National Energy Board Act Part VI (Oil and Gas) Regulations (SOR/96-244)

Short Title

1 These Regulations may be cited as the National Energy Board Act Part VI (Oil and Gas) Regulations.

Interpretation

2 In these Regulations,

Act

Act means the National Energy Board Act; (Loi)

heavy crude oil

heavy crude oil means a substance that has a density greater than 875.7 kg/m³ and is

• (a) oil, other than refined petroleum products,

• (b) a blend of oils, other than refined petroleum products, or

• (c) a blend of oils, other than refined petroleum products, with refined petroleum products; (pétrole brut lourd)

licence

licence means a licence for the exportation or importation of oil or gas issued under Part VI of the Act; (licence)

light crude oil

light crude oil means a substance that has a density equal to or less than 875.7 kg/m³ and is

• (a) oil, other than refined petroleum products,

• (b) a blend of oils, other than refined petroleum products, or

• (c) a blend of oils, other than refined petroleum products, with refined petroleum products; (pétrole brut léger)

order

order means an order authorizing the exportation, importation, exportation for subsequent importation or importation for subsequent exportation of gas or authorizing the exportation of oil that is issued by the Board under these Regulations; (ordonnance)

refined petroleum products

refined petroleum products means

• (a) oil recovered by the processing of oil sands,

• (b) gasoline-type fuels for use in internal combustion engines,

• (c) oil for use as a component in the blending of gasoline-type fuels referred to in paragraph (b),

• (d) middle distillates, including the products commercially known as kerosene, stove oil, diesel fuel, furnace oil, diesel oil, gas oil, distillate heating oil, engine distillates and Nos. 1, 2 and 3 fuel oils,

• (e) heavy fuel oils, including Nos. 4, 5 and 6 fuel oils, bunker “C” oil, “C” grade oil, residual fuel oil, heavy bunker oil, intermediate and thin bunker fuels and any blend of heavy fuel oils, and

• (f) partially processed oil, whether commingled with crude oil or equivalent hydrocarbons or not. (produits pétroliers raffinés)

PART IGeneral

Procedures for Applying For and Issuing Licences and Orders

3 In addition to the requirements of these Regulations, Part I of the National Energy Board Rules of Practice and Procedure, 1995 applies in respect of the procedures to be followed in applying for and issuing a licence or an order.

Approval of Licences

4 The approval of the Governor in Council is required prior to the issuance of a licence for

• (a) the exportation of gas;

• (b) the importation of gas;

• (c) the exportation of heavy crude oil; or

• (d) the exportation of oil other than heavy crude oil.

Conditions of Orders

5 [Repealed, SOR/2000-256, s. 1]

Suspension and Revocation of Orders

• 6 (1) Subject to subsection (2), the Board may

  • (a) suspend an order if any term or condition of the order has not been complied with or has been contravened; or

  • (b) revoke an order if the holder of the order refuses to comply with any term or condition of the order, or does not comply with any conditions imposed for the lifting of a suspension.

• (2) Before suspending or revoking an order, the Board shall send a notice to the holder of the order setting out the term or condition of the order that it is alleged the holder has not complied with, has contravened or has refused to comply with, and shall afford the person an opportunity to be heard.

• (3) Notwithstanding subsections (1) and (2), the Board may suspend or revoke an order on the application or with the consent of the holder of the order.

Inspections

• 7 (1) A member of the Board or any person authorized by the Board in writing for the purpose may, in order to carry out an inspection in connection with the exportation or importation of oil or gas, at any reasonable time

  • (a) enter any premises in which oil or gas is produced or recovered for export from Canada, is exported from Canada or is imported into Canada, or any place of business related to such production or recovery;

  • (b) inspect any instruments, devices, plant, equipment, books, records or accounts or any other thing used for or in connection with the exportation or importation of oil or gas; and

  • (c) conduct any tests that are necessary in order to carry out the inspection.

• (2) A person authorized by the Board to exercise the powers referred to in subsection (1) shall produce the authorization, when requested to do so during the exercise of those powers.

• (3) Every person who is the operator of or in charge of any premises or any thing referred to in subsection (1) shall permit a member of the Board or a person authorized by the Board to exercise the powers referred to in that subsection and shall assist the member or person in exercising those powers.

Units of Measurement

• 8 (1) For the purposes of these Regulations, all gas shall be measured in units of measurement that meet the requirements of the Electricity and Gas Inspection Act, and

  • (a) in the case of volume measurement, shall be expressed as the number of cubic metres the gas would occupy at standard conditions, namely, at a temperature of 15°C and at an absolute pressure of 101.325 kPa; and

  • (b) in the case of thermal measurement, shall be computed as the number of joules on a dry basis where dry gas has a moisture content of less than 110 mg/m³.

• (2) Where volume is measured under conditions of temperature and pressure other than the standard conditions described in paragraph (1)(a), the volume shall be converted to the equivalent under the standard conditions, in accordance with the Ideal Gas Laws, and shall be corrected for deviations from the Ideal Gas Laws in accordance with subsection (3), where the amount of the deviation exceeds one per cent.

• (3) Correction for deviation from the Ideal Gas Laws shall be based on the tables published in American Gas Association (AGA) Report No. 3, Orifice Metering of Natural Gas and Other Related Hydrocarbon Fluids, as amended from time to time.

• (4) Notwithstanding subsections (1) to (3), propane, butanes and ethane may be measured in liquid form, in which case the volume measurement shall be computed in cubic metres.

9 For the purposes of these Regulations, the units of measurement of liquids, other than liquids determined by the Board to be cryogenic liquids, shall be computed at a temperature of 15°C.

