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Appendix A
List of Issues for Hearing GH-1-2004

1. The need for the proposed project.

2. The economic feasibility of the proposed project.

3. The potential commercial impacts of the proposed project.

4. The appropriateness of the general routes of the proposed pipelines.

5. The toll and tariff regulation of the proposed Mackenzie Gas Pipeline.

6. The suitability of the design of the proposed project.

7. The terms and conditions to be included in any approval the NEB may issue.

8. The appropriateness of the Applicants' public consultation program and the adequacy of aboriginal consultation.

9. The ability of the Proponents to manage risk and financial liabilities related to the construction, operation and decommissioning of the proposed project.

10. The appropriateness of the Development Plans for the Taglu, Parsons Lake and Niglintgak fields.

11. The estimated cost of construction of the Mackenzie Valley Pipeline for the purpose of subsection 5.2(1) of the National Energy Board Cost Recovery Regulations.

12. For the purpose of Phase 6 of the NEB process, the reports from the Joint Review Panel process.

13. The appropriate tolls, access and tariff provisions for the Mackenzie Gathering System and the methods for resolving disputes on these matters.

Appendix B
Recital and appearances

IN THE MATTER OF the National Energy Board Act (Act) and the Regulations made thereunder: and

IN THE MATTER OF an application filed with the National Energy Board on 7 October 2004 under file PA-IOR 2004-001, for a Certificate of Public Convenience and Necessity under Parts III and IV of the Act by Imperial Oil Resources Ventures Limited (IORVL) on behalf of itself, Mackenzie Valley Aboriginal Pipeline Limited Partnership (APG), ConocoPhillips Canada (North) Limited (ConocoPhillips), Shell Canada Limited (Shell) and ExxonMobil Canada Properties (ExxonMobil); and

IN THE MATTER OF an application filed with the National Energy Board on 7 October 2004 under file FacPipe IRL MGS-04 for authorization for the Mackenzie Gathering System, pursuant to paragraph 5(1)(b) of the Canada Oil and Gas Operations Act (COGO Act). The application was filed by Imperial on behalf of itself, ConocoPhillips, Shell and ExxonMobil; and

IN THE MATTER OF an application filed with the National Energy Board on 7 October 2004 under file FieldOp IRL Taglu-07 for approval of the Development Plan for the Taglu field, pursuant to section 5.1 of the COGO Act, filed by Imperial Oil Resources Limited; and

IN THE MATTER OF an application filed with the National Energy Board on 7 October 2004 under file FieldOp CPN Parsons-07 for approval of the Development Plan for the Parsons Lake field, pursuant to section 5.1 of the COGO Act, filed by ConocoPhillips on behalf of itself and ExxonMobil; and

IN THE MATTER OF an application filed with the National Energy Board on 20 October 2004 under file FieldOp SCL Niglintgak-07 for approval of the Development Plan for the Niglintgak field, pursuant to section 5.1 of the COGO Act, filed by Shell; and

IN THE MATTER OF National Energy Board Hearing Order GH-1-2004 dated 24 November 2004;

HEARD in Inuvik, N.W.T. on 25, 26, 27, 28, 30, 31 January and 1 February 2006; Norman Wells, N.W.T. on 24, 25 and 26 April 2006; Fort Good Hope, N.W.T. on 29 and 30 May 2006; Tulita, N.W.T. on 1 June 2006; Yellowknife, N.W.T. on 2 June, 24, 25, 26, 27, 28, 29, 31 July and 1 August 2006; Fort Providence, N.W.T. on 25, 26 September 2006; High Level, Alberta on 27 September 2006; Hay River, N.W.T. on 29 and 30 September 2006; Deline, N.W.T. on 2 October 2006; Wrigley, N.W.T. on 3 October 2006; Fort Simpson, N.W.T. on 4 and 5 October 2006; Inuvik, N.W.T. on 22, 23, 24, 25, 27, 28, 29, 30 November and 1 December 2006; Tuktoyaktuk, N.W.T. on 4 December 2006; Fort MacPherson, N.W.T. on 5 December 2006; Tsiigehtchic, N.W.T. on 6 December 2006; Inuvik, N.W.T. on 11, 12, 13 and 14 December 2006; Yellowknife, N.W.T. on 10 and 11 October 2007, 29 March and 12, 13, 14, 15, 16 April 2010; and Inuvik, N.W.T on 20, 21 and 22 April 2010.

BEFORE:

K.W. Vollman Presiding Member

G. Caron Member

D. Hamilton Member

APPEARANCES:

Imperial Oil Resources Ventures Limited (IORVL): D.G. Davies, B. Ho, T. Hughes, W. ShalaganWitnesses: Dr. G. Angevine, B. Bleaney, R. Boivin, K.M. Braaten, D. Brandes, D. Coolidge, B.J. Cunningham, K. Drysdale, R. Falconer, D. Gough, D.G. Harris, C.E. Heuer, K. Johnson, L. Kennedy, J. Kingsbury, B. Kohrs, G.L. Lee, R. Luckasavitch, H. Marreck, A. Martinson, D. Mazurek, K. McShane, J. Oswell, R. Ottenbreit, G. Penrose, Dr. A. Safir, C. Saunders, E. van Beurden, W. Veldman, A. Watson, W. Williams, M.M. Zhang

Imperial Oil Resources Limited: D.G. Davies, B.HoWitnesses: M. Curtin, D. Haeberle, B. Parent, M. Sykes, F. Yurkiw

Shell Canada Limited: S.H.T. Denstedt, M. Henderson,B. Gilmour, R. RodierWitnesses: P.M. Davies, P. Johnson, R.K. Johnson, M.A. Read, R.J. Ritchie

ConocoPhillips Canada (North) Limited: S.H.T. Denstedt, G. Teixeira, R. RodierWitnesses: R. Bleaney, A. Duguid, S. Kennedy, B. Plesuk, G. Prost

Alternatives North: K. O’Reilly

Apache Canada Ltd: A.W. Carpenter, S. CarpenterWitnesses: B. Jackson, B. Kalynchuk

Ayoni Keh Land Corporation: L.D. Rae

France Benoit: F. Benoit

BP Canada Energy Company: B. Wallace

Canadian Parks & Wilderness Society: K. Brekke

Government of Canada – Justice Canada: J.M. Shaw, R. MackWitnesses: C.A. Brumwell, M. Chenier, L. Clayton, W. Fenton, C. Gibson, R. Hurst, F. Lefebvre, C. Leowen, B. MacDonald, P. Szkwarok

Canadian Association of Petroleum Producers: N. Schultz

Chevron Canada Resources: K.F. Miller Witnesses: R. Maier, M. Morand, K. Nahm, K. Starkey

Dehcho Elders Council: Grand Chief H. Nowegian

Dehcho First Nations: Grand Chief S. Gargan, J. Acorn

Dehcho Harvesters Council: Grand Chief H. Nowegian

Ecology North: D. Ritchie

EnCana Corporation: R.K. Powell

Environment Canada: B. Rattan, C.J. Thomas, J.R. Harvey

Fort Simpson Métis Local No. 52: M. Lafferty

Gwich’in Tribal Council: R. Nerysoo

Indian and Northern Affairs Canada: S. Duke, R. GrawWitnesses: Dr. A. Baumgard, Dr. C. Burn, T. Kaiser, D. Livingstone, Dr. B. Roggensack, Dr. W. Savigny, E. Yaremko

Inuvialuit Regional Corporation: N. Cournoyea

Ka’a’Gee Tu First Nation: Chief L. Chicot

Lidlii Kue First Nations: Chief J. Antoine

Mackenzie Explorer Group: D.E. Crowther, J. Farrell, R. NeufeldWitnesses: Dr. L. Booth, J. Chipperfield, N. Deyell, M. Drazen, N. Dustan, L. Germiquet, G. Hiltz, R. Maier, K. Milne, M. O’Blenes, R.K. Powell, M. Scott, S. Willis

Mackenzie Valley Aboriginal Pipeline Limited Partnership: L.E. Smith, Q.C., F. Carmichael

MGM Energy Corp. (formerly Paramount Resources Ltd.): A.S. Hollingworth, N. Dilts, G. BunioWitnesses: R. DeWolf, W. Rausch

Mosbacher Operating Ltd.: L.L. Manning Witnesses: H. Baird, R.G. Dingwall

North Slave Métis Alliance: S. Grieve

Northern Pipeline Projects Ltd.: D. Anguish

Pehdzeh Ki First Nation: Chief T. Lannie

Government of Northwest Territories: C.W. Sanderson, Q.C., K. Bergner, C. Ferguson, J. FulfordWitnesses: Hon. B. Bell, R. Priddle, P. Vician

Sahdae Energy Ltd.: D. EvanchukWitnesses: A. Chung, D. Grabke, R. Lawrence

Sambaa K’e Dene Band: J. Lojek, S. Morgan, P. Redvers

Sierra Club of Canada: P. Falvo, K. Ferguson, S. Hazell Witnesses: E. May; M. McCulloch

Talisman Energy: F.C. Basham

World Wildlife Fund – Canada: P. Falvo, M. Hummel, Dr. R. Powell

Government of Yukon: J.H. Smellie, R.E. Smith, G.M. NettletonWitnesses: G. Engbloom; B. Love; K. Osadetz

National Energy Board: P. Enderwick, A. Hudson, D. Saumure

Written Final Argument: Acho Dene Koe First Nation, Alberta Department of Energy, Apache Canada Ltd., Ayoni Keh Land Corporation, Chevron Canada Ltd., North Slave Métis Alliance, Suncor Energy Marketing Inc.

Opening Remarks and Oral Statements: A. Andre, G. Andre, J. Andre, L. André, Chief F. Andrew, J. Antoine, J. Arsenault, L. Azzolini, G. Barbaby, D. Bayha, A. Beaudin, J. Bernard, P. Bhuggins, C. Brown, D. Campbell, S. Carle, B. Clement, D. Codzi, L. Cooke, M. Cox, M. Dubeau, Mayor D. Ehman, A. Elanik, J. Elleze, S. Elleze, M. Ellton, E. Erutse, D. Etchinelle, E. Freeland Ballantyne, Chief C. Furlong, M. Gannon, S. Gargan, D. Gaudet, G. Gibson, R. Gordon, G. Grandjambe, J. Grandjambe, R. Grandjambe, T. Grandjambe, F. Gruben, R. Gruben, L. Jackson, W. Jackson, J. Kakfwi, T. Kakfwi, Chief J. Kay, I. Katz, C. Kochon, G. Kochon, Chief R. Kochon, E. Koe, B. Kotchile, T. L. Kuptana, J. Lacorn, E. Lamothe, W. Landry, M. Lavigne, P. Lélorey, L. Lennie, Chief T. Lennie, L. Little, I. Manuel, T. Manuel, A. Martel, A. Masuzumi, H. McCauley, R. McCord, G. McMeekin, E. Menicoche, K. Menicoche, L. Menicoche Moses, Mayor M. Mihaly, Elder E. Mitchell, D. Nelner, Chief C. Neyelle, B. Nind, J. Norbert, Chief K. Norwegian, J. Paulson, M. Phelan, F. Pierrot, Chief R. Pierrot, J. Pokiak, B. Ritias, T. Remy Sawyer, Chief P. Ross, B. Saunders, D.L. Simmons, D. Sipos, D. Sonfrere, J.A. Snowshoe, S. Snowshoe, V. Teddy, M. Teya, J. Thomas, A. Tobac, C. Tobac, Jim Tutcho, John Tutcho, A. Tuninge, D. Vital, J. Vital, A. Williams, A. Yellee, A. Yallee for D’Arcy Moses

Appendix C
Summary of events

Appendix C Summary of events

Date

Event

June 2002

The Cooperation Plan for the Environmental Impact Assessment and Regulatory Review of a Northern Gas Pipeline Project through the Northwest Territories (Cooperation Plan) was issued. The Cooperation Plan set out a joint environmental impact assessment process to meet the requirements of the Canadian Environmental Assessment Act, the Mackenzie Valley Resource Management Act and the Inuvialuit Final Agreement.

February 2003

The Plan for Public Involvement in the Environmental Assessment of the Proposed Mackenzie Valley Gas Pipeline in the Northwest Territories was issued. The Plan provided general information to the public about opportunities to participate in the environmental impact assessment and regulatory review of an anticipated gas pipeline project through the Northwest Territories.

18 June 2003

The Preliminary Information Package for the Mackenzie Gas Project was submitted by the Proponents.

17 July 2003

The Mackenzie Gas Project was referred to the Minister of the Environment for the establishment of a review panel under theCanadian Environmental Assessment Act.

21 July 2003

An application for a Type A Land Use Permit and Type B Water License for the Camsell Bend Development was filed with the Mackenzie Valley Land and Water Board, triggering the environmental review process.

21 August 2003

The Minister of the Environment referred the Mackenzie Gas Project to a Joint Review Panel under theCanadian Environmental Assessment Act.

October 2003

The Draft Terms of Reference for the Environmental Impact Assessment of the Mackenzie Gas Project was released for comment by the Joint Secretariat for the Inuvialuit Settlement Region, the Mackenzie Valley Environmental Impact Review Board and the Canadian Environmental Assessment Agency.

December 2003

A Memorandum of Agreement was signed by the National Energy Board, the Mackenzie Valley Land and Water Board, the Northwest Territories Water Board, the Mackenzie Valley Environmental Impact Review Board, the Inuvialuit Game Council, the Canadian Environmental Assessment Agency, and the Department of Indian Affairs and Northern Development. The Agreement served to establish the Northern Gas Project Secretariat.

22 April 2004

The Agreement for the Coordination of the Regulatory Review of the Mackenzie Gas Project was released, setting out details for the environmental impact assessment by a Joint Review Panel, the coordination of hearings between regulatory agencies, and the maintenance of a public registry.

August 2004

The Environmental Impact Statement Terms of Reference for the Mackenzie Gas Project was issued by the Joint Secretariat for the Inuvialuit Settlement Region, the Mackenzie Valley Environmental Impact Review Board and the Canadian Environmental Assessment Agency.

9 August 2004

The seven-member Joint Review Panel was created.

16 September 2004

The Joint Review Panel released its Rules of Procedure for the conduct of the Environmental Impact Assessment of the Mackenzie Gas Project by a Joint Review Panel.

7 October 2004

The Environmental Impact Statement was submitted to the Joint Review Panel by the Proponents.

7 October 2004

Proponents submitted all but one of the applications for the Mackenzie Gas Project to the National Energy Board.

20 October 2004

Shell Canada Limited submitted its Niglintgak Development Plan Application to the National Energy Board.

24 November 2004

The National Energy Board issued Hearing Order GH-1-2004 including a schedule of events covering the technical review phase of the proceeding.

November 2004 to January 2006

The National Energy Board, Joint Review Panel and Northern Gas Project Secretariat conducted public information sessions in communities along near the proposed pipeline route. Also during this period the National Energy Board and Joint Review Panel carried out several rounds of information requests in their respective hearings.

23 December 2004

The National Energy Board finalized and issued its List of Issues for the proceeding.

13 July 2005

Imperial Oil Resources Ventures Limited announced that it would advise the National Energy Board in late summer of its readiness to proceed to hearing.

15 September 2005

Imperial Oil Resources Ventures Limited stated it would advise the National Energy Board and the Joint Review Panel in November 2005 of its willingness to proceed to hearing.

23 November 2005

Imperial Oil Resources Ventures Limited announced that it was willing to proceed to public hearings.

December 2005

The National Energy Board held a pre-hearing planning conference to assist parties in preparing for the National Energy Board public hearing. The conference was held in Inuvik, Yellowknife, Fort Good Hope, and Fort Simpson.

20 December 2005

A coordinated hearing schedule was released for the National Energy Board and Joint Review Panel hearings.

25 January 2006 to 14 December 2006

The National Energy Board held 47 days of hearings in 15 communities, starting and ending in Inuvik. The other locations were Norman Wells, Fort Good Hope, Tulita, Fort Providence, Yellowknife, High Level, Hay River, Déline, Wrigley, Fort Simpson, Colville Lake, Tuktoyaktuk, Fort McPherson and Tsiigehtchic.

14 February 2006 to 29 November 2007

The Joint Review Panel held 117 days of hearings in 26 communities, starting and ending in Inuvik.

7 April 2006

The Mackenzie Explorer Group filed a motion with the National Energy Board for an order that, when constructed and placed into service, the Mackenzie Gathering System and Mackenzie Valley Pipeline will be a single pipeline subject to regulation under Part IV of the National Energy Board Act and that Imperial Oil Resources Ventures Limited prepare, file and serve the toll principles and the tariff(s) for this single pipeline for approval under Part IV of the National Energy Board Act.

2 June 2006

An oral hearing was held in Yellowknife on the Mackenzie Explorer Group’s motion.

10 July 2006

The National Energy Board issued Ruling No. 16, denying The Mackenzie Explorer Group’s motion. The Mackenzie Explorer Group subsequently appealed the National Energy Board’s decision to the Federal Court of Appeal in August 2006.

14 December 2006

The National Energy Board completed its initially scheduled evidentiary hearing in Inuvik.

5 February 2007

The National Energy Board issued a list of potential conditions for comment by parties.

12 March 2007

Imperial Oil Resources Ventures Limited filed a project cost estimate and schedule update.

30 March 2007

Imperial Oil Resources Ventures Limited filed updated costs, tolls and fees.

15 May 2007

Imperial Oil Resources Ventures Limited filed supplemental information to its project updates.

10-11 October 2007

The National Energy Board held a hearing session in Yellowknife to examine updated evidence filed in the National Energy Board hearing.

28-29 November 2007

The Joint Review Panel heard closing statements in Inuvik.

22 April 2008

In Anadarko Canada Corp. v. (National Energy Board) [2008] F.C.J. No. 664, the Federal Court of Appeal dismissed Mackenzie Explorer Group’s appeal of the National Energy Board’s decision to dismiss the Mackenzie Explorer Group’s motion that the Mackenzie Gathering System when built should be regulated under the National Energy Board Act.

7 October 2009

The National Energy Board issued information on the next steps in its hearing in anticipation of the Joint Review Panel issuing its report.

30 December 2009

The Joint Review Panel issued its report.

30 December 2009

Mr. Rowland J. Harrison, Q.C. issued his subsection 15(1) report.

6 January 2010

The National Energy Board established a process to consult on the Joint Review Panel recommendations.

28 January 2010

The Proponents sent comments on the Joint Review Panel recommendations to National Energy Board and parties to both hearings.

11 February 2010

Parties to both hearings sent comments on the Joint Review Panel recommendations to the National Energy Board, the Proponents and other parties.

18 February 2010

The Proponents sent reply comments on the Joint Review Panel recommendations to National Energy Board and parties to both hearings.

9 March 2010

The National Energy Board provided proposed modifications to the Joint Review Panel for written response.

9 March 2010

The National Energy Board issued a revised list of potential conditions for comment by parties.

15 March 2010

Updated evidence, including evidence on economic feasibility and further evidence on the adequacy of Aboriginal consultation was filed with the National Energy Board.

29 March 2010

The Joint Review Panel responded to the National Energy Board’s proposed modifications to the Joint Review Panel recommendations.

29 March 2010

National Energy Board held a hearing session in Yellowknife to examine the updated evidence that was filed in its hearing.

8 April 2010

Written final argument was filed with the National Energy Board.

12-16 April 2010

The National Energy Board heard final argument in Yellowknife.

20-22 April 2010

The National Energy Board heard final argument in Inuvik. The hearing ended after a total of 58 days of hearing in 15 communities.

Appendix D
Development field reservoirs:
characteristics and exploration history

The Niglintgak and Taglu reservoirs are both located in the Reindeer Sands formed 60 million years ago during the Early Tertiary Period. This rock is considered to be fairly young, or immature, and poorly consolidated. This means that as gas is extracted, the rock may compress and crumble and the earth can slowly sink. Gas from Parsons Lake reservoir is found in the Kamik Formation of the Early Cretaceous Period, which was formed 140 million years ago. The Kamik Formation is more mature than the Reindeer Sands, and is consolidated. Although the fields share some similar geological characteristics, the reservoirs are all quite different. In the Niglintgak field, the gas is only about one kilometre below the surface, making it a relatively shallow field. In comparison, the Taglu and Parsons Lake fields contain gas about three kilometres below the surface. Characteristics of the gas in each reservoir also differ.

The Parsons Lake field covers a large widespread area with Significant Discovery Licence 030 and 032 covering 104 sections of land. The Niglintgak field's Significant Discovery Licence 019 and Taglu's Significant Discovery Licence 063 cover 12 and 20 sections of land respectively. The Niglintgak and Parsons Lake fields are expected to produce water immediately after gas production commences. Imperial does not anticipate producing any water with its gas production until approximately five years after the Taglu begins production. The natural gas from both the Taglu and Parsons Lake fields is rich containing large amounts of natural gas liquids whereas natural gas from the Niglintgak field is lean. In addition, natural gas from the Parsons Lake field contains significant amounts of carbon dioxide, 3 to 5 percent, which may present corrosion issues. The gas from the Niglintgak and Taglu fields contains small amounts of carbon dioxide.

Table D-1 Gas characteristics for the development fields

Table D-1 Gas characteristics for the development fields

Parameter

Niglintgak field

Taglu field

Parsons Lake field

Project life, years

25

30

25

Initial daily raw
natural gas
production,
Mm³/d (MMcf/d)

4.3 (150)

12.6(445)

9.0(324)

Initial daily
natural gas
liquids production,
m³/d (Bbl/d)

6(40)

1,230 (7,700)

520(3,271)

Expected commencement
of water production

12th year of production

5th year of production

1st year of production

Carbon dioxide, CO2,content
(%) of gas

0.90%

0.27%

3.00% north pool 5.00% south pool

Hydrogen Sulphide, H2S, content (%)
of gas

0.00%

0.00%

0.00%

Projected depth of production wells, mTVD (ft)

850-2,100
(2,789-6,890)

2,992-3,335
(9,816-10,941)

2,923-2,943

(9,590-9,655)

Expected initial
flowing wellhead pressure, MPa (psi)

9.651

(1,400)

17.80

(2,580)

23.002

(3,336)

Significant discovery licence(s)

SDL-019

SDL-063

SDL-030, SDL-032

Sections of land

12 sections of land

20 sections of land

104 sections of land

[1] Estimate for all wells except for the deep L, M and N sand well which is estimated to be 15.45 MPa (2,241 psi).

[2] Estimate for the north pool. The south pool is estimated to be 19.00 MPa (2,756 psi).

A brief description of the history of exploration and the approach to gas production follows for each field. Oil and gas companies have been exploring Canada's North since the 1950s. However, despite the lure of rich deposits of hydrocarbons, exploration and discovery in the harsh Arctic environment has proven to be a challenge.

Niglintgak

Shell first obtained exploration land in the Mackenzie Delta in 1958. The history of exploration for the Niglintgak field is shown in Table D-2.

Table D-2 Niglintgak exploration history

Table D-2 Niglintgak exploration history

Year

Activity

1960s and 1970s

2-D seismic surveys

1973

Drilling of discovery well H-30

1974 – 1977

Drilling of four additional exploratory and delineation wells

1988

SDL-019 issued

1988 – 1989

3-D seismic survey

2000

Declaration of a Commercial Discovery issued

The current model of the reservoir is based on information obtained from seismic surveys and exploratory wells. Results of the model for Significant Discovery Licence 019, which covers most of the Niglintgak field, are shown in Table D-3.

Shell, the operator of the Niglintgak field, subdivided the Niglintgak Reindeer Sands into 26 units, or layers, labeled sands A to Z. In some other layers there is no gas present or not in quantities large enough to be commercially extracted. Of the 26 units, Shell plans to produce, or extract gas, from the gas bearing A sands, D to G sands and the L to N sands. The model also indicates the reservoir is broken into several compartments as a result of faulting.

Did you know?

Commercial discovery, significant discovery and significant discovery licence

A commercial discovery is a discovery of petroleum that demonstrates petroleum reserves to justify the investment of capital and effort to bring the discovery to production (Canada Petroleum Resources Act).

A production licence is a licence for oil and gas rights issued in respect of all portions of the commercial discovery area that are subject to an exploration licence and/or a significant discovery licence by the Minister of Indian Affairs and Northern Development Canada upon application of an interest holder of the exploration licence and/or significant discovery licence where a commercial discovery is in force.

A significant discovery is a discovery indicated by the first well on a geological feature that demonstrates by flow testing the existence of hydrocarbons in that feature and, having regard to geological and engineering factors, suggests the existence of an accumulation of hydrocarbons that has potential for sustained production (Canada Petroleum Resources Act).

A significant discovery licence is a licence for oil and gas rights issued in respect of all portions of the significant discovery area that are subject to an exploration licence by the Minister of Indian Affairs and Northern Development Canada upon application of an interest holder of the exploration licence where a declaration of significant discovery is in force.

Table D-3 Reservoir model results for Significant Discovery Licence 019

Table D-3 Reservoir model results for Significant Discovery Licence 019

Parameter

Unit

 

Original gas-in-place

34.0 Gm³

(1.2 Tcf)

Recoverable gas

27.0 Gm³

(0.95 Tcf)

Recoverable natural gas liquids

40,000 m³

(250,000 Bbl)

Initial raw gas production rate

4.3 Mm³/d

(150 MMcf/d)

Taking into account this compartmentalization, Shell concluded that six production wells could efficiently produce the reservoir. These six wells would range in vertical depth from 850 to 2100 metres and from 1050 to 2550 metres in length and they would be directionally drilled from three well pads. The well locations and the plan and cross-section views of the well pad are shown in Figures 4-5 and D-1.

Four wells would produce the A sand, one well would produce the D to G sands, and one well would produce the L to N sands. Usually, gas from each unit is produced independently of the other units. However, in some cases it is more efficient to mix, or commingle, gas from several units when it is being extracted. Shell plans to make an application to commingle production from the D to G sands and from the L to N sands because of enhanced wellbore flow performance, improved ultimate recovery and economic reasons. The four A sands wells and the D to G sands well are expected to produce a lean sweet gas with little or no natural gas liquids. The L to N sands well would produce a richer gas. Shell estimates the average gas composition to be lean, 98 percent methane with the liquid-rich gas making up less than 5 percent of the total flow.

The locations for these initial six wells were chosen by Shell to optimize gas recovery with minimal water production. However, as wells begin to produce, the operators will have new reservoir data from flow tests

Figure D-1 A NW-SE cross-section of the Niglintgak reservoir and proposed initial well locations

Figure D-1 A NW-SE cross-section of the Niglintgak reservoir and proposed initial well locations

Did you know?

Definitions

Condensate - a liquid hydrocarbon mixture that may be separated from natural gas.

Natural gas liquids - a liquid hydrocarbon mixture that may be extracted from natural gas.

Rich or wet gas - natural gas that contains significant amounts of condensate or natural gas liquids.

Lean or dry gas - natural gas that contains little or no condensate or natural gas liquids.

and well analysis. This information will be used to determine if additional faulting and compartmentalization exist and whether any contingent wells would be required. This monitoring program would help ensure the Niglintgak field operates effectively and that gas recovery and production are optimized.

All original Niglintgak exploration and delineation wells were abandoned in 1996.

Taglu

Natural gas in the Taglu field is found in three sand units, or layers, known as the A, B, and C units of the Reindeer Formation in the Tertiary Period. The A sands, the Upper C and the Lower C sands are estimated to contain 95 percent of the original gas-in-place.

The history of exploration for the Taglu field is shown in Table D-4.

Table D-4 Taglu exploration history

Table D-4 Taglu exploration history

Year

Activity

1969

Start of 2-D seismic surveys

1971

Drilling of discovery well G-33

1971 – 1985

Drilling of seven additional exploratory and delineation wells

1987

SDL-063 issued

1987 – 1988

3-D seismic survey

2004

Declaration of a Commercial Discovery issued

Imperial used a computer model to estimate volumes of gas, natural gas liquids and water from its proposed wells. Results are shown in Table D-5.

