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     Alberta Regulation 213/2002

     Electric Utilities Act

     ROLES, RELATIONSHIPS AND RESPONSIBILITIES
     AMENDMENT REGULATION

     Filed:  October 21, 2002

Made by the Minister of Energy (M.O. 54/2002) on October 17, 2002 pursuant
to section 31.995(1) of the Electric Utilities Act.


1   The Roles, Relationships and Responsibilities Regulation (AR 86/2000)
is amended by this Regulation.


2   Section 20 is repealed and the following is substituted:

Settlement system code
     20(1)  The Power Pool Council

               (a)  must establish the settlement system code, and

               (b)  may review and change the settlement system code if
the Power Pool Council considers it appropriate.

     (2)  Without restricting the generality of subsection (1), the
settlement system code may provide for

               (a)  the approval by the Power Pool Council of
professional and other costs relating to the development and implementation
of the settlement system code and any amendments to or replacements or
substitutions for the settlement system code, and

               (b)  the payment of the costs approved under clause (a)
by owners of electric distribution systems and wire services providers
conducting load settlement under the settlement system code and by the
Transmission Administrator, including

                         (i)  establishment of procedures to provide
for the payment of those costs, and

                         (ii) determination of the proportions or
amounts of those costs to be paid by owners of electric distribution
systems, wire services providers and the Transmission Administrator.

     (3)  Owners of electric distribution systems and transmission
facilities, wire services providers, retailers, the Transmission
Administrator, the power pool and any other person involved in the delivery
and exchange of electric energy in Alberta must comply with the settlement
system code.

     (4)  An owner of an electric distribution system may recover

               (a)  under its distribution tariff, or

               (b)  directly from users of load settlement information,

     its prudent costs related to complying with the settlement system
code, including the costs referred to in subsection (2).

     (5)  Without restricting the generality of section 16 of the Act, the
Board may in accordance with that section determine the justness and
reasonableness of

               (a)  any costs approved under subsection (2),

               (b)  any procedures established to provide for the
payment of those costs, and

               (c)  any determination of the proportions or amounts of
those costs to be paid by owners of electric distribution systems, wire
services providers and the Transmission Administrator.


     ------------------------------

     Alberta Regulation 214/2002

     Fisheries (Alberta) Act

     GENERAL FISHERIES (ALBERTA) AMENDMENT REGULATION

     Filed:  October 22, 2002

Made by the Lieutenant Governor in Council (O.C. 489/2002) on October 22,
2002 pursuant to section 43 of the Fisheries (Alberta) Act.


1   The General Fisheries (Alberta) Regulation (AR 203/97) is amended by
this Regulation.


2   Section 2 is amended

     (a)  in clause (a) by adding the following after subclause (i)(C):

               (D)  with a term of one day for a non-resident of
Canada;

     (b)  by repealing clause (d)(v):

     (c)  by repealing clause (h) and substituting the following:

               (h)  fish stocking licence;


3   Section 3 is amended

     (a)  in subsection (2)(f) by adding "and equipment, including water
and equipment used in transporting fish," after "water";

     (b)  by repealing subsection (4) and substituting the following:

          (4)  The Minister may include terms and conditions in a fish
stocking licence generally or specifically with respect to the following:

               (a)  the possession of cultured fish, including the
source of the fish, and transport to the location where they may be
stocked;

               (b)  where and when cultured fish may be stocked;

               (c)  the person or persons authorized to transport and
stock the cultured fish;

               (d)  the number of cultured fish of a species to be
stocked at any location;

               (e)  the reporting of cultured fish stocking activities
and the submission of records.


4   Section 23 is repealed.


5   Section 25 is amended by adding the following after subsection (2):

     (3)  No person shall possess fish taken under the authority of a
licence issued under the Fisheries Act (Canada) that authorizes the licence
holder to catch fish solely for the purpose of providing food for the
licence holder's personal use or for the use of their immediate family,
except for that purpose.


6   The heading "Trout Stocking" preceding section 26 and section 26 are
repealed and the following is substituted:

     Fish Stocking

Fish stocking licence
     26(1)  A fish stocking licence may be issued by the Minister that
authorizes

               (a)  the possession and transport of live cultured fish
of a species listed in section 1 of Schedule 2 of the Ministerial
Regulation, and

               (b)  the placing of live cultured fish of a species
mentioned in clause (a) into the bodies of water specified in the licence.

     (2)  A body of water specified in a fish stocking licence may not
include

               (a)  contained waters,

               (b)  water that forms part of a premises that is the
subject of a fish culture licence, or

               (c)  water that is not accessible to the public.

     (3)  The Minister may refuse the issuance of a fish stocking licence
for any reason that relates to environmental concerns or proposed
activities involving the fish.


7   Section 27(2)(c) is repealed and the following is substituted:

     (c)  subject to section 31, sell the live cultured fish and eggs
referred to in clause (a) to the holder of a Class A commercial fish
culture licence, to the holder of a recreational fish culture licence or to
a premises that holds a food establishment permit under the Food Regulation
(AR 240/85).


8   Section 30(b) is repealed and the following is substituted:

     (b)  the person does not hold such a licence but receives the fish
from the premises of the holder of a licensed Class A or Class B commercial
fish culture licence and

               (i)  the fish are held in not more than 5 contained
waters in a premises identified in a food establishment permit under the
Food Regulation (AR 240/85), and

               (ii) not more than 100 fish are kept in each such
contained water.


9   Section 31(1) is repealed and the following is substituted:

Selling Class A fish
     31(1)  No person shall dispose of or sell, in Alberta, live fish from
a Class A commercial fish culture premises, except to

               (a)  a recreational fish culture licensee,

               (b)  a commercial fish culture licensee,

               (c)  a research licensee,

               (d)  a fish stocking licensee,

               (e)  a person authorized to receive fish under section
30(b), or

               (f)  a person who is authorized to possess the fish in
another jurisdiction and who is obtaining the fish for immediate removal
from Alberta.


10   Section 40 is repealed and the following is substituted:

Diseased and escaped fish
     40   The holder of a fish culture licence, the person in charge of
live fish at a licensed fish culture premises, the holder of a fish
research licence who possesses live fish or the holder of a food
establishment permit under the Food Regulation (AR 240/85) in charge of a
food establishment where live cultured fish are possessed must, immediately
on discovery of diseased fish at the premises or in that person's
possession, or immediately on discovery of an escape of fish, report that
fact to the Director.


11   Section 58 is amended

     (a)  in subsection (1) by striking out "or" at the end of clause
(a), by adding "or" at the end of clause (b) and by adding the following
after clause (b):

               (c)  within the period or periods, if any, specified in
the licence or in any attachment to the licence.

     (b)  by adding the following after subsection (1):

          (1.1)  Subsection (1) does not apply to a person who is
lawfully catching cultured fish.


12   Section 62 is amended by striking out "October 31, 2002" and
substituting "October 31, 2012".


13   Schedule 1 is repealed and the following is substituted:

     SCHEDULE 1

Item Column 1  Column 2  Column 3
No.
     Lakes     Species   Species

 1   AMISK          Northern Pike
     (68-18-W4)

 2   ATHABASCA Lake Whitefish
     (117-I-W4)

 3   BISTCHO   Lake Whitefish
     (124-6-W6)

 4   CALLING   Lake Whitefish
     (72-22-W4)

 5   EDWARDS        Northern Pike
     (75-9-W4)

 6   ELINOR         Northern Pike
     (64-11-W4)

 7   ETHEL          Northern Pike
     (64-3-W4)

 8   FROG Lake Whitefish
     (57-3-W4)

 9   GLOVER         Northern Pike
     (75-9-W4)

10   GOODFISH  Lake Whitefish
     (89-5-W5)

11   HAIG Lake Whitefish
     (91-14-W5)

12   HELENA    Lake Whitefish Walleye
     (66-11-W4)

13   HILDA     Lake Whitefish Walleye
     (63-3-W4) Tullibee

14   IRONWOOD       Northern Pike
     (65-11-W4)          Walleye

15   KEHEWIN   Lake Whitefish
     (59-7-W4)

16   LAC LA BICHE   Tullibee
     (68-15-W4)

17   LESSER SLAVE   Lake Whitefish
     (74-11-W4)

18   LONG Lake Whitefish
     (90-2-W5)

19   MOOSE          Northern Pike
     (61-7-W4)      Walleye

20   MUSKWA         Northern Pike
     (68-18-W5)          Walleye

21   NIPISI    Tullibee
     (78-7-W5)

22   NORTH BUCK     Tullibee
     (66-17-W4)

23   NORTH WABASCA  Lake Whitefish
     (82-4-W5)

24   RATTLESNAKE         Northern Pike
     (12-8-W5)      Walleye

25   ROCK ISLAND    Tullibee
     (75-22-W4)

26   ROLLING HILLS       Northern Pike
     (16-14-W4)

27   SANDY     Lake Whitefish
     (79-22-W4)

28   SAWN Lake Whitefish
     (92-12-W5)

29   SKELETON  Lake Whitefish
     (65-18-W4)

30   SOUTH WABASCA  Tullibee
     (80-24-W4)

31   ST. MARYS      Walleye
     (4-24-W4)

32   VANDERSTEENE   Lake Whitefish
     (88-3-W5)

33   WEST TWIN Lake Whitefish
     (90-4-W5)


14   Sections 2(a) and (b) and 4 come into force on April 1, 2003.

     Alberta Regulation 215/2002

     Provincial Court Act

     PROVINCIAL COURT CIVIL DIVISION AMENDMENT REGULATION

     Filed:  October 22, 2002

Made by the Lieutenant Governor in Council (O.C. 492/2002) on October 22,
2002 pursuant to section 9 of the Provincial Court Act.


1   The Provincial Court Civil Division Regulation (AR 329/89) is amended
by this Regulation.


2   Section 1.1 is amended by striking out "$7500" and substituting "$25
000".


3   This Regulation comes into force on November 1, 2002.


     ------------------------------

     Alberta Regulation 216/2002

     Provincial Court Act

     PROVINCIAL COURT FEES AND COSTS AMENDMENT REGULATION

     Filed:  October 22, 2002

Made by the Lieutenant Governor in Council (O.C. 493/2002) on October 22,
2002 pursuant to section 9 of the Provincial Court Act.


1   The Provincial Court Fees and Costs Regulation (AR 18/91) is amended by
this Regulation.


2   Section 1 is amended in clauses (a) and (b) by striking out "$100.00"
and adding the following at the end of each:

     (i)  for claims of $7500 or less   $100.00

     (ii) for claims exceeding $7500    $200.00


3   The following is added after section 1:

     1.1   The clerk of the Court may waive the whole fee or part of the
fee payable under section 1(a) or (b) by an individual who the clerk,
applying the guidelines (if any) established by the Minister, considers is
unable to pay that fee.


4   Section 2 is amended

     (a)  in clauses (a) and (b) by striking out "$25.00" and adding the
following at the end of each:

               (i)  for claims of $7500 or less   $100.00

               (ii) for claims exceeding $7500    $200.00

     (b)  by repealing clause (g);

     (c)  in clause (h)(iii) by striking out "0.085" and substituting
"0.105";

     (d)  by repealing clause (j);

     (e)  in clause (k)(i) and (ii) by striking out "$25.00" and adding
the following at the end of each:

               (A)  for claims of $7500 or less   $100.00

               (B)  for claims exceeding $7500    $200.00


     (f)  by adding the following after clause (k):

               (l)  on an application or hearing, payment for
additional classes of costs not otherwise specified in clauses (a) to (k)
may be awarded, in the judge's discretion.


5   The following is added after section 3:

     All Divisions

     3.1(1)  In this section, "peace officer" means

               (a)  a member of the Royal Canadian Mounted Police,

               (b)  a member of a municipal police service within the
meaning of the Police Act,

               (c)  a special constable within the meaning of the
Police Act,

               (d)  a person whose legal functions include written
authorization to issue violation tickets under Part 2 or 3, or both, of the
Provincial Offences Procedure Act, or

               (e)  a person appointed under the regulations under the
National Defence Act (Canada) for the purposes of section 156 of that Act.

     (2)  Notwithstanding anything in this Regulation, fees for the search
of a name, the inspection of a file or a copy or the certification of a
document are not payable by a peace officer when the service in question is
required in the execution or discharge of the peace officer's duties.


6   This Regulation comes into force on November 1, 2002.


     ------------------------------

     Alberta Regulation 217/2002

     Regulations Act

     MISCELLANEOUS CORRECTION AND REPEAL REGULATION

     Filed:  October 22, 2002

Made by the Lieutenant Governor in Council (O.C. 494/2002) on October 22,
2002 pursuant to section 10 of the Regulations Act.


1   The Freedom of Information and Protection of Privacy Regulation (AR
200/95) is amended in Schedule 1 under the heading "SOLICITOR GENERAL" by
striking out "Criminal Injuries Appeal Board" and substituting "Criminal
Injuries Review Board".


2   The Planning Exemption Regulation (AR 223/2000) is amended in section
2(1)(a) by striking out "the a" and substituting "a".


3   The Student Financial Assistance Regulation (AR 215/99) is amended in
section 30(b) by striking out "Provincial Treasurer's" and substituting
"Minister's".


4   The Expropriation Act Forms Regulation (AR 188/2001) is amended

     (a)  in the Schedule in Form 1, in item 4 as it relates to section
6(2) of the Act, by striking out "therein" and substituting "in it";

     (b)  in the Schedule in Form 1, in item 5 as it relates to section
10(1)(a) of the Act, by striking out "within 21 days of service on him" and
substituting "within 21 days after service on the owner".


