Refresh Your Memory on Applicable Petroleum Laws

petroleum storage tank

As we enter a new year, it is a good time to reflect on the laws that regulate the oil industry in Canada and keep us all safe. As the fourth largest crude oil producer in the world, Canada’s oil production typically meets all of its domestic oil requirements as well as exporting over 3 million barrels of crude oil a day to countries around the world, including the United States.

Canadian Petroleum Resources Act (Canada)

Established in 1985, this legislation governs gas and oil exploration offshore and in the North. This legislation is dual governed by The Minister of Indigenous and Northern Affairs in the North and the Minister of Natural Resources in other areas, including the Atlantic Accord and the Canada-Nova Scotia Petroleum Resources Accord.

This legislation ensures that a transparent and competitive bidding process is undertaken by companies wishing to explore for, develop and produce petroleum in areas that are under federal jurisdiction. It ensures that rights, once issued, are secure and supports the recirculation of exploration sites.

This legislation ensures that suitable reservoirs are developed with a focus on engineering efficiency, conservation of resources and protection of the environment.

Canada Oil and Gas Operations Act (Canada)

This piece of legislation applies to organizations involved in exploring and drilling for the production, conservation, processing and transportation of oil in onshore sites that are under federal administration, on Nunavut, on Sable Island and within the waters of Canada that are outside of Northwest Territories, not under federal administration and not within the continental shelf of Canada.

It ensures that safety is prioritized for oil workers as well as to protect the environment and to be accountable in the event of polluting events. The legislation ensures that natural oil reserves are conserved by joint production arrangements and the use of economically efficient infrastructure.

Canadian Energy Regulator Act (Canada)

This act ensures that all infrastructure, including pipelines, power lines, facilities, equipment and systems relating to energy projects are constructed, maintained and decommissioned in a safe and efficient manner that prioritizes the safety of the operators, the equipment and the environment.

It regulates trade and ensures that decision making processes are fair, inclusive and transparent. It also mandates that oil exporters comply with exportation requirements and seek a license for any exports that they wish to conduct.

Net Zero Emissions By 2050 Target

The Canadian Net-Zero Emissions Accountability Act was made law in June 2021 and demonstrates Canada’s commitment to achieve net-zero emissions by 2050.

The Pathway Alliance was established by Canada’s largest oil producers in 2021 following the publication of this legislation and this sets out how the industry plans to support the Government plans to achieve net-zero emissions from oil production by 2050. Multiple pathways will be followed to achieve this challenging target, with the first step being the implementation of carbon capture and storage technology which will capture CO2 emissions at the source before transporting it to safe storage underground. This cheap technology is proven and reliable and we are proud to be involved in its implementation. Further technologies to explore are direct air capture and using low carbon fuels, hydrogen and electricity to power operations.