Table D-5 Reservoir model results for the Taglu field

Table D-5 Reservoir model results for the Taglu field

Parameter

Unit

 

Original gas-in-place

109.0 Gm³

(3.8 Tcf)

Recoverable gas

81.0 Gm³

(2.8 Tcf)

Recoverable natural gas liquids

4.85 Mm³

(30.0 MMBbl)

Initial raw gas production rate

12.6 Mm³/d 

(445 MMcf/d)

Imperial's reservoir modeling results describe the Taglu field as being one fault block with minor faulting which is too small to compartmentalize the reservoir. This means the Taglu field is not anticipated to be partitioned and as a result Imperial is proposing to develop 10 to 15 production wells from a single well pad located near the centre of the reservoir. Imperial has provided 11 potential well locations including four wells that would produce from the A sands, four wells that would produce the B2, upper C, lower C and LC2 sands, and three wells that would produce the A and C sands. The vertical depth of these wells would range from about 2992 to 3335 metres. Imperial has indicated if production were not commingled, the field would have a lower gas recovery, a decelerated production profile and a negative economic impact. Imperial also plans to monitor the production wells to confirm the current reservoir model. If faults are located that compartmentalize the reservoir, then contingent wells would be developed. The original Taglu exploration and delineation wells have been abandoned.

Parsons Lake

The history of exploration for the Parsons Lake field is shown in Table D-6.

Table D-6 Parsons Lake exploration history

Table D-6 Parsons Lake exploration history

Year

Activity

1950s, 1960s, 1970s

2-D seismic surveys

1972

Drilling of discovery well F-09

1973 – 1977

Drilling of 17 additional exploratory and delineation wells

1988

SDL-030 & SDL-032 issued

2002

3-D seismic survey

2004

Declaration of a Commercial Discovery issued

Currently, ConocoPhillips believes the Parsons Lake field contains two main natural gas pools. The larger north pool contains approximately 85 percent of the reservoir's natural gas and is partially located under Parsons Lake itself while the rest of the pool stretches northeast of Parsons Lake. The smaller south pool is found southwest of Parsons Lake. The main gas bearing interval in both pools is the Kamik Formation of the Lower Cretaceous Period. ConocoPhillips plans to produce from the Kamik A, A1, B and C sands. The A1, B and C sands each contain roughly a third of the original gas-in-place for the entire Parsons Lake field. The results of reservoir simulation are shown in Table D-7.

Table D-7 Reservoir model results for Parsons Lake

Table D-7 Reservoir model results for Parsons Lake

Parameter

Unit

 

Original gas-in-place

97.7 Gm³

(3.45 Tcf)

Recoverable gas

64.0 Gm³

(2.3 Tcf)

Recoverable natural gas liquids

3.0 Mm³

(18.7 MMBbl)

Initial raw gas production rate

9.0 Mm³/d

(324 MMcf/d)

ConocoPhillips is planning to drill the field in two phases. In phase one, crews would drill nine production wells, two disposal wells and 10 contingent production wells from the north pad. Phase two would occur a few years later and would involve drilling three production wells and four contingent production wells from the south pad. If drilling results and further exploration activities indicate additional surface locations are required, ConocoPhillips is proposing three contingent satellite well pads, each holding up to three wells. The vertical depth of these wells would be about 3000 metres.

ConocoPhillips 1 reservoir model of the Parsons Lake field shows it is subdivided into 42 compartments because of multiple faults and multiple sands. Original gas-in-place estimates from the 19 compartments containing gas range from 0.9 to 16.4 Gm³ (32 to 580 Bcf). Like the other operators, ConocoPhillips is proposing to commingle production from the lower permeability sands of the Kamik Formation to effectively and economically deplete these compartments. This would include three wells commingling the A, A1 and B sands, and, three wells commingling the A1 and B sands from the north pad. The north pad would also include two wells which would produce from the C sands only and one well which would produce from the A1 sands only. Two wells are proposed to

[1] ConocoPhillips has proposed that the B-19 well initially produce from the C sands and be then recompleted to produce the A1 and B sands, commingled.

commingle the A1 and B sands in the south pool. The third well from the south pad would initially produce the C sands and then be re-completed to produce from the B sands. The advantages of commingling as outlined by ConocoPhillips include reduced costs and longer production life. Commingling would reduce costs because of a lower well count, a smaller project footprint and fewer re-completion programs and associated production downtime. Commingling would enable recovery from smaller reserve compartments and tighter and thinner sands. In addition, ConocoPhillips estimates the pressure differences are less than 0.30 MPa (43 psi) in the sands that would be commingled.

ConocoPhillips has indicated that uncertainty in geological, geophysical and reservoir engineering interpretations means the locations of wells drilled after start-up depend on production and drilling results. Despite the significant amount of information already known about the field, production data is needed to verify much of the geological modeling. Like Shell and Imperial, ConocoPhillips plans to monitor production and evaluate the need for any contingent wells.

As all original wells have been abandoned, new wells would need to be drilled to develop the Parsons Lake field.

Appendix E
Conversion factors and energy content

Abbreviation table

Abbreviation table

Metric prefixes

 

Equivalent

k kilo 10³
M mega   106
G giga 109
T tera 1012
P peta 1015
E exa 1018

 

Metric to Imperial conversion table

Metric to Imperial conversion table

Physical units

 

Equivalent

m metre 3.2808 feet
km kilometre 0.621 mile
cubic metre 6.292 barrels (oil or NGL),
35.301 cubic feet (gas)
MPa megapascal   145.037 psi
GJ gigajoule 0.95 million Btu
ha hectare 2.47 acres
Energy content table

Energy content table

 

Energy measures

Energy content

Electricity

 

MW.h

GW.h

TW.h

megawatt hour

gigawatt hour

terawatt hour

3.6 GJ

3600 GJ

3.6 PJ

Natural gas

 

MMBtu  

Mcf

MMcf

Bcf

Tcf

million British thermal units  

thousand cubic feet

million cubic feet

billion cubic feet

trillion cubic feet

1.05 GJ

1.05 GJ

1.05 TJ

1.05 PJ

1.05 EJ

Natural gas liquids

 

ethane

propane

butanes

18.36 GJ

25.53 GJ

28.62 GJ

Appendix F
Authorization MO-13-2004

IN THE MATTER OF Subsection 15(1) of the National Energy Board Act

AND IN THE MATTER OF an Authorization of a National Energy Board Member to Report and Make Recommendations to the National Energy Board on Matters relating to the Mackenzie Gas Project Application

BEFORE the Board on 15 October 2004.

A. Background

Imperial Oil Resources Ventures Limited, the Aboriginal Pipeline Group, ConocoPhillips Canada (North) Limited, ExxonMobil Canada Properties and Shell Canada Limited (Proponents) have applied or will be applyingto the National Energy Board (the Board) for a certificate under section 52 of the National Energy Board Act (NEBA) for the natural gas transmission pipeline, an approval under section 5.1 of the Canada Oil and Gas Operations Act (COGOA) for the production facilities at the Taglu, Parsons Lake and Niglintgak natural gas fields and for authorizations under paragraph 5(1)(b) of the COGOA for the Mackenzie gathering system, collectively the Mackenzie Gas Project (MGP).

The Board will designate a Panel (NEB Panel) to consider the Mackenzie Gas Project application pursuant to the NEBA.

A Joint Review Panel (JRP) of seven members has been established by agreement of the Mackenzie Valley Environmental Impact Review Board, the Inuvialuit as represented by the Inuvialuit Game Council and the Minister of the Environment to conduct an environmental impact review of the Mackenzie Gas Project that will meet the requirements of the

Canadian Environmental Assessment Act, the Mackenzie Valley Resource Management Act and the Inuvialuit Final Agreement.

A Board Member, Mr. Rowland Harrison, has been appointed as a member of the JRP.

The Board desires to authorize Mr. Harrison under subsection 15(1)of the NEBA to report and make recommendations on certain aspects of the application.

B. Authorization

In accordance with the provisions of subsection 15(1) of the NEBA, the Board hereby authorizes Mr. Harrison to report and make recommendations to the NEB Panel regarding the matters set out in Section C below for use by the NEB Panel in its consideration of the Mackenzie Gas Project .

Mr. Harrison has all the powers of the Board for the purpose of taking evidence and acquiring the necessary information for the purpose of making the report and recommendations on the Mackenzie Gas Project application.

This authorization allows Mr. Harrison to utilize the Joint Review Panel process to compile the evidence and information necessary for him to make his report and recommendations to the NEB Panel. Mr. Harrison will consider the matters identified in the Environmental Impact Statement Terms of Reference for the Mackenzie Gas Project dated August 2004 and any other matter that comes within

Section C upon which information or evidence is presented to the Joint Review Panel.

By virtue of this authorization, Mr. Harrison will consider all evidence and material presented to or obtained by the Joint Review Panel regarding the matters set out in Section C below in preparing and presenting his report and recommendations to the NEB Panel.

C. Matters for Report and Recommendations

In relation to the facilities described in Annex 1 to the Schedule: Project Description (which Schedule is appended to the Agreement for an Environmental Impact Review of the Mackenzie Gas Project executed July 27 to August 3 2004), Mr. Harrison's report and recommendations will have regard to the protection of the social, cultural and economic well-being of residents and communities and will include a consideration of the factors as set out in Annex 2 to the said Schedule: Joint Review Panel Mandate.

This authorization was approved by the Board on the 15th of October, 2004.

National Energy Board

[original signed by]

Michel L. Mantha

Secretary

Appendix G
Mr. Rowland J. Harrison’s subsection 15(1) report

30 December 2009

Ms. Anne-Marie Erickson

Acting Secretary

National Energy Board

444 – 7th Avenue S.W.

Calgary, Alberta

T2P OX8

Dear Ms. Erickson:

Mackenzie Gas Project Hearing Order GH-1-2004NEB Authorization Order MO-13-2004

I refer to the above Authorization approved by the National Energy Board (NEB or Board) on October 15, 2004, in accordance with the provisions of subsection 15 (1) of the National Energy Board Act (NEB Authorization).

On September 2, 2004, I was appointed by the federal Minister of Environment (Minister) as a member of the Joint Review Panel for the Mackenzie Gas Project (JRP), pursuant to the Agreement for an Environmental Impact Review of the Mackenzie Gas Project (JRPA), between the Mackenzie Valley Environmental Impact Review Board, the Inuvialuit Game Council and the Minister.

In accordance with the terms of the NEB Authorization and of the JRPA, I participated fully in the joint review of the Mackenzie Gas Project undertaken by the JRP and in preparing Foundation for a Sustainable Northern Future: Report of the Joint Review panel for the Mackenzie Gas Project (JRP Report).

On December 30, 2009, the JRP Report was posted to the JRP Registry. It can be accessed at http://www.ngps.nt.ca/registryDetail_e.asp.

I am a signatory to the JRP Report and agree with its conclusions and recommendations.

I adopt the JRP Report as my report to the NEB for the purpose of fulfilling the requirements of the NEB Authorization. Insofar as the JRP Report recommendations are directed to and address matters within the jurisdiction of the NEB, I recommend them for the Board’s consideration.

Yours truly,

[original signed by]

Rowland J. Harrison, Q.C.

Appendix H
National Energy Board’s letter to
Joint Review Panel regarding modifications

9 March 2010

Mr. Robert Hornal

Chair

Joint Review Panel for the Mackenzie Gas Project

c/o Northern Gas Project Secretariat

5114 – 49th Street

Yellowknife, NWT X1A 1P8

Mackenzie Gas Project (MGP) – Hearing Order
GH-1-2004 Consult to Modify Process for the Recommendations Identified in the Joint Review Panel (JRP) Report on the Environmental Impact Review of the Mackenzie Gas Project

The National Energy Board (NEB) is considering the JRP report (Report) issued on 30 December 2009. Pursuant to section 137 of the Mackenzie Valley Resource Management Act (MVRMA), the purpose of this letter is to consult with the JRP on possible modifications to the specific recommendations in the Report that were directed to the NEB. The NEB will make final decisions in these matters after final argument.

On 6 January 2010 the NEB set out a comment process regarding the Report and the JRP recommendations that were within the NEB’s mandate. On 28 January 2010 the NEB received comments from the Proponents of the Mackenzie Gas Project . On 11 February 2010 the NEB received comments from parties to the NEB Hearings and the JRP Hearings. On 18 February 2010 the NEB received reply comments from

the Proponents1. In accordance with subsection 137(2) of the MVRMA, the NEB is identifying the comments received as new information the NEB is considering that was not before the JRP.

The attached Table of Concordance for JRP Recommendations and NEB Proposed Conditions (Appendix 1) indicates how the NEB proposes to address each JRP recommendation that was addressed to the NEB. Some of the proposed modifications apply to more than one recommendation as described in the following categories.

Clarification of the Desired End Result

When the NEB prepares conditions it does so with a desired end result (DER) in mind. The DER is the goal or specific outcome expected in response to a condition. This way, the proponent can understand the intent of the condition and the NEB can verify compliance. The NEB prefers to use a goal-oriented approach in describing the DER, whereby the NEB is clear as to the specific outcomes that must be produced. The Proponent is left with flexibility in choosing how to best achieve these outcomes. Verification of compliance with statutes, regulations and conditions continues throughout the project lifespan from the approval stage and continuing through construction, operation and abandonment.

The NEB is considering modifying some of the recommendations to create conditions that have clearly stated desired end results, can be measured for compliance, and are goal-oriented.

[1] Documents from the comment process can be found on the National Energy Board's website by clicking on this hyperlink. Alternatively go to www.neb-one.gc.ca. On the right side of the page under “Major Applications (s. 52)” click on Mackenzie Gas Project, then click on the link under the heading “Regulatory Documents”. Go into the “6 - Joint Review Panel Report, Mr. Harrison's s. 15 Report and Consult to Modify Process” folder and choose “C - Comments to NEB on Joint Review Panel Recommendations”.

Prevailing Statutes and Regulations

Every certificate, authorization or approval issued by the NEB under the National Energy Board Act (NEBA) or the Canada Oil and Gas Operations Act (COGOA) must comply with the prevailing statutes and regulations. Regulations have been issued requiring companies to:

  • follow specified technical standards for the safety, security and protection of people, the environment and property (for example, the Onshore Pipeline Regulations, 1999 and the latest versions of relevant design codes, including the Canadian Standards Association Z662, Oil and Gas Pipeline Systems)
  • follow toll and tariff requirements (for example, the Toll Information Regulations and Gas Pipeline Uniform Accounting Regulations);
  • develop manuals, programs and plans to manage the operations of pipelines, plants and field developments.

The NEB expects to see these requirements reflected in environmental protection plans, design drawings and specifications filed pursuant to any approvals.

Flexible and goal-oriented regulations such as those made under the NEBA and COGOA allow regulatory requirements and industry practices to improve and adapt efficiently over the life span of a facility.

The Board issues guidance notes for its goal oriented-regulations which provide assistance to interested parties in understanding the requirements of the regulations and how requirements could be met. The NEB verifies compliance through audits and inspections.

In a number of instances recommendations require information to be filed which would come to the NEB through prevailing statutes and regulations. In these cases, a condition would be duplicative. Accordingly the NEB is considering not including such recommendations as conditions.

Adjustments to the Timing for Implementation

The NEB regulates safety, security, environmental and economic matters throughout a project’s life span. The NEB is considering reorganizing several recommendations to reflect the normal sequence of project activities and, accordingly, the filing of related manuals and plans.

Within the Jurisdiction of Other Regulatory Authorities

In the NEB’s view, some recommendations fall within the jurisdiction of other regulatory authorities. Conditions imposed by the NEB in such cases could conflict with existing and future regulatory requirements. Duplication serves no useful purpose and undermines an effective and efficient regulatory process. Therefore, the NEB is considering not including such recommendations as conditions.

The NEB will continue to work in collaboration with the organizations created by the land claim agreements in the Northwest Territories when matters of mutual interests arise in the implementation of the respective conditions attached to the various permits which may be issued in respect of the Mackenzie Gas Project .

Delegation of Authority

Some of the JRP’s recommendations require other persons, groups or agencies to approve something in order for a proposed NEB condition to be satisfied. In monitoring compliance with conditions it is important to be clear on who is accountable for specific outcomes. The NEB is charged by statute with making the decisions on whether the Mackenzie Gas Project , taking into account the conditions that would be imposed, is in the public interest. If the satisfaction of conditions must be approved by others, accountability becomes unclear. Multiple approvals for the same requirement do not contribute to achieving concrete results. Accordingly, the NEB considers it inappropriate to delegate these decisions to others by requiring their approval for conditions to be satisfied.

However, the NEB strongly promotes consultation with those affected by the decisions it makes and with those who have relevant expertise and information. Therefore the NEB is considering an approach whereby the Proponents are required to consult with appropriate parties and file the results of consultation with the NEB, rather than requiring other parties to approve the Proponents’ filings to the NEB.

Outside the Scope of the Mackenzie Gas Project Applications

Some JRP recommendations relate to future facilities for which applications have not yet been made to the NEB. Although some of these facilities were within the scope of the JRP’s environmental review, they are not within the scope of the applications the NEB is currently considering. The NEB is considering not including conditions that relate to future applications in the decisions it must make in the GH-1-2004 proceeding. These recommendations will be available for consideration by the NEB when applications for the future facilities come before it.

Operational Matters

Some JRP recommendations are directed to NEB operational matters rather than to the Proponents of the Mackenzie Gas Project . The NEB will consider these recommendations if it approves the project and if the Proponents decide to proceed, but they are not being considered for inclusion as conditions.

Closing

Should the Mackenzie Gas Project be approved, the JRP recommendations directed to the NEB with the possible modifications set out herein could be included as conditions in any approvals granted. For your reference a complete list of potential NEB conditions for the Mackenzie Gas Project is attached (Appendix 2).

The NEB will proceed to final argument on 12 April 2010 and requests that the JRP provide any comments it may have on the proposed modifications by 31 March 2010.

Yours truly,

[Original signed by J. Morales]

for

Anne-Marie Erickson

Acting Secretary of the Board

Attachments

cc: Parties to the JRP Hearing

Parties to the GH-1-2004 Hearing

Appendix I
Concordance table

Appendix I Concordance table

JRP No.

Title of JRP Recommendation

NEB Condition

5-1

Proponents’ Commitments

1, N1, T1, P1

Since the National Energy Board (NEB) may not adopt all of the recommendations in the Joint Review Panel (JRP) report, it proposes removing the phrase "or except where the Joint Review Panel for the Mackenzie Gas Project (the Panel) has recommended otherwise."

5-2

NGTL Approval Conditions

-

Outside the scope of the Mackenzie Gas Project (MGP) applications as it involves future application(s).

6-1

Baseline

37

Addressed in Condition 37.

Timing adjusted to require earlier submission of information.

Adjusted to clarify desired end result.

6-2

Final Designs, Impact Assessments, Mitigation Plans

3, 6, 7, 14, 38, 39, 41, 42, 44, 45, 46, 47, 48, 49, 51, 70, N7

The elements of this recommendation are addressed in the NEB conditions listed or through prevailing statutes and regulations [monitoring and ongoing mitigation of integrityand environmental issues would be dealt with during operation by the requirements of the Onshore Pipeline Regulations, 1999 (OPR) sections 39, 40 and 48].

Timing adjusted to require earlier submission of information.

6-3

Impacts of Climate Change

6, 70, 72, N8, T7, P8

Addressed in the conditions listed.

Timing adjusted to allow for earlier submission of information.

Adjusted to clarify desired end result.

6-4

Construction and Operations Plan – KIBS/Fish Island

3, 38, N11, T10, P10

Addressed in the conditions listed.

Kendall Island Bird Sanctuary (KIBS) – falls within the jurisdiction of other regulatory authorities [Environment Canada].

Fish Island – addressed through prevailing statutes and regulations [sections 39 & 48 of the OPR].

This recommendation will also be addressed in the Environmental Protection Plan.

6-5

Fill and Ditch Subsidence

44

Addressed in Condition 44.

6-6

Frost Bulb and Aufeis Mitigation

51

Addressed in Condition 51, which requires Proponents' consultation with Department of Fisheries and Oceans.

Timing adjusted to allow for consultation.

6-7

Groundwater Mitigation

48, 49

Addressed in Conditions 48 and 49.

To be incorporated into the slope design report required in Condition 48.

The NEB has the required expertise to assess adequacy.

6-8

Sediment Mitigation

3, 38

Sediment control is routine for stream crossing design and construction and the NEB would expect it to be part of stream crossing designs and incorporated within the Environmental Protection Plan as required by Conditions 3 and 38.

Addressed through prevailing statutes and regulations [post-construction monitoring for issues would be by overflights of the right of way undertaken as part of the monitoring and surveillance requirements of OPR section 39].

6-9

Acid Rock Drainage Mitigation

3, 38, 43

Timing adjusted to obtain the information earlier.

Conditions 3 and 38 incorporate the need for an acid rock drainage prevention plan.

Condition 43 includes consideration of the environment in the replacement backfill and padding specifications.

6-10

Taglu/Niglintgak Subsidence and Flooding

N4, T3

Addressed in Conditions N4 and T3.

Adjusted to clarify desired end result.

6-11

Permafrost and Terrain Research and Monitoring Program

39, 71, 72, N7

Although this recommendation is not directed at the NEB, the effects monitoring plan from recommendation 6-2 (Condition 39) as well as Conditions 71 and 72 will support any government program.

6-12

Adoption of Proposed NEB Conditions

9, 10, 37, 39, 43, 45, 46, 47, 48, 49, 51, 66, 70, 71, 72, N4, T3

Addressed in the conditions listed.

Outside the scope of the Mackenzie Gas Project applications to the extent it involves future application(s).

7-2

Spill Contingency Planning and Reporting

4, N20, T19, P19

The listed conditions require an Emergency Response Plan for the construction phase of the project of a greater scope than what is proposed in this recommendation.

Addressed through prevailing statutes and regulations [OPR sections 32 to 35 address the operations phase].

Canada Oil and Gas Operations Act (COGOA) paragraph 5(1)(b) requires a contingency plan.

7-3

Spill Prevention and Response – Highways

-

Falls within the jurisdiction of other regulatory authorities [Government of the Northwest Territories].

7-4

Spill Prevention and Response – Hazardous Materials

4

Addressed in Condition 4.

Addressed through prevailing statutes and regulations [the construction safety manual (OPR section 18) contains training and handling requirements].

The Environmental Protection Plan required for construction addresses the remaining issues as part of the general environmental protection measures.

During the operating phase, the training, handling and monitoring requirements for hazardous materials are dealt with as part of the Environmental Protection Program and Operations and Maintenance manuals.

COGOA paragraph 5(1)(b) requires safety plan, environmental protection plan and contingency plan.

7-5

Spill Prevention and Response – Bulk Fuel Storage on Ice or Water

-

Falls within the jurisdiction of other regulatory authorities [Transport Canada].

7-6

Spill Prevention and Response – Bulk Fuel Storage on Land

-

Falls within the jurisdiction of other regulatory authorities [Indian and Northern Affairs Canada].

7-7

Environmental Emergency Plans

4, 61, 62, N20, N21, T19, T20, P19, P20

Addressed in conditions listed. Incorporated in Emergency Response Plans.

Timing adjusted to allow for earlier filing of plans.

Adjusted to clarify desired end result.

Addressed through prevailing statutes and regulations [OPR sections 32 to 35 address the Operations phase].

COGOA paragraph 5(1)(b) requires safety plan, environmental protection plan and contingency plan.

7-8

Accident and Malfunction Plans –Earthquakes

4, 61, 62, N20, T19, P19

Addressed in the conditions listed.

Addressed through prevailing statutes and regulations [accidents and malfunction caused by an earthquake would be addressed in the Emergency Response Plan required by OPR section 32 and Conditions 61 and 62].

7-9

Transportation Emergency Preparedness and Response Plan

4, N20, T19, P19

Addressed in the conditions listed.

Incorporated in the Emergency Response Plans.

Adjusted to clarify desired end result.

7-10

Local Spill Response Teams

61

The proponent would be required to assess the potential for local spill response teams for pipeline operation as part of Condition 61.

7-11

Spills Management – Mackenzie River

-

This will be considered in collaboration with the other parties to the Northwest Territories/Nunavut Spills Working Agreement.

8-1

Regional Air Quality Management Strategy

-

Outside the scope of the Mackenzie Gas Project applications as it involves future application(s).

8-2

Final Design, Construction and Operations Procedures

13, N14, N16, T13, T15, P13, P15

Addressed in the conditions listed.

8-3

Air Quality and Emissions Management Plan

11, 12, 13, 15, 59, 67, N10, N11, N14, N15, N16, N17, T10, T13, T14, T15, T16, P10, P13, P14, P15, P16

Addressed in the conditions listed.

8-4

Air Quality Impacts Monitoring Program

15, 16, 59, N11, N12, T10, T11, P10, P11

Addressed in the conditions listed.

8-5

Waste Management Plan – Incineration

12, 16, 59, N11, N12, N15, T10, T11, T14, P10, P11, P14

Addressed in the conditions listed.

A waste management plan is also part of the Environmental Protection Program during operation.

8-6

Greenhouse Gas Emissions Targets

11, 13, 59, N11, N14, N16, T10, T13, T15, P10, P13, P15

Addressed in the conditions listed.

8-7

Greenhouse Gas Emissions Monitoring

59, N11, T10, P10

Addressed in the conditions listed.

9-1

Fish and Fish Habitat Decision Trees

50, N26, T25, P25

Addressed in the conditions listed.

Timing adjusted to allow Proponent more time for design and consultation.

Adjusted to clarify the desired end result.

Adjusted to replace the delegation of authority with consultation.

9-3

Stream Flow Mitigation

39, 51, 69

Addressed in the conditions listed.

Addressed through prevailing statutes and regulations [OPR 39 and 48].

Adjusted to replace the delegation of authority with consultation.

9-4

Fish Habitat Compensation Plan

-

Falls within the jurisdiction of other regulatory authorities [Department of Fisheries and Oceans].

9-6

Fish and Fish Habitat Inspection and Enforcement

-

The NEB would work with other responsible agencies as appropriate to develop an enforcement and inspection strategy.

9-7

Dredging and Barge Landings Plans

T9

Mackenzie Gas Project - Falls within the jurisdiction of other regulatory authorities [Transport Canada, Environment Canada & Department of Fisheries and Oceans].

Development plan applications - addressed in Condition T9 for the proposed Taglu barge landing.

9-8

Dredging Plans – VLMs

-

Falls within the jurisdiction of other regulatory authorities [Environment Canada and Department of Fisheries and Oceans].

9-9

Excavation/Dredging Plan – Niglintgak

N10

Addressed in Condition N10.

9-10

Marine Mammal Protection Plan

-

Falls within the jurisdiction of other regulatory authorities [Transport Canada, Environment Canada & Department of Fisheries and Oceans].

10-1

Wildlife Protection and Management Plans

29, 30, 31, N22, N23, N24, N25, T21, T22, T23, T24, P21, P22, P23, P24

To address the recommendations in chapter 10 of the JRP's report, a systematic approach to laying out the conditions is warranted to aid effective implementation and future compliance verification. The NEB has included a condition that sets out the framework for a Wildlife Protection and Management Plan based on the recommendations of the JRP, with species-specific details found in subsequent conditions. Together, this set of conditions is intended to address the JRP's recommendations related to wildlife protection and management.

Timing adjusted to allow for earlier filing of data.

Adjusted to clarify desired end result.

Adjusted to replace delegation of authority with consultation.

Outside the scope of the Mackenzie Gas Project applications to the extent that it involves future application(s).

10-2

Yellow Rail and Western Toad

34

Included as species-specific details to Wildlife Protection and Management Plan(s) (see 10-1).

Adjusted to replace the delegation of authority with consultation.

10-4

Listed Species Assessments

29, N22, T21, P21

Addressed in the conditions listed (see 10-1).

Adjusted to clarify the desired end result.

Outside the scope of the Mackenzie Gas Project applications to the extent that it involves future application(s).

10-6

Future Development and Woodland Caribou

-

Outside the scope of the Mackenzie Gas Project applications as it involves future application(s).

10-7

Parsons Lake Airstrip Operating Procedures

P21

Addressed in Condition P21.

Addressed in the Wildlife Protection and Management Plan(s) (see 10-1).

10-8

Porcupine Caribou Herd Protection Plan

31, N23, T22, P22

Addressed in the conditions listed.

