Manual 008

Oil Sands and Coal

Exploration Application Guide
August 19, 2014
Alberta Energy Regulator
Manual 008: Oil Sands Exploration and Coal Exploration Application Guide

August 2014

Published by
Alberta Energy Regulator
Suite 1000, 250 – 5 Street SW
Calgary, Alberta
T2P 0R4

Telephone: 403-297-8311
Toll free: 1-855-297-8311
E-mail: [email protected]
Website: www.aer.ca
 Alberta Energy Regulator

Contents
1 Introduction ............................................................................................................................................. 1

2 Application Requirements for OSE Programs, CEPs, and Well Licences ............................................. 2
2.1.1 Notification and Consultation Requirements ............................................................................... 2
2.1.2 OSE Program and CEP Application Requirements .................................................................... 3

2.1.2.1 General ............................................................................................................... 3

2.1.2.2 First Nations Consultation ............................................................................................ 3
2.1.2.3 Consent ........................................................................................................................ 3
2.1.2.4 Exploration Terms and Expiry ...................................................................................... 3
2.1.2.5 Range and Flexibility for Well Site and Access Road Locations .................................. 4
2.1.2.6 Mapping ........................................................................................................................ 4
2.1.2.7 Caribou Protection Plans .............................................................................................. 4
2.1.2.8 Historical Resource Requirements ............................................................................... 4

3 Oil Sands Evaluation Well Licence Applications under Directive 056 .................................................... 5

4 Application Process and Timelines......................................................................................................... 5

4.1 OSE Program and CEP Application Process on Public Lands .................................................... 5
4.2 CEP and OSE Program Application Process on Private Lands ................................................... 6
4.3 Application Processing Timelines ................................................................................................. 6

5 Changes to OSE Programs, CEPs, and Well Licences ......................................................................... 6

5.1 Amendments to Approved OSE Programs and CEPs ................................................................. 6
5.2 Transfer or Assignment of OSE, CEP, and Oil Sands Evaluation Wells ...................................... 7

6 CEP and OSE Program Renewal Applications and Well Licence Term Changes ................................. 7
6.1 Temporary Field Authorizations .................................................................................................... 8
6.2 Cancellations ................................................................................................................................ 8
6.3 Conversion of Exploration Operations to Permanent Dispositions on Public Lands .................... 8

7 Reporting ................................................................................................................................................ 9

8 Reclamation ............................................................................................................................................ 9

9 Contact Information ................................................................................................................................ 9

Appendix 1 Oil Sands Exploration Programs and Coal Exploration Programs Application Completeness
Checklist................................................................................................................................. 10

Tables

Table 1. Summary of Applications Required for Exploration on Public Land ......................................... 2

Table 2. Summary of Applications Required for Exploration on Private Land ........................................ 2

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1 Introduction
This application guide includes the application requirements, processes, and expected timelines for oil
sands exploration and coal exploration programs to help industry plan its programs and to help all
interested parties understand the regulatory process for exploration under the Public Lands Act, the
Environmental Protection and Enhancement Act, the Oil Sands Conservation Act, and the Oil and Gas
Conservation Act. This guide should enable the submission of complete applications that can be evaluated
by the Alberta Energy Regulator (AER) within expected timelines.

Highlights

• Applicants are encouraged to notify stakeholders before submitting an application for an oil sands
exploration (OSE) program and any associated oil sands evaluation wells. This notification must meet
the requirements of the Public Lands Act and Directive 056: Energy Development Applications and
Schedules, and it can be done early in the process and as one single notification.

• The term for OSE programs and coal exploration programs (CEPs) will be five years, which would
include up to two years to complete exploration operations and up to three years to reclaim them.
Applicants may request shorter terms. Longer CEP and OSE program terms will

− give industry more flexibility to complete exploration programs and reclamation without
requiring additional applications, and

− give interested parties with a better understanding of longer-term plans.

