Changes to two resource acts in the Northwest Territories will improve transparency and increase information that will be made public.
Both the Petroleum Resources Act [PRA] and the Oil and Gas Operations Act [OGOA] saw similar evolutions under new legislative changes that updated acts the territory inherited from the federal government under devolution in 2014.
Menzie McEachern, the territory’s director of mineral and petroleum resources, said some of the biggest changes to both acts lay in the sharing of information.
“What it does is it puts the legislation on its head from a transparency, confidentiality perspective,” he said.
McEachern explained that prior to the amendments, the legislation was structured to make information submitted to the minister confidential by default. Now the default is for that information to be made public.
That doesn’t mean all information will be public, however, McEarchern said. Financial or contractual information still remains confidential.
McEachern said another significant change is to environmental studies research funds. Another board position will open up to the public and increase the possibility of Indigenous input into resource development in the territory, he added.
“[This] makes it possible for Indigenous governments and Indigenous organizations to nominate members to the fund,” he said. “As well as to incorporate one of the criteria … the kind of traditional technical requirements and understanding of the oil and gas industry, and … a consideration of Indigenous knowledge that is relevant to the purpose of the fund.”
McEarchern said due to technical and other required qualifications, the board is made up of a mix of NWT residents and southern Canadians.
Significant discovery licenses get expiry date
For the PRA, changes were also made to significant discovery licences as a way of encouraging resource development in the territory. Prior to these amendments, McEarchern said these licences had no expiry date and could be held indefinitely, which often stifled development.
“Now, future significant discovery licenses will have a 15-year term limit on them to encourage companies to take the next step and develop those significant discovery licenses for potential production, [to] further explore and develop those areas as opposed to just sitting on them indefinitely.”
After that 15-year period, McEarchern said resource companies will have to reapply and indicate their plans for exploration and development. Otherwise, the land will return to the territory and be open to other companies to apply.
McEachern noted that companies face constraints when it comes to market conditions and the prices of oil and gas. Operating in the Northwest Territories is also more costly than in southern Canada, he added, due to its infrastructure deficit.
New abilities for oil and gas regulator
The OGOA has seen reforms when it comes to accountability. The regulator will now be able to hold public hearings and issue guidelines and interpretation notes.
McEarchern said these new processes will help companies better understand the regulator’s decision process.
“It actually brings us into alignment with a similar authority that was added to the Canada Oil and Gas Operations Act,” he said.
Pauline de Jong was appointed as the Regulator of Oil and Gas Operations last week. She said the amendments will help provide clarify how the act will be followed.
“It’s taking that information that’s in the legislation and saying, OK, this is how we’re actually going to turn that into practice,” she explained.
The addition of proof of financial responsibility will give the regulator better means for dealing with emergency situations, McEarchern said.
“It allows the regulator to cover any sorts of damages associated with say, an oil spill or debris without needing to prove the fault or alter negligence in court,” he said.
McEarchern said it’s been a long time since the acts have been updated and the changes bring them more in line with northern needs.
“It can be considered a first step or an ongoing process because in changing the act, there’s now also the opportunity to look at the regulations under the Act and to see what improvements or modernization needs there are at the regulation level.”