Included as species-specific details to Wildlife Protection and Management Plan(s) (see 10-1).

Adjusted to replace delegation of authority with consultation.

10-11

Grizzly Bear Den Surveys

32, N27, T26, P26

Addressed in the conditions listed.

Included as species-specific details to Wildlife Protection and Management Plan(s) (see 10-1).

10-15

Future Development and Polar Bears

-

Outside the scope of the Mackenzie Gas Project applications as it involves future application(s).

10-16

Wildlife Protection and Management Plans – Listed Species

29, N22, T21, P21

Addressed in the conditions listed (see 10-1).

Outside the scope of the Mackenzie Gas Project applications to the extent that it involves future application(s).

10-17

Wood Bison Plan

33

Addressed in Condition 33.

Included as species-specific details to Wildlife Protection and Management Plan(s) (see 10-1).

Adjusted to replace delegation of authority with consultation.

10-18

Short-Eared Owls and Rusty Blackbirds Surveys

35, N24, T23, P23

Addressed in the conditions listed.

Included as species-specific details to Wildlife Protection and Management Plan(s) (see 10-1).

10-19

Peregrine Falcon Protection and Management Plan

36, N25, T24, P24

Addressed in the conditions listed.

Included as species-specific details to Wildlife Protection and Management Plan(s) (see 10-1).

10-20

Raptor Protection and Management Plan

36, N25, T24, P24

Addressed in the conditions listed.

Included as species-specific details to Wildlife Protection and Management Plan(s) (see 10-1).

10-24

Air Operations Plan – Taglu

T21

Addressed in Condition T21.

Addressed in the Wildlife Protection and Management Plan(s) (see 10-1).

10-25

De-Icing Fluid Management

16, N12, T11, P11

Addressed in the conditions listed.

Addressed in Waste Management Plan (see 14-3)

10-26

Noise Emissions – KIBS

N9, T8

Addressed in Conditions N9 and T8.

Alberta’s Energy Resources Conservation Board Directive 038 permissible sound level of 40 dBA at 1.5 km may be adjusted to reflect “best management practices” and “best available technologies”.

11-8

Approval of Community Conservation Plans and land use plans that incorporate socio-cultural and ecological thresholds

-

Outside the scope of the Mackenzie Gas Project applications as it involves future application(s).

11-10

Legal enforceability of approved Community Conservation Plans in the Inuvialuit Settlement Region

-

Outside the scope of the Mackenzie Gas Project applications as it involves future application(s).

11-15

Interim protection of Sahtu Settlement Area lands identified as having high conservation value or traditional and cultural importance

-

Outside the scope of the Mackenzie Gas Project applications as it involves future application(s).

11-16

Approval of the Sahtu Land Use Plan

-

Outside the scope of the Mackenzie Gas Project applications as it involves future application(s).

11-18

Approval of the Dehcho Land Use Plan

-

Outside the scope of the Mackenzie Gas Project applications as it involves future application(s).

12-2

Harvester Compensation Agreements (NWT) – Communication

-

Falls within the jurisdiction of other regulatory authorities [specified within the various Land Claim Agreements].

12-5

Harvester Compensation Agreements (Alberta) – Communication

-

Outside the scope of the Mackenzie Gas Project applications as it involves future application(s).

12-6

Worst-Case Scenarios

MGS1, MGS75, N1, N5, T1, T5, P1, P6

Addressed in the conditions listed.

13-2

Granular Management Plan

-

Outside the scope of the Mackenzie Gas Project applications as it involves future application(s).

13-3

Merchantable Timber

MVP75

Addressed in Condition 75 for the Mackenzie Valley Pipeline.

Adjusted to clarify desired end result.

13-6

Heritage Resources Management Plan

21

Addressed in Condition 21.

Adjusted to clarify desired end result.

14-1

Transportation and Logistics Plan

-

Falls within the jurisdiction of other regulatory authorities [GNWT].

14-2

Community Services/Infrastructure

22

Addressed in Condition 22.

Adjusted to clarify desired end result.

14-3

Waste Management Plan

16, N12, T11, P11

Addressed in the conditions listed.

15-9

Diversity Plans

23, N28, T27, P27

Addressed in the conditions listed.

Adjusted to clarify desired end result.

15-10

Employee Travel to Work Sites

-

Outside the scope of the Mackenzie Gas Project applications as it involves future application(s).

16-1

Closed Work Camps

24

Addressed in Condition 24.

16-2

Existing Camps

25

Addressed in Condition 25.

Adjusted to replace delegation of authority with consultation.

16-3

Worker Interactions – Fort Good Hope and Tulita

26

Addressed in Condition 26.

16-4

Noise Monitoring

15, 68, N9, N11, T8, T10, P9, P10

Addressed in the conditions listed.

16-23

Issues Resolution Program

27, N29, T28, P28

Addressed in the conditions listed.

Outside the scope of the Mackenzie Gas Project applications to the extent it involves future application(s).

17-1

Extension of NEB Decommissioning and Abandonment Principles

MGS77, MGS78, MGSTolls4, N5, N6, T5, T6, P6, P7

Addressed in the conditions listed.

Adjusted to clarify desired end result.

17-2

Coordination of Decommissioning and Abandonment Approvals

MGS77, MGS78, MGSTolls4, N5, N6, T5, T6, P6, P7

Addressed in the conditions listed.

Adjusted to clarify desired end result.

The NEB will continue to work collaboratively with Northern agencies to develop a coordinated and effective approach.

18-5

Adaptive Management Components

-

The NEB subscribes to the principles of adaptive management.

18-7

Local NEB Office

-

This is an operational matter that the NEB will consider should the applications be approved and the Proponents decide to proceed.

18-8

NEB Reports

-

The NEB will continue to work collaboratively with Northern agencies to develop a coordinated and effective approach regarding compliance and inspection activities for the project. All reports filed in compliance with conditions will be available on the NEB’s website.

18-9

Comprehensive Environmental Management Plans

3, 38, 59, N11, T10, P10

Addressed in the conditions listed.

Addressed through prevailing statutes and regulations [OPR and Canada Oil and Gas Drilling and Production Regulations].

18-10

Coordination of Compliance Monitoring

-

The NEB will continue to work collaboratively with Northern agencies to develop a coordinated and effective approach regarding compliance and inspection activities for the project.

18-11

Local Monitors

28, N30, T29, P29

Addressed in the conditions listed.

18-21

Future Developments

-

Outside the scope of the Mackenzie Gas Project applications as it involves future application(s).

Appendix J
Joint Review Panel’s response
to NEB’s consult to modify process

March 29, 2010

Ms. Anne-Marie Erickson

Secretary

National Energy Board

444 – 7th Avenue S.W.

Calgary, Alberta

T2P 0X8

Dear Ms. Erickson:

Mackenzie Gas Project (MGP) – Hearing Order GH-1-2004

Consult to Modify Process for the Recommendations Identified in the Joint Review Panel (JRP) Report on the Environmental Impact Review of the Mackenzie Gas Project

The Joint Review Panel for the Mackenzie Gas Project (JRP or Panel) acknowledges receipt of the letter of March 9, 2010 from the National Energy Board (NEB) for the purpose of “consult[ing] with the JRP on possible modifications to the specific recommendations in the [JRP] Report that were directed to the NEB” (the “NEB letter to consult”).

The JRP has considered the NEB letter to consult and provides the following comments.

The JRP first notes that neither the Panel’s Terms of Reference nor the Mackenzie Valley Resource Management Act (MVRMA) provide the Panel with any guidance on the Panel’s role in the “consult to modify” process, which, the Panel notes, is unique to the MVRMA. The Panel has considered the Mackenzie Valley Environmental Impact Review Board Reference Bulletin of June 5, 2005 but has found it to be of limited assistance in guiding the Panel.

In the absence of guidance, the Panel has concluded that its role is to provide overall comments directed at whether, in the Panel’s view, any modifications that are proposed to be made to the Panel’s recommendations would have the effect of nullifying or undermining the Panel’s overall conclusions with respect to the likely significance of the impacts of the Mackenzie Gas Project and its contribution to sustainability. In the Panel’s view, it is not the Panel’s role to “pass judgment” on the drafting of measures that appear to be directed at implementing the Panel’s recommendations.

It appears to the Panel that, generally, and subject to the following two paragraphs, the NEB Proposed Conditions have not rejected any of the Panel’s recommendations that are directed to the NEB and that the modifications proposed by the NEB are primarily for the purpose of ensuring that the implementation of those recommendations conforms to established NEB protocols and procedures, operational requirements and other statutes and regulations. Where the proposed modifications might affect the interests of other parties (for example, where information is to be provided to other regulators), the Panel notes that those parties may present their views to the NEB.

In the Table of Concordance forwarded with the NEB letter to consult, the NEB has noted in several instances that the relevant JRP recommendation is “[o]utside the scope of the Mackenzie Gas Project (MGP) applications as it involves future application(s).” The JRP does not understand this notation to be a rejection by the NEB of the relevant recommendation. The relevant JRP recommendations stand and the Panel expects that they would, accordingly, be considered by the NEB in the specific context of any future applications.

In several other instances, the NEB has noted in its Table of Concordance that certain JRP recommendations are “within the jurisdiction of other regulatory authorities…” In these instances, the substance of the Panel’s recommendations stands and the specific recommendations should be read as being directed to the relevant regulatory authority.

The Panel understands that the Government of Canada will, pursuant to section 135 of the MVRMA, consult the Panel in the event the Government proposes to make any modifications or rejections to the Panel’s recommendations. The Panel may make further comments at that time.

The Panel reaffirms its overall conclusion that the adverse impacts of the Mackenzie Gas Project and the Northwest Alberta Facilities would likely not be significant and that the project and those Facilities would likely make a positive contribution towards a sustainable northern future,

“subject to the full implementation of the Panel’s recommendations.”

Sincerely,

[Original signed by]

Robert Hornal

Joint Review Panel Chair

cc: All Parties to the Environmental Impact Review conducted by the Joint Review Panel for the proposed Mackenzie Gas ProjectMr. Joe Acorn

Appendix K
Conditions for the Mackenzie Valley Pipeline

Unless otherwise specified in the condition, pre-construction activities include activities such as: clearing and grading for infrastructure development; construction and operation of camp facilities; the development of borrow pits, roads, and airstrips; snow pad construction; the transportation and stockpiling of fuel and material; and geotechnical investigations necessary for the construction of the pipeline project. Pre-construction activities may include other activities such as clearing of the right of way if approved by the National Energy Board. Pre-construction activities do not include activities associated with normal surveying operations or data collection activities.

Unless otherwise specified in the condition, pipe-laying operations include the clearing of vegetation in proximity of water crossings and on thaw sensitive slopes, as well as grading and trenching and other forms of right of way and station site preparation that may have an effect on the environment through to final clean-up and reclamation.

Unless otherwise specified, Proponent consultation referred to in a condition must be carried out in a manner that includes the Proponent:

a) providing, to the party to be consulted,

  1. notice of the matter in sufficient form and detail to allow the party to prepare its views on the matter,
  2. a reasonable period for the party to prepare those views, and
  3. an opportunity to present those views to the party conducting the consultation; and

b) considering, fully and impartially, any views so presented.

Unless otherwise specified in a condition best available technology (BAT) means technology with superior emissions performance which is commercially available at a reasonable cost at the time it is required for the project which meets the goals of pollution prevention and energy efficiency.

Unless otherwise specified in a condition best management practices (BMP) are innovative, dynamic, and improved environmental protection practices and procedures that help ensure that development is conducted in an environmentally responsible manner. BMP may exist as formal guidelines or generally accepted procedures that are recognized by regulators and industry associations as best practices.

Conditions that correspond for the Mackenzie Valley Pipeline and the Mackenzie Gathering System

General

1. Unless the NEB otherwise directs, the Proponent shall cause the approved facilities to be designed, located, constructed, installed and operated in accordance with the commitments, specifications, standards, policies, mitigation measures, procedures, and other information referred to in its application or in the Environmental Impact Statement or other filings, or as otherwise agreed to during the GH-1-2004 Hearing and during the review by the Joint Review Panel.

2. Unless the NEB otherwise directs, the Proponent shall comply with all filing timelines and completion dates set out in these conditions.

Prior to Pre-Construction Activities

3. To compile and communicate all of the Proponent’s environmental protection procedures, mitigation measures, and monitoring commitments pertaining to pre-construction activities to its field staff and to the NEB inspectors, the Proponent shall file with the NEB an Environmental Protection Plan (EPP) for approval at least 90 days prior to the start of pre-construction activities. The EPP may be divided into separate plans by region or project area as deemed necessary.

The pre-construction EPP shall include:

a) the scope and area of application of the EPP;

b) environmental protection procedures and measures, including decision criteria for timing and implementation of these measures, site-specific plans and drawings, mitigation measures, and monitoring applicable to pre-construction activities;

c) an acid rock drainage prevention plan incorporating the testing of quarried and exposed rock during infrastructure, borrow pit and quarry development and provisions for the safe disposal or treatment of unsuitable material if required;

d) references to other plans and manuals for environmental protection required by field staff and inspectors; and

e) evidence of consultation with appropriate regulatory authorities and government subject matter experts in the area of application of the EPP.

4. To address worker and public safety and environmental protection during construction in the unique northern environment, the Proponent shall file an Emergency Response Plan with the NEB at least 60 days prior to the start of pre-construction activities which shall address 24-hour medical evacuation, fire response and hazardous chemical and fuel spill response and security issues. The Emergency Response Plan shall be prepared in consultation with Indian and Northern Affairs Canada, the Canadian Coast Guard, Transport Canada, Environment Canada, the Government of the Northwest Territories and the Inuvialuit Land Administration, as applicable, and shall include:

a) the scope of the plan detailing the project infrastructure, geographic and time period covered by the plan;

b) training and orientation requirements of company and contractor staff;

c) an inventory of petroleum products, chemicals and other hazardous substances, together with corresponding MSDS sheets, that will be transported, stored and/or used during the pre-construction and construction phases;

d) storage facilities and locations of the above inventoried products and substances;

e) identification of resources (equipment and staff) to be on-site and/or available to respond to emergencies;

f) identification of mutual aid partners and the location of their resources (equipment and staff) available to respond to emergencies;

g) procedures for responding to spills, releases, fires, medical emergencies and security issues including the incident reporting and notification system;

h) location of fire and spill response equipment stores and the spill kit requirements for vehicles;

i) a phone list of company, contractor, government agency and community representatives outlining their respective roles and information needs;

j) clean-up and disposal procedures for generated clean-up wastes;

k) identification of muster points for emergency evacuations from camps and facilities;

l) location of emergency medical treatment locations and capabilities;

m) the requirement for 24-hour emergency medical evacuation capability; and

n) maps showing the location of the right of way and infrastructure such as camps, access roads, material storage areas, barge landing sites and borrow pits to facilitate the dispatch of first responders.

5. To address worker and public safety in the unique northern environment, the Proponent shall file a construction safety manual with the NEB at least 60 days prior to the start of pre-construction activities.

6. To confirm consideration of the effects of climate change on specific geohazard mitigation, slope and stream crossing designs and terrain stability for the overall design life of the project, the Proponent shall file a report six months prior to the start of pre-construction activities which includes:

a) an analysis of the impacts of climate change and variability on permafrost and terrain stability for a series of representative locations and conditions using potential upper limit temperature scenarios which may occur along the Mackenzie Valley;

b) a description of how these upper limit temperature scenarios may impact precipitation and stream flows along the Mackenzie Valley;

c) a description of how the Proponent will account for the potential change in precipitation patterns in the detailed design of slopes and water course crossings for the project; and

d) the results of consultation with other appropriate regulators and government departments.

7. To facilitate NEB inspections, the Proponent shall file with the NEB updated environmental alignment sheets at least 90 days prior to pre-construction activities, and shall file with the NEB any modifications as they become available.

8. To facilitate NEB inspections, the Proponent shall file with the NEB a detailed construction schedule or schedules identifying major activities at least 30 days prior to pre-construction activities and pipe-laying operations, and shall notify the NEB of any modifications to the schedule or schedules as they occur.

9. To demonstrate that project winter roads will be constructed and operated in a safe and environmentally acceptable manner, the Proponent shall file with the NEB a manual for the construction, operation, maintenance and closure of project winter roads at least 30 days prior to the start of project winter road construction. The manual shall include:

a) required road width, clearing and grading requirements, grade, allowable speed, signage, maximum vehicle weight;

b) objective and measurable environmental and engineering criteria to determine when the winter road will be ready for use;

c) safe ice thickness criteria for lake, river and stream crossing including the frequency of ice profiling;

d) local regulatory requirements;

e) installation and removal requirements for snow fills, culverts, corduroy and temporary bridges; and

f) objective and measurable environmental and engineering criteria for closure.

10. To demonstrate that the pipeline and project winter roads will be constructed and operated in a safe and environmentally acceptable manner, the Proponent shall file with the NEB a copy of any applicable permits, authorizations and letters of advice issued by the Federal departments, the Government of the Northwest Territories, or local regulatory organizations that are referred to in an EPP or winter road manual at least 90 days prior to pre-construction activities.

11. The Proponent shall evaluate the technologies and practices available to reduce emissions of particulate matter (PM) and PM and ozone precursors from its facilities and construction related activities, and incorporate the BMP and BAT to reduce emissions of PM and precursors of PM and ozone to the extent practicable. The Proponent shall file a report of its findings and how it will implement its findings to the NEB at least six months prior to construction of the Inuvik Area Facility, compressor stations and heater stations.

12. The Proponent shall evaluate and implement technologies and practices available to reduce mercury, dioxin and furan emissions from incinerators operating at construction camps and its station facilities to the extent practicable. The Proponent shall file a report of its findings and how it intends to implement its findings to the NEB at least 60 days prior to the operation of its construction camps and station facilities.

13. The Proponent shall file with the NEB at least 60 days prior to the start of station facility construction, a report outlining:

a) the specific design and operational measures it has implemented and will implement to minimize methane leakage and venting through the system’s operation taking into account BMP developed by CAPP, Environment Canada, the Canadian Energy Partnerships for Environmental Innovation and the Canadian Gas Association;

b) how the Proponent has utilized waste heat energy to minimize natural gas fuel consumption in the design of the Inuvik Area Facility;

c) the use of BAT when specifying compressor units used on the project including size, efficiency and their conformity with Canadian Council of Ministers of the Environment National Emissions Guidelines for Stationary Combustion Turbines (CCME,1992); and

d) results of consultation with Environment Canada and the Government of Northwest Territories.

14. To demonstrate that the design is experimentally verified and that the inputs and outputs of the design calculations are clearly determined for overland, slope and water crossing designs, the Proponent shall file with the NEB at least six months prior to the start of pipe manufacture:

a) a stress/strain analysis, including all inputs, assumptions, outputs, methods, and outline of process of calculation;

b) a detailed description and results of all verification tests performed in support of the stress/strain analysis;

c) an explanation and reconciliation of any differences and uncertainties that may result among:

i) stress/strain analysis inputs and outputs;

ii) results of verification tests;

iii) final material properties specifications; and

iv) loads, stresses and strains pipelines may experience during transportation, construction, and operation; and

d) a description of the processes for the implementation of changes that may occur between the design information and material specifications submitted to the NEB as a result of Conditions 14 and 18, and the detailed design and the actual material properties.

15. The Proponent shall file with the NEB for approval, at least 30 days prior to the start of pre-construction activities an Air Quality Monitoring Program developed in consultation with Environment Canada, Health Canada and the Government of the Northwest Territories, to be undertaken immediately prior to and during construction. This program shall include:

a) identification of the baseline, pre-construction conditions;

b) the location of monitoring sites on a map or diagram, the purpose for the locations selected, and the timing for installation;

c) methods and schedule of constituent monitoring (PM, O3, NO2 and noise);

d) data recording, processing and reporting details;

e) the process for public communication and complaint response; and

f) details of the additional measures that would be implemented as a result of monitoring data or ongoing concern, and the criteria or thresholds that would require these measures.

The Proponent shall include a legacy plan detailing the measures that would be continued through the operation phase as a result of monitoring undertaken or ongoing concern and the criteria or thresholds that are used to determine when they would no longer be required.

16. In order that the right of way, camps and supporting infrastructure are maintained, operated and left in an environmentally acceptable condition following the construction phase of the project, the Proponent shall file a Waste Management Plan with the NEB for approval 90 days prior to the start of pre-construction activities. This plan shall be developed in consultation with the Government of the Northwest Territories, Indian and Northern Affairs Canada and Environment Canada.

The Waste Management Plan shall address all wastes associated with the construction of the project with the objectives of minimizing impacts to the environment and ensuring worker and public safety. The plan shall address air, land and water quality; measures to minimize animal attraction; and preventing uncontrolled fires. The scope of the plan shall include:

a) disposal or treatment of potentially hazardous and dangerous materials, including petroleum products, toxic or persistent chemicals, oily wastes, de-icing fluids and fuel barrels;

b) solid waste management including metals, plastics, recyclables, incinerator ash, equipment, equipment parts, batteries, building materials and construction waste;

c) food waste management;

d) management of contaminated soil, snow and ice from spills and de-icing activities;

e) treatment and disposal of waste water (including domestic sewage and grey water); and

f) incinerator emissions monitoring.

The plan shall address:

i) incineration and evaporator technology choices and rationale for selection;

ii) training requirements for operators;

iii) waste segregation requirements;

iv) interim waste storage;

v) treatment;

vi) testing method for waste streams proposed for release to the environment (e.g. air and water);

vii) disposal method for waste streams proposed for release to the environment; and

viii) final off-site waste disposal locations and facilities including evidence of facility approvals and compliance with regulations.

17. To mitigate potential localized low fracture toughness in or adjacent to the welds which could be detrimental during anticipated pipeline deformation at low operating temperatures, the Proponent shall:

a) determine the minimum acceptable value for the crack tip opening displacement (CTOD) for weld metal and heat affected zone of mill circumferential, helical (if practicable) and longitudinal welds, for the lowest installation temperature and the most severe deformation during construction or operation. The CTOD tests shall be conducted for all combinations of pipe steel producers and pipe mill manufacturers and be representative of applicable project pipe with the maximum Carbon Equivalent (CE) heat;

b) determine the minimum acceptable value for the CTOD for field circumferential welds for the lowest installation temperature and the most severe deformation during construction or operation. The CTOD tests shall be conducted at the welding procedure development phase, for all combinations of pipe steel producers and pipe mill manufacturers and be representative of applicable project pipe with the maximum CE heat. Deviations in the essential changes as specified in CSA Z662-07, Table 7.3 and Table K1 will require weld procedure requalification and retesting to determine the minimum acceptable value for the CTOD; and

c) file with the NEB minimum acceptable CTOD values and results of the tests:

i) for the mill qualification welds, at least 60 days prior to the pipe manufacture; and

ii) for the field circumferential qualification welds, at least 60 days prior to the field welding.

18. To demonstrate compliance with appropriate regulations, standards and engineering practices and to facilitate NEB audits, the Proponent shall file with the NEB the following documents,to be finalized prior to the procurement of materials:

a) project-specific material specifications for pipe, fittings, valves, and pig launchers and receivers, at least 90 days prior to the start of manufacture of each of these elements;

b) specifications for plant-applied coatings for buried and exposed pipeline(s) and valves, at least 90 days prior to the application of each coating. The specifications shall include coating materials, application methods, and verification test results;

c) specifications for materials to be used for the manufacture of stations, the Inuvik Area Facility, and the Trout Lake Heater Station, including applicable standards, and non-destructive examination methods and frequency, at least 60 days prior to the start of the manufacture of each of these facilities;

d) joining program for mill welding, at least 90 days prior to the start of manufacture of pipe, components or facilities in the plant;

e) non-destructive examination specifications for the mill non-destructive examinations at least 90 days prior to the start of each non-destructive examination; and

f) project-specific quality assurance programs for all materials, components, and processes at least 90 days prior to manufacture of pipe components and facilities.

19. Unless the NEB otherwise directs, to facilitate NEB monitoring, the Proponent shall file with the NEB project progress reports that summarize major activities by construction spread, as follows:

a) every month during active construction periods; and

b) every two months during pre-construction and inactive construction periods.

These reports shall also provide:

i) the description of any significant pipeline and facilities design changes;

ii) the list of any current and cumulative number of incidents, accidents, or hazardous occurrences as defined in regulations pursuant to the National Energy Act and the Canada Labour Code Part II;

iii) a description of any major activities planned for the next reporting period;

iv) locations and proposed timing of any planned pressure tests; and

v) locations of any unsuccessful pressure tests and their cause.

20. To demonstrate the effective management of safety and environmental protection matters during pre-construction and construction, the Proponent shall file with the NEB at the start of field pre-construction activities, a diagram of the project’s organization, clearly identifying roles, responsibilities and reporting structure.

21. The Proponent shall file with the NEB, at least 30 days prior to the start of pre-construction activities, the Heritage Resources Management Plan as reviewed by the Prince of Wales Northern Heritage Centre.

22. The Proponent shall file with the NEB, at least 90 days prior to the start of pre-construction activities, the results of consultations regarding the conclusion of fee-for-service agreements with affected communities respecting the use of community services or infrastructure facilities.

23. The Proponent shall file, at least 90 days prior to the start of pre-construction activities, diversity plans, inclusive of gender equality, for both the construction and operations phases of the Mackenzie Gas Project. The plans shall include:

a) methods for determining diversity goals;

b) identification of diversity goals;

c) steps to achieve the identified goals;

d) commitments to the provision of a healthy and safe work environment;

e) steps to create a Diversity Management Committee; and

f) a monitoring and reporting system.

The Proponent shall require its contractors and subcontractors to comply with the Proponent’s diversity plans.

24. To minimize and address adverse impacts of any interactions between the construction workforce on the Mackenzie Gas Project and the communities in proximity to the project, the Proponent shall implement closed work camps. This requirement shall apply to all new work camps proposed by the Proponent, its contractors and subcontractors.

25. To minimize and address adverse impacts of any interactions between workers in existing open camps that may be used for the project and the communities in proximity to those camps, the Proponent shall identify to the NEB whether any of the existing open construction camps will be used, either directly or indirectly, in relation to project construction. Where existing open camps are to be used and are to remain open, the Proponent shall develop a plan to minimize and address adverse impacts of any interactions. The plan should be developed in consultation with affected communities, identify the specific measures to be employed to address adverse impacts, and comply with the commitments made by the Proponent. The plan shall be filed with the NEB at least six months prior to the start of pre-construction activities.

26. To minimize and address potential adverse impacts of any interactions between the construction workforce on the Mackenzie Gas Project and the communities of Fort Good Hope and Tulita, the Proponent shall file with the NEB, at least six months prior to the start of pre-construction activities, a plan to monitor the interactions between the construction workforce and the communities. The plan shall be developed in consultation with the leadership of Fort Good Hope and Tulita, and include:

a) plans for monitoring interactions;

b) the specific measures that will be employed to address adverse interactions, should any be identified; and

c) plans for regular consultation and reporting on interactions with both potentially affected communities.

27. The Proponent shall file with the NEB, at least six months prior to the start of pre-construction activities, plans for a formal issues resolution program that will be implemented during construction and operations of the Mackenzie Gas Project. The plans shall be prepared in consultation with the government of the Northwest Territories, the Government of Yukon and Aboriginal authorities, and include:

a) a description of the process by which any complaints or issues related to the Mackenzie Gas Project would be raised with the Proponent or governments;

b) a description of the process by which any received complaints or issues would be allocated among those with responsibility for action and a description of the roles and responsibilities of any party involved in assessing or responding to any complaint or issue;

c) a description of the process by which any received complaints or issues would be resolved;

d) a description of any protocols developed for referral and resolution of any complaints or issues;

e) a description of the recourse mechanisms for any unresolved complaints or issues or any unsatisfactorily resolved complaints or issues; and

f) a description of the process for communicating and informing communities about the issues resolution program.

28. The Proponent shall file, prior to the start of pre-construction activities, information related to the hiring of local residents as monitors to carry out compliance and environmental impact monitoring for the Mackenzie Gas Project including:

a) the nature of the activities to be monitored;

b) clearly defined job descriptions for the positions as monitors;

c) identification of the training that will be offered to monitors to enable them to perform their duties; and

d) confirmation that monitors have been hired.