• The expiry date of an oil sands evaluation well licence may be extended past the typical one-year
term, up to a maximum of two years, to align with the expiry period of the exploration operations of
an approved OSE program. An applicant’s preapplication notification is valid for up to two years to
support an oil sands evaluation well licence, provided the notification clearly stated the term of the
OSE program.

• An application for an OSE program or CEP may include a range of applied-for exploration operation
locations, such as oil sands evaluation well sites, drill holes, and access roads, thereby
accommodating changes that result from ongoing exploration. Any requested operational flexibility
and their associated impacts must be fully assessed and consulted on.

• A caribou protection plan (CPP) may be submitted or amended at any time. A CPP is required when
activities are within a caribou zone. The CPP will be given a reference number from a land use officer
upon submission. The applicant will be notified by the land use officer once the CPP is accepted. An
accepted CPP is required before the AER can render a decision on an OSE program or CEP
application within a caribou zone.

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2 Application Requirements for OSE Programs, CEPs, and Well

Licences

2.1 Difference between application requirements on private and public lands

Application requirements vary between public and private lands. Requirements also vary depending on
whether the proposed exploration operation is in an approved mine site or in a mineral surface lease
(MSL).
Table 1. Summary of Applications Required for Exploration on Public Land

Public lands

Legislative requirements Outside of approved MSL Inside approved MSL

Public Lands Act and Application under section 20 of the Public Notification is required under section 3.1
Environmental Protection Lands Act, and notification under the of the Code of Practice for Exploration
and Enhancement Act Code of Practice for Exploration Operations.
Operations.

Outside of approved mine site* Inside approved mine site*

Energy resource After a letter of authority is granted for an No oil sands evaluation well licence is
enactments OSE program, an oil sands evaluation required for mine sites in accordance with
well licence is required in accordance the Oil Sands Conservation Act.
with Directive 056 pursuant to the Oil and
Gas Conservation Act. Permit may be required in accordance
with the Coal Conservation Act.
Permit may be required in accordance
with the Coal Conservation Act.
*Mine Site is defined in the Oil Sands Conservation Rules

Table 2. Summary of Applications Required for Exploration on Private Land

Private lands

Legislative requirements Outside of approved MSL or mine site Inside approved MSL or mine site
Environmental Protection Notification is required under section 3.1 Notification is required under section 3.1
and Enhancement Act of the Code of Practice for Exploration of the Code of Practice for Exploration
Operations. Operations.

Outside of approved mine site Inside approved mine site

Energy resource Oil sands evaluation well licence is No oil sands evaluation well licence is
enactments required under Directive 056 pursuant to required.
the Oil and Gas Conservation Act.
Permit may be required under the Coal
Permit may be required under the Coal Conservation Act.
Conservation Act.

2.1.1 Notification and Consultation Requirements

The AER’s notification and consultation requirements are specified under AER legislation. The AER
requires an applicant to develop a participant involvement program that includes people who may be
directly and adversely affected by the OSE program or CEP. An applicant must initiate the participant
involvement program before filing a CEP or OSE program application under the Public Lands Act or any
oil sands evaluation well licence application under Directive 056.

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For CEP or OSE programs on public land, applicants are encouraged to conduct a single notification that
addresses the full extent and impact of proposed exploration activity and that meets the notification
requirements for the CEP or OSE program application and all associated Directive 056 applications.

For OSE programs and CEPs on private land, written consent is required from all registered owners of the
land on which the exploration program will be conducted.

The Aboriginal Consultation Office (ACO) assesses the adequacy of First Nation consultation made on
behalf of the Crown.

2.1.2 OSE Program and CEP Application Requirements

2.1.2.1 General
Any oil sands or coal exploration activity must comply with the Code of Practice for Exploration
Operations (COP) under the Environmental Protection and Enhancement Act (EPEA). If an OSE
program or a CEP is on public land, a Public Lands Act disposition providing for the surface access
approval is required in addition to the COP notification.