5   The Wildlife Regulation (AR 143/97) is amended in section 65 by
striking out "65(1)" and substituting "65".


6   The Agriculture Financial Services Regulation (AR 99/2002) is amended
in section 20(1)(e) by striking out "production." and substituting
"production,".


7   The Balancing Pool Regulation (AR 169/99) is amended in section
5(1)(g.1) by striking out "subclause (g)" and substituting "clause (g)".


8   The Gaming and Liquor Regulation (AR 143/96) is amended in section
68(4) by striking out "containers" and substituting "container".


9   The Correctional Institution Regulation (AR 205/2001) is amended in
section 34(1) by striking out "inmates's" and substituting "inmate's".


10   The Weed Regulation (AR 171/2001) is amended in Schedule 2

     (a)  in Form 1

               (i)  in the text from section 28(1)(b) of the Act by
striking out "12.1 or 17(1)" and substituting "13 or 18(1)";

               (ii) in the text from section 28(4) of the Act by
striking out "accompanied by" and substituting "accompanied with";

               (iii)     in the text from section 28(5) of the Act by
striking out "his" and substituting "the appellant's";

     (b)  in Form 2

               (i)  by striking out "(Section 17)" and substituting
"(Section 18)";

               (ii) by striking out "under section 17(1)" and
substituting "under section 18(1)";

               (iii)     in the text from section 28(1)(b) of the Act by
striking out "12.1 or 17(1)" and substituting "13 or 18(1)";

               (iv) in the text from section 28(4) of the Act by
striking out "accompanied by" and substituting "accompanied with";

               (v)  in the text from section 28(5) of the Act by
striking out "his" and substituting "the appellant's";

     (c)  in Form 3

               (i)  by striking out "(Section 12.1)" and substituting
"(Section 13)";

               (ii) by striking out "under section 12.1" and
substituting "under section 13";

               (iii)     in the text from section 28(1)(b) of the Act by
striking out "12.1 or 17(1)" and substituting "13 or 18(1)";

               (iv) in the text from section 28(4) of the Act by
striking out "accompanied by" and substituting "accompanied with";

               (v)  in the text from section 28(5) of the Act by
striking out "his" and substituting "the appellant's".


11   The Access Enforcement Regulation (AR 61/2000) is amended

     (a)  in section 5 by striking out "61.3, 61.31 or 61.41" and
substituting "68, 69 or 71 of the Act";

     (b)  in section 6 by striking out "61.7" and substituting "74 of the
Act".


12   The Access Enforcement Forms Regulation (AR 74/2000) is amended in the
Schedule, in the Affidavit in the  Notice of Hearing by striking out
"Commissioner of Oaths" and substituting "Commissioner for Oaths".


13   The Dairy Industry Regulation (AR 139/99) is amended in the 4th
subsection of section 25 by striking out "(3) Despite" and substituting
"(4) Despite".


14(1)  The following regulations are repealed:

     (a)  Section 90 Declaration Regulations (AR 329/78);

     (b)  Section 14 Declaration Regulation (AR 333/78);

     (c)  Camrose Agricultural Society Loan Guarantee Regulation (AR
458/83);

     (d)  Natural Gas Royalty (Pre-1994) Regulation (AR 246/90);

     (e)  section 2(a), (b), (c), (d), (f), (g), (h) and (i) of the Fee
Reduction Regulation (AR 44/2000);

     (f)  Fees (Reduction of Certain Fees to be Charged by the New
Employment Pension Plans Regulation) Regulation (AR 36/2000);

     (g)  Fees (Reduction of Certain Fees Charged by the Fisheries
(Ministerial) Regulation) Regulation (AR 57/2000);

     (h)  Fees (Reduction of Certain Fees Charged by the Wildlife
Regulation) Regulation (AR 58/2000);

     (i)  Probate Fees Reduction Regulation (AR 43/2000);

     (j)  Approved Corporations Regulation (AR 365/84);

     (k)  Entitlement Shares Regulation (AR 223/95);

     (l)  Reservation Payments Shares Regulation (AR 224/95);

     (m)  Saskatchewan Interconnection Facilities Regulation (AR 225/95);

     (n)  Unit Obligation Amounts Regulation (AR 226/95);

     (o)  Temporary Suspension Regulation (AR 284/95).

(2)  The Reactivated Well Incentive Regulation (AR 404/91) is repealed on
December 31, 2002.


     Alberta Regulation 218/2002

     Public Health Act

     WORK CAMPS REGULATION

     Filed:  October 22, 2002

Made by the Lieutenant Governor in Council (O.C. 496/2002) on October 22,
2002 pursuant to section 66 of the Public Health Act.


     Table of Contents

Definitions    1
Compliance required by owner  2
Location of work camps   3
Buildings 4
Beds and bedding    5
Furnishings    6
Laundry service     7
Outdoor privies     8
Handwashing facilities   9
Water     10
Notice    11
Sewage disposal     12
Garbage   13
Work camp closed    14
Repeal    15
Expiry    16


Definitions
1   In this Regulation,

     (a)  "building" means any permanent or temporary structure, tent,
vehicle or mobile unit used for recreation or accommodation for persons
working or residing at a work camp or for the storage, preparation or
serving of food at a work camp;

     (b)  "potable water" means water that is safe for human consumption;

     (c)  "work camp" means one or more buildings established to
accommodate persons who are employed in mining, lumbering, construction,
drilling, resource exploration or any other similar industry, and includes
the land on which the building or buildings are situated.


Compliance required by owner
2   The owner of a work camp shall ensure that sections 3 to 14 are
complied with.


Location of work camps
3   A work camp must be

     (a)  located on land that is adequately drained, and

     (b)  located, operated and equipped so that no nuisance is created.


Buildings
4   All buildings of a work camp must be

     (a)  structurally sound,

     (b)  effectively protected against entry by vermin and other
animals, and

     (c)  maintained 

               (i)  in good repair, and

               (ii) in a safe, clean and sanitary and weatherproof
condition.


Beds and bedding
5(1)  Mattresses, pillows and other bedding that are supplied at a work
camp must be maintained in a clean and sanitary condition.

(2)  Mattresses and pillows that are supplied at a work camp must have
covers that can be laundered.

(3)  Sheets and pillowcases that are supplied at a work camp must be
laundered as required to keep them clean and before each new user.


Furnishings
6   All furnishings provided at a work camp must be maintained in good
repair and in a clean condition.


Laundry service
7   A work camp must be provided with a laundry service or laundry
facilities in a manner sufficient to enable persons working or residing at
the work camp to launder their personal items at least once a week.


Outdoor privies
8(1)  Where no other Act, regulation or by-law requires that a work camp be
equipped with water closets or chemical closets, the work camp must be
provided with outdoor privies in a number and location and constructed so
as to adequately meet the needs of persons working or residing at the work
camp.

(2)  Water closets, chemical closets and outdoor privies must be maintained
in a clean and sanitary condition.


Handwashing facilities
9(1)  A work camp must be provided with handwashing facilities in a number
and manner sufficient to adequately meet the needs of the persons working
or residing at the work camp.

(2)  A work camp must be equipped with an adequate supply of

     (a)  soap or detergent in dispensers, and

     (b)  single service towels or hot air dryers.


Water
10(1)  A work camp must be supplied with hot and cold water in an amount
and manner sufficient to adequately meet the needs of persons working or
residing at the work camp for cleaning and laundering.

(2)  A work camp must be supplied with potable water in an amount and
manner sufficient to adequately meet the needs of persons working or
residing at the work camp for drinking, food preparation and personal
hygiene purposes.

(3)  The potable water supply and equipment used for transmission,
treatment and storage of it must be maintained in good repair and in a
sanitary condition.

(4)  When a work camp is not serviced by a municipal watermain, the
regional health authority in which the work camp is located may give
directions to the owner with respect to

     (a)  the source of the water to be used as potable water,

     (b)  the method of water treatment,

     (c)  the method of transmission of water,

     (d)  the storage of water, and

     (e)  the equipment used in connection with the storage of water,

and the owner shall comply with the regional health authority's directions.


Notice
11   A notice must be posted in a conspicuous place in a work camp
indicating which water sources are not potable.


Sewage disposal
12   A work camp must have an adequate sewage disposal system to manage the
sewage generated by the camp.


Garbage
13   Garbage and refuse must not be allowed to accumulate in a work camp so
as to cause a nuisance or provide a breeding ground for vermin and other
animals.


Work camp closed
14   When a work camp is permanently closed, the camp location must be left
in a clean condition.


Repeal
15   The Work Camps Regulation (AR 251/85) is repealed.


Expiry
16   For the purpose of ensuring that this Regulation is reviewed for
ongoing relevancy and necessity, with the option that it may be repassed in
its present or an amended form following a review, this Regulation expires
on August 31, 2011.


     ------------------------------

     Alberta Regulation 219/2002

     Agriculture Financial Services Act

     AGRICULTURE FINANCIAL SERVICES AMENDMENT REGULATION

     Filed:  October 22, 2002

Made by the Lieutenant Governor in Council (O.C. 497/2002) on October 22,
2002 pursuant to sections 18, 37 and 56 of the Agriculture Financial
Services Act.


1   The Agriculture Financial Services Regulation (AR 99/2002) is amended
by this Regulation.


2   Section 18 is repealed and the following is substituted:

Qualifications to be an applicant  for a loan re primary producer
     18(1)  In order for a person to qualify to be an applicant for a
direct loan, the person must

               (a)  in the case of an individual,

                         (i)  be a primary producer,

                         (ii) be a resident of Alberta or intend to
become a resident of Alberta, and

                         (iii)     be a Canadian citizen;

               (b)  in the case of a company,

                         (i)  be a primary producer,

                         (ii) be incorporated in Alberta,

                         (iii)     have or intend to have its business
operations directed and managed in Alberta,

                         (iv) have at least 80% of the equity shares
of the company beneficially owned by individuals, each of whom must be a
Canadian citizen who ordinarily resides in Canada, and

                         (v)  have the majority of the voting and
equity shares of the company controlled by individuals each of whom is a
Canadian citizen who is or intends to become a resident of Alberta.

     (2)  In order for a person to qualify to be an applicant for a
guaranteed loan, the person must

               (a)  in the case of an individual,

                         (i)  be a primary producer,

                         (ii) be a resident of Alberta or intend to
become a resident of Alberta, and

                         (iii)     be a Canadian citizen;

               (b)  in the case of a company,

                         (i)  be a primary producer,

                         (ii) be incorporated in Canada and
registered to carry on business in Alberta,

                         (iii)     have or intend to have its business
operations directed and managed in Alberta,

                         (iv) have at least 80% of the equity shares
of the company beneficially owned by individuals, each of whom must be a
Canadian citizen who ordinarily resides in Canada, and

                         (v)  have the majority of the voting and
equity shares of the company controlled by individuals each of whom is a
Canadian citizen who is or intends to become a resident of Alberta.

     (3)  Where a person intends to apply

               (a)  to the Corporation for a direct loan or a
guaranteed loan, that person must provide to the Corporation evidence
satisfactory to the Corporation that the person meets the qualifications
referred to in subsection (1) in the case of a direct loan, or subsection
(2) in the case of a guaranteed loan, to be an applicant, or

               (b)  to a lender for a guaranteed loan, that person must
provide to the lender evidence satisfactory to the lender that the person
meets the qualifications referred to in subsection (2) to be an applicant.


3   Section 21(a) is amended by striking out "produces" and substituting
"producers".


4   Section 53(1) is amended by striking out "(i) "structural change"" and
substituting "(j) "structural changes"".


5   Section 57(10) is repealed.


6   The Alberta Opportunity Fund Regulation (AR 273/94) is repealed.


     ------------------------------

     Alberta Regulation 220/2002

     Mines and Minerals Act

     NATURAL GAS ROYALTY REGULATION, 2002

     Filed:  October 22, 2002

Made by the Lieutenant Governor in Council (O.C. 498/2002) on October 22,
2002 pursuant to sections 5 and 36 of the Mines and Minerals Act.


