the management and operation of a unit area and a unitized zone, that is entered into by working interest owners who are parties to a unit agreement with respect to that unit area and unitized zone, and includes a unit operating agreement as varied by a unitization order; (accord d’exploitation unitaire)

unit operation

exploitation unitaire

unit operation means those operations conducted pursuant to a unit agreement or a unitization order; (exploitation unitaire)

unit operator

exploitant unitaire

unit operator means a person designated as a unit operator under a unit operating agreement; (exploitant unitaire)

unit tract

parcelle unitaire

unit tract means the portion of a unit area that is defined as a tract in a unit agreement; (parcelle unitaire)

unitization order

arrêté d’union

unitization order means an order of the Committee made under section 41; (arrêté d’union)

unitized zone

terrain

unitized zone means a geological formation that is within a unit area and subject to a unit agreement; (terrain)

working interest

intérêt économique direct

working interest means a right, in whole or in part, to produce and dispose of oil or gas from a pool or part of a pool, whether that right is held as an incident of ownership of an estate in fee simple in the oil or gas or under a lease, agreement or other instrument, if the right is chargeable with and the holder thereof is obligated to pay or bear, either in cash or out of production, all or a portion of the costs in connection with the drilling for, recovery and disposal of oil or gas from the pool or part thereof; (intérêt économique direct)

working interest owner

détenteur

working interest owner means a person who owns a working interest. (détenteur)

Pooling

Marginal note:Voluntary pooling

• 30 (1) Where one or more working interest owners have leases or separately owned working interests within a spacing unit, the working interest owners and the royalty owners who own all of the interests in the spacing unit may pool their working interests and royalty interests in the spacing unit for the purpose of drilling for or producing, or both drilling for and producing, oil and gas if a copy of the pooling agreement and any amendment thereto has been filed with the Chief Conservation Officer.

• Marginal note:Pooling agreement by Her Majesty

  (2) The Minister may, on behalf of Her Majesty, enter into a pooling agreement on any terms and conditions that the Minister deems advisable and, despite anything in this Act, the Territorial Lands Act, the Federal Real Property and Federal Immovables Act, the Canada Petroleum Resources Act or any regulations made under those Acts, the pooling agreement is binding on Her Majesty.

Marginal note:Application for pooling order

• 31 (1) In the absence of a pooling agreement, a working interest owner in a spacing unit may apply for a pooling order directing the working interest owners and royalty owners within the spacing unit to pool their interests in the spacing unit for the purpose of drilling for and producing, or producing, oil or gas or both from the spacing unit.

• Marginal note:Hearing by Committee

  (2) An application under subsection (1) shall be made to the Minister who shall refer the application to the Committee for the purpose of holding a hearing to determine whether a pooling order should be made and at that hearing the Committee shall afford all interested parties an opportunity to be heard.

• Marginal note:Matter to be supplied Committee on hearing

  (3) Prior to a hearing held pursuant to subsection (2), the working interest owner making application shall provide the Committee, and such other interested parties as the Committee may direct, with a proposed form of pooling agreement, and the working interest owners who have interests in the spacing unit to which the proposed pooling agreement relates shall provide the Committee with such information as the Committee deems necessary.

• Marginal note:Order of Committee

  (4) After a hearing held pursuant to subsection (2), the Committee may order that all working interest owners and royalty owners who have an interest in the spacing unit shall be deemed to have entered into a pooling agreement as set out in the pooling order.

Marginal note:Contents of pooling order

32 Every pooling order shall provide

• (a) for the drilling and operation of a well on the spacing unit or, where a well that is capable of or that can be made capable of production has been drilled on the spacing unit before the making of the pooling order, for the future production and operation of that well;

• (b) for the appointment of a working interest owner as operator to be responsible for the drilling, operation or abandoning of the well whether drilled before or after the making of the pooling order;

• (c) for the allocation to each pooled tract of its share of the production of the oil or gas from the pooled spacing unit that is not required, consumed or lost in the operation of the well, which allocation shall be on a prorated area basis unless it can be shown to the satisfaction of the Committee that that basis is unfair, whereupon the Committee may make an allocation on another more equitable basis;

• (d) in the event that no production of oil or gas is obtained, for the payment by the applicant therefor of all costs incurred in the drilling and abandoning of the well;

• (e) where production has been obtained, for the payment of the actual costs of drilling the well, whether drilled before or after the making of the pooling order, and for the payment of the actual costs of the completion, operation and abandoning of the well; and

• (f) for the sale by the operator of any oil or gas allocated pursuant to paragraph (c) to a working interest owner where the working interest owner thereof fails to take in kind and dispose of the production, and for the deduction out of the proceeds by the operator of his expenses reasonably incurred in connection with the sale.

