1. Phased Environmental Impact Assessment (EIA) Process for Oil & Gas Development in New Brunswick Department of Environment January 2011

2. EIA - Background Regulatory Authority: NB Environmental Impact Assessment Regulation (87- 83) – Clean Environment Act. If a project is of a type that is listed in Schedule “A” of the EIA Regulation, then it must be registered with Environment. For onshore oil and gas, potential EIA triggers include: - (f) all commercial extraction or processing of combustible energy yielding materials; - (h) all pipelines exceeding 5 km in length, except: water, steam or domestic wastewater pipelines; pipelines or pipe lines that are the subject of an application under the Gas Distribution Act or the Pipe Line Act; - (m) all waste disposal facilities or systems; - (r) all projects involving the transfer of water between drainage basins; -(s) all waterworks with a capacity greater than fifty cubic metres of water daily; -Other triggers include wetlands > 2 ha, unique/rare/endangered species, etc.)

3. Phased EIA - Approach EIA review will begin much earlier, but allow certain types of development work to be undertaken during the review process. A determination (or approval) would still be required for a project prior to the commercial extraction phase. Reduced delays for project proponents, as the review will have been ongoing concurrent with the pre- commercial phase/ideally consistent TRC involved throughout the review. ENV has applied similar approach to water exploration projects since approx 2002 (e.g., municipal drinking water projects; WSSA). 9

4. Overview of Phased Approach Pre-Registration Phase (Exploration Phase) ground penetrating radar seismic tests test pits temporary access roads Registration Review Phase well pad construction test well drilling hydraulic fracturing assessment/monitoring EIA review is concurrent with pre-commercial development Determination Phase (Following EIA Decision) pipeline construction Processing plant construction / commercial extraction and operation test well drilling continues Minister’s decision on large area of province 10

5. Overview of Phased Approach Step 1 – EIA Registration The project is registered with DENV at the exploratory phase with reduced information requirements. This registration must describe: 1.the location of the proposed drill target area(s); 2.the existing environment within the drill target area(s) including any environmental constraints; 3. the proposed exploration activities including how the proponent attempted to avoid any environmental constraints. Details related to water, wastewater and pipelines can be deferred.

6. Overview of Phased Approach Step 1 - continued Project Review: The proposed exploratory work is reviewed by a Technical Review Committee (TRC) tailored to Phase 1 of the project. This review would be largely focused on siting and the potential environmental affects associated with exploration activities. This review is coordinated by a DENV Project Manager who would serve as a single point of contact for the proponent/TRC. A landowner approval must be in place. Commencement of public consultation and stakeholder engagement. Within approximately 30 days DENV issues letter indicating that drilling and testing can proceed according to conditions. END OF STEP 1

7. Overview of Phased Approach – Step 2 Construction of well pads is undertaken and exploratory wells are constructed and tested. Public consultation and stakeholder engagement is on-going and the results submitted to DENV for review prior to the Minister’s decision. For only those wells deemed viable by the proponent, information on the required infrastructure (e.g. pipelines, etc.) is submitted for review by the TRC. Minister’s Decision – Construction of project related infrastructure (pipelines, etc.) may be undertaken as per the conditions imposed in the Minister’s Decision. The Minister’s Decision would include conditions related to future phases of the project.

8. Benefits of Phased Approach –Exploratory work can still be undertaken prior to a Ministerial Decision on the entire project. –Single point of contact for the proponent and stakeholders – with DENV and DNR as key TRC members. –Single EIA registration vs. the multiple registrations currently required. Additional sites or future phases can be added to the original project as desired thereby saving proponents up to $5000 per well pad. –Proponents have the freedom to explore throughout the study area based on avoidance of environmental constraints. –Details related to water supply and wastewater requirements can be finalized while exploratory drilling is undertaken. –The proponent would submit information on the required infrastructure (e.g. pipelines, processing plant) when they opt to develop commercially.

9. Other Considerations Phased approach requires oil and gas companies to enter the EIA regulatory process earlier than is currently the case. Provides a consistent, credible environmental regulatory review process. Will help to improve consideration of cumulative environmental impacts. 12

10. Other Considerations Important to meet 30 day turn around for TRC iterations. Identification of requirements, preferable to questions (Siting; mitigation; conditions; monitoring) - prescriptive. Ideally as projects are reviewed under the phased EIA process, standards will be developed collaboratively by the TRC. 12

11. EIA - EIA Methodology: Assessment of Project Activities on VECs Issues Scoping (ECCs…VECs) Mitigation Residual Impact Rating Environmental Management & Follow-Up Project DescriptionExisting Environmental Information Public InputOther Stakeholder Input

12. Questions?