Your guide to de-risking water security with the Manual 025 regulation update
In October 2022, the Alberta Energy Regulator (AER) finally updated Manual 025: Applications under the Water Conservation Policy for Upstream Oil and Gas Operations (Manual 025) to guide upstream Oil and Gas applicants seeking new Water Act licences, renewals, or amendments, to meet the objectives of the Water Conservation Policy for Upstream Oil and Gas Operations (WCP).
Since the release of the WCP in 2020, we have worked closely with the AER to help clients follow the policy objectives, i.e., conserve high-quality nonsaline water (HQNS). However, with this amendment, there is now a defined framework composed of risk-based tiers within which sites will be assessed.
Tiers have implications for application requirements and the potential for longer review times for higher-risk (read higher-tiered) projects. Producers will therefore want to conduct a water resources assessment to ensure their sites are classified correctly and engaging with regulators on fair terms.
Disclaimer: The information provided on this page is accurate as of 20/10/2022. Regulations are subject to change, and we cannot be held liable for any discrepancies arising between the content provided and future legislation. Please review the Alberta Energy Regulator website for updates, or reach out to our team for a free consultation.
Who does this affect?
The regulation applies to surface and groundwater licences for the purpose of:
- Oil sands thermal in situ operations
- Enhanced oil recovery (EOR) and cold bitumen EOR
- Multistage hydraulic fracturing operations in horizontal wells
Tiered assessment framework
Application requirements and level of review vary based on 4 Risk Tiers (4 being riskier and therefore rigorous). Applications are assessed based on:
Water Source: High-quality non-saline water vs. alternative non-saline water
Project Scale: Total volume of the annual allocations authorized by all term licences to a site.
- A project requiring Groundwater is considered small if the total allocation volume of all high-quality non-saline water for the entire project is <1370 m3/day
- A surface water project is considered small if the total allocation volume of all high-quality non-saline water for the entire project is < 2700 m3/day and the application location is for <0.7% of the median annual runoff contributing to the source water body (inc. outflow from lakes and reservoirs, and flowing waterbody)
Water-short designation: Applications in water-short or potentially water-short areas will be assessed under a higher tier – consult the AER mapping tool for more information (pictured below).
View the table defining each of the 4 tiers on Page 9 of Manual 025.
Implications for producers
Water Resource Assessments
Expect more analysis and application detail for Tier 3 and 4, and increased review time compared to a lower tier. Producers will need to consider the impact to construction schedules and book environmental assessments before the winter to avoid delays the following year.
If there is a feasible alternative source assessment, an economic analysis may also be required to determine the economic viability of using alternative water sources for the project, not just in comparison to other sources.
All assessments will need to be completed by a trained APEGA member or accredited accountant.
Tier Negotiation
It is possible to drop from a higher risk tier if the renewal applicant demonstrates additional water conservation efforts. This does also consider historical efforts, so if your company has been proactive and responsible with its water management policy in the past, you could benefit here.
Integrated Sustainability helps producers liaise successfully with the AER (including Alberta’s first produced water pond) and can help meet with the AER to present a case for risk tier adjustment.
Key definitions you should know
High-Quality Non-Saline Water (HQNS)
Per Manual 025, HQNS is defined as “water below the surface of the ground that has total dissolved solids (TDS) less than or equal to 4000 mg/l and supports instream and aquatic ecosystem needs or is usable with standard treatment” (Manual 025)
Alternative Non-Saline Water
Alternative Non-Saline water is defined as, “surface water and nonsaline groundwater that either is highly mineralized due to the geological setting or has already been used and adversely affected by an industrial, commercial, or municipal activity” (Manual 025)
Locally Constrained Areas
In addition to “water short” and “potentially water short” Manual 025 includes a new definition – locally constrained areas.
- The AER has released a mapping tool to help compare diversion locations and identify water short, potentially water short, and locally constrained areas
- Applicants can also undertake their own analysis to assess if a chosen source is not locally constrained
