Working on wells and associated works without the consent of an operator in limited circumstances to prevent, decrease, or eliminate a hazard to the public or to the environment

Bill 228 Resource Management and Safety Act, 2024

The government introduced Bill 228 Resource Management and Safety Act, 2024 that will help address the challenges Ontario is facing including a projected increase in wildland fire, managing carbon dioxide emissions, hazards posed by certain deteriorating oil and gas wells, and supporting rapid infrastructure and housing development.

Details

In Ontario, the Oil, Gas and Salt Resources Act (OGSRA) regulates the exploration and development of oil, gas, and salt solution-mining resources in the province. Under the Act, Ministry inspectors have the authority to enter on to private land to carry out their duties, including determining whether operators of a work (wells and equipment used in association with the well) are complying with the requirements of the Act, including its associated regulations and operating standards. The Act also allows Ministry inspectors to order a well operator to take steps to bring a work into compliance or to plug a well. It does not however provide the Ministry with the authority to perform work on the well and associated equipment directly without the permission of the operator, even in circumstances where the well has become a hazard.

There are thousands of oil and gas wells primarily located in southwestern Ontario, and over time, some can deteriorate and become hazardous. Leaking wells can lead to gas migrating away from the well which may contaminate drinking water or result in other hazards that can impact people and the environment. This can also affect neighboring properties. This proposal aims to enhance public safety and protect the environment by allowing the Ministry to directly address a hazardous well in situations where an operator is unwilling or unable to address the hazard because of death, insolvency or bankruptcy of an operator.

Under those circumstances the Ministry would have the authority to take action to prevent, decrease or eliminate a hazard that could harm people, property or the natural environment and pursue the non-compliant well operator for the costs of remediation. Actions by the ministry, or a service provider on behalf of the Ministry, could include, for example, well plugging, or temporarily shutting in a well by closing valves. The proposal has been scoped to apply to situations where the Ministry believes a delay in action to address the hazard could result in health, safety, or environmental consequences.

The proposal would also allow the Ministry to recover costs of any actions taken on the well and associated works required to come into compliance with the Act, its regulations and operating standards. Well operators in Ontario already establish financial security in a trust to provide some assurance that wells will be plugged and works completed at the end of their useful life in compliance with the OGSRA and its regulations..

If used to address a hazard, the Ministry could, with these proposed amendments, draw on a noncompliant operator’s financial security to carry out necessary actions, such as plugging or closing valves. Further, the Ministry could order that those funds from the trust would be replenished by the noncompliant operator(s). Finally, remediation costs could also be sought, further to this source, from the noncompliant operator(s).

The proposed changes would expedite response times in specific circumstances where the Minister would have authority to take action to prevent, decrease or eliminate a hazard without operator consent and to pursue non-compliant operator(s) for the cost of that remediation. Actions to reduce risks from wells supports the Ministry’s Legacy Well Action Plan, which was developed to tackle the challenges related to legacy oil and gas wells. The Action Plan’s goals are to enhance understanding of risks, develop risk management strategies, and support enhanced emergency planning and preparedness measures.

Proposed Changes:

The proposed amendments would:

Create the authority in the OGSRA for the Minister to take action, without the operator’s consent, to prevent, decrease, or eliminate a hazard to the public or to the environment.

• This authority would be scoped to preventing, decreasing or eliminating a hazard to the public or to the environment with respect to a well and associated works where:
  • An order has been issued to one or more of the operators of the work for compliance and the order has not been complied within the specified time
  • In the opinion of the Minister the work has become a hazard to the public or environment, and
  • A non-compliant operator of the work is deceased, was dissolved, or is bankrupt or has initiated bankruptcy proceedings.
• This authority would enable either the Ministry, or a direct service provider on behalf of the Ministry, to do the work needed to address the hazard.
• In those limited circumstances, to gain access to the land the Ministry would either:
  • Obtain the consent of the landowner;
  • Or in cases where this is not possible, a new power would enable the Ministry to seek a judicial warrant to enter the premises without the consent of the landowner to remediate the hazard.

Enable the Ministry to pursue non-compliant well operators for the costs of remediation.

• The proposal would also allow the Ministry to recover costs of any action taken on the well and associated work. To recover costs for remediation from a non-compliant operator in limited circumstances under the proposed changes, the Ministry may:
  • recover costs of any action taken on the well using the financial security provided by non-compliant well operator(s) under the OGSRA. The ministry could then order the non-compliant operator(s) of the well to replenish the security from which the costs for the work on the hazardous well were deducted; and/or
  • issue an order to non-compliant well operator(s) to pay for the costs of the actions needed to comply with the outstanding order and thereby address the hazard.

Regulatory impact analysis

There is no direct compliance cost associated with this proposal. Impacts to non-compliant well operators would be associated with complying to existing regulations/standards. There are no additional costs, including administrative costs, associated with this proposal.

This proposal aims to enhance public safety and protect the environment by allowing the Ministry to directly address a hazardous well in situations where an operator is unwilling or unable to address the hazard because of death, insolvency or bankruptcy of an operator. Therefore, environmental and social consequences are positive but narrowly scoped to the circumstances in which the proposal applies.

In these circumstances, not allowing a hazard to worsen can prevent more expensive remediation costs and can reduce damage to people and property and harm to the environment. The proposal would allow the work on the hazardous well to be expedited by the Ministry, and remediation costs recovered from the non-compliant operator(s).

When an operator is not meeting their responsibilities with respect to a well and incurring the associated costs, those liabilities can default to becoming the responsibility of others. In cases where a landowner and the well operator are different entities, this proposal could ultimately benefit the landowner who could be financially accountable for well remediation on their property if the operator is non-compliant and the hazard is not addressed. Cost savings could also be passed on to local municipalities who may otherwise have to provide emergency response services, or to adjacent landowners, who may incur costs of remediation on impacted areas of their property if a hazardous well is allowed to worsen over time.

The proposal also allows the Ministry to recover costs incurred by the Ministry or its service provider for addressing the hazardous well, therefore avoiding the need for public funds (taxpayers) to subsidize addressing the hazard and getting the well into compliance, which are the legal and financial obligations of well operators.