Oil, Gas and Salt Resources Act

The Oil, Gas and Salt Resources Act (OGSRA) gives the Minister of Natural Resources authority for regulating petroleum resources. This includes exploration, drilling and production of oil and natural gas, production of salt using the solution mining method, underground storage of hydrocarbons in geological formations, and disposal of oilfield fluids in Ontario.

 

The Act also enables the Minister to:

  • Appoint inspectors who have the authority to order the operator of a well or works to plug the well or correct the works where it is a hazard to the public or to the environment
  • Issue a certificate to every inspector
  • Establish a spacing unit for each well to ensure orderly development of oil and gas resources
  • Subject to Section 40 of the Ontario Energy Board Act, grant a licence or permit and impose such terms and conditions and such duties and liabilities as the Minister in his or her discretion considers proper
  • Establish the Oil, Gas and Salt Resources Trust to fund information management, research, surveys and laboratory operations relating to oil, gas and salt resources
  • To licence, collect and maintain detailed records and to monitor all oil, gas, salt solution-mining, storage and oil-field fluid disposal wells in Ontario.

 

Drilling, operating or deepening or any other activity must comply with the well licence. No one can accept oil or gas from unlicensed wells. Injection permits are required for wells used to inject oil, gas or water into a formation to enhance resource recovery and for disposing of oil field fluid into subsurface formations. The Province requires that works associated with wells and any changes made to these facilities be works registered to assist in provincial monitoring.

 

The OGSRA gives the Mining and Lands Commissioner the authority to order:

  • The oil or gas interests within a spacing unit be joined - Pooling Order
  • The oil or gas interests within an oil or gas pool or field be joined - Unitization Order

 

Regulation 245/97: Exploration, Drilling and Production under the OGSRA provides that an operator must:

  • Comply with the "Provincial Standards" (pdf, 1.85 MB) which are set by the Ministry of Natural Resources
  • Pay a well licence fee on or before February 15 of each year to the Oil, Gas and Salt Resources Trust
  • Register a well or production facility
  • Comply with spacing units requirements for all wells
  • Produce oil or gas from only one well in a spacing unit
  • Produce oil or gas from a well in a spacing unit only when all the interests in the oil and gas in the spacing unit have been pooled
  • Apply to the Commissioner for a spacing unit pooling order to join the interests within a spacing unit
  • Apply to the Commissioner for a unitization order to join the interests within the field or pool
  • Establish security in the form of a trust fund for the purpose of providing financial assurance that wells will be plugged and works completed in accordance with the Act and regulations and any order of the Board or the Commissioner.
  • Provide blowout prevention equipment when a well is being drilled, tested, serviced, etc.
  • Provide liability insurance of $5 million for operations conducted in a water-covered area that provides compensation for all damage caused by drilling, pipeline construction, production, servicing or abandonment of operations
  • Plug a dry or unused well within 12 months after it is determined to be dry or is taken out of use
  • Prohibit harm to designated gas storage areas where work performed on a well is located within 1.6 kilometres of a designated gas storage area

 

The OGSRA and its regulations govern the operations of the petroleum industry to ensure its activities do not pose a hazard to public safety or pollute the natural environment.

 

National Standards Published by the Canadian Standards Association (CSA) and adopted under the OGSRA

 

The Provincial Standards also reference CSA Standards Z341 for Storage of Hydrocarbon in Underground Formations and Z662 for Oil and Gas Pipeline Systems, and several API specifications for oilfield equipment and procedures.

 

For more details view the CSA web site and the American Petroleum Institute (API) web site