CEP and OSE program applications must address all aspects of the COP and, where the OSE program or
CEP is on public land, must include the activities plan check list in appendix 1 of this document.

2.1.2.2 First Nations Consultation

To ensure that consultation feedback is incorporated into the application, the AER strongly encourages
companies to have received a decision on the adequacy of First Nations consultation (FNC) before
submitting any applications. The AER will not make a decision on the CEP or OSE program application
until the ACO decides on the adequacy of FNC.

Companies are encouraged to contact the ACO well before submitting a CEP or OSE program application
to ensure that FNC is adequate for the extent of the applied-for exploration program.

2.1.2.3 Consent
An application for an OSE program or CEP on public land must include consent from any overlapping
surface rights holders, including forestry management agreement holders, coniferous timber licence
holders, deciduous timber licence holders, and grazing lease holders. Before submitting an application to
the AER, consent must be obtained, and a copy of the consent must be included in the application.

2.1.2.4 Exploration Terms and Expiry

OSE program or CEP applications will be issued for terms of five years—two years for exploration and
three years for reclamation.

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2.1.2.5 Range and Flexibility for Well Site and Access Road Locations
To accommodate changes to the exploration operation locations (e.g., oil sands evaluation well sites, drill
holes, and access roads) resulting from ongoing exploration, a clearly defined range of the exploration
operation locations and the impact of this range may be requested in a CEP or OSE program application.
This range or flexibility the applicant may require should be clearly described and shown on constraints
maps. For example, the proposed oil sands evaluation well site will be within a specified distance of the
location shown on a constraints map. The proposed extent of the range of the location of exploration
operations must be fully justified in the CEP or OSE program application. If approved, this range
provides flexibility to accommodate changes during the program implementation. No subsequent
application would be required for changes to exploration operation locations within a previously assessed
and approved range.

For the flexibility in locations to be granted, the applicant must provide a declaration that FNC was
deemed adequate for the full range of exploration operation locations proposed in the CEP or OSE
program application.

2.1.2.6 Mapping
CEP or OSE program application maps must clearly identify each exploration operation location, such as
oil sands evaluation wells, drill holes, and access roads, and any sensitive areas, in accordance with the
Code of Practice for Exploration Operations. If the applicant is requesting a range for any exploration
operation locations, maps must clearly identify this potential range.

The AER encourages applicants to submit geographic information system (GIS) shapefiles for every map
included in the CEP or OSE program application for ease of AER review and for future reference. The
AER does not require hard copies of applications.

2.1.2.7 Caribou Protection Plans

The AER requires an accepted CPP before deciding on a CEP or OSE program if the program falls within
caribou zones as shown on the provincially-approved caribou land-use referral map. A CPP can be
submitted or amended at any time. A CPP related to the location of the exploration program must be
submitted to the appropriate regional area land use e-mail address, which may be found on the AER’s
website, www.aer.ca/about-aer/contact-us/land-use-contacts.

2.1.2.8 Historical Resource Requirements

Applicants must work with Alberta Culture to ensure that all requirements under the Historical Resources
Act are met for a CEP or OSE program application.

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3 Oil Sands Evaluation Well Licence Applications under Directive 056

Each oil sands evaluation well site specified in an OSE program requires a Directive 056 licence before
any associated field activity occurs, unless the oil sands evaluation well will be within an approved mine
site under the Oil Sands Conservation Act. Under part 2, section 4(5) of the Oil Sands Conservation
Rules, oil sands evaluation wells drilled within an approved mine site do not require a Directive 056 well
licence.

An applicant’s notification of an OSE program on public lands must satisfy the participant involvement
requirements for Directive 056 well licence applications. OSE program approval satisfies the landowner
non-objection requirement under Directive 056 for activities on public lands.

To expedite the Directive 056 licensing process, applicants are encouraged to submit a request for
multiple well licences at the same time using the multiwell, B150 application type. Site-specific surveys
are not required; instead, maps provided in the OSE program application can be attached to support the
Directive 056 application.