Marginal note:Provision of penalty

• 33 (1) A pooling order may provide for a penalty for a working interest owner who does not, within the time specified in the order, pay the portion of the costs attributable to him as his share of the cost of drilling and completion of the well, but the penalty shall not exceed an amount equal to one-half of that working interest owner’s share of those costs.

• Marginal note:Recovery of costs and penalty

  (2) If a working interest owner does not, within the time specified therefor in the pooling order, pay his share of the costs of the drilling, completing, operating and abandoning of the well, his portion of the costs and the penalty, if any, are recoverable only out of his share of production from the spacing unit and not in any other manner.

Marginal note:Effect of pooling order

34 Where a pooling order is made, all working interest owners and royalty owners having interests in the pooled spacing unit shall, on the making of the order, be deemed to have entered into a pooling agreement as set out in the pooling order and the order shall be deemed to be a valid contract between the parties having interests in the pooled spacing unit, and all its terms and provisions, as set out therein or as altered pursuant to section 35, are binding on and enforceable against the parties thereto, including Her Majesty.

Marginal note:Application to alter pooling order

• 35 (1) The Committee shall hear any application to vary, amend or terminate a pooling order where the application is made by the owners of over twenty-five per cent of the working interests in the pooled spacing unit, calculated on a prorated area basis, and may, in its discretion, order a hearing on the application of any working interest owner or royalty owner.

• Marginal note:Alteration of pooling order

  (2) After a hearing held pursuant to subsection (1), the Committee may vary or amend the pooling order to supply any deficiency therein or to meet changing conditions and may vary or revoke any provision that the Committee deems to be unfair or inequitable or it may terminate the pooling order.

• Marginal note:Tract participation ratios protected

  (3) Where a pooling order is varied or amended, no change shall be made that will alter the ratios of tract participations between the pooled tracts as originally set out in the pooling order.

Marginal note:Prohibition

• 36 (1) No person shall produce any oil or gas within a spacing unit in which there are two or more leases or two or more separately owned working interests unless a pooling agreement has been entered into in accordance with section 30 or in accordance with a pooling order made under section 31.

• Marginal note:Saving

  (2) Subsection (1) does not prohibit the production of oil or gas for testing in any quantities approved by the Chief Conservation Officer.

Unitization

Marginal note:Unit operation

• 37 (1) Any one or more working interest owners in a pool or part of a pool exceeding in area a spacing unit, together with the royalty owners, may enter into a unit agreement and operate their interests pursuant to the terms of the unit agreement or any amendment thereto if a copy of the agreement and any amendment has been filed with the Chief Conservation Officer.

• Marginal note:Minister may enter into unit agreement

  (2) The Minister may enter into a unit agreement binding on Her Majesty, on any terms and conditions that the Minister may deem advisable, and any of the regulations under this Act, the Territorial Lands Act, the Federal Real Property and Federal Immovables Act or the Canada Petroleum Resources Act that may be in conflict with the terms and conditions of the unit agreement stand varied or suspended to the extent necessary to give full effect to the terms and conditions of the unit agreement.

• Marginal note:Unit operator’s relationship to parties

  (3) Where a unit agreement filed under this section provides that a unit operator shall be the agent of the parties thereto with respect to their powers and responsibilities under this Act, the performance or non-performance thereof by the unit operator shall be deemed to be the performance or non-performance by the parties otherwise having those powers and responsibilities under this Act.

Marginal note:Requiring unitization to prevent waste

• 38 (1) Notwithstanding anything in this Act, where, in the opinion of the Chief Conservation Officer, the unit operation of a pool or part thereof would prevent waste, he may apply to the Committee for an order requiring the working interest owners in the pool or part thereof to enter into a unit agreement and a unit operating agreement in respect of the pool or part thereof, as the case may be.

• Marginal note:Hearing

  (2) Where an application is made by the Chief Conservation Officer pursuant to subsection (1), the Committee shall hold a hearing at which all interested persons shall be afforded an opportunity to be heard.

• Marginal note:Order

  (3) If, after the hearing mentioned in subsection (2), the Committee is of the opinion that the unit operation of a pool or part thereof would prevent waste, the Committee may by order require the working interest owners in the pool or part thereof to enter into a unit agreement and a unit operating agreement in respect of the pool or part thereof.

