[FREDERICTON, NB] – Amendments to the Oil and Natural Gas Act were introduced Tuesday that would increase penalties that can be levied against a company that violates the act.
"Under existing legislation, fines of between $640 and $10,400 are applicable for most violations of the Oil and Natural Gas Act,'" says Natural Resources Minister Bruce Northrup. "Under the new administrative penalties system being established, the maximum penalty would be $1 million. This will be a strong and effective new tool to ensure companies follow the rules in the oil and gas sector.'"
The proposed amendments will establish a Director of Administrative Penalties within the Department of Natural Resources. The director will be empowered to investigate violations and impose penalties.
Administrative penalties are financial penalties imposed by regulators for violations of a statue or regulation. The system does not require the intervention of the courts to impose a penalty.
The proposed amendments would also improve the approach to granting oil and natural gas rights in the province. They will:
– Grant the minister authority to approve the redistribution of a portion of the work commitments from one licence to search to another licence or licences to search under certain terms and conditions. This will allow licensees to refocus exploration efforts based more closely on geological findings as exploration work progresses on their licences;
– Allow for an extension of a licence to search should there be a delay that is legitimately beyond the control of a licensee. The extension is subject to criteria and will be for a maximum of two, one-year periods; and
– Permit lessees to group their leases together. This will allow a hydrocarbon basin or resource play to be under one administrative unit or lease.
The proposed amendments also address a housekeeping item that will clarify the minister's authority to grant well licences and collect a security deposit and related fees. The amendment will apply to both new wells and previously authorized wells.