Proposed amendments to Ontario Regulation 245/97 to regulate compressed air energy storage in porous rock reservoirs and make other amendments to reference more current standards for the regulated sector

ERO number
019-2935
Notice type
Regulation
Act
Oil, Gas and Salt Resources Act, R.S.O. 1990, c. P.12
Posted by
Ministry of Natural Resources and Forestry
Notice stage
Decision
Decision posted
Comment period
January 19, 2021 - March 5, 2021 (45 days) Closed
Last updated

This consultation was open from:
January 19, 2021
to March 5, 2021

Decision summary

We have decided to proceed with regulating compressed air energy storage in porous rock, making administrative changes related to trustees, and making other amendments to reference more current standards for the regulated sector.

Decision details

Amendments to Ontario Regulation 245/97

Effective July 1, 2022:

  1. Compressed air energy storage (CAES) projects in porous rock will be subject to the Oil, Gas and Salt Resources Act

For CAES projects that meet the eligibility criteria (e.g., location, type of subsurface storage container, former use for oil and gas storage or production), the regulation establishes application, financial and operating requirements and enables these projects to seek authorizations under this framework. CAES projects in porous rock that do not meet the eligibility criteria are prohibited.

In response to comments received (described below), the final regulation for CAES projects in porous rock was modified from the original proposal to:

  • remove the requirement for concurrent submission on applications (e.g., well licences, injection permit), allowing applicants to determine how to sequence their applications while maintaining notification and engagement requirements on all applications
  • provide greater flexibility to address the need for extended drilling timeframes on larger projects by establishing those timeframes as conditions of individual licences
  • allow security to be posted at commencement of works (e.g., site preparation) instead of at time of licence issuance
  • scope the information sources that the minister may rely on to elevate security levels to information provided by independent experts or by the ministry
  1. Any applicant that carries out notification and consultation for an application under the requirements of the regulation, or under one of the Provincial Standards that is incorporated by reference into the regulation, is required to take all reasonable steps to ensure that any personal information collected under those processes is retained, transferred and disposed of in a secure manner so as to protect the information against theft, loss, or unauthorized use or disclosure. This is a change from the original proposal, which indicated that this requirement would apply to CAES projects in porous rock; the decision was made to apply the requirement more broadly to all applicants under the act.                                                                                                           
  2. The regulation provisions related financial security have also been updated to remove Banks and Credit Unions as possible trustees, as they are prohibited from acting as trustees under other legislation.

Amendments to the Oil, Gas and Salt Resources of Ontario Provincial Operating Standards and Provincial Standards for Compressed Air Energy Storage in Salt Caverns: Applications and Operations

The ministry is proceeding to implement the proposed changes to both Provincial Standard documents to update all references to 3rd party codes and standards in a manner that ensures the newest edition always applies into the future.

Minor administrative changes have also been made in these documents, such as removing requirements to submit reports in duplicate, providing for email submissions, updating ministry names, and correcting typographic and section reference errors.

The changes will come into effect on July 1, 2023. 

Comments received

Through the registry

4

By email

5

By mail

0
View comments submitted through the registry

Effects of consultation

Amendments to Ontario Regulation 245/97

No comments were received on the proposal to make administrative updates to existing regulation provisions related to trustees to remove Banks and Credit Unions as possible trustees.

Comments on the changes related to CAES in porous rock reservoirs were generally supportive of regulating CAES porous rock projects under this act, while suggesting changes that would facilitate the industry’s ability to advance these types of projects. These suggestions included:

  • allowing more CAES porous rock projects to apply for authorizations (e.g., more types of subsurface storage areas)
  • providing broader project approvals up-front for business certainty, while accommodating operational flexibility during the initial development stages
  • scoping the information sources that the minister may rely on to elevate financial security levels
  • providing more phase-in time for industry to establish the full financial security amounts 

Some changes, as described above, have been made in response to these comments.

Comments also suggested the need for Tribunal hearings or appeals that are available to both landowners and proponents to address situations where there is an impasse on compensation or rights to use and access lands for the purpose of CAES in a porous rock reservoir. This would require changes to the act, which is outside of the scope of this proposal.