• Marginal note:Cessation of operations

  (4) If in the time specified in the order referred to in subsection (3), being not less than six months after the date of the making of the order, the working interest owners and royalty owners fail to enter into a unit agreement and a unit operating agreement approved by the Committee, all drilling and producing operations within the pool or part thereof in respect of which the order was made shall cease until such time as a unit agreement and a unit operating agreement have been approved by the Committee and filed with the Chief Conservation Officer.

• Marginal note:Permit to continue operations

  (5) Notwithstanding subsection (4), the Committee may permit the continued operation of the pool or part thereof after the time specified in the order referred to in subsection (3) if it is of the opinion that a unit agreement and unit operating agreement are in the course of being entered into, but any such continuation of operations shall be subject to any conditions prescribed by the Committee.

Compulsory Unitization

General

Marginal note:Pooled spacing unit included in unit area

• 48 (1) A pooled spacing unit that has been pooled pursuant to a pooling order and on which a well has been drilled may be included in a unit area as a single unit tract and the Committee may make such amendments to the pooling order as it deems necessary to remove any conflict between the provisions of the pooling order and the provisions of the unit agreement, or the unit operating agreement or the unitization order, if any.

• Marginal note:Effect of including pooled spacing unit in unit area

  (2) Where a pooled spacing unit is included in a unit area pursuant to subsection (1), the provisions of the unit agreement, the unit operating agreement and the unitization order, if any, prevail over the provisions of the pooling order in the event of a conflict.

• Marginal note:Exceptions

  (3) Notwithstanding subsection (2),

  • (a) the share of the unit production that is allocated to the pooled spacing unit shall in turn be allocated to the separately owned tracts in the pooled spacing unit on the same basis and in the same proportion as production actually obtained from the pooled spacing unit would have been shared under the pooling order;

  • (b) the costs and expenses of the unit operation that are allocated to the pooled spacing unit shall be shared and borne by the owners of the working interests therein on the same basis and in the same proportion as would apply under the pooling order; and

  • (c) the credits allocated under a unit operating agreement to a pooled spacing unit for adjustment of investment for wells and equipment thereon shall be shared by the owners of the working interests therein in the same proportion as would apply to the sharing of production under the pooling order.

PART IIIAppeals and Enforcement

Appeals

Marginal note:Orders and decisions final

• 49 (1) Except as provided in this Act, every decision or order of the Committee is final and conclusive.

• Marginal note:Decision or order defined

  (2) Any minute or other record of the Committee or any document issued by the Committee, in the form of a decision or order, shall for the purposes of this section be deemed to be a decision or order of the Committee.

Marginal note:Stated case for Federal Court

• 50 (1) The Committee may of its own motion, or at the request of the Minister, state a case, in writing, for the opinion of the Federal Court on any question that in the opinion of the Committee is a question of law or of the jurisdiction of the Committee.

• Marginal note:Proceedings thereon

  (2) The Federal Court shall hear and determine the case stated and remit the matter to the Committee with the opinion of the Court thereon.

Marginal note:Governor in Council may review orders of Committee

51 The Governor in Council may at any time, in his discretion, either on petition of any interested person or of his own motion, vary or rescind any decision or order of the Committee made under this Act, whether the order is made between parties or otherwise and any order that the Governor in Council makes with respect thereto becomes a decision or order of the Committee and, subject to section 52, is binding on the Committee and on all parties.

Marginal note:Appeal to Supreme Court of Canada

• 52 (1) An appeal lies from a decision or order of the Committee to the Supreme Court of Canada on a question of law or a question of jurisdiction, on leave therefor being obtained from the Supreme Court in accordance with the practice of the Supreme Court, on application made within one month after the making of the decision or order sought to be appealed from or within such further time as the Court may allow, and the costs of that application are in the discretion of the Court.

• Marginal note:Entry of appeal

  (2) No appeal lies after leave therefor has been obtained under subsection (1) unless it is set down for hearing in the Supreme Court of Canada within sixty days from the making of the order granting leave to appeal.

• Marginal note:Staying order

  (3) Where leave to appeal is granted pursuant to subsection (1), any order of the Committee in respect of which the appeal is made shall be stayed until the matter of the appeal is determined.

• Marginal note:Powers of the Court

  (4) After the hearing of the appeal pursuant to this section, the Supreme Court of Canada shall certify its opinion to the Committee and the Committee shall make any order necessary to comply with the opinion.

