Subsurface Rights or Interests (continued)
Selection of Lands for Intermediate Term of Permit (continued)
Marginal note:Transitional provision
Bitumen Recovery Project Approval
Marginal note:Application for approval
56 (1) A subsurface contract holder may apply to the Minister for approval of a bitumen recovery project if they have achieved the minimum level of evaluation and have applied to the provincial authority for approval of the project.
Marginal note:Minimum level of evaluation
(2) The minimum level of evaluation is achieved when
(a) one well is drilled on each section of the lands that are subject to the contract — if the section is in the proposed bitumen recovery project area — and at least 25% of those wells are cored; or
(b) one well is drilled on at least 60% of the sections of the lands that are subject to the contract — if the sections are in the proposed bitumen recovery project area — at least 25% of those wells are cored and seismic data are obtained over at least 3.2 km in each undrilled section.
Marginal note:Content of application
(a) a description of the lands to be included in the project;
(b) evidence that the minimum level of evaluation has been achieved;
(c) a statement that the subsurface contract holder has applied for or received the provincial authority’s approval of the project;
(d) the results of an environmental review of the project that has been conducted by a qualified environmental professional who deals with the holder at arm’s length;
(e) the terms and conditions respecting the royalty to be paid for the oil and gas recovered from lands in the project area;
(f) the reporting requirements for the project;
(g) a detailed description of the project, including its location, size and scope, the operations to be carried out, the schedule of pre-construction, construction and start-up operations and the reasons for selecting that schedule;
(h) a map indicating all the rights and interests in the lands in the project area and in any area that is likely to be affected by project operations;
(i) an aerial photographic mosaic of the project area at a scale that is adequate to show the location of the project components, including wells, facilities, tanks, access roads, railways, pipelines, public utility corridors, tailings ponds and waste storage sites;
(j) a detailed description of storage and transportation facilities for the oil and gas, including the size of any pipeline that may be used and the name of the entity that owns it;
(k) the anticipated rate of production of the oil and gas for the period for which approval is sought;
(l) the year and month in which the annual minimum level of production of bitumen will be achieved;
(m) a description of the energy sources to be used and their anticipated quantity and cost, along with a comparison to alternative sources; and
(n) the term of the approval sought, along with the anticipated starting and completion dates of the project.
Marginal note:Environmental review
(2) The results of the environmental review of the bitumen recovery project must be submitted in the prescribed form and include
(a) a site evaluation that is based on the site’s topography, soils, vegetation, wildlife, sources of water, existing structures, archeological and cultural resources, traditional ecological knowledge, current land uses and any other feature of the site that could be affected by the project;
(b) a description of the operations to be carried out during the project, the duration of each and its location on the site;
(c) a description of the short-term and long-term effects that each operation could have on the environment of the site and on any surrounding areas;
(d) a description of the proposed mitigation measures, the potential residual effects after mitigation and the significance of those effects; and
(e) a description of the consultations undertaken with the council and the First Nation members.
Marginal note:Environmental protection measures letter
(3) After reviewing the application, the Minister must send the applicant and the council a letter that sets out the environmental protection measures that must be implemented to permit the subsurface contract holder to carry out operations under the project.
(a) the applicant has achieved the minimum level of evaluation of the lands in the project area;
(b) a written resolution of the council approving the project has been submitted;
(c) the application meets the requirements of subsections 57(1) and (2);
(d) the project has been approved by the provincial authority; and
(e) the project can be carried out without causing irremediable damage to the First Nation lands.
Marginal note:Terms and conditions of approval
(2) The approval may include any terms and conditions that are necessary to permit the Minister to verify the progress of operations carried out under the project, payment of the approved royalty and implementation and compliance with the environmental protection measures.
Marginal note:Surface contract required
Marginal note:Compliance with measures
(2) The holder must ensure that all environmental protection measures included in the approval are implemented and complied with.
Marginal note:Minimum level of production
Marginal note:Compensation — bitumen
(2) If the annual minimum level of production of bitumen from the lands that are subject to the bitumen recovery project is not achieved in any year following the month in which that level was to be achieved, the subsurface contract holder must pay compensation equal to 25% of the difference between the value of the minimum level of production and the value of the actual level of production.
Marginal note:Deemed price
(3) For the purpose of calculating the compensation, the price of bitumen is deemed to be the monthly Bitumen Floor Price published by the Alberta provincial authority for the relevant time period.
Marginal note:Additional lands, wells or facilities
61 Once a bitumen recovery project has been approved, the subsurface contract holder must obtain the approval of the Minister and the council before adding lands, wells or facilities to the project.
Drilling Over Expiry
Marginal note:Application for extension
62 (1) A subsurface contract holder may apply to the Minister, in the prescribed form, for an extension of the deadline for applying for approval of a selection of lands under subsection 54(1) or for continuation under section 64 if
(a) the holder has spudded or re-entered a well for the purpose of deepening it or completing a new zone, but cannot finish the operation before the relevant term expires;
(b) the application is submitted before the relevant term expires;
(c) the application identifies the well and indicates when it was spudded or re-entered; and
(d) the application includes the rent for the following year.
Marginal note:Approval of extension
(2) If an application is submitted in accordance with subsection (1), the Minister must extend the deadline for applying for approval of a selection of lands or for continuation to the 30th day after the day on which the spudded or re-entered well is rig-released. The Minister must send the council a notice of the extension.
Marginal note:Rights during extension
(3) During an extension, the holder may continue to produce from any wells in the contract area that are already producing, but must not spud or re-enter any other wells in that area.
Marginal note:Transitional provision
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