PART IIGas

DIVISION IGAS OTHER THAN PROPANE, BUTANES AND ETHANE

Application

10 This Division applies to gas other than propane, butanes and ethane.

10.1 For the purposes of subsection 119.01(1.1) of the Act, natural gas means a mixture of gas that is composed of at least 85% methane and that may also contain other hydrocarbons that at a temperature of 15°C and an absolute pressure of 101.325 kPa are in a gaseous state, as well as minor amounts of non-hydrocarbon gas and impurities.

Exemption

11 Ethylene and propylene are exempt from the operation of Part VI of the Act.

Information to be Furnished by Applicants for Licences for Exportation

12 An applicant for a licence for the exportation of gas shall furnish to the Board all the information that is necessary for the Board to dispose of the application, including, unless otherwise authorized by the Board,

• (a) the terms that the applicant is requesting for the licence, including

  • (i) the duration of the licence,

  • (ii) the maximum daily, annual and term quantities of gas proposed to be exported,

  • (iii) if applicable, the tolerance levels that are necessary to accommodate temporary operating conditions, and

  • (iv) the points of exportation of the gas from Canada;

• (b) information respecting the applicant’s gas supply supporting the proposed exportation, whether contractually dedicated or undedicated, including

  • (i) a summary of the quantities of gas under contract to or owned by the applicant, including daily and annual volumes, reserves and the termination date of every such contract, and

  • (ii) a copy of each pro forma contract for each type of gas purchase contract;

• (c) information respecting the applicant’s gas market, including

  • (i) details of the applicant’s gas export sale, including

    • (A) a copy of every gas export sales contract for the proposed exportation,

    • (B) a detailed summary of the terms and conditions of every such contract, including the details of the matters referred to in Schedule I, substantially in the form set out therein, and

    • (C) the name of a person to whom questions respecting the details of every such contract may be directed, and

  • (ii) a description of the export market to be served by the proposed exportation;

• (d) where the gas proposed to be exported is from a gas supply other than a contractually dedicated pool, field or area, a gas supply and demand balance for the reserves supporting the application, on both an aggregate and an annual basis for the duration of the proposed exportation, identifying all firm contractual commitments supported by those reserves;

• (e) details of the transportation arrangements pertaining to the proposed exportation, including

  • (i) the details and status of all contractual arrangements for the movement of the gas in and outside Canada,

  • (ii) a copy of every transportation contract for the movement of the gas in Canada, and

  • (iii) a description of any existing or proposed gathering, storage or transmission facility, and of any new facility other than a gathering, storage or transmission facility, that is required to move the gas to market, whether the facility is, or will be, in or outside Canada,

• (f) information respecting the potential environmental effects of the proposed exportation and any social effects that would be directly related to those environmental effects;

• (g) an assessment of the impact of the proposed exportation on Canadian energy and natural gas markets to determine whether Canadians are likely to have difficulty in meeting their energy requirements at fair market prices;

• (h) a copy of, or details of the status of, each approval or authorization of a federal, provincial or state government pertaining to

  • (i) the removal of gas from a province,

  • (ii) the importation of gas into the country of destination,

  • (iii) transportation services,

  • (iv) tariffs and tolls,

  • (v) facilities,

  • (vi) environmental reviews, and

  • (vii) contractual arrangements necessary for the exportation of gas; and

• (i) a status sheet summarizing the contractual arrangements and regulatory approvals and authorizations, substantially in the form set out in Schedule II.

Information to be Furnished by Applicants for Licences for Importation

13 An applicant for a licence for the importation of gas shall furnish to the Board all the information that is necessary for the Board to dispose of the application, including, unless otherwise authorized by the Board,

• (a) the terms that the applicant is requesting for the licence, including

  • (i) the duration of the licence,

  • (ii) the maximum daily, annual and term quantities of gas proposed to be imported,

  • (iii) if applicable, the tolerance levels that are necessary to accommodate temporary operating conditions, and

  • (iv) the points of importation of the gas into Canada;

• (b) information respecting the applicant’s gas supply supporting the proposed importation, including

  • (i) a summary of the quantities of gas under contracts for the purchase of gas, including the total daily and annual volumes and reserves under those contracts, and the termination date for each of those contracts, and

  • (ii) a copy of each pro forma contract for each type of gas purchase contract;

• (c) information respecting the applicant’s gas market, including

  • (i) details of the applicant’s gas import purchase, including

    • (A) a copy of every gas import purchase contract for the proposed importation, and

    • (B) a detailed summary of the terms and conditions of every such contract, and

  • (ii) a description of the market to be served by the proposed importation;

• (d) details of the transportation arrangements pertaining to the proposed importation, including

  • (i) the details and status of all contractual arrangements for the movement of the gas in and outside Canada,

  • (ii) a copy of every transportation contract for the movement of the gas in Canada, and

  • (iii) a description of any existing or proposed gathering, storage or transmission facility, and of any new facility other than a gathering, storage or transmission facility, that is required to move the gas to market, whether the facility is, or will be, in or outside Canada,

• (e) information respecting the potential environmental effects of the proposed importation and any social effects that would be directly related to those environmental effects; and

• (f) a copy of, or details of the status of, each approval or authorization of a federal, provincial or state government pertaining to

  • (i) the removal of gas from the country of production,

  • (ii) the importation of gas into a province,

  • (iii) transportation services,

  • (iv) tariffs and tolls,

  • (v) facilities,

  • (vi) environmental reviews, and

  • (vii) contractual arrangements necessary for the importation of gas.