• Marginal note:Order subject to section 51

  (5) Any order made by the Committee pursuant to subsection (4), unless the order has already been dealt with by the Governor in Council pursuant to section 51, shall be subject to that section.

Safety and Conservation Officers

Marginal note:Officers

53 The safety officers and conservation officers necessary for the administration and enforcement of this Act and the regulations shall be designated by the National Energy Board from among its officers and employees.

Marginal note:Powers of officers

54 For the purpose of ensuring compliance with this Act and the regulations, a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer may at any reasonable time

• (a) enter any place, including lands, buildings, installations, vessels, vehicles and aircraft, used for any work or activity in respect of which this Act applies, for the purpose of carrying out inspections, examinations, tests or inquiries or of directing that the person in charge of the place carry them out, and the officer may be accompanied by any other person that the officer believes is necessary to help carry out the inspection, examination, test or inquiry;

• (b) take photographs or make drawings of any place or thing referred to in this section;

• (c) order that any place or thing referred to in this section not be interfered with for a specified period;

• (d) require the production, for inspection or copying, of any books, records, documents, licences or permits required by this Act or the regulations;

• (e) take samples or particulars and carry out, or have carried out, any reasonable tests or examinations; and

• (f) require the person in charge of the place, or any other person in the place who has knowledge relevant to an inspection, examination, test or inquiry, to furnish information, either orally or in writing, in the form requested.

Marginal note:Certificate to be produced

55 The National Energy Board shall provide every safety officer and conservation officer and the Chief Safety Officer and the Chief Conservation Officer with a certificate of appointment or designation and, on entering any place pursuant to this Act, the officer shall, if so required, produce the certificate to the person in charge of the place.

Marginal note:Assistance to officers

56 The owner, the person in charge of any place referred to in section 54 and every person found therein shall give a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer, as the case may be, all reasonable assistance to enable the officer to carry out duties and functions under this Act or the regulations.

Marginal note:Obstruction of officers and making of false statements

57 No person shall obstruct or hinder or make a false or misleading statement, either orally or in writing, to a safety officer, the Chief Safety Officer, a conservation officer or the Chief Conservation Officer who is engaged in carrying out duties and functions under this Act or the regulations.

Marginal note:Power of conservation engineer when dangerous operation detected

• 58 (1) Where a conservation engineer, on reasonable grounds, is of the opinion that an operation is in contravention of any safety regulation made pursuant to this Act and that continuation of the operation is likely to result in serious bodily injury, he may order that the operation cease or be continued only in accordance with the terms of the order and shall affix at or near the scene of the operation a notice of the order in a form prescribed by the Minister.

• Marginal note:Notice

  (2) The safety officer or Chief Safety Officer who makes an order under subsection (1) shall affix at or near the scene of the operation a notice of the order in a form approved by the National Energy Board.

• Marginal note:Expiration of order

  (3) An order made by a safety officer under subsection (1) expires seventy-two hours after it is made unless it is confirmed before that time by order of the Chief Safety Officer.

• Marginal note:Modification or revocation

  (4) A safety officer who makes an order under subsection (1) shall immediately so advise the Chief Safety Officer, and the Chief Safety Officer may modify or revoke the order.

• Marginal note:Referral for review by National Energy Board

  (5) A person carrying out an operation to which an order under subsection (1) makes reference, or any person having a pecuniary interest in that operation, may, by notice in writing, request the Chief Safety Officer to refer the order to the National Energy Board to review the need for the order under section 28.6 of the National Energy Board Act and, on receiving the notice, the Chief Safety Officer shall refer the order accordingly.

• Marginal note:Operations in respect of which order made

  (6) No person shall continue an operation in respect of which an order has been made pursuant to this section, except in accordance with the terms of the order or until the order has been set aside by the National Energy Board pursuant to section 28.6 of the National Energy Board Act.

• (7) to (9) [Repealed, 1994, c. 10, s. 12]

Marginal note:Priority

58.1 An order made by a safety officer or the Chief Safety Officer prevails over an order made by a conservation officer or the Chief Conservation Officer to the extent of any inconsistency between the orders.

Installation Manager

Marginal note:Installation manager

• 58.2 (1) Every holder of an authorization under paragraph 5(1)(b) in respect of a work or activity for which a prescribed installation is to be used shall put in command of the installation a manager who meets any prescribed qualifications, and the installation manager is responsible for the safety of the installation and the persons at it.

