B.C. legislative amendments will facilitate hydrogen development

On November 24, 2022, British Columbia passed the Energy Statutes Amendment Act, 2022 [PDF] (the Act) to change the legislation governing energy resources in B.C., including hydrogen. Most parts of the Act will not come into force until proclaimed by regulation, including the parts relating to hydrogen.

Once fully in force, the Act will significantly amend the Oil and Gas Activities Act (the OGAA), including by renaming it as the Energy Resources Activities Act and renaming the B.C. Oil and Gas Commission (BCOGC) as the British Columbia Energy Regulator (BCER) — consistent with other energy regulators in Canada (notably, the Canada Energy Regulator and the Alberta Energy Regulator). The B.C. Oil and Gas Appeal Tribunal will similarly be renamed as the Energy Resource Appeal Tribunal.

Changes to regulate hydrogen in B.C.

The above name changes from “oil and gas” to “energy resources” more broadly reflect the Act’s broadening of the OGAA’s scope to include hydrogen. A new definition will be added for “energy resource”, which will include hydrogen. Similarly, the term “oil and gas activity” will be replaced with the term “energy resource activity”, which will be defined to include the construction or operation of a facility for manufacturing hydrogen.

Functionally, this will mean that the to-be renamed BCOGC will regulate hydrogen production in B.C., including by

• issuing permits required for hydrogen facilities and requiring facility operators to comply with their permits^[1]
• requiring hydrogen projects to comply with environmental measures established by the regulations^[2]
• requiring hydrogen projects to comply with obligations to minimize damage and waste^[3]
• enforcing other obligations that currently apply to “oil and gas activities” under the OGAA

Under the to-be-renamed OGAA, requirements for an application for a hydrogen manufacturing facility permit will be similar to those for an oil and gas activity. They will also include a description of the activity, plans, application forms and records required by the BCER, and a written report of consultations and notifications. Payment of security may also be required. The BCER will consider the application and any written submissions, as well as the government’s environmental objectives, before deciding whether to issue a permit for an applied-for hydrogen manufacturing facility.^[4]

One aspect of the future application process for a hydrogen manufacturing facility permit that remains unclear is whether the applicant will generally be required to carry out any consultation or notifications, beyond providing notice of the application to the owner of the land on which the facility is proposed to be constructed and operated.^[5] While there is an OGAA regulation that prescribes circumstances in which an applicant for an oil and gas activity must carry out additional consultation and notifications,^[6] no amendments or other legislation have been introduced that would impose such requirements on an applicant for a hydrogen manufacturing facility.

Conclusion

The inclusion of hydrogen within the Energy Resource Activities Act and the BCER’s jurisdiction aligns with B.C.’s commitment to hydrogen as part of its transition to a low-carbon economy. The province has previously discussed the key role that hydrogen will play in its energy transition in the CleanBC Roadmap to 2030 [PDF] and the BC Hydrogen Strategy [PDF], the latter of which we have previously written about on this blog.