Recent legislative consultations: Carbon capture, utilization and storage in Saskatchewan

This article was prepared with the assistance of summer student Makayla Ziegler.

Saskatchewan’s Ministry of Energy and Resources has recently consulted stakeholders on proposed legislative changes to The Mineral Resources Act, 1985 (MRA) and The Oil and Gas Conservation Act (OGCA).

Together, these proposed legislative changes represent a comprehensive reform of the legislative framework surrounding subsurface resources. This demonstrates the Government of Saskatchewan’s intention to competitively position the province in carbon capture, utilization and storage (CCUS), while modernizing the regulatory scheme currently in place.

This article summarizes the key proposals and provides practical guidance for parties effected by the proposed legislative changes. It is important to note that the discussion below reviews proposed legislative changes that are not yet in force and are subject to change.

As the legal landscape surrounding subsurface resources continues to develop, the MLT Aikins Energy team will continue providing updates.

Amendments to The Mineral Resources Act, 1985

1. Crown ownership of subsurface pore spaces

The Government of Saskatchewan is proposing amendments aimed at bringing Saskatchewan into alignment with its western provincial counterparts by enhancing statutory clarity on the ownership of subsurface pore space and supporting the industry. The proposal will clearly establish that subsurface pore space is a public resource managed by the Crown.

Key elements of the proposed amendments, as described by the Ministry of Energy and Resources, are as follows:

• All pore space in Saskatchewan is vested in the Crown;
• No historic or future surface or mineral grant conveys ownership of pore space;
• Pore space ownership is deemed to have always been reserved for the Crown;
• Confirming that mineral and storage rights holders may use pore space as necessary to exercise their respective rights, without requiring permission from other rights holders;
• Confirmation that the amendments do not apply to federal lands; and
• Clarification that no compensation or expropriation claims arise as a result of these amendments.

2. Long-term liability management framework and Sequestration Legacy Fund

The proposed amendments will allow for the structured and conditional transfer of long-term liability for CO₂ sequestration projects to the Crown. The acceptance of liability will be optional and decided through strict transfer criteria, which would include “the achievement of full regulatory closure” as determined by the Ministry of Energy and Resources for the project.  Alberta, Manitoba and Ontario have implemented or are considering implementing a similar legislative pathway.

To assist with the obligations of the Crown in these situations, the Government of Saskatchewan is proposing a Carbon Dioxide Sequestration Legacy Fund that will provide financing to:

• Support the Crown’s long-term monitoring of the behavior of sequestered CO₂;
• Fulfil any obligations assumed by the Crown relating to ownership of the sequestered CO₂;
• Pay for suspension, abandonment, reclamation or remediation costs relating to orphan wells and facilities; and
• Administration costs.

Repeal and replacement of The Oil and Gas Conservation Act

1. Legislative focus and applicability to non-oil and gas resources

There is currently a need for the regulation of non-oil and gas resources and activities, along with all wells and facilities associated with oil and gas. In response to such need, the Government of Saskatchewan is proposing that there be an adoption of new legislation addressing the wells and facilities involved in the production of all mineral resources.

Furthermore, there is a proposal for the OGCA’s oil and gas resource conservation provisions to be transferred to the MRA, which outlines the conservation of all mineral resources in the province.

2. Legislative modernization and structure

The OGCA exhibits inconsistencies in its section numbering and structure as a result of its evolution from the original 1952 legislation, which has been amended extensively over the years. The proposed legislation seeks to adopt modern drafting standards.

3. Regulatory instruments: Regulations, orders and directives

The proposed legislation would more clearly define the regulatory instruments used by the Ministry of Energy and Resources. Specifically:

• Explicitly recognize directives as a distinct regulatory instrument;
• Align regulations with matters of broad industry applicability, financial impact or legislative significance; and
• Continue the use of Minister’s Orders and directives for technical, operational and site-specific requirements.

4. Licensing, registries and administrative processes

The proposed changes to the OGCA will establish a legislative authority that will designate an electronic registry for well and facility licences and a ministerial power to waive the administrative levy for defunct companies.

Additionally, there is a proposal to require the registration of interests respecting the location of wells on the title to lands upon which they are situated.

5. Repeal of the Oil and Gas Conservation Board: Amendments to The Pipeline Act, 1998

As a further attempt to modernize the legislation, the Government of Saskatchewan has suggested that sections 7 through 7.8 of the OGCA are removed to eliminate the Oil and Gas Conservation Board. The new strategy will consist of ministerial powers to appoint third-party experts, who will be responsible for investigating the Minister’s jurisdiction over oil and gas related matters.

Corresponding changes will then need to be made to The Pipeline Act, 1998.

How we help

For assistance with CCUS projects and solutions, please reach out to the Energy team at MLT Aikins. We have in-depth knowledge of CCUS technologies and projects, and have advised on some of Western Canada’s major carbon capture projects. Our lawyers actively follow CCUS developments, and we are involved in a broad range of work, including advising on regulatory and compliance issues.

Share