29. To minimize project-related impacts on wildlife species, the Proponent shall file with the NEB for approval, before the detailed pipeline route is filed with the NEB and at least 90 days priorto the start of pre-construction activities, a Wildlife Protection and Management Plan or Plans to address general wildlife protection and specific protection of woodland caribou, barren ground caribou, grizzly bear, polar bear and wolverine. The Wildlife Protection and Management Plan(s) shall specify goals, area covered by the plan(s), and assumed zones of influence of project activities and rationales for these assumptions. The Wildlife Protection and Management Plan(s) may be divided into separate plans by region or project area as deemed necessary.

The Wildlife Protection and Management Plan(s) shall include:

a) results of pre-construction surveys, including surveys for species at risk listed on Schedule 1 of the Species at Risk Act public registry (listed species) except where the Minister has determined that recovery for the species is not feasible, and locations of any observations of species classified as at risk or may be at risk on the most recent Committee on the Status of Endangered Wildlife in Canada assessment and NWT General Status Ranks;

b) updated impact assessments for listed species in consideration of the Species at Risk Act, conducting the impact assessments directly on the listed species where possible rather than using one or more indicator species;

c) mitigation measures including:

i) measures to avoid or minimize disturbances including linear disturbance and effects of habitat fragmentation, sensory disturbance, and barriers to movement;

ii) scheduling of project activities to minimize wildlife disturbance;

iii) measures to minimize the development footprint in habitats known to support listed species;

iv) measures to limit predator travel along right of ways;

v) procedures to avoid disturbance of potential maternal denning areas;

vi) access management, including provisions for public consultation;

vii) protocols and education/awareness activities for managing human-wildlife interactions, including measures to limit harvesting and to deter wildlife, especially bears, from entering camps and other facilities;

viii) measures to reduce the impacts of access road, right of way, and other project-related vehicle and air traffic on wildlife and migratory birds; and

ix) any wildlife protection measures included in other project management plans, or references to those measures;

d) protocols for monitoring and adaptive management including:

i) establishing and maintaining linkages to regional programs;

ii) survey protocols to be employed to avoid or prevent impacts to wildlife;

iii) plans for monitoring responses of wildlife to project activities during all phases of the project;

iv) protocols for documenting habitat loss and habitat change as well as wildlife incidents, interactions and mortality; and

v) measures to determine the effectiveness of mitigation measures, criteria to determine when and how mitigation measures should be adapted, as well as the responses proposed to address unforeseen effects;

e) implementation plans, including:

i) details on how the plans will be implemented by the Proponent;

ii) the measures the Proponent will take to enable the participation of local monitors; and

iii) the process for updating the protection plan as information gaps are addressed, including listed species’ recovery strategies and action plans;

f) processes for oversight and reporting with respect to the Wildlife Protection and Management Plan(s) and how those processes will be implemented; and

g) evidence of consultation with the Government of the Northwest Territories, Environment Canada and appropriate wildlife management boards or comparable organizations.

To support the Wildlife Protection and Management Plan(s), the Proponent shall implement the following species-specific requirements, set out in Conditions 30 to 36, in additionto the specifications of Condition 29.

30. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29) with respect to woodland caribou:

a) timing and dates during which project-related activities would occur so as to avoid or minimize conflict with caribou movement or sensitive feeding or calving time; and

b) evidence of consultation with the Dehcho Boreal Caribou Working Group.

31. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29) with respect to barren ground caribou:

a) timing and dates during which project-related activities would occur so as to avoid or minimize conflict with caribou movement or sensitive feeding or calving time;

b) plans to address any impacts from the project on the Porcupine caribou herd resulting from increased use of the Dempster Highway by project-related traffic; and

c) evidence of consultation with the Porcupine Caribou Management Board and the Government of Yukon.

32. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29) with respect to grizzly bear:

a) a plan to conduct annual grizzly bear den surveys during pre-construction activities and pipe-laying operations prior to the commencement of work planned for the coming season;

b) proposed mitigation measures for avoiding disturbance to grizzly bear dens; and

c) a commitment to file the results of the surveys annually during pre-construction activities and pipe-laying operations, prior to the commencement of work planned for the coming season, with the Government of the Northwest Territories and appropriate wildlife management boards.

33. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29):

a) mitigation measures to avoid creation of preferred bison habitat; and

b) a monitoring program to detect wood bison use of the Mackenzie Gas Project’s right of way and a process to develop mitigation measures in consultation with the Government of the Northwest Territories if wood bison start using the project right of way.

34. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29):

a) the results of a survey in those parts of the Local Study Area where, based on the most recent assessment by the Committee on the Status of Endangered Wildlife in Canada, the yellow rail and western toad might occur, to confirm the presence or absence of those species;

b) proposed mitigation and monitoring measures specific to yellow rail and western toad, based on the results of this survey; and

c) evidence of consultation with Environment Canada and the Government of the Northwest Territories.

35. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29) a commitment to conduct pre-construction, construction and post-construction surveys and monitoring programs in relation to short-eared owls and rusty blackbirds and to file this information with the Government of the Northwest Territories.

36. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29) mitigation measures specific to raptors, including peregrine falcon and bald and golden eagles, that include the following restrictions on project-related activities or facilities, unless the NEB otherwise directs:

a) for permanent structures, long-term habitat disturbance including pipeline right of way, road, quarry, camp, etc., ground and air access, and blasting maintain a setback of 1000 m from nest sites between April 15 and September 1 for peregrine falcons and between March 30 and July 31 for all other raptors; and

b) for aircraft overflight, maintain a setback of 760 m above ground level from nest sites between April 15 and September 1 for peregrine falcons and between March 30 and July 31 for all other raptors.

Prior to Pipe-laying Operations

37. The Proponent shall undertake a geotechnical verification program to support the final design and construction of the project facilities and shall file with the NEB 90 days prior to pipe-laying operations or station construction:

a) copies of all borehole logs and the results of geophysical surveys completed; and

b) an updated assessment of permafrost, ground ice and terrain conditions along the Mackenzie Valley Pipeline including, as applicable, copies of all published information regarding permafrost conditions, ground ice and terrain conditions used in the assessment.

38. To compile and communicate all of the Proponent’s environmental protection procedures, mitigation measures, and monitoring commitments pertaining to pipe-laying operations to its field staff and to the NEB inspectors, the Proponent shall file with the NEB an Environmental Protection Plan (EPP) for approval at least 90 days prior to the start of pipe-laying operations. The EPP may be divided into separate plans by region or project area as deemed necessary.

The EPP for pipe-laying operations shall include:

a) the scope and area of application of the EPP;

b) environmental protection procedures and measures, including decision criteria for timing and implementation of these measures, site-specific plans and drawings, mitigation measures, and monitoring applicable to pipe-laying operations;

c) an acid rock drainage prevention plan incorporating the testing of quarried and exposed rock during trenching, borrow pit and quarry development and provisions for the safe disposal or treatment of unsuitable material if required;

d) a reclamation plan which includes a description of the condition to which the Proponent intends to reclaim and maintain the right of way, a description of measurable goals for reclamation, methods to minimize invasive plant introduction and measures to maximize vegetation recovery;

e) references to other plans and manuals for environmental protection required by field staff and inspectors; and

f) evidence of consultation with appropriate regulatory authorities and government subject matter experts in the area of application of the EPP.

39. To promote safety of the pipeline and protection of the environment and to advance knowledge of the effects of pipeline construction and operation in permafrost environments the Proponent shall develop an effects monitoring program for the project. The purpose of this program is to:

a) monitor the effects of the environment on pipeline integrity;

b) monitor the long-term effects of the construction and operation of pipeline on the physical environment; and

c) validate design assumptions and approaches and monitor the effects of construction and operations practices used on the project.

This program shall take into account the results of the geotechnical verification program, the geohazard assessment and observations

made during construction and shall be developed in consultation with Indian and Northern Affairs Canada, Natural Resources Canada and the Department of Fisheries and Oceans. The program shall address and identify changes in thermal regimes and their environmental effects, including existing and potential thaw settlement, frost heave, slope stability, river crossing scour, aufeis, drainage and fish passage impedance and erosion issues, and how these would be affected by successive changes in compressor station configuration. The program shall outline the monitoring methods to be used, instrumentation locations and the frequency of monitoring. The results shall be integrated into the Proponent’s integrity management program and environmental protection program. The Proponent shall file with the NEB:

i) a report for approval, at least 90 days prior to the start of pipe-laying operations, which outlines the scope, objectives, monitoring methodologies and frequencies and the criteria for the selection of instrumentation sites for the program;

ii) on 1 April of each subsequent year of pipeline construction, locations it has chosen to monitor, the rationale for selection, the instrumentation required and the time of its installation; and

iii) a report by 30 November of each year describing the results of this program, and its mitigation/intervention plans to address issues identified.

40. The Proponent shall file with the NEB for approval the Construction Safety Manual at least 60 days prior to the start of pipe-laying operations.

41. The Proponent shall file with the NEB the final Pipeline Construction and Facility Specifications at least 60 days prior to the start of construction. The specifications shall be of sufficient scope and detail to demonstrate the suitability of the specifications prior to the start of pipe-laying operations and facility construction.

42. To facilitate NEB inspections, the Proponent shall file with the NEB updated engineering and environmental alignment sheets at least 90 days prior to the start of pipe-laying operations, and shall file with the NEB any modifications as they become available.

43. The Proponent shall file with the NEB for approval the replacement backfill and padding specifications at least 60 days prior to the start of pipe-laying operations. The specifications shall include provisions to ensure the replacement backfill and padding do not contain materials injurious to the pipeline, its coating and the environment.

44. Unless the NEB otherwise directs, to determine the effectiveness of the Proponent’s plans for remediating ditch fill settlement for the project, the Proponent shall file a report with the NEB 90 days prior to the start of pipe-laying operations, which addresses:

a) its methods for determining the quality and quantity of imported fill required to remediate excess ditch settlement;

b) the timing and methods for hauling and stockpiling the fill materials;

c) the methods it will use to assess and address the need for additional replacement backfill or manage any excess backfill during final clean up and reclamation;

d) methods and locations for the disposal of excess excavated material not required for backfill; and

e) evidence of consultation with land managers and appropriate regulators.

45. To demonstrate that it has adequately assessed and mitigated against geohazards and to facilitate NEB monitoring during operations, the Proponent shall file with the NEB, at least 90 days prior to the start of pipe-laying operations, a Geohazard Assessment for the project describing:

a) its geohazard assessment methodology and the specific and combined geohazards identified along the route that have a reasonable probability of impacting the project;

b) specific measures to be implemented to mitigate individual and combined geohazards;

c) decision criteria for the implementation of mitigation for geohazards identified during construction;

d) the qualifications of the staff making decisions regarding design and implementation; and

e) the ongoing monitoring requirements.

46. To demonstrate that the pipeline design can accommodate an increase in compressor stations over time and is sufficient to withstand anticipated frost heave and thaw settlement loadings, the Proponent shall file with the NEB at least 90 days prior to the start of pipe-laying operations:

a) a report summarizing the findings of the final design frost heave and thaw settlement analysis for overland areas demonstrating that the pipeline design is sufficient to withstand anticipated frost heave and thaw settlement loadings. Where analysis indicates that the strain demand over the design life may exceed the strain capacity of the pipeline materials (omitting the effect of secondary mitigation measures), the report shall describe the site specific secondary measures incorporated into the design or integrity management program to prevent the pipeline from exceeding the critical threshold strain limits.

b) an assessment of the impacts of changing pipe operating temperatures associated with an increase in compressor stations over time, on the right of way. Where the assessment indicates that significant impacts may occur, the secondary measures required to mitigate these impacts shall be identified and reflected in the design prior to construction.

47. The Proponent shall undertake a hazard analysis identifying reasonably foreseeable hazards or problems with horizontal directionally drilled (HDD) activities, based on site specific data, and develop specific contingency plans for each HDD crossing. The Proponent shall file the hazard analysis and contingency plans

with the NEB at least 60 days prior to the start of construction of an HDD watercourse crossing. The plans shall identify and address, where applicable, site-specific concerns such as the presence of ice-rich permafrost and other potentially unfavorable geotechnical conditions.

48. To facilitate NEB inspection during construction and monitoring during operations, and to confirm that there have been no significant changes to the slope design methodology, the Proponent shall file for approval with the NEB a Slope Design Methodology Final Report following the completion of final design and at least 90 days prior to the start of pipe-laying operations. The Slope Design Methodology Final Report shall include:

a) the slope design methodology, data requirements, assessment techniques and pre-construction slope inventory;

b) revisions to threshold slope angles, critical longitudinal and critical cross slope criteria based on findings from final design and further geotechnical investigations;

c) target Factor of Safety for longitudinal and cross slope designs;

d) details of selected passive ground cooling systems including the proposed number, location, type, refrigerant, typical drawings, corrosion protection and installation method;

e) details of the selected surface insulation(s) including type, source, thickness and specified mitigation against the introduction of noxious weeds (if applicable);

f) details of erosion control requirements including typical drawings and spacing requirements for berms, plugs and ditches;

g) results of thermal analysis showing 10 and 25 year thaw depth predictions for the startup, 3, 7 and 14 station configurations based on selected thermal mitigation options for thaw sensitive slopes exceeding critical slope length, slopes identified as potential concerns from a stability perspective which cannot be avoided by route refinements, and slopes that have or will have

slope instrumentation installed during the construction phase;

h) typical design drawings for various slope conditions;

i) specific designs for thaw sensitive slopes exceeding critical slope length;

j) a tabular summary of sites requiring site-specific slope designs, indicating the location and identification number of the slope, slope angle, slope length, slope height, orientation, actual or assumed soil conditions, nature of the site-specific issue and proposed mitigation measures; and

k) a slope stability response plan describing the actions the Proponent shall take, and the timing of those actions, should monitoring indicate that the Factor of Safety for a slope falls below the design Factor of Safety or thaw depth exceeds predicted values.

49. The Proponent shall file with the NEB for approval a Field Changes Manual, for Slopes at least 90 days prior to the start of pipe-laying operations. The manual shall include:

a) specific criteria for the implementation of changes to the designs, grading, materials, installation procedures, thermal stabilization measures, erosion mitigation measures and monitoring;

b) details regarding the required qualifications of its field staff implementing the manual; and

c) consultation required with other experts and regulatory authorities and the scope of that consultation.

50. To protect traditional harvesting of fish from adverse impacts related to project stream crossings, the Proponent shall file with the NEB, at least 90 days prior to the start of pipe-laying operations, the final suite of decision trees proposed to manage the impacts of the Mackenzie Gas Project on fish and fish habitat including:

a) an explanation of the decision-making process, the criteria for decision-making and the mitigation options;

b) a description of how the Proponent will address the importance of fish habitat and fish populations to local communities and harvesters; and

c) evidence of consultation with Fisheries and Oceans Canada and the relevant management boards and agencies with regard to the decision trees.

51. To demonstrate the adequacy of scour protection and thermal mitigation measures of watercourse crossing designs and facilitate NEB inspection during construction, the Proponent shall file for approval with the NEB at least 90 days prior to the start of pipe-laying operations:

a) a revised Watercourse/Waterbody Crossing Inventory, in both PDF and MS Excel spreadsheet format, describing the watercourse name and numerical identifier, coordinates, stream class, width of wetted channel, construction method, design type, minimum pipeline cover, navigability and fish habitat status and level of assessment;

b) detailed final design drawings and plans for all watercourse and waterbody crossings requiring site specific designs, including HDD crossings, showing the design flood level, calculated vertical and lateral scour potential and detailing proposed thermal, erosion, scour control and ground water flow mitigation measures;

c) detailed final design drawings of typical designs for open cut and isolated crossings of Lakes, Active I, Active II and Vegetated Channel watercourses detailing proposed thermal, erosion, scour control and ground flow mitigation measures;

d) 25 year frost bulb growth/thaw settlement analysis (for the start up, 3, 7 and 14 station configuration), including predicted strain demand/ available strain capacity and frost bulb dimensions, for all Large, HDD, Active I and Active II watercourse crossings which demonstrates that changes in the thermal regime of the pipe associated with changes in compressor station configurations or degraded insulation effectiveness will not result in aufeis conditions or unacceptable pipe strains; and

e) evidence of consultation with the Department of Fisheries and Oceans in regards to the design of stream crossings.

52. To facilitate NEB monitoring, the Proponent shall notify the NEB at least 30 days prior to qualifying the automated ultrasonic non-destructive examination procedures for mill and field circumferential welds.

53. The Proponent shall develop the joining program and file it with the NEB at least 30 days prior to conducting welding procedure qualification tests for:

a) field circumferential production, tie-in and repair pipeline welds; and

b) welding of project facilities.

The joining program shall include:

i) requirements for the qualification of welders;

ii) requirements for the qualification and duties of welding inspectors;

iii) welding procedure specifications;

iv) non-destructive examination specifications;

v) quality assurance program for field welds and welding procedures; and

vi) any additional information which supports the joining program.

54. To facilitate NEB inspection, the Proponent shall file with the NEB procedure qualification records for welding and non-destructive examination within 30 days of the completion of procedure qualification tests.

55. To facilitate NEB inspection, the Proponent shall file with the NEB the specifications for field applied coatings at least 60 days prior to the start of pipe-laying operations.

During Construction

56. To facilitate NEB inspection of all phases of construction, the Proponent shall provide when requested, logistical support to NEB staff undertaking inspection of construction and reclamation, at a reasonable cost to the NEB. (For clarity, the scope of this support is limited to transportation of NEB staff and vehicles to isolated camp locations, vehicle fuel and maintenance, meals and accommodation, office space and communications support.)

57. Unless the NEB otherwise directs the Proponent shall pressure test the approved facilities with a liquid medium and submit the Pressure Testing Program, demonstrating compliance with applicable codes, standards and regulatory requirements, to the NEB for approval at least 60 days prior to the start of pressure testing; or in the event that a hydrostatic test is not practicable, the Proponent shall file with the NEB for approval, at least 60 days prior to the start of any air testing activities, the Proponent’s air testing measures. The program shall include:

a) information demonstrating the ability of the leak test to detect the same size leak as a comparable hydrostatic test;

b) information demonstrating that the pipeline has adequate notch toughness;

c) a description of the specific safety precautions to be implemented during the pressure test; and

d) a confirmation of successful leak test of pipeline sections prior to their installation under watercourses, lakes and ponds.

58. To verify implementation of the Proponent’s quality assurance and control plans and procedures, the Proponent shall file monthly summary reports during construction outlining non-conformances with its design, materials, and construction specifications and the disposition of these non-conformances.

Prior to Operation

59. The Proponent shall file with the NEB for approval, at least 90 days prior to the planned start of operation, the elements of the Environmental Protection Program for the operation and maintenance of the pipeline pursuant to section 48 of the Onshore Pipeline Regulations, 1999. The elements to be submitted include but are not limited to policies, practices and procedures for:

a) ongoing environmental training for employees/operators;

b) handling and disposal of all wastes associated with the operation and maintenance of the project;

c) management of air emissions, including:

i) maximum Proponent-identified and/or legislated discharge limits for PM and NOx;

ii) maximum Proponent-identified greenhouse gas targets;

iii) reduction strategies for air emissions including PM, NOx, and greenhouse gases;

iv) monitoring and measurement methods; and

v) record keeping including annual reporting of greenhouse gases to the NEB;

d) public communication program (non-emergency); and

e) program review and consultation with Environment Canada and the Government of Northwest Territories.

60. To demonstrate that in-line inspection tools will be able to support effective integrity management programs, the Proponent shall submit to the NEB at least 90 days prior to the start of system operation:

a) the type, description, specifications, operating limits and detection limits of all in-line inspection tools which can be used by the Proponent during operation of its pipelines;

b) data on the inertial curvature in-line inspection tool(s) developed for the project indicating the detectable level of displacement and associated strain, the recommended pig velocity, and the relationship between pig velocity and strain resolution; and

c) intervention values for all parameters that will be monitored by in-line inspection tools.

61. The Proponent shall prepare:

a) an Emergency Preparedness and Response Plan for the project prior to the start of system operation and file with the NEB the Emergency Procedures Manual at least 30 days priorto the start of operation; and

b) a report, to be filed with the Emergency Procedures Manual, which outlines:

i) the potential for the establishment of local, community-based spill response teams to assist in responses to Mackenzie Gas Project incidents;

ii) a discussion of the opportunities and constraints of establishing local spill response teams including a training and equipment needs assessment; and

iii) the Proponent’s commitment to work with local communities to build and maintain community spill response capacity.

In preparing its Emergency Preparedness and Response Plan, the Proponent shall have regard to:

1) the NEB letter dated 24 April 2002 entitled Security and Emergency Preparedness Programs addressed to all oil and gas companies under the jurisdiction of the NEB and subsequent amendments made thereafter; and

2) emergency responses required as a result of significant earthquakes which may require a broader scope of response.

62. To demonstrate that it is prepared to respond to an emergency at the outset of operation, the Proponent shall hold an emergency response exercise to evaluate the effectiveness of the Emergency Preparedness and Response Plan at least 10 days prior to the start of system operation and file a letter of notification with the NEB upon the successful completion of the exercise.

63. Unless the NEB otherwise directs the Proponent shall file with the NEB a report describing the final design of the SCADA and leak detection system for the Mackenzie Valley Pipeline at least 90 days prior to the start of operation of the Mackenzie Valley Pipeline. The report shall include information suitable for establishing a base line for the quality program for its SCADA and leak detection system and shall include:

a) a description of the SCADA and leak detection system;

b) the location and type of pressure, temperature and flow monitoring and control devices and remote terminal units;

c) the location of remotely operated valves;

d) the target detect ability (e.g., amounts leaked, time to detect, leakage rate);

e) the target sensitivity (i.e., minimum leak size);

f) the target reliability (i.e., false alarm rate, failure to alarm rate);

g) the expected system robustness (i.e., system availability in light of the system operating conditions);

h) the target accuracy (i.e., size and location of a detected leak); and

i) a description of the quality program using both direct and inferred methods that the Proponent shall implement during the operational phase of the project to ensure optimal performance.

64. To demonstrate that the SCADA and leak detection system are calibrated to actual system conditions, the Proponent shall file with the NEB, reports describing the results of the Proponent’s quality program for its SCADA and leak detection system and how identified issues were addressed. Unless the NEB otherwise directs, the reports shall be filed one year, three years and five years after the start of system operation.

During Operation

65. Within 30 days of the date that the approved project is placed in service, the Proponent shall file with the NEB a confirmation, by an officer of the company, that the approved project was completed and constructed in compliance with all applicable conditions in this Certificate. If compliance with any of these conditions cannot be confirmed, the officer of the company shall file with the NEB details as to why compliance cannot be confirmed. The filing required by this condition shall include a statement confirming that the signatory to the filing is an officer of the company.

66. To facilitate monitoring during operation, the Proponent shall file with the NEB, within six months of the start of system operation, a geotechnical construction report including maps and drawings, which identifies and describes:

a) longitudinal and cross slopes identified during construction as requiring ongoing monitoring;

b) locations where passive cooling systems were installed;

c) locations where slope instrumentation including thermistors, piezometers and slope inclinometers were installed;

d) slopes exceeding the critical slope length which were identified during construction as being thaw sensitive or exhibiting evidence of soil movement;. and

e) locations where slope design changes were made in accordance with the Field Change Manual for Slopes and the reasons for the design change.

67. To minimize or reduce air emissions from flaring, the Proponent shall meet the Guideline for Ambient Air Quality Standards in the Northwest Territories and Alberta’s Energy Resources Conservation Board Directive 60: Upstream Petroleum Industry Flaring, Incinerating and Venting.

68. To minimize noise disturbance from pipeline facilities, the Proponent shall:

a) design pipeline facilities to meet the requirements of Alberta’s Energy Resources Conservation Board Directive 038; and

b) file with the NEB, 90 days following the start of operation, a post construction noise assessment report.

69. To aid NEB inspectors in confirming the effectiveness of mitigation techniques and any adaptation required, as well as to identify effects that were not predicted and appropriate adaptive management to address these effects, the Proponent shall file with the NEB a post-construction environmental report that reflects any monitoring or follow-up program developed, including:

a) identification on a map or diagram of any environmental issues which arose during construction;

b) the criteria used or to be used to verify the accuracy of the environmental assessment predictions;

c) the determination of the accuracy of the environmental assessment predictions;

d) discussion of the effectiveness of the mitigation applied pre-, during and post- construction and where adaptive management was necessary;

e) identification of the current status of the issues identified describing whether those issues are resolved or unresolved; and

f) proposed measures and schedule that the Proponent shall implement to address any unresolved concerns.

The report shall be filed on or before the 31 of January of each of the first, third, fifth and tenth years following the start of project operation, unless the NEB otherwise directs.

70. Unless the NEB otherwise directs, to demonstrate the management of pipeline integrity and thermal effects on the right of way the Proponent shall monitor geotechnical and thermal effects on the pipeline(s) with respect to thaw subsidence, frost heave and slope stability by:

a) undertaking a detailed as-built survey prior to backfill which documents the position of the pipeline for comparison with future in-line inertial inspection data, the location of pipe specification changes, the location of each circumferential weld, buoyancy control devices, depth of cover; and

b) undertaking an inertial in-line inspection within one month of the start of operations and on an annual basis thereafter.

71. To facilitate monitoring, the Proponent shall record ditch wall geotechnical information during construction and shall file the ditch wall logs with the NEB within one year of the start of system operation.

72. To facilitate monitoring, the Proponent shall file with the NEB, within one year of the start of system operation, copies of all stream flow monitoring, ice thickness measurements and ground temperature monitoring data collected during project planning and design. Numerical records shall be submitted in both PDF and MS Excel spreadsheet format.

Planning Clause

73. The Proponents shall file updated cost estimates and report on their decision to construct by 31 December 2013.

Sunset Clause

74. Unless the NEB otherwise directs, this Certificate shall expire on 31 December 2015 unless construction in respect of the Mackenzie Gas Project has commenced by that date.

Conditions that apply only to the Mackenzie Valley Pipeline

75. The Proponent shall notify and consult with Aboriginal and municipal authorities in each community proximate to the Mackenzie Valley Pipeline right of way with regard to community use of merchantable timber that would be cleared along the Mackenzie Valley Pipeline right of way, and shall provide the NEB with a report on its consultations and any agreements that have been reached 90 days prior to the start of pre-construction activities for the relevant spread.

76. To facilitate local access to gas, the Proponent shall file with the NEB at least 90 days prior to the start of pipe-laying operations a report identifying:

a) details of any expressions of interest it has received for connections to a gas delivery lateral or in having a delivery lateral constructed to connect to a local gas distribution system;

b) technical details regarding the tie-in, valves, regulating and metering equipment required to satisfy the request; and

c) the expected timing for the installation of the facilities.

Appendix L
Miscellaneous Order for
Mackenzie Valley Pipeline Tolls and Tariff

National Energy Board logo

ORDER MO-17-2010

IN THE MATTER OF Part IV of the National Energy Board Act and

IN THE MATTER OF the applications by Imperial Oil Resources Ventures Limited (the Proponent), on behalf of Imperial Oil Resources Ventures Limited, the Mackenzie Valley Aboriginal Pipeline Limited Partnership, ConocoPhillips Northern Partnership, ExxonMobil Canada Properties and Shell Canada Limited as managing partner of Shell Canada Energy filed with the National Energy Board (Board) for the Mackenzie Valley Pipeline under file numbers: OF-Fac-Gas-I017-2004-1, OF-EP-FacPipe-I003-MAC 04, OF-EP-FieldOp-I003-TL 07, OF-EP-FieldOp-C648-PL 07, OF-EP-FieldOp-S245-NIG 07.