     Table of Contents

     Part 1
     General

Definitions    1
Miscellaneous interpretive rules   2
Furnishing documents to the Minister    3
Reporting standards 4
Petroleum Registry of Alberta 5
Prescribed prices, factors, deductions and allowances  6
Fees 7
Lessee's liability unaffected 8
Application of Regulation     9

     Part 2
     Royalty

     Division 1
     Determination of the Crown's Royalty Share

Royalty share of natural gas, gas products and field condensate  10
Royalty calculation point     11
Special royalty O.C.     12
Unit operations     13
Proportionment of royalty liability     14
When royalty not payable 15
Royalty exemptions  16

     Division 2
     Royalty Compensation

Liability for royalty compensation 17
Payment of royalty compensation    18
Injection credits   19
Allowable costs     20
Deposits  21

     Part 3
     Administration and Enforcement

Well groups    22
Royalty clients     23
Responsibility for quantities available for sale  24
Allocations of quantities available for sale 25
Provisional royalty compensation   26
Other reports  27
Keeping of records  28
Penalties 29
Penalty following audit  30
Interest  31
Application of payments  32
Audit of Department records   33

     Part 4
     Consequential Amendments and Repeal

Amends AR 351/93    34
Amends AR 263/97    35
Repeal    36

     Schedule 1
     Natural Gas and Residue Gas

Definitions    1

     Royalty Share of Gas

Calculation of royalty quantity for gas 2
Gas royalty for low productivity wells  3

     Royalty Compensation for Gas

Aggregate Gas Reference Price 4
Transportation Allowance 5
Net Gas Reference Price  6
Calculation of royalty compensation for gas  7
CAP election   8
Determining a royalty client's annual CAP    9
Recalculation of royalty compensation for gas sold
  under long-term contracts   10

     Schedule 2
     Ethane

Definitions    1

     Royalty Share of Ethane

Calculation of royalty quantity for ethane   2
Ethane royalty for low productivity wells    3

     Royalty Compensation for Ethane

Transportation Allowance 4
Net Ethane Reference Price    5
Calculation of royalty compensation for ethane    6

     Schedule 3
     Propane

Propane royalty quantity 1
Propane royalty compensation  2

     Schedule 4
     Butanes

Butanes royalty quantity 1
Butanes royalty compensation  2

     Schedule 5
     Pentanes Plus

Royalty quantity of pentanes plus  1
Royalty compensation for pentanes plus  2

     Schedule 6
     Sulphur

Definitions    1
Royalty quantity of sulphur   2
Determination of royalty client's annual S-CAP    3
Report of sulphur disposition 4
Sulphur royalty compensation  5

     Schedule 7
     New Gas, New Ethane and New Pentanes Plus

New gas categories  1
Residue gas and ethane   2
New pentanes plus   3

     Schedule 8
     Royalty Exemptions

     Exemption for Otherwise Flared Solution Gas

Interpretation 1
Exemption for solution gas    2

     Exemptions for Qualifying Intervals
     in Deep Gas Wells

Definitions    3
Application for exemption     4
Nature of exemption 5
Determinations by Minister    6
Value of Crown's royalty share     7
Transfer of exemption    8

Table 1   -    Value of Crown Royalty Share of Natural Gas Exempted per
Eligible Well
Table 2   -    Areas


     Part 1
     General

Definitions
1   In this Regulation,

     (a)  "Act" means the Mines and Minerals Act;

     (b)  "allocation data" means owner allocation data or stream
allocation data or both;

     (c)  "allowable costs" means costs and allowances for which the
Crown is liable under section 20(1);

     (d)  "battery" means a pipeline or pipeline installation at which
natural gas recovered from one or more wells is collected and measured
prior to its delivery to another facility or into a pipeline;

     (e)  "Board" means the Energy Resources Conservation Board or the
Alberta Energy and Utilities Board;

     (f)  "butanes" means, in addition to its normal scientific meaning,
a mixture mainly of butanes that ordinarily may contain some propane or
pentanes plus;

     (g)  "commercial storage facility" means the wells and other
facilities used in the operation of a commercial storage scheme and
designated by the Minister as a commercial storage facility for the
purposes of this Regulation;

     (h)  "commercial storage scheme" means a scheme approved or ordered
by the Board under the Oil and Gas Conservation Act for the storage of
natural gas or a gas product in an underground formation or subsurface
cavern and designated by the Minister as a commercial storage scheme for
the purposes of this Regulation;

     (i)  "common stream operator", in relation to natural gas or residue
gas delivered from one or more facilities to a receipt meter station in a
production month, means the person who is recorded in the Petroleum
Registry of Alberta as the common stream operator in relation to that
natural gas or residue gas;

     (j)  "component analysis" means an analysis of a sample of natural
gas or residue gas to determine the respective volumes and quantities of
in-stream components of the natural gas or residue gas;

     (k)  "Crown lease" means an agreement granting petroleum and natural
gas rights, natural gas rights, petroleum rights or oil sands rights;

     (l)  "Crown percentage", in relation to a well group, means the
portion of the production from well events in the group that is recovered
pursuant to a Crown lease, as shown in the records of the Department;

     (m)  "dispose of", in relation to any natural gas or gas product,
means

               (i)  to sell and deliver the natural gas or gas product
to a buyer, or

               (ii) to otherwise dispose of and deliver the natural gas
or gas product to a person who by reason of the disposition becomes its
owner;

     (n)  "document" includes information transmitted electronically;

     (o)  "facility" means

               (i)  a battery,

               (ii) a gathering system,

               (iii)     a gas processing plant,

               (iv) a reprocessing plant,

               (v)  a gas injection facility, or

               (vi) a commercial storage facility;

     (p)  "field condensate" means products obtained from natural gas or
solution gas before it is delivered to a gathering system;

     (q)  "field straddle plant" means a reprocessing plant designated by
the Minister as a field straddle plant for the purposes of this Regulation
in a designation that remains unrevoked;
     
     (r)  "gas injection facility" means

               (i)  the wells and other associated injection
facilities, or

               (ii) a well without any associated injection facilities,         

          used by an operator in the operation of one or more gas
injection schemes;

     (s)  "gas injection scheme" means a scheme, other than a commercial
storage scheme, approved or ordered by the Board under the Oil and Gas
Conservation Act and respecting the injection of natural gas or a gas
product into an underground formation;

     (t)  "gas processing plant" means a plant for the processing of
natural gas but does not include a reprocessing plant, well head separator,
treater or dehydrator;

     (u)  "gas product" means residue gas, ethane, propane, butanes,
pentanes plus, sulphur or any other product obtained by processing natural
gas or by reprocessing residue gas or otherwise, but does not include field
condensate;

     (v)  "gathering" includes compressing by means of a compressor
forming part of a gathering system;

     (w)  "gathering system" means a pipeline or pipeline system,
including installations and equipment associated with the pipeline or
pipeline system, that transmits natural gas from one or more wells to a gas
processing plant or other delivery point;

     (x)  "in-stream component" or "ISC" means a component of natural gas
or residue gas, including, without limitation, methane, ethane, propane,
butanes, pentanes plus, carbon dioxide, hydrogen, hydrogen sulphide, helium
and nitrogen;

     (y)  "ISC reference prices", in relation to a production month,
means, collectively, the Methane ISC Reference Price, Ethane ISC Reference
Price, Propane ISC Reference Price, Butanes ISC Reference Price and
Pentanes Plus ISC Reference Price for that production month;

     (z)  "light-ends" means a gas product that is obtained at a gas
processing plant or reprocessing plant and is given by the owner of the
product to another person for no consideration and that is, in the
Minister's opinion, not of a kind or quantity sufficient for the owner of
the product to dispose of by way of sale;

     (aa) "mainline straddle plant" means a plant for the reprocessing of
residue gas that is designated by order of the Minister as a mainline
straddle plant for the purposes of this Regulation in a designation that
remains unrevoked;

     (bb) "new ethane" means ethane obtained from new gas;

     (cc) "new gas" means natural gas or residue gas that qualifies as
new gas under section 1 or 2 of Schedule 7;

     (dd) "new pentanes plus" means pentanes plus that qualifies as new
pentanes plus under section 3 of Schedule 7; 

     (ee) "1994 Regulation" means the Natural Gas Royalty Regulation,
1994 (AR 351/93);

     (ff) "old ethane" means ethane other than new ethane;

     (gg) "old gas" means natural gas or residue gas other than new gas;

     (hh) "old pentanes plus" means pentanes plus other than new pentanes
plus;

     (ii) "operator", with reference to a facility, means the person who
is the operator of the facility according to the records of the Department;

     (jj) "owner allocation data", in relation to an allocation of
quantities available for sale to a royalty client, means the owner
allocation factor or factors for that allocation and the related data
referred to in section 25(3)(e)(ii);

     (kk) "owner allocation factor" means an owner allocation factor
referred to in section 25(3)(c) or (d);

     (ll) "pentanes plus" means a mixture of hydrocarbons consisting
wholly or mainly of pentanes and heavier hydrocarbons and obtained from
natural gas by processing or otherwise, but does not include field
condensate;

     (mm) "Petroleum Registry of Alberta" or "Registry" means the
electronic information system administered by the Department and called the
Petroleum Registry of Alberta;

     (nn) "plant gate" means

               (i)  in relation to a gas processing plant, the first
point of measurement of the quantity of a gas product after it is obtained
at that gas processing plant, or

               (ii) in relation to a reprocessing plant, the first
point of measurement of the quantity of a gas product after it is obtained
at that reprocessing plant;

     (oo) "pool" means a natural underground reservoir containing or
appearing to contain an accumulation of petroleum or natural gas separated
or appearing to be separated from any other such accumulation;

     (pp) "production entity" means

               (i)  a drilling spacing unit prescribed by or
established pursuant to regulations under the Oil and Gas Conservation Act
to the extent that it is not included in an area described in subclause
(ii) or (iii),

               (ii) the area of a project as defined in the Oil and Gas
Conservation Act, or

               (iii)     a unit area;

     (qq) "production month", in relation to any natural gas, gas product
or field condensate, means the month in which it is recovered or obtained;

     (rr) "propane" means, in addition to its normal scientific meaning,
a mixture mainly of propane that ordinarily may contain some ethane or
butanes;

     (ss) "quantities available for sale", in relation to a production
month, means

               (i)  the quantities or volumes of gas products obtained
during the production month at a gas processing plant or reprocessing
plant,

               (ii) the quantities or volumes of natural gas or gas
products delivered from a gathering system during the production month,
except quantities or volumes delivered to a gas processing plant,
reprocessing plant or to another gathering system,

               (iii)     the quantities of natural gas delivered during the
production month from a battery, or

               (iv) the quantities or volumes of natural gas or gas
products disposed of during the production month before being delivered to
a gas processing plant or reprocessing plant;

     (tt) "receipt meter station" means each place on a pipeline at which
natural gas or residue gas can be received and the quantity so received can
be measured;

     (uu) "reprocessing plant" means a plant for the reprocessing of
residue gas, with or without the capacity of processing natural gas, but
does not include a mainline straddle plant;

     (vv) "residue gas" means a gaseous mixture consisting primarily of
methane and obtained as a separate product at a gas processing plant or
reprocessing plant;

     (ww) "royalty calculation point", in relation to any natural gas,
gas product or field condensate, means the place determined under section
11 as the place at which the Crown's royalty share of the natural gas, gas
product or field condensate is to be calculated;

     (xx) "royalty client" means

               (i)  with reference to a well group, a person shown in
the records of the Department as a royalty client for that well group, or

               (ii) with reference to the Crown's royalty share of
excess or unallocated quantities of natural gas or gas products referred to
in section 26, a person who is deemed to be a royalty client in respect of
those quantities by reason of the operation of section 26(1)(c) or (2)(c);

     (yy) "royalty client account" means an account maintained by the
Department for a royalty client pursuant to section 18(6);

     (zz) "royalty compensation" means money payable to the Crown under
this Regulation as compensation in respect of the Crown's royalty share of
natural gas, a gas product or field condensate, the Crown's title to which
is transferred pursuant to section 17;

     (aaa)     "royalty invoice" means a monthly invoice issued and sent to a
royalty client pursuant to section 18(1);

     (bbb)     "solution gas" means the gaseous component of petroleum that is
separated from crude oil after the recovery of the petroleum from a well;

     (ccc)     "special pentanes plus" means pentanes plus designated by the
Minister as special pentanes plus for the purposes of this Regulation;

     (ddd)     "stream allocation data", in relation to an allocation of
quantities available for sale, means the stream allocation factor or
factors for that allocation and the related data referred to in section
25(3)(e)(i);

     (eee)     "stream allocation factor" means a stream allocation factor
referred to in section 25(3)(a) or (b);

     (fff)     "unit area" means the unit area under a unit agreement or unit
operation order;

     (ggg)     "well event" means

               (i)  a part of a well completed in a zone and given a
unique well identifier by the Board,

               (ii) parts of a well completed in 2 or more zones and
given a single unique well identifier by the Board,         

               (iii)     a part of a well completed in and recovering
natural gas from a zone but which has not yet been given a unique well
identifier by the Board, or

               (iv) parts of a well completed in and recovering natural
gas from 2 or more zones during the period when the parts are considered by
the Minister as a single well event for the purposes of this Regulation and
before the Board makes a decision whether or not to give the parts a single
unique well identifier;

     (hhh)     "well group" means a well group referred to in section 22.


Miscellaneous interpretive rules
2(1)  Where any reference is made in this Regulation to a month, whether by
its name or not, the reference shall be construed as being the period
commencing at 8:00 a.m. on the first day of that month and ending
immediately before 8:00 a.m. on the first day of the next month.

(2)  For the purposes of the provisions of this Regulation that refer to
persons being associated with each other, persons are associated with each
other if they are considered associated with each other by reason of a
general or special direction of the Minister.

(3)  For the purpose of the provisions of this Regulation that refer to
persons dealing at arm's length with each other, persons shall be regarded
as not dealing at arm's length with each other if, at a material time under
this Regulation, they are related parties within the meaning of the CICA
Handbook published from time to time by the Canadian Institute of Chartered
Accountants.

(4)  If any natural gas or gas product is injected into a pool and any
question arises as to the purpose for which the gas was injected, then, for
the purposes of this Regulation, the question shall be decided by the
Minister.

(5)  The Minister shall decide any question arising under this Regulation
as to whether any particular plant, pipeline or installation is a battery,
a gathering system, a gas processing plant, a reprocessing plant, a gas
injection facility or a receipt meter station for the purposes of this
Regulation.

(6)  Where any question arises pertaining to the interpretation or
application of this Regulation, the Minister is the sole judge of the
question and there shall be no appeal from the Minister's decision.


Furnishing documents to the Minister
3(1)  If a provision of this Regulation requires a document to be furnished
to the Minister, or an amount to be paid to the Crown, on or before a day,
the document shall be considered furnished or the amount shall be
considered paid, as the case may be, if it is received by the Department on
or before that day.

