Critical Well Licence Applications: Criteria And The Drilling Industry's Role In Exploration
Authors: Rooke John D. 
Published: March 2010

The thesis of this paper is that the drilling industry (the "industry) should understand the criteria used to asses "critical" sour well licence applications and should actively participate at the Energy Resources Conservation Board (ERCB) hearings in support of such applications by providing evidence relevant to safe drilling procedures.

It is not the purpose of this paper to detail the ERCB's hearing procedures or to canvas, in detail, every decision relating to critical sour wells. Rather it is to provide an overview of guidelines set by the ERCB's decisions for successfully obtaining a critical sour well licence, while recognizing the public's legitimate concerns.

As is well known to the industry, no well drilling operation, or any preparatory or incidental operation, except survey, may be conducted in Alberta without a valid licence issued by the ERCB. However, it is important that the industry and the public be more fully informed and involved in the process.

The Energy Resources Conservation Act R.S,A. 1980, c. E-il (the ERCB Act) establishes the administrative mechanisms for regulatory management of oil and gas operations in the province. The Act provides for the organization and constitution of the ERCB, sets out its general mandate and the purposes to be pursued, and prescribes its general powers and duties. It also sets out the legislative scheme for oil and gas regulation. The ERCB administers the Oil and Gas Conservation Act R.S.A. 1980, c.0-5 (the Conservation Act) and is given broad general powers to make such "just and reasonable orders and directions" as the ERCB may consider necessary to achieve the policy objectives of the Conservation Act.

Section 4 of the Conservation Act sets Out the legislative objectives or purposes of oil and gas conservation including:to conservate and preserve fossil fuel resources;to establish and enforce safe and efficient practices in location, spacing, drilling and operations of wells;to ensure that mineral owners are afforded every opportunity to recover their minerals:to provide information regarding fossil fuel resources in Alberta;to control pollution in the drilling and operations of fossil fuel production; andto provide for the economic and efficient development of oil and gas resource in the public interest.

Resource development, the public interest and pollution control are objectives which are not easily reconciled. In its administration of the Conservation Act, the ERCB is often called upon to balance what are, in practice, competing legislative objectives.

While the matter of conservation and energy resource development is of prime importance, a key phrase in the jurisdiction of the ERCB is the "public interest". The public interest is not defined in either the ERCB Act or the Conservation Act, but it has been the subject of extensive interpretation and debate by counsel who have appeared before the ERCB on behalf of applicants and intervenors. In general terms, the ERCB has adopted a utilitarian approach to the public interest. They have attempted to provide the greatest good for the greatest number within the province.