Applicants must identify the OSE program approval and expiry term in a cover letter attached to the
Directive 056 application. The expiry date of oil sands evaluation well licences will be aligned with the
expiry term of operations part of an approved OSE program to a maximum of two years.

4 Application Process and Timelines

4.1 OSE Program and CEP Application Process on Public Lands

Applications for CEP and OSE programs on public land must be submitted to
[email protected]. All e-mails should include a reference to the type of program in the
subject line of the e-mail.

The AER strongly encourages applicants to submit complete applications to ensure efficient AER review.
Incomplete CEP or OSE program applications will generally be rejected within five business days.

Public Lands Act applications that are submitted to the AER without the FNC adequacy assessment
decision will be reviewed, but a decision will not be made until the FNC is complete.

For CEP and OSE program applications on public lands, the application will be sent to the appropriate
AER land use officers (LUOs), based on region, after an initial completeness review. The LUOs will be
responsible for the primary review of the program applications. The LUOs will also be the contacts for
managing the day-to-day operations of all CEP or OSE programs in their areas.

Public notice of a CEP or OSE program application on public lands will be issued on the AER’s website
upon registration, in accordance with section 31 of the Responsible Energy Development Act (REDA).
The AER’s Rules of Practice describes the public notice of application process. The public notice of

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application will generally have a 30-day notice period, during which the public can submit any statements
of concern (SOC). The AER expects any concerns raised through an applicant’s preapplication
notification process to be addressed wherever possible before an application is submitted.

When a regulatory decision is made on a CEP or OSE program application, a notice of decision granting
the exploration activity will be sent by e-mail to the holder of the exploration program and any SOC
filers. The holder can then apply for oil sands evaluation well licences under Directive 056.

The AER will also issue a public notice of application for oil sands evaluation well licence applications;
however, the decision on oil sands evaluation well licences that can be submitted as “routine” will be
expedited in accordance with section 5.2 of the AER’s Rules of Practice.

4.2 CEP and OSE Program Application Process on Private Lands

CEP and OSE programs on private land only require notification to the AER, not an application;
therefore, no public notice of application is issued on the AER’s website. However, in accordance with
section 3.2.1 of the Code of Practice for Exploration Operations, beginning or continuing exploration on
private land is prohibited without the written consent of all registered owners of the land on which the
exploration program will be conducted. Once written consent is obtained, a notification for exploration on
private land under the Code of Practice for Exploration Operations must be submitted to
[email protected].

For a CEP or OSE program on private land, notification must include written consent of all current
registered owners of that land.

Oil sands evaluation well licence applications on private lands must meet all Directive 056 requirements,
including site-specific consultation programs. Licences issued will reflect a one-year term unless
requested otherwise.

4.3 Application Processing Timelines

A decision on a complete CEP or OSE program application under the Public Lands Act without any SOCs
can be expected within 60 business days. On a complete OSE program application submitted by
September 15, the AER will make a decision by October 31. These timelines may be extended because of
unresolved SOCs.

5 Changes to OSE Programs, CEPs, and Well Licences

5.1 Amendments to Approved OSE Programs and CEPs

To reduce the number of regulatory decisions and additional notifications, industry is encouraged to plan
ahead and apply for the full extent of its planned exploration programs. Location changes beyond the
range previously assessed and approved, and any surface disturbance that goes beyond the impact

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previously assessed and approved, requires a subsequent CEP or OSE program application, including
notification and consultation. An applicant may file an amendment to an approved CEP or OSE program
CEP following the same process for a new program as outlined above.

Amendment applications for OSE programs and CEPs must be submitted to

[email protected] and must reference the approved exploration program number.

5.2 Transfer or Assignment of OSE, CEP, and Oil Sands Evaluation Wells
OSE programs and CEPs, whether in the application stage or approved, are prohibited under section 149
of the Public Lands Administration Regulation from being transferred from one company to another as
part of an acquisition.