(2)  Unless otherwise directed by the Minister, any document required or
permitted to be furnished under this Regulation must

     (a)  contain all the information called for by the prescribed form,
if any, for the document, and

     (b)  be completed in accordance with any general directions given by
the Minister or any instructions shown in the prescribed form, if any, for
the document.

(3)  The Minister may refuse to accept a document that does not meet the
requirements of subsection (2) and in that case the document shall, for the
purposes of this Regulation, be considered not to have been furnished.


Reporting standards
4(1)  In this section,

     (a)  "cubic metre of gas" means the volume of natural gas or residue
gas which, when dry and at standard temperature and under standard
pressure, will fill a space of one cubic metre;

     (b)  "gross or higher heating value" means, for the purposes of
subsection (3)(a), the total joules obtained by the complete combustion of
one cubic metre of natural gas or residue gas and air under conditions
where

               (i)  the combination reaction is at constant standard
pressure,

               (ii) the gas, including acid gas components, is free of
all water vapour,

               (iii)     the temperature of the gas, air and products of
combustion are at standard temperature, and

               (iv) all water formed by the combustion reaction is
condensed to a liquid state;

     (c)  "heat content" means the total amount of heat contained in a
gas stream, including the sensible heat and latent heat of condensation;

     (d)  "standard pressure" means the absolute pressure of 101.325
kilopascals;

     (e)  "standard temperature" means 15 degrees Celsius.

(2)  In a document furnished to the Minister under the Act or this
Regulation,

     (a)  volumes of natural gas or residue gas shall be expressed in
thousands of cubic metres of gas to the nearest tenth of a thousand cubic
metres;

     (b)  the heating value of natural gas or residue gas shall be
expressed in megajoules per cubic metre to the nearest hundredth of a
megajoule per cubic metre;

     (c)  quantities of natural gas or residue gas shall be expressed as
heat content in gigajoules to the nearest whole gigajoule;

     (d)  volumes of ethane, propane, butanes, pentanes plus and field
condensate shall be expressed in cubic metres to the nearest tenth of a
cubic metre;

     (e)  volumes of in-stream components shall be expressed in thousands
of cubic metres, to 3 decimal places;

     (f)  quantities of in-stream components shall be expressed as heat
content in gigajoules, to 3 decimal places;

     (g)  quantities of sulphur shall be expressed in tonnes to the
nearest tenth of a tonne;

     (h)  prices of natural gas or residue gas shall be expressed in
dollars per gigajoule to the nearest cent.

(3)  Subject to subsection (4), in a document furnished to the Minister
under the Act or this Regulation,

     (a)  volumes of natural gas, residue gas or ethane in gaseous form
shall be converted to gigajoules by multiplying the volumes of the gas by
the gross or higher heating value of the gas, and

     (b)  if the gross or higher heating value used under clause (a) is
calculated from a component analysis of the gas, the gross or higher
heating value of the gas shall be calculated in accordance with Calculation
of Gross Heating Value, Relative Density and Compressibility Factor for
Natural Gas Mixtures from Compositional Analysis (GPA Standard 2172)
published from time to time by the Gas Processors Association.

(4)  If the Minister requires a document furnished under the Act or this
Regulation to show volumes or quantities of in-stream components of natural
gas or residue gas,

     (a)  the respective volumes of the in-stream components of the gas
shall be determined from a component analysis of the gas,

     (b)  the respective volumes of the in-stream components of the gas
shall be converted to gigajoules by multiplying those volumes by the gross
or higher heating value of the respective in-stream components as shown in
any edition of Table of Physical Constants of Paraffin Hydrocarbons and
Other Components of Natural Gas (GPA Standard 2145) published by the Gas
Processors Association, and

     (c)  the quantities of the in-stream components calculated under
clause (b) shall be normalized so that the aggregate quantities of those
in-stream components equal the aggregate quantities of the gas.

(5)  The conditions of measurement of volume and heating value when not
otherwise specified in this section shall be

     (a)  in accordance with the provisions of the Electricity and Gas
Inspection Act (Canada), and

     (b)  corrected for actual atmospheric pressure to the nearest 2
kilopascals.

(6)  For the purposes of calculating royalty on ethane under this
Regulation, volumes of ethane in liquid form shall be converted to the
number of cubic metres the ethane would occupy in gaseous form at standard
temperature and under standard pressure.


Petroleum Registry of Alberta
5(1)  Subject to this section, where a provision of this Regulation
requires a person to furnish to the Minister

     (a)  allocation data,

     (b)  information respecting volumes or quantities of in-stream
components of natural gas or residue gas,

     (c)  information referred to in section 27(4), (5) or (7),

     (d)  a report the deadline for the furnishing of which occurs on or
after October 31, 2002, or

     (e)  a report related to October, 2002 or any subsequent production
month,

the allocation data, information or report shall be furnished by electronic
transmission to the Petroleum Registry of Alberta in accordance with the
directions of the Minister respecting the operation of the Registry.

(2)  The Minister may by a general direction exempt from the operation of
subsection (1)

     (a)  any class of persons other than operators, or

     (b)  any class of reports, subject to any conditions in the
direction.

(3)  Section 5 of the Mines and Minerals Administration Regulation (AR
262/97) does not apply to the furnishing of allocation data or any
information or reports to which subsection (1) applies.

(4)  A reference in this Regulation to a report filed with the Board, to
the extent it applies to a report related to October, 2002 or any
subsequent production month, shall be read as a reference to a report filed
with the Board by electronic transmission to the Registry.

(5)  For the purposes of this Regulation, where natural gas or a gas
product is delivered in a production month from a facility (the "sending
facility") to a receipt meter station or another facility, the reports
filed with the Board showing the volumes of the natural gas or gas product
received at the receipt meter station or the other facility from the
sending facility in that month shall, subject to subsequent corrections, be
considered as the volumes delivered from the sending facility in that
month.

(6)  Without limiting the operation of section 4 of the Mines and Minerals
Administration Regulation (AR 262/97),

     (a)  the Minister may send to a person a royalty invoice or any
notice or other document authorized or required to be sent to that person
under this Regulation by electronic transmission to the Petroleum Registry
of Alberta in accordance with the directions of the Minister respecting the
operation of the Registry, and

     (b)  a royalty invoice or a notice or other document sent in
accordance with clause (a) is deemed for the purpose of this Regulation to
be received by that person when it is transmitted to the Registry.


Prescribed prices, factors, deductions and allowances
6(1)  The Minister shall, by order, prescribe an amount per gigajoule  as
the Gas Reference Price for October, 2002 and for each subsequent
production month.

(2)  The Minister shall, by order, for October, 2002 and for each
subsequent production month, prescribe the following, each expressed as an
amount per gigajoule:

     (a)  the Methane ISC Reference Price;

     (b)  the Methane ISC Par Price;

     (c)  the Methane ISC Adjusted Intra-Alberta Transportation
Deduction.

(3)  The Minister shall, by order, for October, 2002 and for each
subsequent production month, prescribe the following, each expressed as an
amount per gigajoule:

     (a)  the Ethane Reference Price;

     (b)  the Ethane Par Price;

     (c)  the Ethane ISC Reference Price;

     (d)  the Ethane ISC Adjusted Intra-Alberta Transportation Deduction.

(4)  The Minister shall, by order, for October, 2002 and for each
subsequent production month, prescribe

     (a)  an amount per cubic metre as the Propane Reference Price,

     (b)  an amount per gigajoule as the Propane Par Price,

     (c)  an amount per gigajoule as the Propane ISC Reference Price, and

     (d)  an amount per gigajoule as the Propane ISC Adjusted
Intra-Alberta Transportation Deduction.

(5)  The Minister shall, by order, for October, 2002 and for each
subsequent production month, prescribe

     (a)  an amount per cubic metre as the Butanes Reference Price,

     (b)  an amount per gigajoule as the Butanes Par Price,

     (c)  an amount per gigajoule as the Butanes ISC Reference Price, and

     (d)  an amount per gigajoule as the Butanes ISC Adjusted
Intra-Alberta Transportation Deduction.

(6)  The Minister shall, by order, for October, 2002 and for each
subsequent production month, prescribe

     (a)  an amount per cubic metre as the Pentanes Plus Reference  
Price,

     (b)  an amount per cubic metre as the Pentanes Plus Par Price,

     (c)  an amount per gigajoule as the Pentanes Plus ISC Reference
Price, and

     (d)  an amount per gigajoule as the Pentanes Plus ISC Adjusted
Intra-Alberta Transportation Deduction.

(7)  The Minister shall, by order, for 2002 and for each subsequent year,
prescribe the following:

     (a)  an amount per gigajoule as the New Methane ISC Select Price;

     (b)  an amount per gigajoule as the Old Methane ISC Select Price;

     (c)  an amount per gigajoule as the New Ethane Select Price;

     (d)  an amount per gigajoule as the Old Ethane Select Price;

     (e)  an amount per gigajoule as the Propane Select Price;

     (f)  an amount per gigajoule as the Butanes Select Price;

     (g)  an amount per cubic metre as the Pentanes Plus Select Price.

(8)  The Minister shall, by order, for 2002 and for each subsequent year,
prescribe

     (a)  the royalty factor for new pentanes plus, and

     (b)  the royalty factor for old pentanes plus.

(9)  The Minister shall, by order, for October, 2002 and for each
subsequent production month, prescribe

     (a)  the respective Transportation Allowances, expressed as  amounts
per cubic metre, applicable to

               (i)  propane and butanes obtained as separate products
from a natural gas liquids mix by fractionation,

               (ii) pentanes plus obtained as a separate gas product
from a natural gas liquids mix by fractionation, and

               (iii)     propane, butanes and pentanes plus contained in a  
natural gas liquids mix,

          for each region of Alberta established pursuant to subsection
(10);

     (b)  the Fractionation Allowance, expressed as an amount per cubic
metre, applicable to propane, butanes and pentanes plus obtained as
separate products from a natural gas liquids mix by fractionation occurring
downstream from

               (i)  the gas processing plant or reprocessing plant at
which  the mix was obtained, or

               (ii) a gathering system, where the mix was not obtained
at a gas processing plant or reprocessing plant;

     (c)  the Special Pentanes Plus Processing Allowance, expressed as an
amount per cubic metre.

(10)  The Minister shall, by order, divide Alberta into regions for the
purposes of subsection (9)(a).

(11)  The Minister may, by order, for October, 2002 and for each subsequent
production month, prescribe a receipt meter station factor for a receipt
meter station.


Fees
7   The Minister may prescribe fees for information, materials or
documents, and  training  and  other  services,  provided  by  the 
Department  under  this Regulation.


Lessee's liability unaffected
8   Nothing in this Regulation operates to relieve a lessee from

     (a)  the lessee's liability to the Crown under an agreement for the
payment of royalty, or

     (b)  the lessee's liability under this Regulation to pay to the
Crown the royalty compensation in respect of the Crown's royalty share of
natural gas, gas products or field condensate.


Application of Regulation
9(1)  This Regulation applies to royalty on natural gas recovered, and gas
products and field condensate obtained, in October, 2002 and subsequent
production months.

(2)  This Regulation applies

     (a)  to solution gas as though it were natural gas, and

     (b)  except as provided in section 10(6) and (7), to products
obtained from solution gas.


     Part 2
     Royalty

     Division 1
     Determination of the Crown's Royalty Share

Royalty share of natural gas, gas products and field condensate
10(1)  If natural gas is recovered from a well event pursuant to a Crown
lease and the natural gas is

     (a)  disposed of,

     (b)  consumed as a fuel,

     (c)  delivered from a gathering system to a mainline straddle plant,
or

     (d)  removed from Alberta

without having first been processed at a gas processing plant or
reprocessing plant, then,  subject  to  this  Regulation,  the  royalty 
reserved  to the Crown on that natural gas shall be that portion of the
natural gas so recovered calculated in accordance with Schedule 1.

(2)  If

     (a)  natural gas is recovered from a well event pursuant to a Crown
lease, and

     (b)  pentanes plus are obtained from the natural gas and delivered
from a gathering system before the natural gas is processed, disposed of,
consumed as a fuel or removed from Alberta,

then, subject to this Regulation, the royalty reserved to the Crown on the
pentanes plus shall be that portion of the pentanes plus calculated in
accordance with Schedule 5.

(3)  Where natural gas is recovered from a well event pursuant to a Crown
lease and gas products are obtained by processing the natural gas, then,
subject to this Regulation, the royalty reserved to the Crown on the
natural gas shall instead be calculated in accordance with this Regulation
on gas products obtained by processing the natural gas and by reprocessing
residue gas obtained from the natural gas.

(4)  The royalty reserved to the Crown on gas products referred to in
subsection (3) shall be calculated as follows:

     (a)  except as provided in clause (b), where natural gas is
processed at a gas processing plant or reprocessing plant and

               (i)  the residue gas obtained as a result of the
processing is disposed of, consumed as a fuel or removed from Alberta
without being reprocessed or is reprocessed at a field straddle plant or
mainline straddle plant, or

               (ii) the gas products, other than residue gas, obtained
as a result of the processing are disposed of, consumed as a fuel or
removed from Alberta,

          the royalty reserved to the Crown on the residue gas and other
gas products shall be calculated on the residue gas and other gas products
obtained as a result of the processing;

     (b)  where residue gas obtained by the processing of natural gas is
reprocessed at one or more reprocessing plants other than a field straddle
plant before the residue gas is disposed of, consumed as a fuel, delivered
to a mainline straddle plant or removed from Alberta,

               (i)  the royalty reserved to the Crown on the residue
gas shall be calculated on the quantity of the residue gas obtained at the
last of those reprocessing plants, and

               (ii) the royalty reserved to the Crown on the gas
products other than residue gas shall be calculated on the quantities of
those gas products obtained at each of those reprocessing plants.