Amendments to the Oil, Gas and Salt Resources of Ontario Provincial Operating Standards and Provincial Standards for Compressed Air Energy Storage in Salt Caverns: Applications and Operations

Comments received on the proposal to update references to external (third-party) technical standards identified:

  • the need to provide transition periods for industry (e.g., 6-12 months lead time) and consideration of how the changes affect existing installations
  • concerns from operators that use wells for private, non-commercial uses related to potential impacts to their right to produce privately-owned resources, additional burdens and costs, and complexity of rules

One commenter wrote-in to identify concerns with the safety of petroleum well related equipment on a neighbouring property. This issue was referred to ministry compliance staff for follow-up.

The implementation date of July 1, 2023 will provide industry with several months advance notice of the initial changes. The revised Provincial Standards documents will be made publicly available on Ontario.ca in advance.

In order to mitigate potential industry concerns about adequate transition timeframes for changes to 3rd party standards that occur after July 2023, the ministry will monitor review processes undertaken by the standard development organizations and communicate with industry about these projects and impending changes to provide them additional time to adapt wherever possible.

Supporting materials

View materials in person

Some supporting materials may not be available online. If this is the case, you can request to view the materials in person.

Get in touch with the office listed below to find out if materials are available.

MNRF - RPDPB - Resources Development Section
Address

300 Water Steet
2nd Floor South
Peterborough, ON
K9J 3C7
Canada

Connect with us

Contact

Dallas Taylor

Phone number
Office
MNRF - PD - Resources Planning and Development Policy Branch
Address

300 Water Street, 2nd Floor, South Tower
Peterborough, ON
K9J 8M5
Canada

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Original proposal

ERO number
019-2935
Notice type
Regulation
Act
Oil, Gas and Salt Resources Act, R.S.O. 1990, c. P.12
Posted by
Ministry of Natural Resources and Forestry
Proposal posted

Comment period

January 19, 2021 - March 5, 2021 (45 days)

Proposal details

Under the Oil, Gas and Salt Resources Act, we regulate the drilling and operation of wells, and associated pipelines and equipment, used for activities such as the exploration and production of oil and natural gas, salt solution-mining, the underground storage of hydrocarbons, and compressed air energy storage projects using salt caverns. Almost all these activities occur in southwestern Ontario where the geology is the most conducive.

The following changes are being proposed:

Amendments to Ontario Regulation 245/97

  1. Make additional compressed air energy storage projects – those using porous rock reservoirs for storage – subject to the Oil, Gas and Salt Resources Act, providing a framework for some of these projects to seek approvals and operate under the Act. Prohibit other compressed air energy storage projects in reservoirs if they do not meet the scope of criteria set out in the proposed regulation. 
  2. Make administrative updates to existing regulation provisions related to Trustees to remove Banks and Credit Unions, as they are prohibited from acting as trustees under other legislation.

Amendments to the Oil, Gas and Salt Resources of Ontario Provincial Operating Standards and Provincial Standards for Compressed Air Energy Storage

  1. Update references to technical standards, produced by organizations like the Canadian Standards Association and American Petroleum Institute, and adopted under the Oil, Gas and Salt Resources Act framework, in a manner that will ensure that these references remain current into the future. 

If approved, the effective date of these changes would be July 1, 2021.

Further details of the proposal are outlined in the document included under the heading of Supporting Documents.

Regulatory impact statement

The anticipated environmental, social, and economic consequences of the proposal are expected to be neutral to positive.

In Ontario, there is currently no clear regulatory oversight for the use of wells to access porous rock reservoirs for the purpose of compressed air energy storage. The proposed changes would provide regulatory oversight of compressed air energy storage projects using porous rock reservoirs, with the objective of increased protection of public and environmental safety, as well as greater clarity and certainty for the energy storage industry. Another key objective of the proposed regulatory approach is to ensure consideration of input from local and Indigenous communities, and the public, in the application process for this type of compressed air energy storage project. 

The proposed updates to reference current external technical standards would improve clarity and certainty which would be expected to increase public and environmental safety going forward; however, it is recognized that the oil, gas, salt, and storage industries generally follow the most current standards as a part of their own business practices.

Supporting materials

View materials in person

Some supporting materials may not be available online. If this is the case, you can request to view the materials in person.

Get in touch with the office listed below to find out if materials are available.

MNRF - RPDPB - Resources Development Section
Address

300 Water Steet
2nd Floor South
Peterborough, ON
K9J 3C7
Canada

Comment

Commenting is now closed.

This consultation was open from January 19, 2021
to March 5, 2021

Connect with us

Contact

Policy Advisor – Resources Development

Phone number
Email address
Office
MNRF - RPDPB - Resources Development Section
Address

300 Water Steet
2nd Floor South
Peterborough, ON
K9J 3C7
Canada