Frequently Asked Questions: Filing Requirements for Onshore Drilling Operations Involving Hydraulic Fracturing
The National Energy Board (NEB or the Board) published the Arctic Offshore Drilling Review (Arctic Review) report in December 2011 after consultation with Northerners, environmental groups, industry and other stakeholders. During the course of the Arctic Review, the NEB heard that additional clarity was sought on the issue of Hydraulic Fracturing in regions covered by the Canada Oil and Gas Operations Act (COGOA).
These Filing Requirements address the unique aspects of hydraulic fracturing within the NEB’s mandate under the COGOA to promote safety, environmental protection, and the conservation of oil and gas resources for onshore drilling and production in the North.
- What is hydraulic fracturing?
- What is the role of the National Energy Board when it comes to regulating hydraulic fracturing in Canada?
- Why have these Filing Requirements been created?
- Does the NEB conduct an environmental assessment (EA) for applications involving hydraulic fracturing?
- What additives are typically used in hydraulic fracturing?
- Does the NEB expect applicants to disclose the chemicals used during the hydraulic fracturing process?
- Were any public consultations conducted in the development of these Filing Requirements?
- Did the NEB consider similar guidelines already in place when developing these Filing Requirements?
- When will these Filing Requirements begin to take effect?
1. What is hydraulic fracturing?
Hydraulic fracturing typically includes a well-stimulation process in which fluids (typically water), proppant (typically sand) and additives are pumped under high pressure into a hydrocarbon-bearing formation. The fluid pressure creates fractures in the formation and the fluid transports the proppant into the fractures. The proppant keeps the fractures open and allows the hydrocarbons to flow from the formation to the wellbore.
2. What is the role of the National Energy Board when it comes to regulating hydraulic fracturing in Canada?
The National Energy Board has regulatory responsibilities for oil and gas exploration and production activities under the COGOA. This includes the drilling, completions, hydraulic fracturing and formation flow testing and production from onshore unconventional reservoirs.
The NEB does not administer:
- Exploration licenses, significant discovery licenses, or production licenses;
- Royalty management; and/or
- Benefit plans.
Applicants should contact Indigenous and Northern Affairs Canada or Natural Resources Canada for further information on these processes.
The NEB does not have jurisdiction over onshore hydraulic fracturing in any of the provinces. Questions relating to provincial hydraulic fracturing requirements and regulations should be directed to the appropriate provincial authority.
3. Why have these Filing Requirements been created?
These Filing Requirements outline the information an Applicant will need to provide in order for the Board to assess applications for hydraulic fracturing. They should be used in all cases where proposed work or activity requiring an Operations Authorization (OA) involves hydraulic fracturing.
The Board may also ask for any additional information it deems relevant over and above the Filing Requirements. It may exclude certain sections of the Filing Requirements that don’t apply to a particular project.
The Board is committed to continually improving its regulatory process and does not view these requirements to be static. The Filing Requirements will be updated periodically to reflect any relevant changes around the practice of hydraulic fracturing so that Board decisions on COGOA-regulated activities continue to promote safety, protection of the environment and conservation of oil and gas resources in the North.
4. Does the NEB conduct an environmental assessment (EA) for applications involving hydraulic fracturing?
The NEB conducts its own assessment of applications involving hydraulic fracturing. An EA must be completed before a COGOA authorization can be issued. The NEB also coordinates EAs with the northern boards or committees established by the Mackenzie Valley Resource Management Act, the Inuvialuit Final Agreement, and the Nunavut Land Claims Agreement.
A company’s application for an OA involving hydraulic fracturing contains information that the NEB uses to conduct its EA. This includes:
- The project development;
- Potential impacts to the environment;
- Potential impacts from accidents and malfunctions;
- Consultation with Aboriginal groups and the public;
- Socio-economic impacts arising from environmental impacts; and
- Mitigation measures that will be in place to protect the environment.
The Board has the authority to reject an application or ask for additional detail if they feel the information submitted as a part of the project description is inadequate or incomplete.
5. What additives are typically used in hydraulic fracturing?
Typical additives used could include:
- friction reducers to allow fracture fluids to be injected at optimum rates and pressures by minimizing friction;
- biocides to prevent growth of microorganism;
- corrosion inhibitors to protect the wellbore;
- gelling agent to increase fracturing fluid viscosity, allowing the fluid to carry more proppant into the fracture; and
- clay stabilizer to prevent swelling.
6. Does the NEB expect applicants to disclose the chemicals used during the hydraulic fracturing process?
Yes. The NEB expects companies to disclose the chemicals they use. Companies must indicate their willingness to publicly disclose the chemical composition of hydraulic fracture fluids as a part of any application for an OA involving hydraulic fracturing.
7. Were any public consultations conducted in the development of these Filing Requirements?
The National Energy Board undertook extensive engagement in the past two and a half years. This engagement focussed on how the NEB regulates hydraulic fracturing. NEB staff participated in over 20 sessions with communities, land claim organizations, elders, youth, legislators, federal and territorial government departments and regulated companies.
Throughout our northern engagement activities, the Board found themes of concern regarding hydraulic fracturing that fall under its jurisdiction including:
- Groundwater contamination (Section 4.4.1);
- Surface water contamination (Section 3.10);
- Reluctance of industry to disclose chemical additives (Section 3.10);
- Inter-well communication and spill risk (Sections 4.5.2 and 6.0);
- Air emissions as a result of development (Section 3.10);
- Induced earthquakes (Section 4.3.4);
All of the concerns outlined above are all addressed in these Filing Requirements.
8. Did the NEB consider similar guidelines already in place when developing these Filing Requirements?
Unconventional oil and gas exploration and development, including horizontal, multi-stage hydraulic fracturing, occur regularly in Canadian jurisdictions including British Columbia, Alberta and Saskatchewan. Some other jurisdictions currently have moratoriums on the practice pending further studies.
In preparing the Filing Requirements for Onshore Drilling Operations Involving Hydraulic Fracturing, the NEB reviewed a number of studies and regulatory documents from different jurisdictions.
9. When will these Filing Requirements begin to take effect?
Companies will be required to begin following these Filing Requirements immediately when applying for any operations authorization involving hydraulic fracturing. The Board expects Applicants to clearly demonstrate how they meet all the requirements prior to issuing an authorization.
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