(5)  The royalty reserved to the Crown on gas products referred to in
subsection (4) is

     (a)  with respect to residue gas, the percentage of the residue gas
calculated in accordance with Schedule 1;

     (b)  with respect to ethane, the percentage of the ethane calculated
in accordance with Schedule 2;

     (c)  with respect to propane, the percentage of the propane
calculated in accordance with Schedule 3;

     (d)  with respect to butanes, the percentage of the butanes
calculated in accordance with Schedule 4;

     (e)  with respect to pentanes plus, the percentage of the pentanes
plus calculated in accordance with Schedule 5;

     (f)  with respect to sulphur, the percentage of the sulphur
prescribed in Schedule 6;

     (g)  with respect to any other gas product not mentioned in clauses
(a) to (f), 30% of the gas product.

(6)  The royalty reserved to the Crown on field condensate shall be
determined in accordance with subsection (7) as though the field condensate
were non-heavy oil as defined in the Petroleum Royalty Regulation (AR
248/90).

(7)  For the purposes of subsection (6), the royalty reserved to the Crown
on field condensate shall be determined

     (a)  under Schedule 3 of the Petroleum Royalty Regulation (AR
248/90), if

               (i)  the natural gas from which it is obtained is new
gas,

               (ii) the crude oil from which it is separated when it is
obtained from petroleum is new oil by reason of section 5(2) of the
Petroleum Royalty Regulation (AR 248/90), or

               (iii)     the Minister determines that the royalty reserved
on it should be determined under Schedule 3 of the Petroleum Royalty
Regulation (AR 248/90) in a particular case,

     or

     (b)  under Schedule 2 of the Petroleum Royalty Regulation (AR
248/90), in any other case.

(8)  The Crown's royalty share of natural gas and gas products shall be
calculated with reference to natural gas and gas products that are
quantities available for sale.

(9)  The royalty on natural gas, gas products and field condensate shall be
free and clear of all deductions.


Royalty calculation point
11   Unless the Minister otherwise determines in a particular case, the
place at which the Crown's royalty share of natural gas, gas products or
field condensate is to be calculated is the place determined in accordance
with the following rules:

     (a)  the royalty share of natural gas referred to in section 10(1)
shall be calculated at

               (i)  the last point of measurement before the natural
gas is delivered from the gathering system in which it is transported, or

               (ii) the point of delivery under the disposition, if the
natural gas is disposed of and the point of delivery is upstream from the
point referred to in subclause (i);

     (b)  the royalty share of pentanes plus referred to in section 10(2)
shall be calculated at the first point of measurement after the pentanes
plus are delivered from the gathering system;

     (c)  the royalty share of residue gas and other gas products
referred to in section 10(4)(a) shall be calculated at the plant gate of
the gas processing plant at which the residue gas and other gas products
are obtained;

     (d)  the royalty share of residue gas referred to in section
10(4)(b)(i) shall be calculated at the plant gate of the last of the
reprocessing plants referred to in that subclause;

     (e)  the royalty share of a gas product referred to in section
10(4)(b)(ii) shall be calculated at the plant gate of the reprocessing
plant at which the gas product is obtained;

     (f)  the royalty share of field condensate shall be calculated at
its first point of measurement after being obtained from natural gas or
solution gas.


Special royalty O.C.
12   Where in the opinion of the Lieutenant Governor in Council it is
necessary or desirable in the interest of conservation or of maintaining or
increasing the recovery of crude oil or natural gas from a well event, a
group of well events, a pool or any portion of a pool, the Lieutenant
Governor in Council may by order

     (a)  prescribe a royalty payable with respect to natural gas
obtained from the well event, the group of well events, the pool or portion
of the pool, or any gas products obtained from that natural gas, that is
less than the royalty that would otherwise be payable under this
Regulation, and

     (b)  prescribe the period in respect of which the order is to apply.
 

Unit operations
13   When natural gas recovered pursuant to a Crown lease is subject to a
unit agreement or unit operation order, the unit area shall be deemed to be
a location for the purposes of determining the rate of royalty applicable
to the portion of the production allocated to any tract wholly or partly
within the location of the Crown lease.


Proportion-ment of royalty liability
14(1)  When the whole or part of a location forms a part only of a
production entity other than a unit area, the royalty payable to the Crown
under this Regulation on production from a well event or events in the
production entity shall be

     (a)  in the proportion that the area of the location within the
production entity bears to the whole of the area of the production entity,
or

     (b)  if the production entity is a drilling spacing unit and an
order under section 80 or 81 of the Oil and Gas Conservation Act is in
effect with respect to the drilling spacing unit, in the proportion that
the share of the production allocated to the location or the part of the
location contained in the drilling spacing unit bears to the whole of the
production from the drilling spacing unit,

and the well event or events in the production entity are deemed to be in
the location or part of the location.

(2)  Where the whole or part of a location forms the whole or part of a
drilling spacing unit that is partly inside and partly outside a unit area,
then, for the purposes of calculating royalty on the natural gas recovered
from a well event in the drilling spacing unit and gas products and field
condensate obtained from that natural gas, portions of the natural gas
shall be attributed to the parts of the drilling spacing unit inside and
outside the unit area, in the proportions that the areas of those
respective parts of the drilling spacing unit inside and outside the unit
area bear to the whole of the area of the drilling spacing unit.


When royalty not payable
15(1)  No royalty is payable to the Crown,

     (a)  subject to subsection (3), on natural gas or residue gas
consumed as a fuel in operations for gathering or processing natural gas
recovered pursuant to a Crown lease, or on residue gas consumed as a fuel
in operations for reprocessing residue gas obtained from natural gas
recovered pursuant to a Crown lease, where

               (i)  the natural gas so consumed is recovered from the
same pool as the natural gas that is gathered or processed, or

               (ii) the residue gas so consumed is obtained from
natural gas recovered from the same pool as the natural gas that is
gathered or processed,

          as the case may be, including consumption as a fuel for the
purpose of generating electricity and steam in a power plant that is
provided for such operations in exchange for the fuel;

     (b)  with approval of the Minister given before January 1, 1994, on
natural gas or residue gas consumed as a fuel in operations for the
recovery or processing of oil sands conducted under a commercial oil sands
scheme under the Oil Sands Conservation Act, where the scheme is also the
subject of a contract entered into pursuant to section 9(a) of the Act;

     (c)  unless the Minister otherwise directs in any case, on natural
gas or residue gas consumed as a fuel in operations for the recovery or
processing of oil sands pursuant to a Project as defined in the Oil Sands
Royalty Regulation, 1997 (AR 185/97) where

               (i)  the consumed natural gas, or the natural gas from
which the consumed residue gas was obtained, respectively, was recovered
under an agreement under which oil sands are to be recovered pursuant to
the Project, and

               (ii) the oil sands so recovered or processed were
recovered from the development area, as defined in the Oil Sands Royalty
Regulation, 1997 (AR 185/97) of the Project;

     (d)  unless the Minister otherwise directs in any case, on natural
gas or residue gas consumed as a fuel in operations for the recovery or
processing of oil sands that is subject to the payment of royalty under the
Oil Sands Royalty Regulation, 1984 (AR 166/84), where the consumed natural
gas, or the natural gas from which the consumed residue gas is obtained,
respectively, and the oil sands recovered or processed in such operations,
are recovered pursuant to the same agreement;

     (e)  unless the Minister otherwise directs in any case, on natural
gas, or residue gas that is obtained from natural gas, recovered pursuant
to an experimental project as defined in the Experimental Oil Sands Royalty
Regulation (AR 347/92), where the natural gas or residue gas is consumed as
a fuel in the operation of the experimental project;

     (f)  with the approval of the Minister, on natural gas or residue
gas consumed as a fuel in operations for the production of experimental oil
from an experimental project approved under the Experimental Project
Petroleum Royalty Regulation (AR 65/92) that is subject to the payment of
royalty to the Crown;

     (g)  unless the Minister otherwise directs in any case, on any
natural gas or residue gas, other than natural gas or residue gas referred
to in clauses (b) to (f), consumed as fuel for drilling or production
operations in respect of a well drilled pursuant to an agreement.

(2)  Despite subsection (1), in respect of natural gas or residue gas
consumed in a month in accordance with clause (b) or (f) of that
subsection,

     (a)  an amount equal to the royalty compensation that would be
payable on the gas in the absence of subsection (1) shall be paid to the
Crown as if subsection (1) did not apply in respect of the gas, and

     (b)  the Minister shall credit an equivalent amount to the royalty
client account of the royalty client who made the payment, no later than
the last day of the month following the month in which the Minister
receives from the royalty client a report satisfactory to the Minister
concerning the consumption of the gas.

(3)  Subsection (1)(a) does not apply to residue gas consumed as a fuel at
a gas processing plant where the residue gas is obtained from a field
straddle plant.

(4)  The Minister may, by written notice given to the person identified by
the Minister as the operator of a commercial oil sands scheme referred to
in subsection (1)(b), withdraw an approval referred to in that subsection
that relates to the scheme.

(5)  Subsection (1)(b) ceases to apply to natural gas and residue gas
consumed in a commercial oil sands scheme on or after the date indicated in
a notice given under subsection (4) as the effective date of withdrawal of
the approval referred to in subsection (1)(b) in respect of the scheme.

(6)  If any natural gas or residue gas that is subject to the payment of
royalty to the Crown is consumed as a fuel without having first been
disposed of, then, unless the Minister otherwise directs, the Crown's
royalty share of the natural gas or residue gas may, subject to the other
provisions of this Regulation that prescribe the royalty payable with
respect to the natural gas or residue gas, be consumed for the same
purpose.


Royalty exemptions
16   Natural gas is exempted from the payment of royalty to the Crown under
this Regulation in accordance with and to the extent authorized under
Schedule 8.


     Division 2
     Royalty Compensation

Liability for royalty compensation
17(1)  The Crown's title to the Crown's royalty share of natural gas and
gas products is automatically transferred

     (a)  at the point immediately downstream from the royalty
calculation point for the natural gas or gas products, or

     (b)  in the case of sulphur,

               (i)  at the place where it is solidified at the site of
the gas processing plant or reprocessing plant at which it is obtained, or

               (ii) at the place where it leaves the gas processing
plant or reprocessing plant at which it is obtained, where it leaves the
plant in liquid form without having first been solidified,

to the person who is, in relation to that royalty share, the owner of the
lessee's share of the natural gas or gas products.

(2)  When the Crown's title to the Crown's royalty share of natural gas or
a gas product is transferred pursuant to subsection (1), compensation is
payable to the Crown in accordance with this Regulation in respect of that
royalty share.

(3)  Subject to this Regulation, the compensation payable to the Crown
under subsection (2) shall be an amount calculated

     (a)  in accordance with Schedule 1, with respect to natural gas
referred to in section 10(1) and to residue gas;

     (b)  in accordance with Schedule 2, with respect to ethane;

     (c)  in accordance with Schedule 3, with respect to propane;

     (d)  in accordance with Schedule 4, with respect to butanes;

     (e)  in accordance with Schedule 5, with respect to pentanes plus;

     (f)  in accordance with Schedule 6, with respect to sulphur.

(4)  Royalty compensation is not payable in respect of

     (a)  gas products other than residue gas, ethane, propane, butanes,
pentanes plus and sulphur, and

     (b)  light-ends.

(5)  Where the Crown is entitled to a royalty on field condensate,

     (a)  unless the Minister directs otherwise in a particular case, the
Crown's title to the Crown's royalty share of the field condensate is
automatically transferred at point immediately downstream from its royalty
calculation point to the person who is, in relation to that royalty share,
the owner of the lessee's share of the field condensate, and

     (b)  the royalty compensation payable to the Crown in respect of the
royalty share so transferred shall be an amount calculated by multiplying
the quantity of the royalty share by the Pentanes Plus Reference Price for
the production month in which the field condensate was obtained less the
Transportation Allowance prescribed for the production month pursuant to
section 6(9)(a)(iii).
 

Payment of royalty compensation
18(1)  The Minister shall, on or before the last day of the 2nd month
following a production month, issue and send an invoice to each royalty
client showing for that production month the Minister's calculations of at
least the following:

     (a)  the aggregate quantities available for sale allocated to the
royalty client for the production month and the Crown's royalty share of
those quantities available for sale;

     (b)  the amount payable to the Crown by the royalty client under
this Regulation.

(2)  Where the Minister is satisfied that incorrect information in the
Registry or information omitted from the Registry may affect the
calculation of royalty compensation payable by a royalty client for a
production month,

     (a)  the Minister may, subject to clause (b), calculate the royalty
compensation on the basis of one or more assumptions that, when applied to
the calculation, will ensure that the Crown is not financially prejudiced
by the incorrect or omitted information, and

     (b)  when the incorrect or omitted information is corrected or
entered, as the case may be, in the Registry, the Minister shall
recalculate the royalty compensation accordingly and have any resulting
difference reflected in the royalty client's royalty client account.

(3)  On receipt of a royalty invoice in respect of a production month, the
royalty client shall pay the Crown the net amount shown in the invoice on
or before

     (a)  the last day in which the offices of the Department are open
during the 3rd month following the production month, where the production
month to which the invoice relates is December, or

     (b)  the last day of the 3rd month following the production month,
in any other case.

