Eight years in the making and the result of two versions of the proposed legislation, a new water withdrawal authorization framework and new water resource protection rules finally came into force on August 14, 2014. The new rules will affect several industries, including the oil and gas sector.
The Water Withdrawal and Protection Regulation ("WWPR") came into force on August 14, 2014, with the exception of sections 11 to 30 and sections 68 and 75, which will come into force on March 2, 2015 and April 1, 2015 respectively. August 14, 2014 also marks the coming into force of sections 31.75 and following of the Environment Quality Act ("EQA").
Highlights of the new water withdrawal rules
What is "water withdrawal"?
Section 31.74 of the EQA defines "water withdrawal" as "the taking of surface water or groundwater by any means".
However, "water withdrawals" by means of the following works are excluded from that definition: (1) works used for the impounding of water; (2) works used for the diversion of water to produce hydroelectric power; and (3) other works used for the production of hydroelectric power.
Criteria for determining whether the new authorization rules apply
The coming into force of the WWPR led to the amendment of the Regulation respecting the application of the Environment Quality Act. Water withdrawals are no longer governed by section 22 of the EQA. Instead, they are subject to a new authorization framework as a result of the coming into force of sections 31.75 and following of the EQA and the WWPR.
The new authorization rules apply to the construction of a water withdrawal facility and water withdrawal operations. All water withdrawals are henceforth subject to the authorization of the Minister of Sustainable Development, the Environment and the Fight Against Climate Change or the government, subject to certain exceptions, including a withdrawal for which the maximum flow rate is less than 75,000 litres per day. Despite this threshold, some of these withdrawals nonetheless require authorization.
Application for authorization
The information required for an application for authorization is similar to that required for an application for a certificate of authorization pursuant to section 22 of the EQA. Information about the applicant and the water withdrawal site as well as technical information in an additional document signed by a professional must be provided.
The additional document, which replaces the hydrogeological study (if groundwater is to be withdrawn) or hydrological study (if surface water is to be withdrawn), must:
- describe the scenario for the planned withdrawal of water for the total withdrawal and for each withdrawal site;
- show that the maximum volume of water withdrawn and consumed per day is reasonable compared to the needs to be met;
- show that the water withdrawal facility is suitable for the declared use; and
- describe the changes expected in the quality of the water when used and discharged into the environment, in particular with respect to any substances added to the water.
In certain cases, a study on the location of the natural environments, flora and wildlife affected by the water withdrawal or disposal site, their characteristics and the mitigating measures of the impact planned must also be filed in support of the application for authorization.
Term, renewal and assignment
An authorization is valid up to 10 years, subject to the exceptions set forth in the WWPR.
When the authorization expires, the holder must submit a renewal application for the same period.
Contrary to a certificate of authorization under section 22 of the EQA, which cannot be transferred without the Minister's consent, all water withdrawal authorizations are transferable. The transferee must inform the Minister of the transfer within 30 days.
Note that the Minister may subject the issuance, renewal or modification of a permit to any condition, restriction or prohibition he considers necessary for greater protection of the environment, including aquatic ecosystems and wetlands.
Intervention by the Minister
The Minister may order the cessation or limitation of a water withdrawal for a period of not over 30 days if he is of the opinion that the water withdrawal presents a serious risk for the environment or public health. The order may also permanently modify the conditions to which the authorization is subject or direct that the withdrawal cease permanently. Note that the EQA currently expressly provides that an order suspending or revoking an authorization entails no compensation from the State.
Existing water withdrawals, whether or not they were authorized in the past, are subject to the new rules and require an initial authorization or a renewal according to the terms prescribed by the WWPR.
As a result, as of the date the new provisions came into force, existing water withdrawal authorizations (including those issued pursuant to section 32 of the EQA concerning waterworks, a water supply intake or work involving sewers) are deemed to have been issued according to the new rules. These authorizations are valid for a period of 10 years as of the date the new rules take effect.
Similar provisions apply to a water withdrawal which is legally carried out before the new rules come into effect but for which no authorization has been issued by the Minister. However, at the end of the 10-year period, these water withdrawals become subject to the obligation to submit an application and obtain an authorization issued in accordance with the new legislative provisions.
Impact on the oil and gas industry
The WWPR contains a set of provisions prescribing how stratigraphic surveys must be carried out and how drilling sites used to explore for or produce petroleum, natural gas or brine, or to explore for or operate an underground reservoir, must be built, with the aim of protecting drinking water resources.
First, section 31 of the WWPR provides definitions which were previously not found in the EQA or the Mining Act:
- fracturing: an operation to create fractures in a geological formation using fluids injected into a well under pressure, except an operation using volumes of fluids below 50,000 litres;
- well segment: part of a well that allows to submit a geological zone to fracturing;
- drilling site: the zone grouping the drilling well or wells used to explore for or produce petroleum, naturel gas or brine, or to explore for or operate in an underground reservoir and the land laid out in the immediate vicinity of the well or wells to receive the equipment and infrastructures necessary for the interventions performed on the well or wells, such as storage areas, soil mound and waste water storage or treatment basins;
- stratigraphic survey: an operation to collect data on a geological formation, using samples and their analysis and technical surveys, conducted as part of preliminary investigations to eventually locate, design and construct a drilling site for the exploration or production of petroleum, natural gas or brine, or for the exploration for or operation of an underground reservoir and the well or wells which will be present on the site.
Under the WWPR, it is prohibited to construct a drilling site or conduct a stratigraphic survey less than 500 metres from a site where water is withdrawn for human consumption or food processing. It is also prohibited to construct a drilling site in a floodplain having a flood recurrence interval of 20 years or in the identified floodplain of a lake or watercourse unless the 20-year and 100-year flood recurrence intervals have been distinguished. The same prohibition applies in the protection zone of groundwater withdrawal or in the intermediate protection zone for surface water withdrawals.
Before being authorized to drill, the promoter of the proposed site must carry out an initial characterization of the site within a 2 km radius which includes a hydrogeological study (interaction of geological structures of the subsoil with the groundwater and surface water). The purpose of this study is to determine whether the 500 m protection zone determined by regulation is sufficient or whether it should be increased.
The WWPR also requires that a stratigraphic survey be sealed at the end of the work.
Water withdrawals for the purpose of hydraulic fracturing operations are subject to the new water withdrawal authorization framework prescribed by sections 31.75 and following of the EQA.
The WWPR prohibits the fracturing operation of a well less than 400 metres below the base of an aquifer. The WWPR sets the base of an aquifer at 200 metres under the surface of the ground, unless the hydrogeological study shows otherwise. Fracturing operations will therefore generally be over 600 metres below the surface of the ground.The WWPR also requires close monitoring of fracturing operations to verify whether they are being carried out in accordance with the parameters described in the fracturing program. Among other things, micro-seismic monitoring during the fracturing of a well is required to assess the propagation of the fractures in the geological formation, unless the planning of the fracturing operation is based on previous data collected in similar wells in the same geological formation.