 

WHEREAS the Proponent filed an application in October 2004 under Part III of the National Energy Board Act for the 1196 kilometre long, 750 millimetre (30 inch) diameter Mackenzie Valley Pipeline to carry natural gas from the a processing plant near Inuvik, Northwest Territories to northwestern Alberta;

AND WHEREAS the Proponent applied for approval of toll and tariff principles for the Mackenzie Valley Pipeline pursuant to Part IV of the National Energy Board Act;

AND WHEREAS the application was set down for hearing in Hearing Order GH-1-2004;

AND WHEREAS the National Energy Board has issued, subject to the approval of the Governor in Council, a certificate of public convenience and necessity for the Mackenzie Valley Pipeline;

IT IS ORDERED pursuant to Part IV of National Energy Board Act that the toll and tariff principles for the Mackenzie Valley Pipeline proposed by the Proponent in the GH-1-2004 proceedings be approved subject to the following:

1. The Mackenzie Valley Pipeline shall be accessible to all shippers that meet the terms of the tariff.

2. The Proponent shall file, for Board approval, a Code of Conduct for the Mackenzie Valley Pipeline for all phases of development including pre-construction, construction and operation. The Code of Conduct is to be filed as soon as possible but in any event no later than 31 December 2011. At a minimum, the Code of Conduct should address in detail:

a) prevention of undue preferential treatment;

b) governance of the interactions between shippers and transporters;

c) independence of transmission operations from affiliate operations;

d) governance of separation of business;

e) protection of confidential and commercially-sensitive information;

f) mechanisms and methodologies related to the design of an acceptable transfer pricing mechanism;

g) a Code of Conduct compliance plan with independent audits; and

h) penalties for breaches of the Code of Conduct and recourse to a third party arbitrator.

3. At least 90 days prior to the start of pre-construction activities the Proponent shall demonstrate to the National Energy Board’s satisfaction that the necessary long-term transportation service contracts have been executed for the Mackenzie Valley Pipeline.

4. The Proponent shall be designated as a Group 1 company and shall file quarterly Surveillance Reports as outlined in the Toll Information Regulations and Section BB, Financial Surveillance Reports in the National Energy Board’s Filing Manual.

5. The return on equity for the Mackenzie Valley Pipeline shall be set reflecting the principle of a 221 basis point premium over other Group 1 companies that were subject to the formula immediately prior to 9 October 2009. The total return will be set taking into account both return on equity and equity thickness.

6. The cost of debt shall be deemed as the weighted average interest rate of the project debt financing provided by the senior lenders for the Mackenzie Valley Aboriginal Pipeline Limited Partnership as long as this reflects the cost of debt that would apply to a stand-alone Mackenzie Valley Pipeline.

7. The Proponent shall use a depreciation method that would allow it to recover 80 percent of its asset costs for the Mackenzie Valley Pipeline over the first 20 years of the Mackenzie Valley Pipeline’s operation unless the Board determines that this methodology no longer reflects the economic life of the Mackenzie Valley Pipeline.

8. The Proponent shall initially establish two tolling zones for the Mackenzie Valley Pipeline.

9. The appropriate toll treatment for future expansions shall be determined at the time of the expansion after considering the specific circumstances.

10. The Proponent shall remove the clause in Section 20.4 of the Tariff Principles that states “As all foreseeable expansions are expected to reduce existing tolls”.

11. As soon as possible but, in any event, no later than 31 December 2011, the Proponent shall remove from any document the words that preclude shippers from raising concerns about the toll and tariff principles before the Board.

12. Prior to operation, the minimum contract term for service on the Mackenzie Valley Pipeline is not required to be shorter than 15 years.

13. The Proponent may choose to offer interruptible service only to shippers with firm service contracts on the Mackenzie Valley Pipeline.

14. A specific proposal for a special interruptible service for gas which fails to meet the tariff specifications for minimum heat content is not required.

15. For gas flowing the full distance under a 15 year contract, the Proponent shall charge a toll premium of $0.15 per gigajoule over the toll for a 20 year contract.

16. By 31 December 2011, and following consultation with potential shippers and the Government of the Northwest Territories, the Proponent shall develop and file the details of an economic test for delivery laterals which are to be constructed and owned by the Mackenzie Valley Pipeline and rolled into its rate base.

17. The Proponent shall incorporate in its toll and tariff principles the requirement that metering and pressure reducing facilities will be rolled into the Mackenzie Valley Pipeline’s cost of service.

18. The Proponent shall file a tariff as soon as reasonably possible but, in any event, no later than 31 December 2011.

 

NATIONAL ENERGY BOARD

 

Anne-Marie Erickson
Secretary of the Board

Appendix M
Conditions for the Mackenzie Gathering System

Unless otherwise specified in the condition, pre-construction activities include activities such as: clearing and grading for infrastructure development; construction and operation of camp facilities; the development of borrow pits, roads, and airstrips; snow pad construction; the transportation and stockpiling of fuel and material; and geotechnical investigations necessary for the construction of the pipeline project. Pre-construction activities may include other activities such as clearing of the right of way if approved by the National Energy Board. Pre-construction activities do not include activities associated with normal surveying operations or data collection activities.

Unless otherwise specified in the condition, pipe-laying operations include the clearing of vegetation in proximity of water crossings and on thaw sensitive slopes, as well as grading and trenching and other forms of right of way and station site preparation that may have an effect on the environment through to final clean-up and reclamation.

Unless otherwise specified, Proponent consultation referred to in a condition must be carried out in a manner that includes the Proponent:

a) providing, to the party to be consulted,

i) notice of the matter in sufficient form and detail to allow the party to prepare its views on the matter,

ii) a reasonable period for the party to prepare those views, and

iii) an opportunity to present those views to the party conducting the consultation; and

b) considering, fully and impartially, any views so presented.

Unless otherwise specified in a condition best available technology (BAT) means technology with superior emissions performance which is commercially available at a reasonable cost at the time it is required for the project which meets the goals of pollution prevention and energy efficiency.

Unless otherwise specified in a condition best management practices (BMP) are innovative, dynamic, and improved environmental protection practices and procedures that help ensure that development is conducted in an environmentally responsible manner. BMP may exist as formal guidelines or generally accepted procedures that are recognized by regulators and industry associations as best practices.

Conditions that correspond for the Mackenzie Valley Pipeline and the Mackenzie Gathering System

General

1. Unless the NEB otherwise directs, the Proponent shall cause the approved facilities to be designed, located, constructed, installed and operated in accordance with the commitments, specifications, standards, policies, mitigation measures, procedures, and other information referred to in its application or in the Environmental Impact Statement or other filings, or as otherwise agreed to during the GH-1-2004 Hearing and during the review by the Joint Review Panel.

2. Unless the NEB otherwise directs, the Proponent shall comply with all filing timelines and completion dates set out in these conditions.

Prior to Pre-Construction Activities

3. To compile and communicate all of the Proponent’s environmental protection procedures, mitigation measures, and monitoring commitments pertaining to pre-construction activities to its field staff and to the NEB inspectors, the Proponent shall file with the NEB an Environmental Protection Plan (EPP) for approval at least 90 days prior to the start of pre-construction activities. The EPP may be divided into separate plans by region or project area as deemed necessary.

The pre-construction EPP shall include:

a) the scope and area of application of the EPP;

b) environmental protection procedures and measures, including decision criteria for timing and implementation of these measures, site-specific plans and drawings, mitigation measures, and monitoring applicable to pre-construction activities;

c) an acid rock drainage prevention plan incorporating the testing of quarried and exposed rock during infrastructure, borrow pit and quarry development and provisions for the safe disposal or treatment of unsuitable material if required;

d) references to other plans and manuals for environmental protection required by field staff and inspectors; and

e) evidence of consultation with appropriate regulatory authorities and government subject matter experts in the area of application of the EPP.

4. To address worker and public safety and environmental protection during construction in the unique northern environment, the Proponent shall file an Emergency Response Plan with the NEB at least 60 days prior to the start of pre-construction activities which shall address 24-hour medical evacuation, fire response and hazardous chemical and fuel spill response and security issues. The Emergency Response Plan shall be prepared in consultation with Indian and Northern Affairs Canada, the Canadian Coast Guard, Transport Canada, Environment Canada, the Government of the Northwest Territories and the Inuvialuit Land Administration, as applicable, and shall include:

a) the scope of the plan detailing the project infrastructure, geographic and time period covered by the plan;

b) training and orientation requirements of company and contractor staff;

c) an inventory of petroleum products, chemicals and other hazardous substances, together with corresponding MSDS sheets, that will be transported, stored and/or used during the pre-construction and construction phases;

d) storage facilities and locations of the above inventoried products and substances;

e) identification of resources (equipment and staff) to be on-site and/or available to respond to emergencies;

f) identification of mutual aid partners and the location of their resources (equipment and staff) available to respond to emergencies;

g) procedures for responding to spills, releases, fires, medical emergencies and security issues including the incident reporting and notification system;

h) location of fire and spill response equipment stores and the spill kit requirements for vehicles;

i) a phone list of company, contractor, government agency and community representatives outlining their respective roles and information needs;

j) clean-up and disposal procedures for generated clean-up wastes;

k) identification of muster points for emergency evacuations from camps and facilities;

l) location of emergency medical treatment locations and capabilities;

m) the requirement for 24-hour emergency medical evacuation capability; and

n) maps showing the location of the right of way and infrastructure such as camps, access roads, material storage areas, barge landing sites and borrow pits to facilitate the dispatch of first responders.

5. To address worker and public safety in the unique northern environment, the Proponent shall file a construction safety manual with the NEB at least 60 days prior to the start of pre-construction activities.

6. To confirm consideration of the effects of climate change on specific geohazard mitigation, slope and stream crossing designs and terrain stability for the overall design life of the project, the Proponent shall file a report six months prior to the start of pre-construction activities which includes:

a) an analysis of the impacts of climate change and variability on permafrost and terrain stability for a series of representative locations and conditions using potential upper limit temperature scenarios which may occur along the Mackenzie Valley;

b) a description of how these upper limit temperature scenarios may impact precipitation and stream flows along the Mackenzie Valley;

c) a description of how the Proponent will account for the potential change in precipitation patterns in the detailed design of slopes and water course crossings for the project; and

d) the results of consultation with other appropriate regulators and government departments.

7. To facilitate NEB inspections, the Proponent shall file with the NEB updated environmental alignment sheets at least 90 days prior to pre-construction activities, and shall file with the NEB any modifications as they become available.

8. To facilitate NEB inspections, the Proponent shall file with the NEB a detailed construction schedule or schedules identifying major activities at least 30 days prior to pre-construction activities and pipe-laying operations, and shall notify the NEB of any modifications to the schedule or schedules as they occur.

9. To demonstrate that project winter roads will be constructed and operated in a safe and environmentally acceptable manner, the Proponent shall file with the NEB a manual for the construction, operation, maintenance and closure of project winter roads at least 30 days prior to the start of project winter road construction. The manual shall include:

a) required road width, clearing and grading requirements, grade, allowable speed, signage, maximum vehicle weight;

b) objective and measurable environmental and engineering criteria to determine when the winter road will be ready for use;

c) safe ice thickness criteria for lake, river and stream crossing including the frequency of ice profiling;

d) local regulatory requirements;

e) installation and removal requirements for snow fills, culverts, corduroy and temporary bridges; and

f) objective and measurable environmental and engineering criteria for closure.

10. To demonstrate that the pipeline and project winter roads will be constructed and operated in a safe and environmentally acceptable manner, the Proponent shall file with the NEB a copy of any applicable permits, authorizations and letters of advice issued by the Federal departments, the Government of the Northwest Territories, or local regulatory organizations that are referred to in an EPP or winter road manual at least 90 days prior to pre-construction activities.

11. The Proponent shall evaluate the technologies and practices available to reduce emissions of particulate matter (PM) and PM and ozone precursors from its facilities and construction related activities, and incorporate the BMP and BAT to reduce emissions of PM and precursors of PM and ozone to the extent practicable. The Proponent shall file a report of its findings and how it will implement its findings to the NEB at least six months prior to construction of the Inuvik Area Facility, compressor stations and heater stations.

12. The Proponent shall evaluate and implement technologies and practices available to reduce mercury, dioxin and furan emissions from incinerators operating at construction camps and its station facilities to the extent practicable. The Proponent shall file a report of its findings and how it intends to implement its findings to the NEB at least 60 days prior to the operation of its construction camps and station facilities.

13. The Proponent shall file with the NEB at least 60 days prior to the start of station facility construction, a report outlining:

a) the specific design and operational measures it has implemented and will implement to minimize methane leakage and venting through the system’s operation taking into account BMP developed by CAPP, Environment Canada, the Canadian Energy Partnerships for Environmental Innovation and the Canadian Gas Association;

b) how the Proponent has utilized waste heat energy to minimize natural gas fuel consumption in the design of the Inuvik Area Facility;

c) the use of BAT when specifying compressor units used on the project including size, efficiency and their conformity with Canadian Council of the Ministers of the Environment National Emissions Guidelines for Stationary Combustion Turbines (CCME,1992); and

d) results of consultation with Environment Canada and the Government of Northwest Territories.

14. To demonstrate that the design is experimentally verified and that the inputs and outputs of the design calculations are clearly determined for overland, slope and water crossing designs, the Proponent shall file with the NEB at least six months prior to the start of pipe manufacture:

a) a stress/strain analysis, including all inputs, assumptions, outputs, methods, and outline of process of calculation;

b) a detailed description and results of all verification tests performed in support of the stress/strain analysis;

c) an explanation and reconciliation of any differences and uncertainties that may result among:

i) stress/strain analysis inputs and outputs;

ii) results of verification tests;

iii) final material properties specifications; and

iv) loads, stresses and strains pipelines may experience during transportation, construction, and operation; and

d) a description of the processes for the implementation of changes that may occur between the design information and material specifications submitted to the NEB as a result of Conditions 14 and 18, and the detailed design and the actual material properties.

15. The Proponent shall file with the NEB for approval, at least 30 days prior to the start of pre-construction activities an Air Quality Monitoring Program developed in consultation with Environment Canada, Health Canada and the Government of the Northwest Territories, to be undertaken immediately prior to and during construction. This program shall include:

a) identification of the baseline, pre-construction conditions;

b) the location of monitoring sites on a map or diagram, the purpose for the locations selected, and the timing for installation;

c) methods and schedule of constituent monitoring (PM, O3, NO2 and noise);

d) data recording, processing and reporting details;

e) the process for public communication and complaint response; and

f) details of the additional measures that would be implemented as a result of monitoring data or ongoing concern, and the criteria or thresholds that would require these measures.

The Proponent shall include a legacy plan detailing the measures that would be continued through the operation phase as a result of monitoring undertaken or ongoing concern and the criteria or thresholds that are used to determine when they would no longer be required.

16. In order that the right of way, camps and supporting infrastructure are maintained, operated and left in an environmentally acceptable condition following the construction phase of the project, the Proponent shall file a Waste Management Plan with the NEB for approval 90 days prior to the start of pre-construction activities. This plan shall be developed in consultation with the Government of the Northwest Territories, Indian and Northern Affairs Canada and Environment Canada.

The Waste Management Plan shall address all wastes associated with the construction of the project with the objectives of minimizing impacts to the environment and ensuring worker and public safety. The plan shall address air, land and water quality; measures to minimize animal attraction; and preventing uncontrolled fires. The scope of the plan shall include:

a) disposal or treatment of potentially hazardous and dangerous materials, including petroleum products, toxic or persistent chemicals, oily wastes, de-icing fluids and fuel barrels;

b) solid waste management including metals, plastics, recyclables, incinerator ash, equipment, equipment parts, batteries, building materials and construction waste;

c) food waste management;

d) management of contaminated soil, snow and ice from spills and de-icing activities;

e) treatment and disposal of waste water (including domestic sewage and grey water); and

f) incinerator emissions monitoring.

The plan shall address:

i) incineration and evaporator technology choices and rationale for selection;

ii) training requirements for operators;

iii) waste segregation requirements;

iv) interim waste storage;

v) treatment;

vi) testing method for waste streams proposed for release to the environment (e.g. air and water);

vii) disposal method for waste streams proposed for release to the environment; and

viii) final off-site waste disposal locations and facilities including evidence of facility approvals and compliance with regulations.

17. To mitigate potential localized low fracture toughness in or adjacent to the welds which could be detrimental during anticipated pipeline deformation at low operating temperatures, the Proponent shall:

a) determine the minimum acceptable value for the crack tip opening displacement (CTOD) for weld metal and heat affected zone of mill circumferential, helical (if practicable) and longitudinal welds, for the lowest installation temperature and the most severe deformation during construction or operation. The CTOD tests shall be conducted for all combinations of pipe steel producers and pipe mill manufacturers and be representative of applicable project pipe with the maximum Carbon Equivalent (CE) heat;

b) determine the minimum acceptable value for the CTOD for field circumferential welds for the lowest installation temperature and the most severe deformation during construction or operation. The CTOD tests shall be conducted at the welding procedure development phase, for all combinations of pipe steel producers and pipe mill manufacturers and be representative of applicable project pipe with the maximum CE heat. Deviations in the essential changes as specified in CSA Z662-07, Table 7.3 and Table K1 will require weld procedure requalification and retesting to determine the minimum acceptable value for the CTOD; and

c) file with the NEB minimum acceptable CTOD values and results of the tests:

i) for the mill qualification welds, at least 60 days prior to the pipe manufacture; and

ii) for the field circumferential qualification welds, at least 60 days prior to the field welding.

18. To demonstrate compliance with appropriate regulations, standards and engineering practices and to facilitate NEB audits, the Proponent shall file with the NEB the following documents, to be finalized prior to the procurement of materials:

a) project-specific material specifications for pipe, fittings, valves, and pig launchers and receivers, at least 90 days prior to the start of manufacture of each of these elements;

b) specifications for plant-applied coatings for buried and exposed pipeline(s) and valves, at least 90 days prior to the application of each coating. The specifications shall include coating materials, application methods, and verification test results;

c) specifications for materials to be used for the manufacture of stations, the Inuvik Area Facility, and the Trout Lake Heater Station, including applicable standards, and non-destructive examination methods and frequency, at least 60 days prior to the start of the manufacture of each of these facilities;

d) joining program for mill welding, at least 90 days prior to the start of manufacture of pipe, components or facilities in the plant;

e) non-destructive examination specifications for the mill non-destructive examinations at least 90 days prior to the start of each non-destructive examination; and

f) project-specific quality assurance programs for all materials, components, and processes at least 90 days prior to manufacture of pipe components and facilities.

19. Unless the NEB otherwise directs, to facilitate NEB monitoring, the Proponent shall file with the NEB project progress reports that summarize major activities by construction spread, as follows:

a) every month during active construction periods; and

b) every two months during pre-construction and inactive construction periods.

These reports shall also provide:

i) the description of any significant pipeline and facilities design changes;

ii) the list of any current and cumulative number of incidents, accidents, or hazardous occurrences as defined in regulations pursuant to the National Energy Act, the Canada Oil and Gas Operations Act and the Canada Labour Code Part II;

iii) a description of any major activities planned for the next reporting period;

iv) locations and proposed timing of any planned pressure tests; and

v) locations of any unsuccessful pressure tests and their cause.

20. To demonstrate the effective management of safety and environmental protection matters during pre-construction and construction, the Proponent shall file with the NEB at the start of field pre-construction activities, a diagram of the project’s organization, clearly identifying roles, responsibilities and reporting structure.

21. The Proponent shall file with the NEB, at least 30 days prior to the start of pre-construction activities, the Heritage Resources Management Plan as reviewed by the Prince of Wales Northern Heritage Centre.

22. The Proponent shall file with the NEB, at least 90 days prior to the start of pre-construction activities, the results of consultations regarding the conclusion of fee-for-service agreements with affected communities respecting the use of community services or infrastructure facilities.

23. The Proponent shall file, at least 90 days prior to the start of pre-construction activities, diversity plans, inclusive of gender equality, for both the construction and operations phases of the Mackenzie Gas Project. The plans shall include:

a) methods for determining diversity goals;

b) identification of diversity goals;

c) steps to achieve the identified goals;

d) commitments to the provision of a healthy and safe work environment;

e) steps to create a Diversity Management Committee; and

f) a monitoring and reporting system.

The Proponent shall require its contractors and subcontractors to comply with the Proponent’s diversity plans.

24. To minimize and address adverse impacts of any interactions between the construction workforce on the Mackenzie Gas Project and the communities in proximity to the project, the Proponent shall implement closed work camps. This requirement shall apply to all new work camps proposed by the Proponent, its contractors and subcontractors.

25. To minimize and address adverse impacts of any interactions between workers in existing open camps that may be used for the project and the communities in proximity to those camps, the Proponent shall identify to the NEB whether any of the existing open construction camps will be used, either directly or indirectly, in relation to project construction. Where existing open camps are to be used and are to remain open, the Proponent shall develop a plan to minimize and address adverse impacts of any interactions. The plan should be developed in consultation with affected communities, identify the specific measures to be employed to address adverse impacts, and comply with the commitments made by the Proponent. The plan shall be filed with the NEB at least six months prior to the start of pre-construction activities.

26. To minimize and address potential adverse impacts of any interactions between the construction workforce on the Mackenzie Gas Project and the communities of Fort Good Hope and Tulita, the Proponent shall file with the NEB, at least six months prior to the start of pre-construction activities, a plan to monitor the interactions between the construction workforce and the communities. The plan shall be developed in consultation with the leadership of Fort Good Hope and Tulita, and include:

a) plans for monitoring interactions;

b) the specific measures that will be employed to address adverse interactions, should any be identified; and

c) plans for regular consultation and reporting on interactions with both potentially affected communities.

27. The Proponent shall file with the NEB, at least six months prior to the start of pre-construction activities, plans for a formal issues resolution program that will be implemented during construction and operations of the Mackenzie Gas Project. The plans shall be prepared in consultation with the government of the Northwest Territories, the Government of Yukon and Aboriginal authorities, and include:

a) a description of the process by which any complaints or issues related to the Mackenzie Gas Project would be raised with the Proponent or governments;

b) a description of the process by which any received complaints or issues would be allocated among those with responsibility for action and a description of the roles and responsibilities any party involved in assessing or responding to any complaint or issue;

c) a description of the process by which any received complaints or issues would be resolved;

d) a description of any protocols developed for referral and resolution of any complaints or issues;

e) a description of the recourse mechanisms for any unresolved complaints or issues or any unsatisfactorily resolved complaints or issues; and

f) a description of the process for communicating and informing communities about the issues resolution program.

28. The Proponent shall file, prior to the start of pre-construction activities, information related to the hiring of local residents as monitors to carry out compliance and environmental impact monitoring for the Mackenzie Gas Project including:

a) the nature of the activities to be monitored;

b) clearly defined job descriptions for the positions as monitors;

c) identification of the training that will be offered to monitors to enable them to perform their duties; and

d) confirmation that monitors have been hired.

29. To minimize project-related impacts on wildlife species, the Proponent shall file with the NEB for approval, before the detailed pipeline route is filed with the NEB and at least 90 days prior to the start of pre-construction activities, a Wildlife Protection and Management Plan or Plans to address general wildlife protection and specific protection of woodland caribou, barren ground caribou, grizzly bear, polar bear and wolverine. The Wildlife Protection and Management Plan(s) shall specify goals, area covered by the plan(s), and assumed zones of influence of project activities and rationales for these assumptions. The Wildlife Protection and Management Plan(s) may be divided into separate plans by region or project area as deemed necessary.

The Wildlife Protection and Management Plan(s) shall include:

a) results of pre-construction surveys, including surveys for species at risk listed on Schedule 1 of the Species at Risk Act public registry (listed species) except where the Minister has determined that recovery for the species is not feasible, and locations of any observations of species classified as at risk or may be at risk on the most recent Committee on the Status of Endangered Wildlife in Canada assessment and NWT General Status Ranks;

b) updated impact assessments for listed species in consideration of the Species at Risk Act, conducting the impact assessments directly on the listed species where possible rather than using one or more indicator species;

c) mitigation measures including:

i) measures to avoid or minimize disturbances including linear disturbance and effects of habitat fragmentation, sensory disturbance, and barriers to movement;

ii) scheduling of project activities to minimize wildlife disturbance;

iii) measures to minimize the development footprint in habitats known to support listed species;

iv) measures to limit predator travel along right of ways;

v) procedures to avoid disturbance of potential maternal denning areas;

vi) access management, including provisions for public consultation;

vii) protocols and education/awareness activities for managing human-wildlife interactions, including measures to limit harvesting and to deter wildlife, especially bears, from entering camps and other facilities;

viii) measures to reduce the impacts of access road, right of way, and other project-related vehicle and air traffic on wildlife and migratory birds; and

ix) any wildlife protection measures included in other project management plans, or references to those measures;

d) protocols for monitoring and adaptive management including:

i) establishing and maintaining linkages to regional programs;

ii) survey protocols to be employed to avoid or prevent impacts to wildlife;

iii) plans for monitoring responses of wildlife to project activities during all phases of the project;

iv) protocols for documenting habitat loss and habitat change as well as wildlife incidents, interactions and mortality; and

v) measures to determine the effectiveness of mitigation measures, criteria to determine when and how mitigation measures should be adapted, as well as the responses proposed to address unforeseen effects;

e) implementation plans, including:

i) details on how the plans will be implemented by the Proponent;

ii) the measures the Proponent will take to enable the participation of local monitors; and

iii) the process for updating the protection plan as information gaps are addressed, including listed species’ recovery strategies and action plans;

f) processes for oversight and reporting with respect to the Wildlife Protection and Management Plan(s) and how those processes will be implemented; and

g) evidence of consultation with the Government of the Northwest Territories, Environment Canada and appropriate wildlife management boards.

To support the Wildlife Protection and Management Plan(s), the Proponent shall implement the following species-specific requirements, set out in Conditions 30 to 36, in addition to the specifications of Condition 29.

30. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29) with respect to woodland caribou:

a) timing and dates during which project-related activities would occur so as to avoid or minimize conflict with caribou movement or sensitive feeding or calving time; and

b) evidence of consultation with the Dehcho Boreal Caribou Working Group.

31. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29) with respect to barren ground caribou:

a) timing and dates during which project-related activities would occur so as to avoid or minimize conflict with caribou movement or sensitive feeding or calving time;

b) plans to address any impacts from the project on the Porcupine caribou herd resulting from increased use of the Dempster Highway by project-related traffic; and

c) evidence of consultation with the Porcupine Caribou Management Board and the Government of Yukon.

32. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29) with respect to grizzly bear:

a) a plan to conduct annual grizzly bear den surveys during pre-construction activities and pipe-laying operations prior to the commencement of work planned for the coming season;

b) proposed mitigation measures for avoiding disturbance to grizzly bear dens; and

c) a commitment to file the results of the surveys annually during pre-construction activities and pipe-laying operations, prior to the commencement of work planned for the coming season, with the Government of the Northwest Territories and appropriate wildlife management boards.

33. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29):

a) mitigation measures to avoid creation of preferred bison habitat; and

b) a monitoring program to detect wood bison use of the Mackenzie Gas Project’s right of way and a process to develop mitigation measures in consultation with the Government of the Northwest Territories if wood bison start using the project right of way.

34. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29):

a) the results of a survey in those parts of the Local Study Area where, based on the most recent assessment by the Committee on the Status of Endangered Wildlife in Canada, the yellow rail and western toad might occur, to confirm the presence or absence of those species;

b) proposed mitigation and monitoring measures specific to yellow rail and western toad, based on the results of this survey; and

c) evidence of consultation with Environment Canada and the Government of the Northwest Territories.

35. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29) a commitment to conduct pre-construction, construction and post-construction surveys and monitoring programs in relation to short-eared owls and rusty blackbirds and to file this information with the Government of the Northwest Territories.

36. The Proponent shall include in its Wildlife Protection and Management Plan(s) (Condition 29) mitigation measures specific to raptors, including peregrine falcon and bald and golden eagles, that include the following restrictions on project-related activities or facilities, unless the NEB otherwise directs:

a) for permanent structures, long-term habitat disturbance including pipeline right of way, road, quarry, camp, etc., ground and air access, and blasting maintain a setback of 1000 m from nest sites between April 15 and September 1 for peregrine falcons and between March 30 and July 31 for all other raptors; and

b) for aircraft overflight, maintain a setback of 760 m above ground level from nest sites between April 15 and September 1 for peregrine falcons and between March 30 and July 31 for all other raptors.