(4)  Where for any reason the Minister fails to issue and send royalty
invoices to royalty clients in respect of a production month by the
deadline prescribed by subsection (1) then, despite subsections (1) and
(3),

     (a)  the Minister may, by general directions to the royalty clients
affected, require them to pay amounts on account of royalty compensation in
respect of that production month by the deadline prescribed by subsection
(3) on the basis of estimates by those royalty clients of the amounts owing
or on any other basis specified in the directions, and

     (b)  the royalty clients affected must pay the amounts in accordance
with the directions.

(5)  After the end of each year the Minister shall, with respect to each
royalty client,

     (a)  calculate the actual quantities available for sale for all of
the production months in that year that are allocated to the royalty
client;

     (b)  calculate the actual royalty compensation payable to the Crown
in respect of the Crown's royalty share of the quantities available for
sale calculated for the year pursuant to clause (a);

     (c)  if the aggregate amount of the actual royalty compensation
calculated for the year under clause (b) exceeds the aggregate of the
amounts of royalty compensation calculated for all production months in the
year shown in the royalty invoices for those production months, show the
excess amount payable to the Crown as an adjustment in the client's next
royalty invoice and also show in that invoice how the excess amount was
calculated;

     (d)  if the aggregate amount of the actual royalty compensation
calculated for the year under clause (b) is less than the aggregate of the
amounts of royalty compensation calculated for all production months in the
year shown in the royalty invoices for those production months, credit the
excess amount to the client in the client's next royalty invoice and also
show in that invoice how the excess amount was calculated.

(6)  The Minister shall maintain for each royalty client an account called
a "royalty client account" that reflects the amounts debited and credited
to the account.

(7)  If the royalty client account for a royalty client shows a net credit
balance in the client's favour as of the end of a month,  then,  unless 
the  Minister  or  the  royalty  client directs otherwise, the Crown shall
pay the royalty client an amount equal to that credit balance.
 

Injection credits
19(1)  If natural gas or a gas product is injected during a production
month into a pool through a gas injection facility for the account of or
for the benefit of a royalty client, the Minister shall establish for the
royalty client a credit for that production month, called an "injection
credit", in an amount determined in accordance with this section.

(2)  Except as provided in subsection (5), an injection credit for a
royalty client in respect of natural gas or a gas product injected into a
pool through a gas injection facility in a production month shall be
calculated by

     (a)  determining the quantity of the Crown's royalty share of the
natural gas or gas products received at the gas injection facility for the
purposes of injection for the account of or for the benefit of the royalty
client (without deducting any part of the gas or gas products that are
subsequently lost or used as fuel in conducting injection) that would have
been payable for that production month if

               (i)  the natural gas had instead been recovered from
that pool in that production month, or

               (ii) the gas products had instead been obtained in that
production month from natural gas recovered from that pool,

          as the case may be, and

     (b)  determining the royalty compensation that would have been
payable by the royalty client under this Regulation with respect to the
royalty quantity determined under clause (a).

(3)  In determining royalty compensation under subsection (2)(b), if

     (a)  natural gas or a gas product is injected during a production
month into a pool through a gas injection facility,

     (b)  the operator of the gas injection facility has informed the
Minister pursuant to section 27(4) or (7) of a facility (in this section
called the "reproducing facility") to which natural gas, or gas products
obtained from natural gas, that may be recovered from the pool in that
production month can be delivered, and

     (c)  the Minister is satisfied that natural gas, or gas products
obtained from natural gas, recovered from the pool during the month could
be delivered to the reproducing facility,

the Minister shall, in addition to considering the natural gas or gas
products received at the gas injection facility as having been recovered,
or obtained from natural gas recovered, respectively, from the pool in that
month, and for the purpose of determining the royalty calculation point for
the natural gas or gas products and the royalty trigger factor for the
purposes of section 5 of Schedule 1 for that point, also consider the
natural gas or gas products as having been delivered to the reproducing
facility after being so recovered or obtained.

(4)  In determining royalty compensation under subsection (2)(b), if

     (a)  natural gas or a gas product is injected during a production
month into a pool through a gas injection facility,

     (b)  the operator of the gas injection facility has informed the
Minister pursuant to section 27(4) or (7) that there is no reproducing
facility for that month in respect of the gas injection facility, and

     (c)  the Minister is satisfied there is no reproducing facility to
which natural gas, or gas products obtained from natural gas, recovered
from the pool during the month could be delivered,

the royalty trigger factor for the purpose of applying section 5(1) of
Schedule 1 in respect of the natural gas or gas products shall, despite
section 5(2) of that Schedule, be 1.0.

(5)  If natural gas or residue gas is injected into a pool in a production
month through a single well having no associated injection facilities or
through a gas injection facility in respect of which there is no
reproducing facility for that production month, an injection credit for a
royalty client for that production month shall be calculated by

     (a)  determining the quantity of the Crown's royalty share of the
natural gas or residue gas so injected for the account of or for the
benefit of the royalty client (without deducting any part of the natural or
residue gas that are subsequently lost or used as fuel in conducting
injection) that would have been payable for that production month if

               (i)  the natural gas had instead been recovered from
that pool in that production month, or

               (ii) the residue gas had instead been obtained in that
production month from natural gas recovered from that pool,

          as the case may be,

     (b)  determining the respective volumes and quantities of the
in-stream components of the natural gas or residue gas so injected,

     (c)  determining the average of the ISC reference prices for the
production month, weighted according to the respective proportionate
quantities of methane, ethane, propane, butanes and pentanes plus
components of the natural gas or residue gas, and

     (d)  multiplying the weighted average price determined under clause
(c) by the quantities of the natural gas or residue gas injected in that
production month.

(6)  The Minister shall apply an injection credit calculated for a
production month as a credit to the royalty client's royalty client
account.
 

Allowable costs
20(1)  The costs and allowances to which the Minister consents and that are
incurred

     (a)  in gathering or processing the Crown's royalty share of natural
gas or reprocessing the Crown's royalty share of residue gas, and

     (b)  in handling the Crown's royalty share of gas products within a
gas processing plant or reprocessing plant after the place in the plant
where the Crown's royalty share is calculated

shall, subject to this section, be deducted from the royalty compensation
otherwise payable in respect of the Crown's royalty share of the natural
gas and gas products.

(2)  In this section, "facility" does not include a gas injection facility
or commercial storage facility.

(3)  The Minister may determine the amount of the costs and allowances
referred to in subsection (1) in respect of 2002 and each subsequent year.

(4)  Subject to subsection (5), the Minister may for the purposes of this
section

     (a)  estimate the amount of the allowable costs calculated for a
royalty client for a year and, subject to clause (b)(ii), consent to that
estimated amount, and

     (b)  after the end of the year determine the actual allowable costs
calculated for that royalty client for that year and,

               (i)  if the actual costs exceed the estimated amount
referred to in clause (a), consent to further costs equal to the
difference, or

               (ii) if the estimated amount referred to in clause (a)
exceed the actual allowable costs, invoice the royalty client for the
difference.

(5)  The allowable costs consented to under this section in respect of a
royalty client for a year may not exceed the aggregate royalty compensation
calculated under section 17(3) in respect of that royalty client for that
year.

(6)  The Minister may not consent under subsection (1) to the Crown being
liable for any allowable costs in relation to approved equipment as defined
in the Gas Processing Efficiency Assistance Regulation (AR 275/89) if
credits have been established under that Regulation in relation to that
approved equipment.

(7)  If credits have been established pursuant to a regulation made under
the Act

     (a)  on the basis of costs the Minister estimates may be saved in
the gathering or processing of the Crown's royalty share of natural gas or
the reprocessing of the Crown's royalty share of residue gas, and

     (b)  that may be applied against the payment of money owing to the
Crown under this Regulation,

the Minister may, in determining the amount of costs and allowances under
subsection (3) in relation to such gathering, processing or reprocessing,
reduce the costs and allowances by an amount or amounts that the Minister
considers necessary to ensure that an amount equal to the present value, as
of the date the credits are established, of the estimated costs savings is
recovered by the Crown.

(8)  The operator of a facility that commences operations in 2002 or any
subsequent year must furnish to the Minister by March 1 of the following
year a report respecting the facility, its owners and their respective
percentage interests in the facility, as of December 31 of the year in
which the facility commences operations.

(9)  If one or more changes occur in the owners of a facility or their
respective percentage interests in the facility during a year, other than
the year in which the facility commences operations, the operator of the
facility must furnish a report to the Minister by the next March 1
respecting the owners and their respective percentage interests as of the
end of the year.

(10)  Despite subsection (9), the operator of a facility must, on written
notice from the Minister, furnish to the Minister, within the time
indicated in the notice, a report respecting the owners of the facility and
their respective percentage interests in the facility as of the date
indicated in the notice.

(11)  A person replaced as the operator of a facility shall furnish to the
Minister a report respecting the change in operators by the last day of the
month following the month in which the change occurs.

(12)  The operator of a facility shall furnish to the Minister in respect
of 2002 and each subsequent year

     (a)  a report respecting the allowable capital costs of the facility
for that year, on or before April 30 in the year following the year to
which the report relates, and

     (b)  if the operator is directed to do so by the Minister, a report
respecting the allowable operating costs of the facility for that year, on
or before March 31 in the year following the year to which the report
relates.

(13)  If a facility commences operations in 2002 or any subsequent year, a
report may not be furnished under subsection (12) by the operator of that
facility in respect of that year if the operator has not furnished a report
under subsection (8) in respect of that facility.

(14)  A royalty client must furnish to the Minister in respect of 2002 and
each subsequent year a report respecting the consideration given by that
client for custom processing fees for that year and, to the extent approved
by the Minister, preceding years, for gathering or processing natural gas
and reprocessing residue gas during that year or preceding years, as the
case may be, and the report must be furnished on or before May 15 of the
year following the latest year to which the report relates.

(15)  A royalty client may reallocate all or part of the allowable capital
costs allocated to it to one or more other royalty clients, but in that
event must furnish to the Minister a report respecting that reallocation on
or before May 15 following the year to which the reallocation relates.


Deposits
21(1)  A deposit made by a royalty client pursuant to section 18 of the
1994 Regulation and held by the Crown on October 1, 2002 shall be held as a
deposit for the purposes of this section as though it had been paid to the
Crown under this section.

(2)  A person who initially becomes a royalty client under this Regulation
on or after October 1, 2002 shall pay to the Crown, as a deposit, an amount
specified by the Minister, in the manner determined by the Minister.

(3)  If a royalty client pays a deposit to the Crown under this section
during a year, the Minister shall in each subsequent year, recalculate the
deposit to be maintained by the royalty client, as an amount equal to the
lesser of 

     (a)  1/6 of the Minister's estimate of the aggregate amount of
royalty compensation for which the royalty client was liable in respect of
the preceding year after deducting allowable costs, and

     (b)  the product of the amount of the deposit maintained by the
royalty client immediately prior to the recalculation and the amount
determined by dividing the long term Gas Reference Price on the date on
which the recalculation occurs by the long term Gas Reference Price on the
date on which the immediately preceding recalculation under this clause
occurred.

(4)  For the purposes of subsection (3)(b), the long term Gas Reference
Price on the date on which a recalculation occurs is the Minister's
estimate as of that date of the average Gas Reference Price for the period
commencing the first day of the year in which the recalculation occurs and
ending on a future date specified from time to time by the Minister.

(5)  Despite subsection (3), the Minister may at any time recalculate the
deposit in an amount determined by the Minister where the Minister
considers the recalculation is warranted in the circumstances.

(6)  If the amount of a deposit is recalculated pursuant to subsection (5),
the Minister shall

     (a)  notify the royalty client of the amount of the recalculated
deposit,

     (b)  if the amount of the recalculated deposit is greater than the
existing deposit, by a notice to the royalty client, require the royalty
client to pay the difference to the Crown within the time prescribed by the
notice in order to maintain the deposit in the recalculated amount, and

     (c)  if the amount of the recalculated deposit is less than the
existing deposit, credit the difference to the client's royalty client
account unless the Minister directs that the difference is to be paid to
the client.

(7)  Money paid to the Crown under this section as a deposit or to increase
a deposit

     (a)  shall be paid into the General Revenue Fund but not credited to
the royalty client's royalty client account, and  

     (b)  shall be refunded to the person maintaining the deposit when
that person ceases to be a royalty client, subject to any rights of the
Crown to set off against the amount otherwise refundable any debt owing by
that person to the Crown.

(8)  Interest is not payable to a royalty client on the amount of a deposit
maintained by the royalty client under this section.


     Part 3
     Administration and Enforcement
 
Well groups
22(1)  For the purposes of this Regulation, 2 or more well events
constitute a well group if those well events are

     (a)  within a block as defined in the Oil and Gas Conservation Act,

     (b)  subject to a unit agreement or unit operation order,

     (c)  within a pool or part of a pool that is subject to a scheme for
enhanced recovery approved pursuant to section 39(1)(a) of the Oil and Gas
Conservation Act, or

     (d)  subject to a commercial storage scheme.

(2)  A well event that is not included in a well group under subsection (1)
is itself a well group for the purposes of this Regulation.
 

Royalty clients
23(1)  The Department shall maintain records showing the persons who are
royalty clients for a well group by reason of

     (a)  allocations of quantities available for sale made to those
persons pursuant to section 25 in their capacity as royalty clients for
that well group, or

     (b)  assignments made to those persons pursuant to subsection (2)
and relating to that well group.

(2)  If a person assigns to another or others responsibility for paying
royalty compensation in respect of quantities available for sale allocated
pursuant to section 25 to that person in the capacity of a royalty client
for a well group, the assignment must be in the form determined by the
Minister and must be furnished to the Minister on or before the last day of
the third month following the production month in which the assignment is
effective.