• Marginal note:Powers

  (2) Subject to this Act and any other Act of Parliament, an installation manager has the power to do such things as are required to ensure the safety of the installation and the persons at it and, more particularly, may

  • (a) give orders to any person who is at the installation;

  • (b) order that any person who is at the installation be restrained or removed; and

  • (c) obtain information or documents.

• Marginal note:Emergency

  (3) In a prescribed emergency situation, an installation manager’s powers are extended so that they also apply to each operator of a vessel, vehicle or aircraft that is at the installation or that is leaving or approaching it.

Offences and Punishment

Marginal note:Offences with respect to documents and records

59 A person is guilty of an offence who

• (a) knowingly makes any false entry or statement in any report, record or document required by this Act or the regulations or by any order made pursuant to this Act or the regulations; or

• (b) knowingly destroys, mutilates or falsifies any report or other document required by this Act or the regulations or by any order made pursuant to this Act or the regulations.

Marginal note:Offences

• 60 (1) Every person is guilty of an offence who

  • (a) contravenes this Act or the regulations;

  • (b) produces any oil or gas from a pool or field under the terms of a unit agreement within the meaning of Part II, or any amended unit agreement, before the unit agreement or amended unit agreement is filed with the Chief Conservation Officer;

  • (c) undertakes or carries on a work or activity without an authorization under paragraph 5(1)(b) or without complying with the approvals or requirements of such an authorization; or

  • (d) fails to comply with a direction, requirement or order of a safety officer, the Chief Safety Officer, a conservation officer, the Chief Conservation Officer or an installation manager or with an order of the Committee or the National Energy Board made under this Act.

• Marginal note:Punishment

  (2) Every person who is guilty of an offence under subsection (1) is liable

  • (a) on summary conviction, to a fine not exceeding one hundred thousand dollars or to imprisonment for a term not exceeding one year, or to both; or

  • (b) on conviction on indictment, to a fine not exceeding one million dollars or to imprisonment for a term not exceeding five years, or to both.

61 and 62 [Repealed, 1992, c. 35, s. 30]

Marginal note:Presumption against waste

63 No person commits an offence under subsection 18(1) by reason of committing waste as defined in paragraph 18(2)(f) or (g) unless the person has been ordered by the National Energy Board under section 28.5 of the National Energy Board Act to take measures to prevent the waste and has failed to comply.

64 [Repealed, 1992, c. 35, s. 31]

Marginal note:Order to comply

65 Where a person is guilty of an offence under this Act, the court may, in addition to any other punishment it may impose, order that person to comply with the provisions of this Act or the regulation or order for the contravention of which he has been convicted.

Marginal note:Continuing offences

66 Where an offence under this Act is committed on more than one day or is continued for more than one day, it shall be deemed to be a separate offence for each day on which the offence is committed or continued.

67 [Repealed, 1992, c. 35, s. 32]

Marginal note:Limitation period

68 A prosecution for an offence under this Act may be instituted at any time within but not later than two years after the time when the subject-matter of the complaint arose.

Marginal note:Evidence

69 In any prosecution for an offence under this Act, a copy of an order purporting to have been made pursuant to this Act or the regulations and purporting to have been signed by the person authorized by this Act or the regulations to make that order is evidence of the matters set out therein.

Marginal note:Jurisdiction of judge or justice

70 Any complaint or information in respect of an offence under this Act may be heard, tried or determined by a justice or judge if the accused is resident or carrying on business within the territorial jurisdiction of that justice or judge although the matter of the complaint or information did not arise in that territorial jurisdiction.

Marginal note:Action to enjoin not prejudiced by prosecution

• 71 (1) Notwithstanding that a prosecution has been instituted in respect of an offence under this Act, the regulations or any order made pursuant to this Act or the regulations, Her Majesty in right of Canada may commence and maintain an action to enjoin the committing of any contravention of this Act, the regulations or any order made pursuant to this Act or the regulations.

• Marginal note:Civil remedy not affected

  (2) No civil remedy for any act or omission is suspended or affected by reason that the act or omission is an offence under this Act.

72 [Repealed, 1992, c. 35, s. 33]

Her Majesty

Marginal note:Binding on Her Majesty

73 This Act is binding on Her Majesty in right of Canada or a province.

Coming into Force

Marginal note:Commencement

Footnote ^*74 Sections 39 to 47 shall come into force on a day to be fixed by proclamation.

• Return to footnote ^*[Note: Sections 39 to 47 not in force.]