Prior to Pipe-Laying Operations

37. The Proponent shall undertake a geotechnical verification program to support the final design and construction of the project facilities and shall file with the NEB 90 days prior to pipe-laying operations or station construction:

a) copies of all borehole logs and the results of geophysical surveys completed; and

b) an updated assessment of permafrost, ground ice and terrain conditions along the Mackenzie Gathering System including, as applicable, copies of all published information regarding permafrost conditions, ground ice and terrain conditions used in the assessment.

38. To compile and communicate all of the Proponent’s environmental protection procedures, mitigation measures, and monitoring commitments pertaining to pipe-laying operations to its field staff and to the NEB inspectors, the Proponent shall file with the NEB an Environmental Protection Plan (EPP) for approval at least 90 days prior to the start of pipe-laying operations. The EPP may be divided into separate plans by region or project area as deemed necessary.

The EPP for pipe-laying operations shall include:

a) the scope and area of application of the EPP;

b) environmental protection procedures and measures, including decision criteria for timing and implementation of these measures, site-specific plans and drawings, mitigation measures, and monitoring applicable to pipe-laying operations;

c) an acid rock drainage prevention plan incorporating the testing of quarried and exposed rock during trenching, borrow pit and quarry development and provisions for the safe disposal or treatment of unsuitable material if required;

d) a reclamation plan which includes a description of the condition to which the Proponent intends to reclaim and maintain the right of way, a description of measurable goals for reclamation, methods to minimize invasive plant introduction and measures to maximize vegetation recovery;

e) references to other plans and manuals for environmental protection required by field staff and inspectors; and

f) evidence of consultation with appropriate regulatory authorities and government subject matter experts in the area of application of the EPP.

39. To promote safety of the pipeline and protection of the environment and to advance knowledge of the effects of pipeline construction and operation in permafrost environments the Proponent shall develop an effects monitoring program for the project. The purpose of this program is to:

a) monitor the effects of the environment on pipeline integrity;

b) monitor the long-term effects of the construction and operation of pipeline on the physical environment; and

c) validate design assumptions and approaches and monitor the effects of construction and operations practices used on the project.

This program shall take into account the results of the geotechnical verification program, the geohazard assessment and observations made during construction and shall be developed in consultation with Indian and Northern Affairs Canada, Natural Resources Canada and the Department of Fisheries and Oceans. The program shall address and identify changes in thermal regimes and their environmental effects, including existing and potential thaw settlement, frost heave, slope stability, river crossing scour, aufeis, drainage and fish passage impedance and erosion issues, and how these would be affected by successive changes in compressor station configuration. The program shall outline the monitoring methods to be used, instrumentation locations and the frequency of monitoring. The results shall be integrated into the Proponent’s integrity management program and environmental protection program. The Proponent shall file with the NEB:

i) a report for approval, at least 90 days prior to the start of pipe-laying operations, which outlines the scope, objectives, monitoring methodologies and frequencies and the criteria for the selection of instrumentation sites for the program;

ii) on 1 April of each subsequent year of pipeline construction, locations it has chosen to monitor, the rationale for selection, the instrumentation required and the time of its installation; and

iii) a report by 30 November of each year describing the results of this program, and its mitigation/intervention plans to address issues identified.

40. The Proponent shall file with the NEB for approval the Construction Safety Manual at least 60 days prior to the start of pipe-laying operations.

41. The Proponent shall file with the NEB the final Pipeline Construction and Facility Specifications at least 60 days prior to the start of construction. The specifications shall be of sufficient scope and detail to demonstrate the suitability of the specifications prior to the start of pipe-laying operations and facility construction.

42. To facilitate NEB inspections, the Proponent shall file with the NEB updated engineering and environmental alignment sheets at least 90 days prior to the start of pipe-laying operations, and shall file with the NEB any modifications as they become available.

43. The Proponent shall file with the NEB for approval the replacement backfill and padding specifications at least 60 days prior to the start of pipe-laying operations. The specifications shall include provisions to ensure the replacement backfill and padding do not contain materials injurious to the pipeline, its coating and the environment.

44. Unless the NEB otherwise directs, to determine the effectiveness of the Proponent’s plans for remediating ditch fill settlement for the project, the Proponent shall file a report with the NEB 90 days prior to the start of pipe-laying operations, which addresses:

a) its methods for determining the quality and quantity of imported fill required to remediate excess ditch settlement;

b) the timing and methods for hauling and stockpiling the fill materials;

c) the methods it will use to assess and address the need for additional replacement backfill or manage any excess backfill during final clean up and reclamation;

d) methods and locations for the disposal of excess excavated material not required for backfill; and

e) evidence of consultation with land managers and appropriate regulators.

45. To demonstrate that it has adequately assessed and mitigated against geohazards and to facilitate NEB monitoring during operations, the Proponent shall file with the NEB, at least 90 days prior to the start of pipe-laying operations, a Geohazard Assessment for the project describing:

a) its geohazard assessment methodology and the specific and combined geohazards identified along the route that have a reasonable probability of impacting the project;

b) specific measures to be implemented to mitigate individual and combined geohazards;

c) decision criteria for the implementation of mitigation for geohazards identified during construction;

d) the qualifications of the staff making decisions regarding design and implementation; and

e) the ongoing monitoring requirements.

46. To demonstrate that the pipeline design is sufficient to withstand anticipated frost heave and thaw settlement loadings, the Proponent shall file with the NEB a report summarizing the findings of the final design frost heave and thaw settlement analysis for overland areas at least 90 days prior to the start of pipe-laying operations. Where analysis indicates that the strain demand over the design life may exceed the strain capacity of the pipeline materials (omitting the effect of secondary mitigation measures), the report shall describe the site specific secondary measures incorporated into the design or integrity management program to prevent the pipeline from exceeding the critical threshold strain limits.

47. The Proponent shall undertake a hazard analysis identifying reasonably foreseeable hazards or problems with horizontal directionally drilled (HDD) activities, based on site specific data, and develop specific contingency plans for each HDD crossing. The Proponent shall file the hazard analysis and contingency plans with the NEB at least 60 days prior to the start of construction of an HDD watercourse crossing. The plans shall identify and address, where applicable, site-specific concerns such as the presence of ice-rich permafrost and other potentially unfavorable geotechnical conditions.

48. To facilitate NEB inspection during construction and monitoring during operations, and to confirm that there have been no significant changes to the slope design methodology, the Proponent shall file for approval with the NEB a Slope Design Methodology Final Report following the completion of final design and at least 90 days prior to the start of pipe-laying operations. The Slope Design Methodology Final Report shall include:

a) the slope design methodology, data requirements, assessment techniques and pre-construction slope inventory;

b) revisions to threshold slope angles, critical longitudinal and critical cross slope criteria based on findings from final design and further geotechnical investigations;

c) target Factor of Safety for longitudinal and cross slope designs;

d) details of selected passive ground cooling systems including the proposed number, location, type, refrigerant, typical drawings, corrosion protection and installation method;

e) details of the selected surface insulation(s) including type, source, thickness and specified mitigation against the introduction of noxious weeds (if applicable);

f) details of erosion control requirements including typical drawings and spacing requirements for berms, plugs and ditches;

g) results of thermal analysis showing 10 and 25 year thaw depth predictions for the start up configurations based on selected thermal mitigation options for thaw sensitive slopes exceeding critical slope length, slopes identified as potential concerns from a stability perspective which cannot be avoided by route refinements, and slopes that have or will have slope instrumentation installed during the construction phase;

h) typical design drawings for various slope conditions;

i) specific designs for thaw sensitive slopes exceeding critical slope length;

j) a tabular summary of sites requiring site-specific slope designs, indicating the location and identification number of the slope, slope angle, slope length, slope height, orientation, actual or assumed soil conditions, nature of the site-specific issue and proposed mitigation measures; and

k) a slope stability response plan describing the actions the Proponent shall take, and the timing of those actions, should monitoring indicate that the Factor of Safety for a slope falls below the design Factor of Safety or thaw depth exceeds predicted values.

49. The Proponent shall file with the NEB for approval a Field Changes Manual, for Slopes at least 90 days prior to the start of pipe-laying operations. The manual shall include:

a) specific criteria for the implementation of changes to the designs, grading, materials, installation procedures, thermal stabilization measures, erosion mitigation measures and monitoring;

b) details regarding the required qualifications of its field staff implementing the manual; and

c) consultation required with other experts and regulatory authorities and the scope of that consultation.

50. To protect traditional harvesting of fish from adverse impacts related to project stream crossings, the Proponent shall file with the NEB, at least 90 days prior to the start of pipe-laying operations, the final suite of decision trees proposed to manage the impacts of the Mackenzie Gas Project on fish and fish habitat including:

a) an explanation of the decision-making process, the criteria for decision-making and the mitigation options;

b) a description of how the Proponent will address the importance of fish habitat and fish populations to local communities and harvesters; and

c) evidence of consultation with Fisheries and Oceans Canada and the relevant management boards and agencies with regard to the decision trees.

51. To demonstrate the adequacy of scour protection and thermal mitigation measures of watercourse crossing designs and facilitate NEB inspection during construction, the Proponent shall file for approval with the NEB at least 90 days prior to the start of pipe-laying operations:

a) a revised Watercourse/Waterbody Crossing Inventory, in both PDF and MS Excel spreadsheet format, describing the watercourse name and numerical identifier, coordinates, stream class, width of wetted channel, construction method, design type, minimum pipeline cover, navigability and fish habitat status and level of assessment;

b) detailed final design drawings and plans for all watercourse and waterbody crossings requiring site specific designs, including HDD crossings, showing the design flood level, calculated vertical and lateral scour potential and detailing proposed thermal, erosion, scour control and ground water flow mitigation measures;

c) detailed final design drawings of typical designs for open cut and isolated crossings of Lakes, Active I, Active II and Vegetated Channel watercourses detailing proposed thermal, erosion, scour control and ground water flow mitigation measures;

d) 25 year frost bulb growth analysis for the start up configuration, including predicted strain demand/available strain capacity and frost bulb dimensions, for all Large, HDD, Active I and Active II watercourse crossings; and

e) evidence of consultation with the Department of Fisheries and Oceans in regards to the design of stream crossings.

52. To facilitate NEB monitoring, the Proponent shall notify the NEB at least 30 days prior to qualifying the automated ultrasonic non-destructive examination procedures for mill and field circumferential welds.

53. The Proponent shall develop the joining program and file it with the NEB at least 30 days prior to conducting welding procedure qualification tests for:

a) field circumferential production, tie-in and repair pipeline welds; and

b) welding of project facilities.

The joining program shall include:

i) requirements for the qualification of welders;

ii) requirements for the qualification and duties of welding inspectors;

iii) welding procedure specifications;

iv) non-destructive examination specifications;

v) quality assurance program for field welds and welding procedures; and

vi) any additional information which supports the joining program.

54. To facilitate NEB inspection, the Proponent shall file with the NEB procedure qualification records for welding and non-destructive examination within 30 days of the completion of procedure qualification tests.

55. To facilitate NEB inspection, the Proponent shall file with the NEB the specifications for field applied coatings at least 60 days prior to the start of pipe-laying operations.

During Construction

56. To facilitate NEB inspection of all phases of construction, the Proponent shall provide when requested, logistical support to NEB staff undertaking inspection of construction and reclamation, at a reasonable cost to the NEB. (For clarity, the scope of this support is limited to transportation of NEB staff and vehicles to isolated camp locations, vehicle fuel and maintenance, meals and accommodation, office space and communications support.)

57. Unless the NEB otherwise directs the Proponent shall pressure test the approved facilities with a liquid medium and submit the Pressure Testing Program, demonstrating compliance with applicable codes, standards and regulatory requirements, to the NEB for approval at least 60 days prior to the start of pressure testing; or in the event that a hydrostatic test is not practicable, the Proponent shall file with the NEB for approval, at least 60 days prior to the start of any air testing activities, the Proponent’s air testing measures. The program shall include:

a) information demonstrating the ability of the leak test to detect the same size leak as a comparable hydrostatic test;

b) information demonstrating that the pipeline has adequate notch toughness;

c) a description of the specific safety precautions to be implemented during the pressure test; and

d) a confirmation of successful leak test of pipeline sections prior to their installation under watercourses, lakes and ponds.

58. To verify implementation of the Proponent’s quality assurance and control plans and procedures, the Proponent shall file monthly summary reports during construction outlining non-conformances with its design, materials, and construction specifications and the disposition of these non-conformances.

Prior to Operation

59. The Proponent shall file with the NEB for approval, at least 90 days prior to the planned start of operation, the elements of the Environmental Protection Program for the operation and maintenance of the pipeline pursuant to section 48 of the Onshore Pipeline Regulations, 1999. The elements to be submitted include but not be limited to policies, practices and procedures for:

a) ongoing environmental training for employees/operators;

b) handling and disposal of all wastes associated with the operation and maintenance of the project;

c) management of air emissions, including:

i) maximum Proponent-identified and/or legislated discharge limits for PM and NOx;

ii) maximum Proponent-identified greenhouse gas targets;

iii) reduction strategies for air emissions including PM, NOx, and greenhouse gases;

iv) monitoring and measurement methods; and

v) record keeping including annual reporting of greenhouse gases to the NEB;

d) public communication program (non-emergency); and

e) program review and consultation with Environment Canada and the Government of Northwest Territories.

60. To demonstrate that in-line inspection tools will be able to support effective integrity management programs, the Proponent shall submit to the NEB at least 90 days prior to the start of system operation:

a) the type, description, specifications, operating limits and detection limits of all in-line inspection tools which can be used by the Proponent during operation of its pipelines;

b) data on the inertial curvature inline inspection tool(s) developed for the project indicating the detectable level of displacement and associated strain, the recommended pig velocity, and the relationship between pig velocity and strain resolution; and

c) intervention values for all parameters that will be monitored by in-line inspection tools.

61. The Proponent shall prepare:

a) an Emergency Preparedness and Response Plan for the project prior to the start of system operation and file with the NEB the Emergency Procedures Manual at least 30 days prior to the start of operation; and

b) a report, to be filed with the Emergency Procedures Manual, which outlines:

i) the potential for the establishment of local, community-based spill response teams to assist in responses to Mackenzie Gas Project incidents;

ii) a discussion of the opportunities and constraints of establishing local spill response teams including a training and equipment needs assessment; and

iii) the Proponent’s commitment to work with local communities to build and maintain community spill response capacity.

In preparing its Emergency Preparedness and Response Plan, the Proponent shall have regard to:

1) the NEB letter dated 24 April 2002 entitled Security and Emergency Preparedness Programs addressed to all oil and gas companies under the jurisdiction of the NEB and subsequent amendments made thereafter; and

2) emergency responses required as a result of significant earthquakes which may require a broader scope of response.

62. To demonstrate that it is prepared to respond to an emergency at the outset of operation, the Proponent shall hold an emergency response exercise to evaluate the effectiveness of the Emergency Preparedness and Response Plan at least 10 days prior to the start of system operation and file a letter of notification with the NEB upon the successful completion of the exercise.

63. Unless the NEB otherwise directs the Proponent shall file with the NEB a report describing the final design of the SCADA and leak detection system for the Mackenzie Gathering System at least 90 days prior to the start of operation of the Mackenzie Gathering System. The report shall include information suitable for establishing a base line for the quality program for its SCADA and leak detection system and shall include:

a) a description of the SCADA and leak detection system;

b) the location and type of pressure, temperature and flow monitoring and control devices and remote terminal units;

c) the location of remotely operated valves;

d) the target detect ability (e.g., amounts leaked, time to detect, leakage rate);

e) the target sensitivity (i.e., minimum leak size);

f) the target reliability (i.e., false alarm rate, failure to alarm rate);

g) the expected system robustness (i.e., system availability in light of the system operating conditions);

h) the target accuracy (i.e., size and location of a detected leak); and

i) a description of the quality program using both direct and inferred methods that the Proponent shall implement during the operational phase of the project to ensure optimal performance.

64. To demonstrate that the SCADA and leak detection system are calibrated to actual system conditions, the Proponent shall file with the NEB, reports describing the results of the Proponent’s quality program for its SCADA and leak detection system and how identified issues were addressed. Unless the NEB otherwise directs, the reports shall be filed one year, three years and five years after the start of system operation.

During Operation

65. Within 30 days of the date that the approved project is placed in service, the Proponent shall file with the NEB a confirmation, by an officer of the company, that the approved project was completed and constructed in compliance with all applicable conditions in this Certificate. If compliance with any of these conditions cannot be confirmed, the officer of the company shall file with the NEB details as to why compliance cannot be confirmed. The filing required by this condition shall include a statement confirming that the signatory to the filing is an officer of the company.

66. To facilitate monitoring during operation, the Proponent shall file with the NEB, within six months of the start of system operation, a geotechnical construction report including maps and drawings, which identifies and describes:

a) longitudinal and cross slopes identified during construction as requiring ongoing monitoring;

b) locations where passive cooling systems were installed;

c) locations where slope instrumentation including thermistors, piezometers and slope inclinometers were installed;

d) slopes exceeding the critical slope length which were identified during construction as being thaw sensitive or exhibiting evidence of soil movement;. and

e) locations where slope design changes were made in accordance with the Field Change Manual for Slopes and the reasons for the design change.

67. To minimize or reduce air emissions from flaring, the Proponent shall meet the Guideline for Ambient Air Quality Standards in the Northwest Territories and Alberta’s Energy Resources Conservation Board Directive 60: “Upstream Petroleum Industry Flaring, Incinerating and Venting”.

68. To minimize noise disturbance from pipeline facilities, the Proponent shall:

a) design pipeline facilities to meet the requirements of Alberta’s Energy Resources Conservation Board Directive 038; and

b) file with the NEB, 90 days following the start of operation, a post construction noise assessment report.

69. To aid NEB inspectors in confirming the effectiveness of mitigation techniques and any adaptation required, as well as to identify effects that were not predicted and appropriate adaptive management to address these effects, the Proponent shall file with the NEB a post-construction environmental report that reflects any monitoring or follow-up program developed, including:

a) identification on a map or diagram of any environmental issues which arose during construction;

b) the criteria used or to be used to verify the accuracy of the environmental assessment predictions;

c) the determination of the accuracy of the environmental assessment predictions;

d) discussion of the effectiveness of the mitigation applied pre-, during and post- construction and where adaptive management was necessary;

e) identification of the current status of the issues identified describing whether those issues are resolved or unresolved; and

f) proposed measures and schedule that the Proponent shall implement to address any unresolved concerns.

The report shall be filed on or before the 31 of January of each of the first, third, fifth and tenth years following the start of project operation, unless the NEB otherwise directs.

70. Unless the NEB otherwise directs, to demonstrate the management of pipeline integrity and thermal effects on the right of way the Proponent shall monitor geotechnical and thermal effects on the pipeline(s) with respect to thaw subsidence, frost heave and slope stability by:

a) undertaking a detailed as-built survey prior to backfill which documents the position of the pipeline for comparison with future in-line inertial inspection data, the location of pipe specification changes, the location of each circumferential weld, buoyancy control devices, depth of cover; and

b) undertaking an inertial in-line inspection within one month of the start of operations and on an annual basis thereafter.

71. To facilitate monitoring, the Proponent shall record ditch wall geotechnical information during construction and shall file the ditch wall logs with the NEB within one year of the start of system operation.

72. To facilitate monitoring, the Proponent shall file with the NEB, within one year of the start of system operation, copies of all stream flow monitoring, ice thickness measurements and ground temperature monitoring data collected during project planning and design. Numerical records shall be submitted in both PDF and MS Excel spreadsheet format.

Planning Clause

73. The Proponents shall file updated cost estimates and report on their decision to construct by 31 December 2013.

Sunset Clause

74. Unless the NEB otherwise directs, this Certificate shall expire on 31 December 2015 unless construction in respect of the Mackenzie Gas Project has commenced by that date.

Conditions that apply only to the Mackenzie Gathering System

75. Prior to leave to open, the Proponent shall provide financial responsibility pursuant to subsection 13(14) of the Inuvialuit Final Agreement in the amount of $6,028,200 to be held in trust by the NEB in a form satisfactory to the NEB and to remain in place until all facilities located within the Inuvialuit Settlement Region are abandoned in accordance with NEB requirements.

76. Prior to the start of pre-construction activities, the Proponent shall provide financial responsibility pursuant to the Canada Oil and Gas Spills and Debris Liability Regulations and subsection 27(1) of Canada Oil and Gas Operations Act in the amount of $25,000,000 in a form satisfactory to the NEB, to remain in place until all facilities are abandoned in accordance with NEB requirements.

77. Unless the NEB otherwise directs, to ensure that safety, integrity, and environmental protection will be at an equivalent level for the Mackenzie Gathering System as for the Mackenzie Valley Pipeline, the Proponent shall comply with the following regulations:

a) the Onshore Pipeline Regulations, 1999, as amended from time to time;

b) the National Energy Processing Plant Regulations, as amended from time to time; and

c) those sections of the National Energy Board Pipeline Crossing Regulations Part I and Part II and as amended from time to time that would be applicable to the Proponent.

78. To ensure the NEB is satisfied that the pipeline may be safely opened for transmission the Proponent shall file for approval the information referred to in NEB FFiling Manual, 2004, for opening the pipeline for operation (Guide “T”).

79. The authorization for the Mackenzie Gathering System under paragraph 5(1)(b) is subject to the Minister of Indian Affairs and Northern Development Canada providing confirmation that the Proponents have satisfactorily met the Benefits Plan requirements of section 5.2 of the Canada Oil and Gas Operations Act.

80. Prior to commencement of pre-construction activities, the Proponents shall provide a declaration pursuant to subsection 5.11(1) of the Canada Oil and Gas Operations Act in a form satisfactory to the NEB.

81. Prior to commencement of the related activities, the Proponents shall provide any necessary certificates pursuant to subsection 5.12(1) of the Canada Oil and Gas Operations Act in a form satisfactory to the NEB.

Appendix N
Miscellaneous Order for
Mackenzie Gathering System Tolls

National Energy Board logo

ORDER MO-18-2010

IN THE MATTER OF Part 0.1 of the Canada Oil and Gas Operations Act; and

IN THE MATTER OF an application by Imperial Oil Resources Ventures Limited (the Proponent), on behalf of Imperial Oil Resources Ventures Limited, ConocoPhillips Canada (North) Limited, ExxonMobil Canada Properties and Shell Canada Limited as managing partner of Shell Canada Energy filed with the National Energy Board (Board) for the Mackenzie Gathering System under file numbers: OF-Fac-Gas-I017-2004-1, OF-EP-FacPipe-I003-MAC 04, OF-EP-FieldOp-I003-TL 07, OF-EP-FieldOp-C648-PL 07, OF-EP-FieldOp-S245-NIG 07.

 

WHEREAS the Proponent filed an application in October 2004 under the Canada Oil and Gas Operations Act for the Mackenzie Gathering System which consists of:

  • 190 kilometres of pipeline to carry the natural gas and natural gas liquids from the Niglinktak, Taglu and Parsons Lake fields to a processing plant near Inuvik, Northwest Territories;
  • the processing plant near Inuvik, Northwest Territories; and
  • a 457 kilometre long, 250 millimetre (10 inch) diameter pipeline to carry natural gas liquids from the processing plant near Inuvik, Northwest Territories to the existing crude oil pipeline at Norman Wells operated by Enbridge Pipelines (NW) Inc.;

AND WHEREAS the application was set down for hearing in Hearing Order GH-1-2004;

AND WHEREAS the appropriate tolls, access and tariff provisions for the Mackenzie Gathering System and the methods for resolving disputes on these matters was on the List of Issues for the Hearing;

AND WHEREAS the National Energy Board has indicated that it intends to issue an authorization for the Mackenzie Gathering System;

IT IS ORDERED pursuant to Part 0.1 of the Canada Oil and Gas Operations Act that the method for determining tolls for the Mackenzie Gathering System agreed to by the Proponent in the GH-1-2004 proceedings be approved subject to the following:

1. The Mackenzie Gathering System shall be accessible to all shippers that meet the terms of the contractual arrangements.

2. Tolls for the Mackenzie Gathering System, including the natural gas liquids line, shall be negotiated and regulated on a complaint basis.

3. The Proponent shall file, for National Energy Board approval, a Code of Conduct for the Mackenzie Gathering System for all phases of development including pre-construction, construction and operation. The Code of Conduct is to be filed as soon as possible but in any event no later than 31 December 2011. At a minimum, the Code of Conduct should address in detail:

a) prevention of undue preferential treatment;

b) governance of the interactions between shippers and transporters;

c) independence of transmission operations from affiliate operations;

d) governance of separation of business;

e) protection of confidential and commercially-sensitive information;

f) mechanisms and methodologies related to the design of an acceptable transfer pricing mechanism;

g) a Code of Conduct compliance plan with independent audits; and

h) penalties for breaches of the Code of Conduct and recourse to a third-party arbitrator.

4. Consistent with the requirements for all pipelines to set aside funds to cover all abandonment activities as set out in RH-2-2008, at least 18 months prior to the pipelines being placed in service the Proponent shall prepare and file for approval:

a) an estimate of abandonment costs and the amount required to be set aside using pipeline-specific assumptions or a combination of pipeline-specific assumptions and Base Case assumptions from the National Energy Board’s RH-2-2008 proceeding; and

b) a proposal for the collection of funds and a proposed process and mechanism to set aside the funds.

 

NATIONAL ENERGY BOARD

 

Anne-Marie Erickson
Secretary of the Board

Appendix O
Conditions for the Shell Canada Limited (Shell)
Development Plan for the Niglintgak field

Many of the proposed conditions reference an application for an authorization under paragraph 5(1)(b) of the Canada Oil and Gas Operations Act (COGOA). Before any drilling or construction activity relating to a development plan may commence, authorizations under paragraph 5(1)(b) would be required. Section 6 of the Canada Oil and Gas Drilling and Production Regulations states that an operator shall provide the following in an application for an authorization under paragraph 5(1)(b): a description of the scope of activities; an environmental protection plan; a safety plan; and a contingency plan. The activities in relation to a development plan may include drilling, completions, facilities construction, production, and decommissioning.

Unless otherwise specified, Proponent consultation referred to in a condition must be carried out in a manner that includes the Proponent:

a) providing, to the party to be consulted,

i) notice of the matter in sufficient form and detail to allow the party to prepare its views on the matter,

ii) a reasonable period for the party to prepare those views, and

iii) an opportunity to present those views to the party conducting the consultation; and

b) considering, fully and impartially, any views so presented.

Unless otherwise specified in a condition best available technology (BAT) means technology with superior emissions performance which is commercially available at a reasonable cost at the time it is required for the project which meets the goals of pollution prevention and energy efficiency.

Unless otherwise specified in a condition best management practices (BMP) are innovative, dynamic, and improved environmental protection practices and procedures that help ensure that development is conducted in an environmentally responsible manner. BMP may exist as formal guidelines or generally accepted procedures that are recognized by regulators and industry associations as best practices.

N1. Unless the National Energy Board (NEB) otherwise directs, Shell shall design, implement or cause to be implemented all of the policies, mitigation measures, procedures, specifications, standards and recommendations for any work or activity referred to in the Development Plan application or in the Environmental Impact Statement or other filings with the Joint Review Panel or as otherwise agreed to during the GH-1-2004 Hearing and during the review by the Joint Review Panel.

N2. To promote potential joint development with a minimal environmental footprint, the north, central and south well pads of the Niglintgak field shall each be designed so they may be expanded to allow for the drilling of at least one well by third party adjacent subsurface rights interest holders.

N3. To prevent coalescence of the well permafrost thaw bulbs, the interwell spacing on a well pad shall not be less than 15 m unless Shell utilizes mitigation measures approved by the NEB.

N4. To confirm the estimates of subsidence due to gas extraction, Shell shall submit a program employing BMP and BAT to quantitatively measure and monitor accumulated subsidence, and to monitor flooding for the life of the field with the initial application for an authorization under paragraph 5(1)(b). For this condition BAT means technology with superior accuracy and measurement performance which is commercially available at a reasonable cost at the time it is required for the project which meets the goals of pollution prevention and energy efficiency. The program shall include:

a) a description of proposed survey area or the proposed number and the proposed locations of the elevation survey points within the projected gas-extraction-subsidence-area;

b) the proposed number and the proposed locations of the elevation benchmarks to be situated outside the projected gas-extraction-subsidence-area in order to estimate natural subsidence;

c) the expected elevation accuracy of the surveys;

d) a proposed baseline survey to be conducted prior to the commencement of natural gas production;

e) the proposed measurement frequency and the proposed reporting frequency to the NEB; and

f) the results of consultation with Environment Canada.