(3)  On the filing by the Minister of an assignment that conforms with
subsection (2), the assignee becomes the royalty client in respect of
quantities available for sale allocated to the assignor pursuant to section
25 for the production month in which the assignment is effective and for
subsequent production months.

(4)  A royalty client is authorized to

     (a)  make a request to the Minister under section 38(2)(b) of the
Act, or

     (b)  make an objection to the Minister under section 39 of the Act.


Responsibility for quantities available for sale
24   For the purposes of this Regulation,

     (a)  the operator of a reprocessing plant is responsible for
quantities available for sale for a production month if they are obtained
at that reprocessing plant in a production month;

     (b)  the operator of a gas processing plant is responsible for
quantities available for sale for a production month if they are obtained
at that gas processing plant in that production month;

     (c)  the operator of a gathering system is responsible for
quantities available for sale for a production month if they are delivered
from that gathering system in that production month

               (i)  other than to a gas processing plant or
reprocessing plant or to another gathering system, or

               (ii) to a delivery point outside Alberta;

     (d)  the operator of a battery is responsible for quantities
available for sale for a production month if they are delivered from that
battery in that production month.
 

Allocations of quantities available for sale
25(1)  Unless the Minister otherwise directs in a particular case,
quantities available for sale for a production month must be allocated in
accordance with the following:

     (a)  where an operator of a reprocessing plant is responsible for
the quantities available for sale, the operator may make allocations of
those quantities to one or more well groups but must allocate the
remainder, if any, to the gas processing plants, gathering systems or
batteries from which the quantities were delivered;

     (b)  where an operator of a gas processing plant is responsible for
the quantities available for sale, the operator may make allocations of
those quantities, and the quantities available for sale allocated to the
operator's gas processing plant pursuant to clause (a), to one or more well
groups but must allocate the remainder, if any, to the gathering systems or
batteries from which the quantities were delivered for processing;

     (c)  where a gathering system operator is responsible for the
quantities available for sale, the operator may make allocations of those
quantities, and the quantities available for sale allocated to the
operator's gathering system pursuant to clause (a) or (b), to one or more
well groups but must allocate the remainder, if any, to the gathering
systems or batteries from which the quantities were delivered;

     (d)  where a battery operator is responsible for the quantities
available for sale, the operator must allocate all of those quantities to
one or more well groups;

     (e)  where an operator allocates quantities available for sale to a
well group pursuant to clause (a), (b), (c) or (d), the operator must
further allocate those quantities to the royalty clients for the well
group;

     (f)  where a well group consists of well events within a unit area,
allocations under clause (e) to royalty clients must be in accordance with
the tract factors under the unit agreement or unit operation order.

(2)  Notwithstanding subsection (1), the Minister may in a particular case
direct  that a facility operator is to be responsible for specified
quantities available for sale and, in that event, the operator must comply
with subsection (1) with respect to those quantities available for sale.

(3)  Allocations of quantities available for sale under subsection (1) must
be made in accordance with the following:

     (a)  where an allocation is made to one facility or well group only,
the stream allocation factor for that allocation is 1.0;

     (b)  where allocations are made to 2 or more facilities or well
groups or any combination of them, the stream allocation factor for each
allocation to a facility or well group is in the proportion that the
quantities allocated to that facility or well group bear to all of the
quantities required to be allocated, expressed as a decimal fraction;

     (c)  where an allocation is made pursuant to subsection (1)(e) to
one royalty client only, the owner allocation factor for that allocation is
1.0;

     (d)  where allocations are made pursuant to subsection (1)(e) to 2
or more royalty clients, the owner allocation factor for each allocation to
a royalty client is in the proportion that the quantities allocated to that
royalty client bear to all of the quantities required to be allocated to
the royalty clients for the well group, expressed as a decimal fraction;

     (e)  the facility operator making the allocations must furnish to
the Minister

               (i)  the stream allocation factor or factors for the
allocations made to facilities and well groups and any other data related
to the factor or factors that the Minister requires, and

               (ii) the owner allocation factor or factors for
allocations made to royalty clients pursuant to subsection (1)(e) and any
other data related to the factor or factors that the Minister requires.

(4)  If natural gas or a gas product is received at a gas injection
facility or commercial storage facility in a production month for the
account of a royalty client for the purpose of injection or storage, as the
case may be, the operator of the facility must furnish to the Minister

     (a)  the stream allocation data and owner allocation data respecting
the quantities so injected at that facility in that production month, as
though those quantities had been recovered from wells at that facility in
that production month, and

     (b)  information respecting the volumes and quantities of in-stream
components of the natural gas or residue gas injected at that facility in
that production month.

(5)  Allocation data referred to in subsection (3) or (4) must be furnished
to the Minister on or before the 15th day of the 2nd month following the
end of the production month to which the allocation data relates.

(6)  A facility operator may furnish to the Minister amended allocation
data for a production month.

(7)  If allocation data required to be furnished by subsection (3) is not
received by the Minister by the deadline prescribed by subsection (5), the
allocation data shall be deemed to be furnished by that deadline for the
purpose only of determining responsibility for quantities available for
sale and to show nil allocations of quantities available for sale.
 

Provisional royalty compensation
26(1)  If a facility operator is responsible for allocating quantities
available for sale pursuant to section 25 but fails to allocate all of
those quantities pursuant to that section,

     (a)  the unallocated quantities of natural gas are deemed to be
recovered pursuant to Crown leases and the unallocated quantities of gas
products are deemed to be obtained from natural gas recovered pursuant to
Crown leases,

     (b)  the unallocated quantities are deemed to be allocated to the
facility operator,

     (c)  the facility operator is deemed for the purposes of this
Regulation to be the royalty client with respect to the Crown's royalty
share of those unallocated quantities, and

     (d)  the facility operator, in the capacity of a royalty client, is
liable to the Crown for the payment of royalty compensation in respect of
the Crown's royalty share of those unallocated quantities, calculated in
accordance with subsection (3).

(2)  Where, according to a report filed with the Board in respect of a
production month that identifies a common stream operator, the total
quantities of natural gas and residue gas received at a receipt meter
station exceed the aggregate of the quantities shown as received at the
receipt meter station from one or more facilities then, for the purposes of
this Regulation and despite any other provision of this Regulation,

     (a)  the excess quantities of natural gas are deemed to be recovered
pursuant to Crown leases and the excess quantities of residue gas are
deemed to be obtained from natural gas recovered pursuant to Crown leases,

     (b)  the excess quantities are deemed to be quantities available for
sale allocated to the common stream operator,

     (c)  the common stream operator is deemed to be the royalty client
with respect to the Crown's royalty share of the excess quantities,

     (d)  the common stream operator, in the capacity of a royalty
client, is liable to the Crown for the payment of royalty compensation in
respect of the Crown's royalty share of those excess quantities, calculated
in accordance with subsection (3), and

     (e)  subsection (6) applies, as far as practicable, to the common
stream operator and any royalty compensation owing by the common stream
operator under clause (d).

(3)  Royalty compensation payable under subsection (1) or (2) shall be
called "provisional royalty compensation" and shall be calculated in
accordance with the following:

     (a)  the Crown's royalty share of the unallocated or excess
quantities, as the case may be, shall be deemed to be 35% of those
quantities;

     (b)  the provisional royalty compensation payable in respect of the
Crown's royalty share of those quantities shall be calculated by
multiplying the Crown's royalty share of those quantities by

               (i)  the Gas Reference Price for the production month,
where the quantities consist of natural gas or residue gas,

               (ii) the Ethane Reference Price for the production
month, where the quantities consist of ethane,

               (iii)     95% of the Propane Reference Price for the
production month, where the quantities consist of propane,

               (iv) 95% of the Butanes Reference Price for the
production month, where the quantities consist of butanes,

               (v)  95% of the Pentanes Plus Reference Price for the
production month, where the quantities consist of

                         (A)  pentanes plus, or

                         (B)  a mixture comprising any two or more of
pentanes plus, propane or butanes, where the relative proportions of each
such gas product in the mixture has not been reported to the Minister for
the purposes of this Regulation in accordance with the Minister's
directions,

               or

               (vi) the price determined by the Minister for the
production month in accordance with subsections (4) and (5), where the
quantities consist of sulphur;     

     (c)  provisional royalty compensation computed under clause (b)
shall not be reduced by an amount for allowable costs.

(4)  The price referred to in subsection (3)(b)(vi) shall be determined for
each production month by dividing

     (a)  the total net revenue for sales of sulphur by all royalty
clients in the month to persons at arm's length with the royalty clients
and reported to the Minister for the production month pursuant to section
4(1) or (2) of Schedule 6,

by

     (b)  the total number of tonnes of sulphur sold in the month under
the sales referred to in clause (a).

(5)  In determining the total net revenue referred to in subsection (4)(a),
the net revenue from any sale included in the determination shall not be
less than zero.

(6)  Where provisional royalty compensation is owing in respect of
unallocated or excess quantities available for sale and the facility
operator concerned allocates all or any of those quantities in accordance
with section 25 by way of initial or amended allocation data furnished to
the Minister or reports filed with the Board, the Minister shall
recalculate the royalty compensation in respect of those allocated
quantities without reference to subsection (3) and any difference shall be
reflected in the facility operator's royalty client account.

(7)  The Crown is not liable for interest on any amounts of provisional
royalty compensation that are reduced pursuant to subsection (6), but will
refund any interest received by it under section 31(2)(a) in respect of
those amounts to the extent those amounts are so reduced.

(8)  Despite section 31, where

     (a)  provisional royalty compensation owing by a facility operator
in respect of unallocated or excess quantities available for sale is
included in a royalty invoice, and

     (b)  the provisional royalty compensation is reduced as a result of
a recalculation under subsection (6) where the facility operator furnished
amended allocation data or filed reports with the Board by the 15th day of
the month following the month in which the invoice was issued,

no interest is payable by the facility operator under section 31(2)(b) in
respect of the provisional royalty compensation to the extent it is so
reduced.
 

Other reports
27(1)  The operator of a gas injection facility must furnish to the
Minister a report respecting

     (a)  the commencement of the operation of the gas injection
facility, if the operation commences after October 1, 2002, and

     (b)  any change in

               (i)  the persons having participating interests in a
well group that is subject to the gas injection scheme,

               (ii) the Crown percentage for a well group that is
subject to the gas injection scheme,

               (iii)     the percentage of new gas or new pentanes plus for
a well group that is subject to the gas injection scheme,

               (iv) the well events comprising a well group or the code
number assigned by the Minister to a well group, where natural gas or a gas
product recovered or obtained from the well group is injected into a pool
through the gas injection facility,

               (v)  the pool or pools into which natural gas or a gas
product is injected through that gas injection facility or the Board's code
number for any of those pools, or

               (vi) the field containing a pool referred to in
subclause (v) or the Board's code number for that field,

          on or before the last day of the month following the production
month in which the commencement date occurs or in which the effective date
of the change occurs, as the case may be.

(2)  A person designated by the Minister as a reporter for the purposes of
this section shall furnish to the Minister, on or before the 10th day of
the 2nd month following each production month, any one or more of the
following in accordance with the designation:

     (a)  a report respecting the volumes of propane, butanes and
pentanes plus purchased by the person in that production month at points in
Alberta specified by the Minister, and the purchase prices of the propane,
butanes and pentanes plus;

     (b)  a report respecting the volumes of propane, butanes and
pentanes plus sold by the person in that production month at points in
Alberta specified by the Minister, and the selling prices of the propane,
butanes and pentanes plus;

     (c)  a report respecting the volumes of ethane purchased by that
person in that production month at points in Alberta specified by the
Minister, and the purchase prices of the ethane;

     (d)  a report respecting the volumes of ethane sold by that person
in that production month at points in Alberta specified by the Minister,
and the selling prices of the ethane.

(3)  In subsection (2), "pentanes plus" includes field condensate.

(4)  The operator of a gas injection facility must furnish to the Minister
information indicating, for the purposes of section 19(4),

     (a)  the reproducing facility referred to in section 19 to which
natural gas, or gas products obtained from natural gas, that may be
recovered from the receiving pool of the gas injection facility can be
delivered, if there is only one such facility when the information is
required to be furnished, or indicating one of those facilities if there is
more than one, or

     (b)  indicating that there is no reproducing facility to which such
natural gas or gas products can be delivered at that time.

(5)  The operator of a facility shall furnish information to the Minister

     (a)  respecting the pipelines to which natural gas or gas products
can be delivered from the facility without first passing through an
intervening facility, and the receipt meter stations through which such
natural gas or gas products can be so delivered, or

     (b)  indicating that there is no pipeline to which the natural gas
or gas products can be delivered at that time.

(6)  Information referred to in subsection (4) or (5) shall be furnished to
the Minister on or before the last day of the month following the month in
which operation of the gas injection facility or facility commences, if
operation commences on or after October 1, 2002.

(7)  If any change occurs in respect of the information furnished to the
Minister under subsection (4) or (5), the operator of the gas injection
facility or facility in respect of which the information was furnished
shall furnish the Minister with further information respecting the change
on or before the last day of the month following the month in which the
change occurs.

(8)  If natural gas recovered in October, 2002 or any subsequent production
month is disposed of without having first been processed at a gas
processing plant or reprocessing plant, the person who disposed of the
natural gas must furnish to the Minister, on or before the 15th day of the
2nd month following the month in which the natural gas was recovered, a
report

     (a)  relating to each disposition of the natural gas and the person
to whom the disposition was made and containing any other related
information the Minister requires, and

     (b)  containing or accompanied by a component analysis of the
natural gas that is the subject of each disposition.

