16.1 (1) Section 16 does not apply to the operator of a CAES project in a porous rock reservoir with respect to the wells, porous rock reservoir and other associated works that are part of the CAES project, except to the extent provided for in this section. O. Reg. 151/22, s. 8. (2) Despite subsection (1), if an operator referred to in that subsection has previously established security under section 16 for any of the wells proposed to be used as part of a CAES project in a porous rock reservoir, the operator shall maintain the security in accordance with section 16 until security is established under this section in respect of the well. O. Reg. 151/22, s. 8. (3) The operator of the wells that are part of a CAES project in a porous rock reservoir shall establish security as financial assurance that, at the end of the project’s lifecycle or before that time, where required, the operator will comply with all requirements in the operator’s licence and permit, the Act, this regulation and any order of the Board or Tribunal with respect to, (a)  the plugging, abandonment and decommissioning of all wells that are part of the project and of the porous rock reservoir; (b)  the decommissioning of all works, other than those referred to in clause (a), that are part of the project; (c)  any necessary site rehabilitation work; and (d)  any ongoing maintenance or monitoring work that is required after plugging, abandonment, decommissioning and site rehabilitation have been completed. O. Reg. 151/22, s. 8. (4) The security established under subsection (3) shall be in the form of, (a)  an irrevocable letter of credit from a bank named in Schedule I or II of the Bank Act
(Canada); or (b)  a trust fund administered in accordance with the Trustee Act. O. Reg. 151/22, s. 8. (5) If the security established under this section is in the form of a trust fund, (a)  the trustee of the fund must meet the requirements in subsections 16 (1.1) and (1.2); and (b)  the operator of the CAES project in a porous rock reservoir shall ensure that the trustee of the fund, (i)  does not make any payments out of the trust fund without the written consent of the Minister, and (ii)  follows the directions of the Minister with respect to payment out of the trust fund. O. Reg. 151/22, s. 8. (6) If the security established under subsection (3) is in the form of an irrevocable letter of credit, the form and terms of the letter of credit shall be approved by the Minister. O. Reg. 151/22, s. 8. (7) If the bank that establishes the letter of credit as security under subsection (3) with respect to wells that are part of CAES project in a porous rock reservoir gives the Ministry notice that the bank intends to allow the letter of credit to expire, the Ministry shall promptly forward the notice to the operator of the CAES project. O. Reg. 151/22, s. 8. (8) The operator of a CAES project in a porous rock reservoir who receives notice of the expiration of a bank’s irrevocable letter of credit under subsection (7) must, at least 30 days before the expiration date, (a)  obtain an irrevocable letter of credit from the same bank or from another bank named in Schedule I or II of the
Bank Act (Canada) in the same amount as the letter of credit that is about to expire; or (b)  establish security in the form of a trust fund in the same amount as the letter of credit that is about to expire and with a trustee that meets the requirements in subsections 16 (1.1) and (1.2). O. Reg. 151/22, s. 8. (9) The security established by the operator of the wells that are part of a CAES project in a porous rock reservoir shall be in an amount equal to the following costs, as estimated by the operator in the application for a licence submitted under subsection 2.4 (10): 1.  The costs of plugging, abandoning and decommissioning all wells that are part of the project and the porous rock reservoir. 2.  The costs of decommissioning all works, other than those referred to in paragraph 1, that are part of the project. 3.  The cost of carrying out necessary site rehabilitation work. 4.  The cost of any ongoing maintenance or monitoring work that is required after plugging, abandonment, decommissioning and site rehabilitation have been completed. O. Reg. 151/22, s. 8. (10) Despite subsection (9), upon reviewing a licence application, the Minister may determine that the amount of security estimated by the operator in the licence application is insufficient and should be increased to an amount that the Minister believes is a more accurate estimate of the costs described in subsection (9), based on one or both of the following factors: 1.  An expert review of the applicant’s estimate conducted as part of the application process for the operator’s well licence and referred to in section 2.4. 2.  Any records or information the Ministry has relating to the cost of abandoning or decommissioning similar wells, porous rock reservoirs and other associated works in Ontario or other jurisdictions. O. Reg. 151/22, s. 8. (11) If the Minister determines that the amount of security should be increased, the Minister shall, before making a decision with respect to the issuing of a licence or permit required for a CAES project in a porous rock reservoir, give the applicant for the licence or permit notice of the amount of security that is required and the applicant shall provide the amount of security required in the notice. O. Reg. 151/22, s. 8. (12) The operator of one or more wells that are part of a CAES project in a porous rock reservoir shall establish the security in the amount required under subsection (9) or (11) before commencing any site preparations for the wells or other associated works or any activity on or in the wells. O. Reg. 151/22, s. 8. (13) Subsections 16 (5) to (7) apply with necessary modifications to security that is provided under subsection (3) or (8) by the operator of a well that is associated with a CAES project in a porous rock reservoir. O. Reg. 151/22, s. 8. (14) The Minister may give directions to the trustee of a trust fund established as security under this section to make payments out of the trust fund, or may draw on the letter of credit established as security under this section, as the case may be, in order to remedy a situation where, (a)  a work represents a hazard to the public or environment; or (b)  the operator of a well that is associated with a CAES project in a porous rock reservoir does not comply with the requirements mentioned in subsection (3). O. Reg. 151/22, s. 8. (15) The operator of the wells that are part of a CAES project in porous rock reservoir may apply to the Minister for a reduction in the amount of the security required under this section if the operator has completed a portion of the work described in subsection (3). O. Reg. 151/22, s. 8. (16) The Minister may consent to the reduction of the amount of security required under this section if the Minister is satisfied that, (a)  the amount of security sought to be reduced corresponds to the estimate for the cost of carrying out work described in subsection (3) upon which the amount of the security was based; and (b)  the amount of security remaining after the reduction will be sufficient to carry out the remaining work described in subsection (3) that is required for the CAES project. O. Reg. 151/22, s. 8. (17) For greater certainty, if the costs incurred by the operator in carrying out a portion of the work described in subsection (9) exceed the estimate of those costs based on which the security was provided under this section, the excess amount incurred for the work shall not be reflected in the reduction of the amount of security under subsection (16). O. Reg. 151/22, s. 8.