N5. Prior to the commencement of drilling, Shell shall provide financial responsibility pursuant to subsection 13(14) of the Inuvialuit Final Agreement in the amount of $30,072,000 to be held in trust by the NEB in the form satisfactory to the NEB and to remain in place until all wells and facilities are abandoned in accordance with NEB requirements.

N6. All financial responsibility provided pursuant to the Canada Oil and Gas Spills and Debris Liability Regulations and subsection 27(1) of Canada Oil and Gas Operations Act shall remain in place until all wells and facilities are abandoned in accordance with NEB requirements.

N7. To promote safety of the pipeline and protection of the environment with respect to the design, construction and operation of the proposed flow line crossing of the Kumak Channel, Shell shall provide the following with the corresponding application for an authorization under paragraph 5(1)(b) of COGOA:

a) a hazard analysis and contingency plan for the proposed horizontal directional drill crossing. The plan shall identify and address site-specific concerns such as the presence of ice-rich permafrost and other potentially unfavourable geotechnical conditions;

b) detailed final design drawings of the proposed HDD showing the design flood level, calculated vertical and lateral scour potential and detailing proposed thermal, erosion, scour control and ground water flow mitigation measures;

c) detailed final design drawings of the contingent open cut detailing proposed thermal, erosion, scour control and ground water flow mitigation measures;

d) a monitoring program for slope stability, scour, drainage impedance and erosion issues for the crossing; and

e) evidence of consultation with other appropriate regulators and government departments.

N8. To confirm adequate consideration of the effects of climate change has been incorporated into the facilities design, Shell shall submit the following information with the initial application for an authorization under paragraph 5(1)(b):

a) an analysis of the impacts of climate change and variability on permafrost and terrain stability for the Niglintgak facility using potential upper limit temperature scenarios which may occur during the operational life of the facilities;

b) a description of how these upper limit temperature scenarios may impact precipitation, rise in sea level, storm surges, ice floes and flood levels;

c) a description of how the proposed facilities design, including water course crossing design, accounts for the potential changes outlined in b); and

d) the results of consultation with appropriate regulators and government departments.

N9. To minimize noise disturbance from facilities inside the Kendall Island Bird Sanctuary, Shell shall:

a) design the facilities to meet, as a minimum, the requirements of Alberta’s Energy Resources Conservation Board Directive 038;

b) incorporate BMP and BAT related to noise abatement into the facilities design;

c) continue to evaluate noise mitigation options in consultation with Environment Canada and submit the results of consultation with the corresponding application for an authorization under paragraph 5(1)(b); and

d) submit an independent noise impact analysis report on the proposed design and the feasibility of further reductions in noise emissions with the corresponding application for an authorization under paragraph 5(1)(b).

N10. Shell shall provide the following with the corresponding application for an authorization under paragraph 5(1)(b):

a) the plans for excavation and dredging at the site of the barge-based gas conditioning facility set-down location;

b) a dredging spoil management plan;

c) the results of consultation with Environment Canada, Department of Fisheries and Oceans and Transport Canada.

N11. To compile and communicate all of Shell’s environmental protection procedures, mitigation measures, and monitoring commitments pertaining to the facilities operations, to its field staff, and to the NEB inspectors, Shell shall file with the NEB an Environmental Protection Plan (EPP). The EPP is to be submitted with the initial application for an authorization under paragraph 5(1)(b) and shall include policies, practices and procedures for:

a) the scope and area of application of the EPP;

b) environmental protection procedures and measures, including decision criteria for timing and implementation of these measures, site-specific plans and drawings, mitigation measures, and monitoring applicable to construction and drilling operations;

c) ongoing environmental training for employees/operators;

d) references to other plans and manuals for environmental protection required by field staff and inspectors;

e) a reclamation plan which includes a description of the condition to which Shell intends to reclaim, a description of measurable goals for reclamation, methods to minimize invasive plant introduction, and measures to maximize vegetation recovery.

f) management of air emissions, including:

i) maximum Proponent-identified and/or legislated discharge limits for particulate matter (PM) and NOx;

ii) maximum Proponent-identified greenhouse gas targets;

iii) reduction strategies for air emissions including PM, NOx, and greenhouse gases;

iv) monitoring and measurement methods;

v) location of monitoring sites on a map or diagram, the purpose for the locations selected, and timing of installation;

vi) details of the additional measures that would be implemented as a result of monitoring data or ongoing concern, and the criteria or thresholds that would require these measures; and

vii) record keeping including annual reporting of greenhouse gases to the NEB;

g) public communication program (non-emergency);

h) program review and consultation with Environment Canada and the Government of Northwest Territories; and

i) evidence of consultation with appropriate regulatory authorities and government subject matter experts in the area of application of the EPP.

N12. In order that the facilities, camps and supporting infrastructure are maintained and operated in an environmentally acceptable condition during construction and production operations, Shell shall submit a Waste Management Plan with the initial application for the authorization under paragraph 5(1)(b). This plan shall be developed in consultation with the Government of the Northwest Territories, Indian and Northern Affairs Canada and Environment Canada.

The plan shall address:

a) all wastes associated with construction and production operations with the objectives of minimizing impacts to the environment and ensuring worker and public safety;

b) training requirements for company and contractor staff;

c) the prevention of uncontrolled fires;

d) disposal or treatment of potentially hazardous and dangerous materials, including petroleum products, toxic or persistent chemicals, oily wastes, aircraft de-icing fluids and fuel barrels;

e) solid waste management including metals, plastics, recyclables, incinerator ash, equipment, equipment parts, batteries, building materials and construction waste;

f) food waste management including measures to minimize animal attraction;

g) management of contaminated soil, snow and ice from spills and aircraft de-icing;

h) treatment and disposal of domestic sewage and grey water;

i) incineration/evaporator technology choices and rationale for selection;

j) waste segregation requirements, interim storage and treatment;

k) testing methods and disposal for waste streams proposed for release to the environment; and

l) the results of consultation.

N13. To demonstrate that winter roads will be constructed and operated in a safe and environmentally acceptable manner, Shell shall submit a manual for the construction, operation, maintenance and closure of winter roads with the initial application for an authorization under paragraph 5(1)(b). The manual shall include:

a) required road width, clearing and grading requirements, grade, allowable speed, signage, maximum vehicle weight;

b) objective and measurable environmental and engineering criteria to determine when the winter road will be ready for use;

c) safe ice thickness criteria for lake, river and stream crossing including the frequency of ice profiling;

d) local regulatory requirements;

e) installation and removal requirements for snow fills, culverts, corduroy and temporary bridges; and

f) objective and measurable environmental and engineering criteria for closure.

N14. Shell shall evaluate the technologies and practices available to reduce emissions of particulate matter (PM) and precursors of PM and ozone from its facilities and construction related activities, and incorporate BMP and BAT to reduce emissions of PM and precursors of PM and ozone to the extent practicable. Shell shall file a report of its findings and how it will implement its findings with the initial application for an authorization under paragraph 5(1)(b).

N15. Shell shall evaluate and implement technologies and practices available to reduce mercury, dioxin and furan emissions from incinerators operating at construction camps and facilities to the extent practicable. Shell shall file a report of its findings and how it intends to implement its findings with the initial application for an authorization under paragraph 5(1)(b).

N16. Shell shall file with the initial application for an authorization under paragraph 5(1)(b) a report outlining:

a) the specific design and operational measures it has implemented and will implement to minimize methane leakage and venting through the system’s operation taking into account BMP developed by Canadian Association of Petroleum Producers, Environment Canada, the Canadian Energy Partnerships for Environmental Innovation and the Canadian Gas Association;

b) how Shell has utilized waste heat energy to minimize natural gas fuel consumption in the design of the facilities;

c) the use of BAT when specifying compressor units used including size, efficiency and their conformity with Canadian Council of Ministers of the Environment National Emissions Guidelines for Stationary Combustion Turbines (CCME,1992); and

d) the results of consultation with Environment Canada and the Government of the Northwest Territories.

N17. To minimize or reduce air emissions from flaring, Shell shall meet the Guideline for Ambient Air Quality Standards in the Northwest Territories and Alberta’s Energy Resources Conservation Board Directive 60: Upstream Petroleum Industry Flaring, Incinerating and Venting.

N18. Unless the NEB otherwise directs, Shell shall submit an updated resource management plan within 18 months after production commences or prior to the drilling of contingent wells.

N19. To protect the correlative rights of adjacent subsurface rights interest holders, Shell shall comply with to the NEB’s Draft Spacing Requirements dated 31 December 2009 or any orders dealing with spacing units that may supersede it.

N20. To address worker and public safety and environmental protection, Shell shall prepare its contingency plans in consultation with Indian and Northern Affairs Canada, the Canadian Coast Guard, Transport Canada, Environment Canada, the Government of the Northwest Territories and the Inuvialuit Land Administration. The contingency plans shall include:

a) training and orientation requirements of company and contractor staff;

b) an inventory indicating storage facility locations for petroleum products, chemicals and other hazardous substances, together with corresponding material safety data sheets (MSDS) sheets, that will be transported, stored and/or used during construction and operational phases;

c) identification of resources (equipment and staff) to be on-site and/or available to respond to emergencies;

d) identification of mutual aid partners and the location of their resources (equipment and staff) available to respond to emergencies;

e) procedures for responding to spills, releases, fires, medical emergencies and security issues including the incident reporting and notification system;

f) location of fire and spill response equipment stores and the spill kit requirements for vehicles;

g) a phone list of company, contractor, government agency and community representatives outlining their respective roles and information needs;

h) clean-up and disposal procedures for generated clean-up wastes;

i) identification of muster points for emergency evacuations from camps and facilities;

j) location of emergency medical treatment locations and capabilities;

k) the requirement for 24-hour emergency medical evacuation capability;

l) maps showing the location of infrastructure such as camps, access roads, material storage areas, aircraft landing sites, barge landing sites and borrow pits to facilitate the dispatch of first responders;

m) consideration of high flood and high ice floe scenarios;

n) consideration of earthquakes; and

o) the results of consultation.

N21. To demonstrate that it is prepared to respond to an emergency at the outset of production, unless the NEB otherwise directs, Shell shall hold an emergency response exercise to evaluate the effectiveness of the contingency plan at least 10 days prior to the commencement of production and file a letter of notification with the NEB upon the successful completion of the exercise.

N22. To minimize field development-related impacts on wildlife species, Shell shall file with the NEB for approval, with the initial application for an authorization under paragraph 5(1)(b), a Wildlife Protection and Management Plan(s) to address general wildlife protection and specific protection of barren ground caribou, grizzly bear, polar bear and wolverine. The Wildlife Protection and Management Plan(s) shall specify goals, area covered by the plan(s), and assumed zones of influence of activities and rationales for these assumptions. The Wildlife Protection and Management Plan(s) shall include:

a) results of pre-construction surveys, including surveys for species at risk listed on Schedule 1 of the Species at Risk Act public registry (listed species) except where the Minister has determined that recovery for the species is not feasible, and locations of any observations of species classified as at risk or may be at risk on the most recent Committee on the Status of Endangered Wildlife in Canada assessment and NWT General Status Ranks;

b) updated impact assessments for listed species in consideration of the Species at Risk Act, conducting the impact assessments directly on the listed species where possible rather than using one or more indicator species;

c) mitigation measures including:

i) measures to avoid or minimize disturbances including linear disturbance and effects of habitat fragmentation, sensory disturbance, and barriers to movement;

ii) scheduling of activities to minimize wildlife disturbance;

iii) measures to minimize the development footprint in habitats known to support listed species;

iv) procedures to avoid disturbance of potential maternal denning areas;

v) access management, including provisions for public consultation;

vi) protocols and education/awareness activities for managing human-wildlife interactions, including measures to limit harvesting and to deter wildlife, especially bears, from entering camps and other facilities;

vii) measures to reduce the impacts of access road and other field development-related vehicle and air traffic on wildlife and migratory birds; and

viii) any wildlife protection measures included in other management plans, or references to those measures;

d) protocols for monitoring and adaptive management including:

i) establishing and maintaining linkages to regional programs;

ii) survey protocols to be employed to avoid or prevent impacts to wildlife;

iii) plans for monitoring responses of wildlife to activities during all phases of the development;

iv) protocols for documenting habitat loss and habitat change as well as wildlife incidents, interactions and mortality; and

v) measures to determine the effectiveness of mitigation measures, criteria to determine when and how mitigation measures should be adapted, as well as the responses proposed to address unforeseen effects;

e) implementation plans, including:

i) details on how the plans will be implemented and linked to Shell’s Wildlife Protection and Management Plan;

ii) the measures taken to enable the participation of local monitors; and

iii) the process for updating the protection plan as information gaps are addressed, including listed species’ recovery strategies and action plans;

f) processes for oversight and reporting with respect to the Wildlife Protection and Management Plan(s) and how those processes will be implemented; and

g) evidence of consultation with the Government of the Northwest Territories, Environment Canada and appropriate wildlife management boards.

N23. Shell shall include in its Wildlife Protection and Management Plan(s) (Condition N22) with respect to barren ground caribou:

a) timing and dates during which activities would occur so as to avoid or minimize conflict with caribou movement or sensitive feeding or calving time;

b) plans to address any impacts on the Porcupine caribou herd resulting from increased use of the Dempster Highway by field development-related traffic; and

c) evidence of consultation with the Porcupine Caribou Management Board and the Government of Yukon.

N24. Shell shall include in its Wildlife Protection and Management Plan(s) (Condition N22) a commitment to conduct pre-construction, construction and post-construction surveys and monitoring programs in relation to short-eared owls and rusty blackbirds and to file this information with the Government of the Northwest Territories.

N25. Shell shall include in its Wildlife Protection and Management Plan(s) (Condition N22) mitigation measures specific to raptors, including peregrine falcon and bald and golden eagles, that include the following restrictions on activities or facilities, unless the NEB otherwise directs:

a) for permanent structures, long-term habitat disturbance including road, quarry, camp, etc., ground and air access, and blasting maintain a setback of 1000 m from nest sites between April 15 and September 1 for peregrine falcons and between March 30 and July 31 for all other raptors; and

b) for aircraft overflight, maintain a setback of 760 m above ground level from nest sites between April 15 and September 1 for peregrine falcons and between March 30 and July 31 for all other raptors.

N26. To protect traditional harvesting of fish from adverse impacts related to construction, Shell shall file with the NEB, with the initial application for an authorization under paragraph 5(1)(b), the final suite of decision trees proposed to manage the impacts on fish and fish habitat including:

a) an explanation of the decision-making process, the criteria for decision-making and the mitigation options;

b) a description of how Shell will address the importance of fish habitat and fish populations to local communities and harvesters; and

c) evidence of consultation with the Department of Fisheries and Oceans and the relevant management boards and agencies with regard to the decision trees.

N27. Shell shall include in its Wildlife Protection and Management Plan(s) (Condition N22) with respect to grizzly bear:

a) a plan to conduct annual grizzly bear den surveys during pre-construction activities and construction operations prior to the commencement of work planned for the coming season;

b) proposed mitigation measures for avoiding disturbanceto grizzly bear dens; and

c) a commitment to file the results of the surveys annually during pre-construction activities and construction operations, prior to the commencement of work planned for the coming season, with the Government of the Northwest Territories and appropriate wildlife management boards.

N28. Shell shall file with the initial application for an authorization under paragraph 5(1)(b), diversity plans, inclusive of gender equality, for both the construction and operations phases. The plans shall include:

a) methods for determining diversity goals;

b) identification of diversity goals;

c) steps to achieve the identified goals;

d) commitments to the provision of a healthy and safe work environment;

e) steps to create a Diversity Management Committee; and

f) a monitoring and reporting system.

Shell shall require its contractors and subcontractors to comply with the diversity plans.

N29. Shell shall file with the initial application for an authorization under paragraph 5(1)(b), plans for a formal issues resolution program that will be implemented during construction and operations. The plans shall be prepared in consultation with the Government of the Northwest Territories and Aboriginal authorities, and include:

a) a description of the process by which any complaints or issues would be raised with Shell or governments;

b) a description of the process by which any received complaints or issues would be allocated among those with responsibility for action and a description of the roles and responsibilities of any party involved in assessing or responding to any complaint or issue;

c) a description of the process by which any received complaints or issues would be resolved;

d) a description of any protocols developed for referral and resolution of any complaints or issues;

e) a description of the recourse mechanisms for any unresolved complaints or issues or any unsatisfactorily resolved complaints or issues; and,

f) a description of the process for communicating and informing communities about the issues resolution program.

N30. Shell shall file with the initial application for an authorization under paragraph 5(1)(b), information related to the hiring of local residents as monitors to carry out compliance and environmental impact monitoring including:

a) the nature of the activities to be monitored;

b) clearly defined job descriptions for the positions as monitors;

c) identification of the training that will be offered to monitors to enable them to perform their duties; and

d) confirmation that monitors have been hired.

N31. The approval of the Development Plan for the Niglintgak field under subsection 5.1(4) of the Canada Oil and Gas Operations Act is subject to the Minister of Indian Affairs and Northern Development Canada providing confirmation that Shell has satisfactorily met the Benefits Plan requirements of section 5.2 of the Canada Oil and Gas Operations Act.

Appendix P
Conditions for the Imperial Oil Resources Limited (IORL)
Development Plan for the Taglu field

Many of the proposed conditions reference an application for an authorization under paragraph 5(1)(b) of the Canada Oil and Gas Operations Act (COGOA). Before any drilling or construction activity relating to a development plan may commence, authorizations under paragraph 5(1)(b) would be required. Section 6 of the Canada Oil and Gas Drilling and Production Regulations states that an operator shall provide the following in an application for an authorization under paragraph 5(1)(b): a description of the scope of activities; an environmental protection plan; a safety plan; and a contingency plan. The activities in relation to a development plan may include drilling, completions, facilities construction, production, and decommissioning.

Unless otherwise specified, Proponent consultation referred to in a condition must be carried out in a manner that includes the Proponent:

a) providing, to the party to be consulted,

i) notice of the matter in sufficient form and detail to allow the party to prepare its views on the matter,

ii) a reasonable period for the party to prepare those views, and

iii) an opportunity to present those views to the party conducting the consultation; and

b) considering, fully and impartially, any views so presented.

Unless otherwise specified in a condition best available technology (BAT) means technology with superior emissions performance which is commercially available at a reasonable cost at the time it is required for the project which meets the goals of pollution prevention and energy efficiency.

Unless otherwise specified in a condition best management practices (BMP) are innovative, dynamic, and improved environmental protection practices and procedures that help ensure that development is conducted in an environmentally responsible manner. BMP may exist as formal guidelines or generally accepted procedures that are recognized by regulators and industry associations as best practices.

T1. Unless the National Energy Board (NEB) otherwise directs, IORL shall design, implement or cause to be implemented all of the policies, mitigation measures, procedures, specifications, standards and recommendations for any work or activity referred to in the Development Plan application or in the Environmental Impact Statement or other filings with the Joint Review Panel or as otherwise agreed to during the GH-1-2004 Hearing and during the review by the Joint Review Panel.

T2. To prevent coalescence of the well permafrost thaw bulbs the interwell spacing on a well pad shall not be less than 15 m unless IORL utilizes mitigation measures approved by the NEB.

T3. To confirm the estimates of subsidence due to gas extraction, IORL shall submit a program employing BAT and BMP to quantitatively measure and monitor accumulated subsidence and to monitor flooding for the life of the field with the initial application for an appropriate authorization under paragraph 5(1)(b). For this condition BAT means technology with superior accuracy and measurement performance which is commercially available at a reasonable cost at the time it is required for the project which meets the goals of pollution prevention and energy efficiency. The program shall include:

a) a description of proposed survey area or the proposed number and the proposed locations of the elevation survey points within the projected gas-extraction-subsidence-area;

b) the proposed number and the proposed locations of the elevation benchmarks to be situated outside the projected gas-extraction-subsidence-area in order to estimate natural subsidence;

c) the expected elevation accuracy of the surveys;

d) a proposed baseline survey to be conducted prior to the commencement of natural gas production;

e) the proposed measurement frequency and the proposed reporting frequency to the NEB; and

f) the results of consultation with Environment Canada.

T4. To confirm adequate consideration for subsurface containment, IORL shall submit a drill cuttings slurry injection management program with the corresponding application for an authorization under paragraph 5(1)(b). The program shall include:

a) a description of the proposed cuttings slurry injection methodologies and proposed wells;

b) a description of the proposed injection zones;

c) a description of the any step-rate or injectivity tests that would be conducted prior to operations; and

d) a description of how the vertical migration of injection and/or formation fluid out of the injection zone and the potential contamination of fresh water aquifers, permafrost intervals and hydrocarbon bearing formations would be prevented during subsurface cuttings slurry injection operations.

T5. Prior to the commencement of drilling, IORL shall provide financial responsibility pursuant to subsection 13(14) of the Inuvialuit Final Agreement in the amount of $30,045,600 to be held in trustby the NEB in the form satisfactory to the NEB and to remain in place until all wells and facilities are abandoned in accordance with NEB requirements.

T6. All financial responsibility provided pursuant to the Canada Oil and Gas Spills and Debris Liability Regulations and subsection 27(1) of Canada Oil and Gas Operations Act shall remain in place until all wells and facilities are abandoned in accordance with NEB requirements.

T7. To confirm adequate consideration of the effects of climate change has been incorporated into the facilities design, IORL shall submit the following information with the initial application for an authorization under paragraph 5(1)(b):

a) an analysis of the impacts of climate change and variability on permafrost and terrain stability for the Taglu facility using potential upper limit temperature scenarios which may occur during the operational life of the facilities;

b) a description of how these upper limit temperature scenarios may impact precipitation, rise in sea level, storm surges, ice floe and flood levels;

c) a description of how the proposed facilities design accounts for the potential changes outlined in b); and

d) the results of consultation with appropriate regulators and government departments.

T8. To minimize noise disturbance from facilities inside the Kendall Island Bird Sanctuary, IORL shall:

a) design the facilities to meet, as a minimum, the requirements of Alberta’s Energy Resources Conservation Board Directive 038;

b) incorporate BMP and BAT related to noise abatement into the facilities design;

c) continue to evaluate noise mitigation options in consultation with Environment Canada and submit the results of consultation with the corresponding application for an authorization under paragraph 5(1)(b); and

d) submit an independent noise impact analysis report on the proposed design and the feasibility of further reductions in noise emissions with the corresponding application for an authorization under paragraph 5(1)(b).

T9. IORL shall provide the following with the application for an authorization under paragraph 5(1)(b) that encompasses the construction of the well pad:

a) the plans for dredging and installing the barge landing located at the Taglu field; and

b) the results of consultation with Environment Canada, Department of Fisheries and Oceans, Indian and Northern Affairs Canada and Transport Canada.

T10. To compile and communicate all of Imperial’s environmental protection procedures, mitigation measures, and monitoring commitments pertaining to the facilities operations, to its field staff, and to the NEB inspectors, Imperial shall file with the NEB an Environmental Protection Plan (EPP). The EPP is to be submitted with the initial application for an authorization under paragraph 5(1)(b) and shall include policies, practices and procedures for:

a) the scope and area of application of the EPP;

b) environmental protection procedures and measures, including decision criteria for timing and implementation of these measures, site-specific plans and drawings, mitigation measures, and monitoring applicable to construction and drilling operations;

c) ongoing environmental training for employees/operators;

d) references to other plans and manuals for environmental protection required by field staff and inspectors;

e) a reclamation plan which includes a description of the condition to which IORL intends to reclaim, a description of measurable goals for reclamation, methods to minimize invasive plant introduction, and measures to maximize vegetation recovery;

f) management of air emissions, including:

i) maximum Proponent-identified and/or legislated discharge limits for particulate matter (PM) and NOx;

ii) maximum Proponent-identified greenhouse gas targets;

iii) reduction strategies for air emissions including PM, NOx, and greenhouse gases;

iv) monitoring and measurement methods;

v) location of monitoring sites on a map or diagram, the purpose for the locations selected, and timing of installation;

vi) details of the additional measures that would be implemented as a result of monitoring data or ongoing concern, and the criteria or thresholds that would require these measures; and

vii) record keeping including annual reporting of greenhouse gases to the NEB;

g) public communication program (non-emergency);

h) program review and consultation with Environment Canada and the Government of Northwest Territories; and

i) evidence of consultation with appropriate regulatory authorities and government subject matter experts in the area of application of the EPP.

T11. In order that the facilities, camps and supporting infrastructure are maintained and operated in an environmentally acceptable condition during construction and production operations, IORL shall submit a Waste Management Plan with the initial application for the authorization under paragraph 5(1)(b). This plan shall be developed in consultation with the Government of the Northwest Territories, Indian and Northern Affairs Canada and Environment Canada. The plan shall address:

a) all wastes associated with construction and production operations with the objectives of minimizing impacts to the environment and ensuring worker and public safety;

b) training requirements for company and contractor staff;

c) the prevention of uncontrolled fires;

d) disposal or treatment of potentially hazardous and dangerous materials, including petroleum products, toxic or persistent chemicals, oily wastes, aircraft de-icing fluids and fuel barrels;

e) solid waste management including metals, plastics, recyclables, incinerator ash, equipment, equipment parts, batteries, building materials and construction waste;

f) food waste management including measures to minimize animal attraction;

g) management of contaminated soil, snow and ice from spills and aircraft de-icing;

h) treatment and disposal of domestic sewage and grey water;

i) incineration/evaporator technology choices and rationale for selection;

j) waste segregation requirements, interim storage and treatment;

k) testing methods and disposal for waste streams proposed for release to the environment; and

l) the results of consultation.

T12. To demonstrate that winter roads will be constructed and operated in a safe and environmentally acceptable manner, IORL shall submit a manual for the construction, operation, maintenance and closure of winter roads with the initial application for an authorization under paragraph 5(1)(b). The manual shall include:

a) required road width, clearing and grading requirements, grade, allowable speed, signage, maximum vehicle weight;

b) objective and measurable environmental and engineering criteria to determine when the winter road will be ready for use;

c) safe ice thickness criteria for lake, river and stream crossing including the frequency of ice profiling;

d) local regulatory requirements;

e) installation and removal requirements for snow fills, culverts, corduroy and temporary bridges; and

f) objective and measurable environmental and engineering criteria for closure.

T13. IORL shall evaluate the technologies and practices available to reduce emissions of particulate matter (PM) and precursors of PM and ozone from its facilities and construction related activities, and incorporate BMP and BAT to reduce emissions of PM and precursors of PM and ozone to the extent practicable. IORL shall file a report of its findings and how it will implement its findings with the initial application for an authorization under paragraph 5(1)(b).

T14. IORL shall evaluate and implement technologies and practices available to reduce mercury, dioxin and furan emissions from incinerators operating at construction camps and facilities to the extent practicable. IORL shall file a report of its findings and how it intends to implement its findings with the initial application for an authorization under paragraph 5(1)(b).

T15. IORL shall file with the initial application for an authorization under paragraph 5(1)(b) a report outlining:

a) the specific design and operational measures it has implemented and will implement to minimize methane leakage and venting through the system’s operation taking into account BMP developed by Canadian Association of Petroleum Producers, Environment Canada, the Canadian Energy Partnerships for Environmental Innovation and the Canadian Gas Association;

b) how IORL has utilized waste heat energy to minimize natural gas fuel consumption in the design of the facilities;

c) the use of BAT when specifying compressor units used including size, efficiency and their conformity with Canadian Council of Ministers of the Environment (CCME) National Emissions Guidelines for Stationary Combustion Turbines (CCME,1992); and

d) the results of consultation with Environment Canada and the Government of the Northwest Territories.