Well licences issued under Directive 056 can be transferred.

6 CEP and OSE Program Renewal Applications and Well Licence Term
Changes
The maximum term for a CEP or OSE exploration program is five years: two years for exploration
activities and three years for reclamation. Any approval less than the two-year exploration operational
term may be eligible for a renewal. CEP and OSE program renewal requests (previously referred to as
extensions) must be submitted to [email protected] and must include the following:

• A clear statement identifying the request as a CEP or OSE program renewal request and the reasons
why the renewal is considered necessary

• The amount of work remaining to be completed in the approved OSE program or CEP

• An updated schedule of the proposed exploration operations, including any changes to the schedule of
previously approved activity within the exploration program

• An updated activities plan

• A list of the associated well licences issued under Directive 056 or permits under the Coal
Conservation Act, with the current expiry dates

Submission under the Public Lands Act of a renewal application for the exploration program will result in
public notice under section 31 of REDA. The public notice of application will generally have a 30-day
notice period, during which the public can submit any statements of concern.

The AER will issue a decision on the renewal application under the Public Lands Act after reviewing the
complete application and after receiving a decision on the adequacy of FNC from the ACO.

A new licence application under Directive 056 is required if a well licence has expired.

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6.1 Temporary Field Authorizations

Temporary field authorizations cannot be used to amend an approved OSE program or CEP. However,
disposition operations approvals (DOAs) can be used for minor access or site relocations beyond those
previously assessed and approved where the disturbance is minimal, low impact, and temporary in nature;
e.g., when the surface area disturbed is less than 0.5 ha and the activity under the DOA will be completed
in less than one year.

The DOA cannot include new access or new sites. DOA will be issued for the maximum time required to
complete the activity.

6.2 Cancellations
To cancel a CEP or OSE program on public lands where no disturbance has taken place, or when a
reclamation certificate has been issued, an application must be submitted to
[email protected] clearly identifying the request to cancel the OSE program or CEP,
including a declaration that no disturbance has taken place.

6.3 Conversion of Exploration Operations to Permanent Dispositions on Public Lands

It may be determined that exploration operation infrastructure (e.g., an oil sands evaluation well, drill
hole, access road) is required for long-term use, such as observation or access. If there is the potential for
converting any CEP or OSE program infrastructure to a permanent disposition, these activities should be
contemplated and described in the initial CEP or OSE program application. However, companies are
encouraged to not apply to the AER for a permanent disposition under the Public Lands Act to convert
exploration operation infrastructure until the purpose is clearly known.

Changing the purpose of an oil sands evaluation well or drill hole from exploratory to permanent requires
a mineral surface lease (MSL) application, and changing the purpose of an access road from exploratory
to permanent requires a licence of occupation (LOC) application. MSL and LOC applications need to
clearly identify conversions from an approved CEP or OSE program, both in the remarks section of the
application and within the environmental field report.

Any proposed exploration operation changes that were not previously assessed and approved require an
amendment application, including notification and consultation. Applicants are encouraged to work with
the ACO to ensure that an FNC undertaken for an exploration program can be used for any conversion
from a temporary disturbance to a longer-term disturbance.

For oil sands evaluation wells proposed to be converted to observation wells, the oil sands evaluation well
licences must be amended to observation well licences through the Directive 056 application process after
the appropriate MSL or LOC approvals have been obtained. Site-specific surveys will be required.
Because oil sands evaluation wells must be abandoned within 30 days of the final drill date unless the
purpose of the well is changed through a Directive 056 licence amendment, applicants are encouraged to

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apply as early as possible when the long-term purpose of the well is clearly known, even if the well has
not been drilled.

7 Reporting
Annual reports and final reports for exploration on private land must be submitted in accordance with the
Code of Practice for Exploration Operations. These reports must be submitted to
[email protected].

