Next Steps for Alberta’s New Geothermal Resource Regime – Energy and Natural Resources

On December 8, 2021, the Government of Alberta signed into law Geothermal Resources Development Act (GRDA). The GRDA establishes a new regulatory framework for the development of geothermal resources in Alberta and grants oversight to the Alberta Energy Regulator (AER). The GRDA provides greater regulatory certainty for potential investors in Alberta’s significant geothermal resources and is an important step towards achieving continued growth in the province’s renewable energy sector.

Following the proclamation of the GRDA, the AER announced in Bulletin 2021-46 that it was working to finalize the province’s regulatory framework for geothermal resource development, including technical and application requirements for project promoters. AER plans to publish rules, guidelines and guidance documents to implement the application process in spring 2022.

Brief history of geothermal resources in Alberta

Geothermal energy – thermal energy generated and stored in the ground – is particularly advantageous as a renewable energy source because it can provide constant and predictable baseload power throughout the year and can be developed over time. help installations that generally require less surface disturbance, a lower carbon footprint and less water consumption than conventional power plants.1Alberta is a prime region for geothermal energy development, given the abundant geothermal resources identified in the province, combined with Alberta’s extensive experience in oil and gas resource development.

Despite the enormous geothermal resource potential in the province, the lack of a clear and certain regulatory regime has historically blocked development.2With the introduction of GRDA and the planned release of AER rules, guidelines and guidance documents, the Government of Alberta aims to close this regulatory and policy gap to provide potential developers with a clear pathway to cultivate the province’s geothermal resources.

New global regulatory framework

Until recently, Alberta’s regulatory regime was largely silent on the licensing of geothermal resource projects. The newly proclaimed GRDA establishes a licensing regime for the exploration and development of geothermal resources that is modeled on the
Oil and Gas Conservation Act. The GRDA also designates the AER as the primary regulator of geothermal resources, as is already the case for Alberta’s oil and gas resources.

With respect to geothermal resources owned by the Provincial Crown (which includes most of the province’s geothermal resources), a proponent must obtain permission to develop the resource (subsurface rights), in accordance with Geothermal Resources Tenure Regulations under the Mines and Minerals Act.3They must then obtain surface access rights and apply to the AER for authorizations for wells and installations within the framework of the GRDA.

The AER published additional details regarding the licensing regime under GRDA in its August 2021 draft guidance, Requirements for the development of geothermal resources.4 The draft directive sets out proposed requirements for a wide range of issues relating to geothermal projects, such as license applications, surface rights, consultation and notification, emergency preparedness and response, l license eligibility, licensee assessments to identify risks and liabilities, security deposits and license transfers, as well as specific technical, application and reporting requirements for wells, facilities and geothermal pipelines.

Other provincial licenses and approvals may also be required for geothermal resource projects under the water lawthe
Environmental Protection and Enhancement Act and, with regard to power stations and connections, Hydroelectric and Electric Power Actwhich is administered by the Alberta Utilities Commission (the AUC).5 The AUC has recently modified
Rule 007: Applications for Power Plants, Substations, Transmission Lines, Industrial System Designations, Hydroelectric and Gas Pipeline Developmentsas the name suggests, sets out the detailed application requirements needed for power plants, including geothermal power plants that fall under the category of “other power plants”.6 The applicability of these other provincial requirements depends largely on the scale, scope and parameters of a given geothermal resource development.

Next steps

As discussed in Osler’s November 2020 post on Bill 36: Geothermal Resources Development Act, the GRDA alone does not address several details regarding how Alberta’s new geothermal framework will be applied. Many of these uncertainties are expected to be addressed by forthcoming AER rules, guidelines and guidance documents. Comments on ARE’s draft guideline for geothermal projects were expected in September 2021, and now that the GRDA is in effect, ARE is set to finalize the guideline and any associated guidance in the coming months . Although the AER is not currently accepting geothermal development applications, AER Bulletin 2021-46 includes contact details for industry and stakeholders to request AER application submissions, licenses and transfers. .

For more information on geothermal energy, its production, and key environmental and regulatory considerations in Western Canada, we encourage you to read Osler’s detailed resource published in conjunction with Matrix Solutions Inc., “Emerging technologies in energy : Environmental and Western Canada – geothermal. »

Footnotes

1 Osler, Hoskin & Harcourt LLP & Matrix Solutions Inc., “Emerging technologies in energy: Environmental and regulation requirements for Western Canada – Geothermal”, online.

2 Canada West Foundation, “Hot Commodity: Geothermal Electricity in Alberta” PDF, July 2018, p. 16, online.

3 GRDA, Art. 7(2)(b); Geothermal Resources Tenure Regulations, s. 2-3.

4 AREs, Bulletin 2021-31: Invitation to comment on proposed new requirements for geothermal resource development PDF, online; ARE, DRAFT GUIDELINE XXX: Requirements for Geothermal Resource Development PDF, online.

5 Matrix Solutions Inc. & Osler, Hoskin & Harcourt LLP, “Emerging technologies in energy: Environmental and regulation requirements for Western Canada – Geothermal” at p. 7-11, online.

6 Rule 007: Applications for Power Plants, Substations, Transmission Lines, Industrial System Designations, Hydroelectric Developments and gas pipelines PDF to PDF 44, online.

The content of this article is intended to provide a general guide on the subject. Specialist advice should be sought regarding your particular situation.

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