T16. To minimize or reduce air emissions from flaring, IORL shall meet the Guideline for Ambient Air Quality Standards in the Northwest Territories and Alberta’s Energy Resources Conservation Board Directive 60: Upstream Petroleum Industry Flaring, Incinerating and Venting.

T17. Unless the NEB otherwise directs, IORL shall submit an updated resource management plan within 18 months after production commences or prior to the drilling of contingent wells.

T18. To protect the correlative rights of adjacent subsurface rights interest holders, IORL shall comply with to the NEB’s Draft Spacing Requirements dated 31 December 2009 or orders dealing with spacing units that may supersede it.

T19. To address worker and public safety and environmental protection, IORL shall prepare its contingency plans in consultation with Indian and Northern Affairs Canada, the Canadian Coast Guard, Transport Canada, Environment Canada, the Government of the Northwest Territories and the Inuvialuit Land Administration. The contingency plans shall include:

a) training and orientation requirements of company and contractor staff;

b) an inventory indicating storage facility locations for petroleum products, chemicals and other hazardous substances, together with corresponding material safety data sheets (MSDS) sheets, that will be transported, stored and/or used during construction and operational phases;

c) identification of resources (equipment and staff) to be on-site and/or available to respond to emergencies;

d) identification of mutual aid partners and the location of their resources (equipment and staff) available to respond to emergencies;

e) procedures for responding to spills, releases, fires, medical emergencies and security issues including the incident reporting and notification system;

f) location of fire and spill response equipment stores and the spill kit requirements for vehicles;

g) a phone list of company, contractor, government agency and community representatives outlining their respective roles and information needs;

h) clean-up and disposal procedures for generated clean-up wastes;

i) identification of muster points for emergency evacuations from camps and facilities;

j) location of emergency medical treatment locations and capabilities;

k) the requirement for 24-hour emergency medical evacuation capability;

l) maps showing the location of infrastructure such as camps, access roads, material storage areas, aircraft landing sites, barge landing sites and borrow pits to facilitate the dispatch of first responders;

m) consideration of high flood and high ice floe scenarios;

n) consideration of earthquakes; and

o) the results of consultation.

T20. To demonstrate that it is prepared to respond to an emergency at the outset of production, unless the NEB otherwise directs, IORL shall hold an emergency response exercise to evaluate the effectiveness of the contingency plan at least 10 days prior to the commencement of production and file a letter of notification with the NEB upon the successful completion of the exercise.

T21. To minimize field development-related impacts on wildlife species, IORL shall file with the NEB for approval, with the initial application for an authorization under paragraph 5(1)(b), a Wildlife Protection and Management Plan(s) to address general wildlife protection and specific protection of barren ground caribou, grizzly bear, polar bear and wolverine. The Wildlife Protection and Management Plan(s) shall specify goals, area covered by the plan(s), and assumed zones of influence of activities and rationales for these assumptions. The Wildlife Protection and Management Plan(s) shall include:

a) results of pre-construction surveys, including surveys for species at risk listed on Schedule 1 of the Species at Risk Act public registry (listed species), except where the Minister has determined that recovery for the species is not feasible and locations of any observations of species classified as at risk or may be at risk on the most recent Committee on the Status of Endangered Wildlife in Canada assessment and NWT General Status Ranks;

b) updated impact assessments for listed species in consideration of the Species at Risk Act, conducting the impact assessments directly on the listed species where possible rather than using one or more indicator species;

c) mitigation measures including:

i) measures to avoid or minimize disturbances includinglinear disturbance and effects of habitat fragmentation, sensory disturbance, and barriers to movement;

ii) scheduling of activities to minimize wildlife disturbance;

iii) measures to minimize the development footprint in habitats known to support listed species;

iv) procedures to avoid disturbance of potential maternal denning areas;

v) access management, including provisions for public consultation;

vi) protocols and education/awareness activities for managing human-wildlife interactions, including measures to limit harvesting and to deter wildlife, especially bears, from entering camps and other facilities;

vii) measures to reduce the impacts of access road, and other field development-related vehicle and air traffic on wildlife and migratory birds; and

viii) any wildlife protection measures included in other management plans, or references to those measures;

d) protocols for monitoring and adaptive management including:

i) establishing and maintaining linkages to regional programs;

ii) survey protocols to be employed to avoid or prevent impacts to wildlife;

iii) plans for monitoring responses of wildlife to activities during all phases of the development;

iv) protocols for documenting habitat loss and habitat change as well as wildlife incidents, interactions and mortality; and

v) measures to determine the effectiveness of mitigation measures, criteria to determine when and how mitigation measures should be adapted, as well as the responses proposed to address unforeseen effects;

e) implementation plans, including:

i) details on how the plans will be implemented and linked to IORL’s Wildlife Protection and Management Plan;

ii) the measures taken to enable the participation of local monitors; and

iii) the process for updating the protection plan as information gaps are addressed, including listed species’ recovery strategies and action plans;

f) processes for oversight and reporting with respect to the Wildlife Protection and Management Plan(s) and how those processes will be implemented; and

g) evidence of consultation with the Government of the Northwest Territories, Environment Canada and appropriate wildlife management boards.

T22. IORL shall include in its Wildlife Protection and Management Plan(s) (Condition T21) with respect to barren ground caribou:

a) timing and dates during which activities would occur so as to avoid or minimize conflict with caribou movement or sensitive feeding or calving time;

b) plans to address any impacts on the Porcupine caribou herd resulting from increased use of the Dempster Highway by field development-related traffic; and

c) evidence of consultation with the Porcupine Caribou Management Board and the Government of Yukon.

T23. IORL shall include in its Wildlife Protection and Management Plan(s) (Condition T21) a commitment to conduct pre-construction, construction and post-construction surveys and monitoring programs in relation to short-eared owls and rusty blackbirds and to file this information with the Government of the Northwest Territories.

T24. IORL shall include in its Wildlife Protection and Management Plan(s) (Condition T21) mitigation measures specific to raptors, including peregrine falcon and bald and golden eagles, that include the following restrictions on activities or facilities, unless the NEB otherwise directs:

a) for permanent structures, long-term habitat disturbance including road, quarry, camp, etc., ground and air access, and blasting maintain a setback of 1000 m from nest sites between April 15 and September 1 for peregrine falcons and between March 30 and July 31 for all other raptors; and

b) for aircraft overflight, maintain a setback of 760 m above ground level from nest sites between April 15 and September 1 for peregrine falcons and between March 30 and July 31 for all other raptors.

T25. To protect traditional harvesting of fish from adverse impacts related to construction, IORL shall file with the NEB, with the initial application for an authorization under paragraph 5(1)(b), the final suite of decision trees proposed to manage the impacts on fish and fish habitat including:

a) an explanation of the decision-making process, the criteria for decision-making and the mitigation options;

b) a description of how IORL will address the importance of fish habitat and fish populations to local communities and harvesters; and

c) evidence of consultation with the Department of Fisheries and Oceans and the relevant management boards and agencies with regard to the decision trees.

T26. IORL shall include in its Wildlife Protection and Management Plan(s) (Condition T21) with respect to grizzly bear:

a) a plan to conduct annual grizzly bear den surveys during pre-construction activities and construction operations prior to the commencement of work planned for the coming season;

b) proposed mitigation measures for avoiding disturbance to grizzly bear dens; and

c) a commitment to file the results of the surveys annually during pre-construction activities and construction operations, prior to the commencement of work planned for the coming season, with the Government of the Northwest Territories and appropriate wildlife management boards.

T27. IORL shall file with the initial application for an authorization under paragraph 5(1)(b), diversity plans, inclusive of gender equality, for both the construction and operations phases. The plans shall include:

a) methods for determining diversity goals;

b) identification of diversity goals;

c) steps to achieve the identified goals;

d) commitments to the provision of a healthy and safe work environment;

e) steps to create a Diversity Management Committee; and

f) a monitoring and reporting system.

IORL shall require its contractors and subcontractors to comply with the diversity plans.

T28. IORL shall file with the initial application for an authorization under paragraph 5(1)(b), plans for a formal issues resolution program that will be implemented during construction and operations. The plans shall be prepared in consultation with the Government of the Northwest Territories and Aboriginal authorities, and include:

a) a description of the process by which any complaints or issues would be raised with IORL or governments;

b) a description of the process by which any received complaints or issues would be allocated among those with responsibility for action and a description of the roles and responsibilities of any party involved in assessing or responding to any complaint or issue;

c) a description of the process by which any received complaints or issues would be resolved;

d) a description of any protocols developed for referral and resolution of any complaints or issues;

e) a description of the recourse mechanisms for any unresolved complaints or issues or any unsatisfactorily resolved complaints or issues; and

f) a description of the process for communicating and informing communities about the issues resolution program.

T29. IORL shall file with the initial application for an authorization under paragraph 5(1)(b), information related to the hiring of local residents as monitors to carry out compliance and environmental impact monitoring including:

a) the nature of the activities to be monitored;

b) clearly defined job descriptions for the positions as monitors;

c) identification of the training that will be offered to monitors to enable them to perform their duties; and

d) confirmation that monitors have been hired.

T30. The approval of the Development Plan for the Taglu field under subsection 5.1(4) of the Canada Oil and Gas Operations Act is subject to the Minister of Indian Affairs and Northern Development Canada providing confirmation that IORL has satisfactorily met the Benefits Plan requirements of section 5.2 of the Canada Oil and Gas Operations Act.

Appendix Q
Conditions for the ConocoPhillips Canada (North) Limited
(ConocoPhillips) Development Plan for the Parsons Lake field

Many of the proposed conditions reference an application for an authorization under paragraph 5(1)(b) of the Canada Oil and Gas Operations Act (COGOA). Before any drilling or construction activity relating to a development plan may commence, authorizations under paragraph 5(1)(b) would be required. Section 6 of the Canada Oil and Gas Drilling and Production Regulations states that an operator shall provide the following in an application for an authorization under paragraph 5(1)(b): a description of the scope of activities; an environmental protection plan; a safety plan; and a contingency plan. The activities in relation to a development plan may include drilling, completions, facilities construction, production, and decommissioning.

Unless otherwise specified, Proponent consultation referred to in a condition must be carried out in a manner that includes the Proponent:

a) providing, to the party to be consulted,

i) notice of the matter in sufficient form and detail to allow the party to prepare its views on the matter,

ii) a reasonable period for the party to prepare those views, and

iii) an opportunity to present those views to the party conducting the consultation; and

b) considering, fully and impartially, any views so presented.

Unless otherwise specified in a condition best available technology (BAT) means technology with superior emissions performance which is commercially available at a reasonable cost at the time it is required for the project which meets the goals of pollution prevention and energy efficiency.

Unless otherwise specified in a condition best management practices (BMP) are innovative, dynamic, and improved environmental protection practices and procedures that help ensure that development is conducted in an environmentally responsible manner. BMP may exist as formal guidelines or generally accepted procedures that are recognized by regulators and industry associations as best practices.

P1. Unless the National Energy Board (NEB) otherwise directs, ConocoPhillips shall design, implement or cause to be implemented all of the policies, mitigation measures, procedures, specifications, standards and recommendations for any work or activity referred to in the Development Plan application or in the Environmental Impact Statement or other filings with the Joint Review Panel or as otherwise agreed to during the GH-1-2004 Hearing and during the review by the Joint Review Panel.

P2. To promote potential joint development with a minimal environmental footprint, the north and south well padsof the Parsons Lake field shall each be designed so they may be expanded to allow for the drilling of at least one well by third party adjacent subsurface rights interest holders.

P3. To prevent coalescence of the well permafrost thaw bulbs, the interwell spacing on a well pad shall not be less than 15 m unless ConocoPhillips utilizes mitigation measures approved by the NEB.

P4. To confirm adequate consideration for subsurface containment, ConocoPhillips shall submit a drill cuttings slurry injection management program with the corresponding application for an authorization under paragraph 5(1)(b). The program shall include:

a) a description of the proposed cuttings slurry injection methodologies and proposed wells;

b) a description of the proposed injection zones;

c) a description of the any step-rate or injectivity tests that would be conducted prior to operations; and

d) a description of how the vertical migration of injection and/or formation fluid out of the injection zone and the potential contamination of fresh water aquifers, permafrost intervals and hydrocarbon bearing formations would be prevented during subsurface cuttings slurry injection operations.

P5. To monitor carbon dioxide (CO2) content in the Parsons Lake field gas production, ConocoPhillips shall provide adequate gas sampling and analysis in the field data acquisition program and in the well data acquisition programs.

P6. Prior to the commencement of drilling, ConocoPhillips shall provide financial responsibility pursuant to subsection 13(14) of the Inuvialuit Final Agreement in the amount of $40,062,500 to be held in trust by the NEB in the form satisfactory to the NEB and to remain in place until all wells and facilities are abandoned in accordance with NEB requirements.

P7. All financial responsibility provided pursuant to the Canada Oil and Gas Spills and Debris Liability Regulations and subsection 27(1) of Canada Oil and Gas Operations Act shall remain in place until all wells and facilities are abandoned in accordance with NEB requirements.

P8. To confirm adequate consideration of the effects of climate change has been incorporated into the facilities design, ConocoPhillips shall submit the following information with the initial application for an authorization under paragraph 5(1)(b):

a) an analysis of the impacts of climate change and variability on permafrost and terrain stability for the Parsons Lake facility using potential upper limit temperature scenarios which may occur during the operational life of the facilities;

b) a description of how these upper limit temperature scenarios may impact precipitation, and the water levels of Parsons Lake and other nearby lakes;

c) a description of how the proposed facilities design accounts for the potential changes outlined in b); and

d) the results of consultation with appropriate regulators and government departments.

P9. To minimize noise disturbance from facilities located at Parsons Lake, ConocoPhillips shall:

a) design the facilities to meet the requirements of Alberta’s Energy Resources Conservation Board Directive 038; and

b) file with the NEB, 90 days following the start of operation, a post construction noise assessment report.

P10. To compile and communicate all of ConocoPhillip’s environmental protection procedures, mitigation measures, and monitoring commitments pertaining to the facilities operations, to its field staff, and the NEB inspectors, ConocoPhillips shall file with the NEB an Environmental Protection Plan (EPP). The EPP is to be submitted with the initial application for an authorization under paragraph 5(1)(b) and shall include policies, practices and procedures for:

a) the scope and area of application of the EPP;

b) environmental protection procedures and measures, including decision criteria for timing and implementation of these measures, site-specific plans and drawings, mitigation measures, and monitoring applicable to construction and drilling operations;

c) ongoing environmental training for employees/operators;

d) references to other plans and manuals for environmental protection required by field staff and inspectors;

e) a reclamation plan which includes a description of the condition to which ConocoPhillips intends to reclaim, a description of measurable goals for reclamation, methods to minimize invasive plant introduction, and measures to maximize vegetation recovery;

f) management of air emissions, including:

i) maximum Proponent-identified and/or legislated discharge limits for particulate matter (PM) and NOx;

ii) maximum Proponent-identified greenhouse gas targets;

iii) reduction strategies for air emissions including PM, NOx, and greenhouse gases;

iv) monitoring and measurement methods;

v) location of monitoring sites on a map or diagram, the purpose for the locations selected, and timing of installation;

vi) details of the additional measures that would be implemented as a result of monitoring data or ongoing concern, and the criteria or thresholds that would require these measures; and

vii) record keeping including annual reporting of greenhouse gases to the NEB.

g) public communication program (non-emergency);

h) program review and consultation with Environment Canada and the Government of Northwest Territories; and

i) evidence of consultation with appropriate regulatory authorities and government subject matter experts in the area of application of the EPP

P11. In order that the facilities, camps and supporting infrastructure are maintained and operated in an environmentally acceptable condition during construction and production operations, ConocoPhillips shall submit a Waste Management Plan with the initial application for the authorization under paragraph 5(1)(b). This plan shall be developed in consultation with the Government of the Northwest Territories, Indian and Northern Affairs Canada and Environment Canada. The plan shall address:

a) all wastes associated with construction and production operations with the objectives of minimizing impacts to the environment and ensuring worker and public safety;

b) training requirements for company and contractor staff;

c) the prevention of uncontrolled fires;

d) disposal or treatment of potentially hazardous and dangerous materials, including petroleum products, toxic or persistent chemicals, oily wastes, aircraft de-icing fluids and fuel barrels;

e) solid waste management including metals, plastics, recyclables, incinerator ash, equipment, equipment parts, batteries, building materials and construction waste;

f) food waste management including measures to minimize animal attraction;

g) management of contaminated soil, snow and ice from spills and aircraft de-icing;

h) treatment and disposal of domestic sewage and grey water;

i) incineration/evaporator technology choices and rationale for selection;

j) waste segregation requirements, interim storage and treatment;

k) testing methods and disposal for waste streams proposed for release to the environment; and

l) the results of consultation.

P12. To demonstrate that project winter roads will be constructed and operated in a safe and environmentally acceptable manner, ConocoPhillips shall submit a manual for the construction, operation, maintenance and closure of project winter roads with the initial application for an authorization under paragraph 5(1)(b). The manual shall include:

a) required road width, clearing and grading requirements, grade, allowable speed, signage, maximum vehicle weight;

b) objective and measurable environmental and engineering criteria to determine when the winter road will be ready for use;

c) safe ice thickness criteria for lake, river and stream crossing including the frequency of ice profiling;

d) local regulatory requirements;

e) installation and removal requirements for snow fills, culverts, corduroy and temporary bridges; and

f) objective and measurable environmental and engineering criteria for closure.

P13. ConocoPhillips shall evaluate the technologies and practices available to reduce emissions of particulate matter (PM) and PM and ozone precursors from its facilities and construction related activities, and incorporate BMP and BAT to reduce emissions of PM and precursors of PM and ozone to the extent practicable. ConocoPhillips shall file a report of its findings and how it will implement its findings with the initial application for an authorization under paragraph 5(1)(b).

P14. ConocoPhillips shall evaluate and implement technologies and practices available to reduce mercury, dioxin and furan emissions from incinerators operating at construction camps and facilities to the extent practicable. ConocoPhillips shall file a report of its findings and how it intends to implement its findings with the initial application for an authorization under paragraph 5(1)(b).

P15. ConocoPhillips shall file with the initial application for an authorization under paragraph 5(1)(b) a report outlining:

a) the specific design and operational measures it has implemented and will implement to minimize methane leakage and venting through the system’s operation taking into account BMP developed by Canadian Association of Petroleum Producers, Environment Canada, the Canadian Energy Partnerships for Environmental Innovation and the Canadian Gas Association;

b) how ConocoPhillips has utilized waste heat energy to minimize natural gas fuel consumption in the design of the facilities;

c) the use of BAT when specifying compressor units used including size, efficiency and their conformity with Canadian Council of Ministers of the Environment National Emissions Guidelines for Stationary Combustion Turbines (CCME,1992); and

d) the results of consultation with Environment Canada and the Government of the Northwest Territories.

P16. To minimize or reduce air emissions from flaring, ConocoPhillips shall meet the Guideline for Ambient Air Quality Standards in the Northwest Territories and Alberta’s Energy Resources Conservation Board Directive 60: Upstream Petroleum Industry Flaring, Incinerating and Venting.

P17. Unless the NEB otherwise directs, ConocoPhillips shall submit an updated resource management plan within 18 months after production commences or prior to the drilling of contingent wells.

P18. To protect the correlative rights of adjacent subsurface rights interest holders, ConocoPhillips shall comply with to the NEB’s Draft Spacing Requirements dated 31 December 2009 or any orders dealing with spacing units that may supersede it.

P19. To address worker and public safety and environmental protection, ConocoPhillips shall prepare its contingency plans in consultation with Indian and Northern Affairs Canada, the Canadian Coast Guard, Transport Canada, Environment Canada, the Government of the Northwest Territories and the Inuvialuit Land Administration. The contingency plans shall include:

a) training and orientation requirements of company and contractor staff;

b) an inventory indicating storage facility locations for petroleum products, chemicals and other hazardous substances, together with corresponding material safety data sheets (MSDS) sheets, that will be transported, stored and/or used during construction and operational phases;

c) identification of resources (equipment and staff) to be on-site and/or available to respond to emergencies;

d) identification of mutual aid partners and the location of their resources (equipment and staff) available to respond to emergencies;

e) procedures for responding to spills, releases, fires, medical emergencies and security issues including the incident reporting and notification system;

f) location of fire and spill response equipment stores and the spill kit requirements for vehicles;

g) a phone list of company, contractor, government agency and community representatives outlining their respective roles and information needs;

h) clean-up and disposal procedures for generated clean-up wastes;

i) identification of muster points for emergency evacuations from camps and facilities;

j) location of emergency medical treatment locations and capabilities;

k) the requirement for 24-hour emergency medical evacuation capability;

l) maps showing the location of infrastructure such as camps, access roads, material storage areas, aircraft landing sites, barge landing sites and borrow pits to facilitate the dispatch of first responders;

m) consideration of earthquakes; and

n) the results of consultation.

P20. To demonstrate that it is prepared to respond to an emergency at the outset of production, unless the NEB otherwise directs, ConocoPhillips shall hold an emergency response exercise to evaluate the effectiveness of the contingency plan at least 10 days prior to the commencement of production and file a letter of notification with the NEB upon the successful completion of the exercise.

P21. To minimize field development-related impacts on wildlife species, ConocoPhillips shall file with the NEB for approval, with the initial application for an authorization under paragraph 5(1)(b), a Wildlife Protection and Management Plan(s) to address general wildlife protection and specific protection of barren ground caribou, grizzly bear, polar bear and wolverine. The Wildlife Protection and Management Plan(s) shall specify goals, area covered by the plan(s), and assumed zones of influence of activities and rationales for these assumptions. The Wildlife Protection and Management Plan(s) shall include:

a) results of pre-construction surveys, including surveys for species at risk listed on Schedule 1 of the Species at Risk Act public registry (listed species), except where the Minister has determined that recovery for the species is not feasible and locations of any observations of species classified as at risk or may be at risk on the most recent Committee on the Status of Endangered Wildlife in Canada assessment and NWT General Status Ranks;

b) updated impact assessments for listed species in consideration of the Species at Risk Act, conducting the impact assessments directly on the listed species where possible rather than using one or more indicator species;

c) mitigation measures including:

i) measures to avoid or minimize disturbances including linear disturbance and effects of habitat fragmentation, sensory disturbance, and barriers to movement;

ii) scheduling of activities to minimize wildlife disturbance;

iii) measures to minimize the development footprint in habitats known to support listed species;

iv) procedures to avoid disturbance of potential maternal denning areas;

v) access management, including provisions for public consultation;

vi) protocols and education/awareness activities for managing human-wildlife interactions, including measures to limit harvesting and to deter wildlife, especially bears, from entering camps and other facilities;

vii) measures to reduce the impacts of access road and other field development-related vehicle and air traffic on wildlife and migratory birds; and

viii) any wildlife protection measures included in other management plans, or references to those measures;

d) protocols for monitoring and adaptive management including:

i) establishing and maintaining linkages to regional programs;

ii) survey protocols to be employed to avoid or prevent impacts to wildlife;

iii) plans for monitoring responses of wildlife to activities during all phases of the development;

iv) protocols for documenting habitat loss and habitat change as well as wildlife incidents, interactions and mortality; and

v) measures to determine the effectiveness of mitigation measures, criteria to determine when and how mitigation measures should be adapted, as well as the responses proposed to address unforeseen effects;

e) implementation plans, including:

i) details on how the plans will be implemented and linked to ConocoPhillips’ Wildlife Protection and Management Plan;

ii) the measures taken to enable the participation of local monitors;

iii) the process for updating the protection plan as information gaps are addressed, including listed species’ recovery strategies and action plans;

f) processes for oversight and reporting with respect to the Wildlife Protection and Management Plan(s) and how those processes will be implemented; and

g) evidence of consultation with the Government of the Northwest Territories, Environment Canada and appropriate wildlife management boards.

P22. ConocoPhillips shall include in its Wildlife Protection and Management Plan(s) (Condition P21) with respect to barren ground caribou:

a) timing and dates during which activities would occur so as to avoid or minimize conflict with caribou movement or sensitive feeding or calving time;

b) plans to address any impacts on the Porcupine caribou herd resulting from increased use of the Dempster Highway by field development-related traffic; and

c) evidence of consultation with the Porcupine Caribou Management Board and the Government of Yukon.

P23. ConocoPhillips shall include in its Wildlife Protection and Management Plan(s) (Condition P21) a commitment to conduct pre-construction, construction and post-construction surveys and monitoring programs in relation to short-eared owls and rusty blackbirds and to file this information with the Government of the Northwest Territories.

P24. ConocoPhillips shall include in its Wildlife Protection and Management Plan(s) (Condition P21) mitigation measures specific to raptors, including peregrine falcon and bald and golden eagles, that include the following restrictions on activities or facilities, unless the NEB otherwise directs:

a) for permanent structures, long-term habitat disturbance including road, quarry, camp, etc., ground and air access, and blasting maintain a setback of 1000 m from nest sites between April 15 and September 1 for peregrine falcons and between March 30 and July 31 for all other raptors; and

b) for aircraft overflight, maintain a setback of 760 m above ground level from nest sites between April 15 and September 1 for peregrine falcons and between March 30 and July 31 for all other raptors.

P25. To protect traditional harvesting of fish from adverse impacts related to construction, ConocoPhillips shall file with the NEB, with the initial application for an authorization under paragraph 5(1)(b), the final suite of decision trees proposed to manage the impacts on fish and fish habitat including:

a) an explanation of the decision-making process, the criteria for decision-making and the mitigation options;

b) a description of how ConocoPhillips will address the importance of fish habitat and fish populations to local communities and harvesters; and

c) evidence of consultation with the Department of Fisheries and Oceans and the relevant management boards and agencies with regard to the decision trees.

P26. ConocoPhillips shall include in its Wildlife Protection and Management Plan(s) (Condition P21) with respect to grizzly bear:

a) a plan to conduct annual grizzly bear den surveys during pre-construction activities and construction operations prior to the commencement of work planned for the coming season;

b) proposed mitigation measures for avoiding disturbance to grizzly bear dens; and

c) a commitment to file the results of the surveys annually during pre-construction activities and construction operations, prior to the commencement of work planned for the coming season, with the Government of the Northwest Territories and appropriate wildlife management boards.

P27. ConocoPhillips shall file with the initial application for an authorization under paragraph 5(1)(b), diversity plans, inclusive of gender equality, for both the construction and operations phases. The plans shall include:

a) methods for determining diversity goals;

b) identification of diversity goals;

c) steps to achieve the identified goals;

d) commitments to the provision of a healthy and safe work environment;

e) steps to create a Diversity Management Committee; and

f) a monitoring and reporting system.

ConocoPhillips shall require its contractors and subcontractors to comply with the diversity plans.

P28. ConocoPhillips shall file with the initial application for an authorization under paragraph 5(1)(b), plans for a formal issues resolution program that will be implemented during construction and operations. The plans shall be prepared in consultation with the government of the Northwest Territories and Aboriginal authorities, and include:

a) a description of the process by which any complaints or issues would be raised with ConocoPhillips or governments;

b) a description of the process by which any received complaints or issues would be allocated among those with responsibility for action and a description of the roles and responsibilities of any party involved in assessing or responding to any complaint or issue;

c) a description of the process by which any received complaints or issues would be resolved;

d) a description of any protocols developed for referral and resolution of any complaints or issues;

e) a description of the recourse mechanisms for any unresolved complaints or issues or any unsatisfactorily resolved complaints or issues; and

f) a description of the process for communicating and informing communities about the issues resolution program.

P29. ConocoPhillips shall file with the initial application for an authorization under paragraph 5(1)(b), information related to the hiring of local residents as monitors to carry out compliance and environmental impact monitoring including:

a) the nature of the activities to be monitored;

b) clearly defined job descriptions for the positions as monitors;

c) identification of the training that will be offered to monitors to enable them to perform their duties; and

d) confirmation that monitors have been hired.

P30. The approval of the Development Plan for the Parsons Lake field under subsection 5.1(4) of the Canada Oil and Gas Operations Act is subject to the Minister of Indian Affairs and Northern Development Canada providing confirmation that ConocoPhillips has satisfactorily met the Benefits Plan requirements of section 5.2 of the Canada Oil and Gas Operations Act.