The holder of an approved CEP or OSE program on public lands must also submit reports in accordance
with the letter of authority. These reports for must be submitted to [email protected].

8 Reclamation
Exploration operations must be reclaimed in accordance with the Code of Practice for Exploration
Operations and, where applicable, the letter of authority. Oil sands evaluation wells must also be
reclaimed in accordance with the 2010 Reclamation Criteria (Updated July 2013) for Reclamation of
Specified Land.

Although the Code of Practice for Exploration Operations gives operators two full growing seasons to
complete reclamation, and three full growing seasons to apply for a reclamation certificate. The AER
encourages operators to complete reclamation within one year of the surface disturbance to help ensure
reclamation success.

Reclamation certificate applications must be submitted through the Electronic Disposition System within
three years of the completion of exploration operations.

Where reclamation has not been successful after the three years, a miscellaneous lease application for
reclamation research may be made to the AER to remove those unsuccessful areas from the OSE program
or CEP. The operator may then apply for a reclamation certificate for the reclaimed area.

Failure to submit an application for a reclamation certificate within the time required is a contravention of
the Code of Practice for Exploration Operations and must be reported.

9 Contact Information
Direct general inquiries to the AER by e-mail at [email protected] or by calling 1-855-297-8311. Direct
technical questions about application requirements to [email protected]. Direct
technical questions about approved CEP or OSE programs to the LUOs in the associated region as
defined by the land use field centre map available on the AER’s website. All e-mails should include a
reference to the type of program in the subject line of the e-mail.

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Appendix 1 Oil Sands Exploration Programs and Coal Exploration

Programs Application Completeness Checklist

Where the answer is “No,” please provide comments explaining why this information is not considered
necessary for a decision by the AER.

General information Yes No Comments

Cover letter (gives Public Lands Act application

date and contact information)

Code of Practice for Exploration Operations

schedule 1—notice information (form) (provide
location of form)
General location of program (include oil sands or
coal lease and/or permit number), and permission
from the lease/permit holder if applicable

Location of sensitive areas and environmental

summary

Requested start date and justification

Requested expiry date and justification

Signature of company representative

Code of Practice for Explorations Operations: Yes No Comments

Schedule 2 (written descriptions)

Time schedule of activity, operating procedures

and suspension described

Core hole size (dimensions) and siting described

Access width (specify new and existing) and siting

described

Amount of area disturbed provided (new and

reused)

Hole location (legal and GPS) table included.

Type of equipment to be used provided

Summary of land use planning policies and

regulations in effect in the area provided

Soil salvage described

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Timber salvage described

Access through other subsurface leases described

Drilling waste / remote sumps described

Water withdrawal described

Erosion control measures described (slopes,

water, wind)

Reclamation and revegetation described

Camps described

Copies of consents provided (e.g., grazing lease)

List of potentially adversely affected stakeholders

provided

First Nation consultation completed? (If Yes,

attach results.)

Historical resources assessment provided

Caribou protection plan — AER regional area

acknowledgment letter provided. (If Yes, attach
copy of letter.)

Land Standing Automated System (LSAS) report

provided

Was area office contacted prior to application

submission? If so, provide the following:
Phone _______________________________
In person _____________________________
Name of contact (please print):
_____________________________________
Date of contact:
_____________________________________

List of other associated activity provided

Map Submission Yes No Comments

Version number and date

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Land ownership identified (Crown or private)

Property boundary shown (oil sands or coal lease)

Core hole locations identified (UTM and LSD

description), with applied-for range as appropriate

Previous exploration programs identified

Access (proposed and existing to be used)

Previously disturbed/undrilled core hole sites

identified

Other surface dispositions identified

Other subsurface lease rights identified

Location of sensitive areas identified

Wildlife zones identified (e.g., caribou, sheep,

ungulates)

Location and types of water crossings identified

Sumps identified (to apply for MSL)

Log storage areas identified

GIS shapefiles provided

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