Thank you, Mr. Speaker.
Content of Annual Report
A commitment to improving accountability and transparency is one of the key priorities of the 18th Legislative Assembly. Public information is expected to be clear, concise, and easily understood. Committee agreed with submitters of comments that making information available will increase public confidence in the regulatory process.
Having the information, year over year, compiled in one place proves of interest and value in the context of accountable and transparent governance. The value of an annual report is the ability to have flexibility around how information is presented so as to allow the reader to put it clearly in context. The regulator already voluntarily prepares and publishes annual reports on activities, which is not required by legislation. The Minister is required to prepare a report with respect to the administration of the Petroleum Resources Act. The committee is of the view that contents of the report should be set out in legislation.
To provide greater clarity for the annual report that is required under the existing legislation, the licences and information issued, for example, can be provided by the Minister. Committee developed two motions that would link several sections and result in collaboration between the regulator and the Minister and annual reporting. This is reflected in Motion 2. The committee also proposed amendments that would set forth a list of information that should be included in the annual report of the Minister, which is reflected in Motion 6 amending Bill 36.
Well Abandonment and Financial Responsibility in Bill 37
Committee heard concerns and sought clarification on the commencement of the one-year period during which an operator must maintain proof of financial responsibility. Committee also had questions on the environmental remediation triggers within the respective reporting year.
During committee's deliberations on how the timing of the one-year period is determined, it was confirmed that abandoning a well is included in the definition of well operation, and that all operations require approval from the regulator. The holder of an authorization must maintain proof of financial responsibility for one year after the Office of the Regulator of Oil and Gas Operations has given notice to the proponent that all authorized works in respect of the abandonment of a well are completed. The extent of reclamation to be carried out before the notice would be issued depends on the approved work plans rather than statutory definitions respecting reclamation.
While committee is confident that concerns regarding the one-year period are addressed in regulations, the general question of assessing financial liability in resource management was raised. Committee is of the view that there needs to be further consideration of how to best ensure that end-of-life obligations are addressed in order to protect the government and residents of the Northwest Territories from potential liabilities.
Due to recent court cases, such as the Redwater case, committee is of the view that decisions which relate to terms of financial responsibility need to be reviewed on their consistency with recent court decisions. Therefore, committee makes the following recommendation.
Recommendation 2
The Standing Committee on Economic Development and Environment recommends that, in the second phase of the review of oil and gas legislation, consideration should be given to recent court decisions and best practices to ensure that the Government of the Northwest Territories and the public are protected from potential liabilities arising from oil and gas operations.
Committee is of the view that the cap for financial liability, which is currently set out in regulations, needs to be reviewed and aligned with Canadian practices. The Oil and Gas Spills Debris Liability Regulations were inherited from the federal government with devolution and have not been updated. Since 2014, however, the federal legislation governing offshore oil and gas exploration was updated to increase the absolute liability cap to $1 billion following a review by the Auditor General of Canada. Committee therefore makes the following recommendation.
Recommendation 3
The Standing Committee on Economic Development and Environment recommends that the Government of the Northwest Territories undertake a comprehensive review of oil and gas-related regulation with the expressed purpose to increase the cap for absolute liability.
I will now pass the reading on to the Member for Frame Lake. Thank you, Mr. Speaker.