(9)  Where natural gas or residue gas is delivered in October, 2002 or any
subsequent production month to the first facility downstream from the
royalty calculation point for that natural gas or residue gas, the operator
of that facility must furnish to the Minister, on or before the 18th day of
the month following the production month, information respecting the
volumes and quantities of in-stream components of the natural gas or
residue gas.

(10)  Where

     (a)  according to a report filed with the Board, natural gas or
residue gas is received in October, 2002 or any subsequent production month
at a receipt meter station,

     (b)  the natural gas or residue gas is received from one or more
facilities at which the royalty calculation point for the natural gas or
residue gas is located, and

     (c)  the report identifies a person as the common stream operator,

the common stream operator must furnish to the Minister, on or before the
18th day of the following month, information respecting the volumes and
quantities of in-stream components of the natural gas or residue gas.
          

Keeping of records
28(1)  A person who is or was required or permitted by this Regulation or
the 1994 Regulation to submit or furnish to the Minister any report or
other document or information shall keep all records that come or came into
that person's possession or the possession of any of that person's agents
and that are, were or could be used for the purpose of preparing the
report, document or information.

(2)  If information furnished to the Minister by one or more persons for
the purposes of this Regulation is inconsistent with information furnished
to the Minister by any other person or persons for the purposes of this
Regulation, the Minister may disclose the information to any or all of
those persons to the extent the Minister considers necessary to resolve the
inconsistency.

(3)  A person required by subsection (1) to keep records must keep those
records in the form of paper documents or store them in an electronic
medium.


Penalties
29(1)  A person who is required to furnish a report to the Minister under
section 20(12)(a) or under section 4(1) or (2) of Schedule 6 and fails to
do so by the prescribed deadline applicable to the report is liable to pay
a penalty of $100 for each month or part of a month during which the
failure continues.

(2)  Despite subsection (1), where

     (a)  a person who is required to furnish a report to the Minister
under section 20(12)(a) in respect of a year fails to do so by the
prescribed deadline for the report by reason of the subsequent rejection of
the report by the Minister,

     (b)  the penalty under subsection (1) is included in the royalty
invoice issued following the prescribed deadline for the report, and

     (c)  the person furnishes the report by the 15th day of the month
following the month in which the invoice was issued,

the person is not liable for the penalty.

(3)  Despite subsection (1), if

     (a)  a person who is required to furnish a report to the Minister
under section 4(1) or (2) of Schedule 6 in respect of a month fails to do
so by the prescribed deadline for the report, and

     (b)  before furnishing the report or without having furnished the
report, furnishes a report to the Minister under section 4(4) of Schedule 6
in respect of the year containing that month,

the person is not liable for a penalty under subsection (1) in relation to
the report referred to in clause (a) in respect of any month occurring
after the month following the month in which the report referred to in
clause (b) is furnished to the Minister.

(4)  A person who is required to furnish a report to the Minister under
section 20(12)(b) and fails to do so by the prescribed deadline for the
report is liable to pay a penalty of $200, and an additional penalty of
$200 upon the passing of each subsequent anniversary of the prescribed
deadline without the report being furnished.

(5)  A person who furnishes a report to the Minister under section 20(14)
after the prescribed deadline for the report is liable to pay a penalty of
$100 for each month following the deadline, ending with the month in which
the report is furnished.

(6)  Despite subsection (5), where

     (a)  a person who is required to furnish a report to the Minister
under section 20(14) in respect of a year fails to do so by the prescribed
deadline for the report by reason of the subsequent rejection of the report
by the Minister, and

     (b)  the penalty under subsection (5) is included in the first
royalty invoice issued following the prescribed deadline for the report,
and

     (c)  the person furnishes the report by the 15th day of the month
following the month in which the invoice was issued,

the person is not liable for the penalty.

(7)  A person who is required to furnish a report to the Minister under
section 27(2) or under section 10(4) of Schedule 1 and fails to do so by
the prescribed deadline applicable to the report is liable to pay a penalty
of $1000 for each month or part of a month during which the failure
continues.

(8)  A person who is required to furnish a report to the Minister under
section 9(7) of Schedule 1 or under section 4(4) of Schedule 6 and fails to
do so by the prescribed deadline applicable to the report is liable to pay
a penalty of $1000.

(9)  The Minister may waive, in whole or part, a penalty imposed under this
section on being satisfied that it is appropriate to do so in the
circumstances.


Penalty following audit
30(1)  Where, as a result of an audit or examination conducted by or on
behalf of the Minister under the Act, the Minister determines that the
royalty compensation actually payable by a royalty client in respect of all
production months in 2002 or any subsequent year is greater than the
aggregate royalty compensation paid in respect of that year, the Minister

     (a)  subject to subsection (2), may impose on the royalty client a
penalty in an amount equal to 10% of the deficiency, and

     (b)  shall, whether a penalty is imposed under clause (a) or not,
give a notice to the royalty client describing what in the Minister's
opinion was the cause giving rise to the deficiency.

(2)  Where the Minister has given a notice to a royalty client under
subsection (1)(b) relating to an audit or examination in respect of a year
and, as a result of an audit or examination conducted by or on behalf of
the Minister under the Act in respect of a subsequent year, the Minister
determines that

     (a)  the royalty compensation actually payable by the royalty client
in respect of all production months in that subsequent year is greater than
the aggregate royalty compensation paid in respect of that subsequent year,
and

     (b)  the cause giving rise to the deficiency was the same as or
similar to the cause described in the notice,

the Minister may, subject to subsection (3), impose on the royalty client a
penalty in an amount not exceeding 50% of that part of the deficiency in
respect of that subsequent year that the Minister considers to be
attributable to that cause.

(3)  No penalty may be imposed under this section if the amount of the
penalty otherwise payable in the absence of this subsection would be less
than $1000.
 

Interest
31(1)  In this section, "overpayment of royalty compensation" and
"underpayment of royalty compensation" means an overpayment or
underpayment, respectively, of royalty compensation payable by a royalty
client, as determined by the Minister in a recalculation of the amount of
royalty compensation.

(2)  Interest is payable by a royalty client to the Crown in accordance
with this section

     (a)  on an underpayment of royalty compensation, computed

               (i)  from the first day of the 3rd month following the
production month in respect of which the royalty compensation is payable,
and

               (ii) to the last day of the month in which the first
royalty invoice is issued in which the underpayment of royalty compensation
initially appears,

     and

     (b)  on any amount that appears as payable to the Crown in a royalty
invoice issued to the royalty client in respect of a production month,
including an underpayment of royalty compensation, computed

               (i)  from the first day of the 4th month following the
production month, and

               (ii) to the date on which the entire unpaid balance,
together with accrued interest, is received by the Minister.

(3)  Interest is payable by the Crown to a royalty client in accordance
with this section on an overpayment of royalty compensation payable by the
royalty client in respect of a production month, computed

     (a)  from the first day of the 3rd month following the end of the
production month, and

     (b)  to the last day of the month in which the first royalty invoice
is issued in which the overpayment and interest are credited.

(4)  For the purposes of this section,

     (a)  interest payable by or to the Crown on any amount referred to
in subsection (2) or (3) is payable on the balance of that amount remaining
unpaid from time to time,

     (b)  if interest is payable under this section by or to the Crown in
respect of any day, the rate of interest in respect of that day is the
yearly rate that is 1% greater than the rate of interest established by
Alberta Treasury Branches as its prime lending rate on loans payable in
Canadian dollars and in effect on the first day of the month in which that
day occurs, and

     (c)  interest computed under subsection (2) or (3) shall, unless the
Minister directs otherwise, be compounded monthly in respect of the period
for which it is computed.


Application of payments
32   Unless the Minister directs otherwise, if money is paid to the credit
of a royalty client's royalty client account, the money shall be applied in
the following order:

     (a)  first, on arrears of fees owing by the royalty client under
this Regulation;

     (b)  2nd, on penalties owing by the royalty client under this
Regulation;

     (c)  3rd, on interest owing by the royalty client under this
Regulation;

     (d)  4th, on an amount owing by the royalty client under section
21(6)(b) to increase a deposit maintained by the royalty client;

     (e)  5th, on royalty compensation owing by the royalty client.


Audit of Department records
33(1)  The Minister may enter into a contract or arrangement with one or
more organizations representative of the oil and gas industry in Alberta
providing for the following:

     (a)  the appointment by those organizations of an independent
auditor to conduct an audit or examination under this section;

     (b)  the conducting by the independent auditor from time to time of
audits or examinations of records of the Department and the Alberta
Petroleum Marketing Commission to the extent that they relate to the method
and calculations by which the Minister determines any amount prescribed
under section 6(1) to (6), (9) or (11), the method and calculations by
which allowable costs are determined by the Minister or the method and
calculations by which any other amounts are determined by the Minister
under this Regulation;

     (c)  the matters arising out of an audit or examination on which the
auditor may report to the organization or organizations and the Minister;

     (d)  the disclosure by the Minister of matters reported to the
Minister under clause (c) to any other organization that

               (i)  is determined by the Minister to have a legitimate
interest in those matters, and

               (ii) has paid or agrees to pay to the organization or
organizations appointing the auditor, the amount specified by the Minister.

(2)  The costs of an audit or examination referred to in subsection (1)
shall be paid by the organization or organizations that appointed the
auditor.

(3)  Information obtained by the Minister under this Regulation may be
communicated, disclosed or otherwise made available to the auditor if the
information

     (a)  relates to the manner in which amounts referred to in
subsection (1)(b) were determined before being prescribed, and

     (b)  is communicated, disclosed or made available in accordance with
the contract or arrangement.

(4)  Information obtained from the Minister by an auditor pursuant to
subsection (3)

     (a)  is to be held by the auditor in confidence and is not to be
further communicated, disclosed or made available by the auditor in any
circumstances where it is possible to relate that information to any
particular identifiable person, gas contract, well, pipeline or facility at
which natural gas or gas products are used or stored inside or outside
Alberta, and

     (b)  subject to clause (a), may be used by the auditor for the
purpose of preparing a report to the organization or organizations that
appointed the auditor if the information is used in accordance with that
contract or arrangement. 


     Part 4
     Consequential Amendments and Repeal

Amends AR 351/93
34 (1)  The Natural Gas Royalty Regulation, 1994 (AR 351/93) is amended by
this section.

(2)  Section 1 is amended

     (a)  by repealing clauses (a.1), (e.1), (e.2), (r.01), (x.1), (x.2),
(y.1) and (gg.1);

     (b)  in clause (ii) by adding "or" at the end of subclause (i), by
striking out "or" at the end of subclause (ii) and by repealing subclause
(iii);

     (c)  by repealing clauses (ll.2) and (ll.3).

(3)  Section 1.1 is repealed.

(4)  Section 2.1 is repealed.

(5)  Section 4(2) is amended by repealing clauses (d.1) and (d.2).

(6)  Section 7 is amended by renumbering the section as subsection (1) and
by adding the following after renumbered subsection (1):

     (2)  Except as otherwise provided, this Regulation does not apply to
royalty payable to the Crown in respect of natural gas recovered, or gas
products or field condensate obtained, in October, 2002 or any subsequent
production month.

(7)  Section 12.1(6)(a) is amended by striking out "after December 31, 1998
and before January 1, 2009" and substituting "in production months
commencing with January, 1999 and ending with September, 2002".


(8)  Section 17 is amended

     (a)  by adding the following after subsection (3):

     (3.1)  Subsections (4) to (11) do not apply to 2003 or any subsequent
year.

     (b)  in subsection (8)(a) by striking out "April 15" and
substituting "April 30".

(9)  Section 19 is amended by repealing subsections (1.1) and (1.2).

(10)  Section 20 is amended

     (a)  in subsection (1)(a) by striking out "or 21.1";

     (b)  in subsection (2) by striking out "or 21.1";

     (c)  in subsection (3) by striking out "or 21.1".

(11)  Section 21 is amended by repealing subsection (0.1).

(12)  Section 21.1 is repealed.

(13)  Section 22 is amended by repealing subsection(0.1).

(14)  Section 22.1 is repealed.

(15)  Section 23 is amended

     (a)  in subsection (1)(a) by adding "and before October 1, 2002"
after "January 1, 1994";

     (b)  in subsection (2) by adding "ending with September, 2002" after
"following each production month";

     (c)  in subsection (6)(b) by adding "and before October 1, 2002"
after "September 1, 2001";

     (d)  by repealing subsections (8), (9) and (10).

(16)  Section 24 is amended by adding the following after subsection (4):

     (4.1)  No penalty is payable under subsection (2), (3) or (3.1) by
reason of the failure to furnish a report for 2002 under section 17(8) or
(10), section 6(7) or 7(5) of Schedule 1 or section 4(4) of Schedule 3 by
the respective deadlines prescribed by this Regulation.

(17)  Section 28 is amended

     (a)  in subsection (3) by striking out "over a 72-month period
commencing with January, 1994 or over such longer period" and substituting
"over a period";

     (b)  in subsection (4) by repealing clause (a) and substituting the
following:

               (a)  shall determine for each royalty client for each
production month an amount as the royalty bank credit for that month by
calculating the royalty compensation that would be payable under

                         (i)  this Regulation, in the case of
production months prior to October, 2002, or

                         (ii) the Natural Gas Royalty Regulation,
2002 in the case of October, 2002 and subsequent production months,

                    if natural gas or a gas product, as the case may
be, was recovered or obtained in that production month from the underground
formation or subsurface cavern in quantities equal to the royalty client's
respective monthly amortized quantities for the month, and

     (c)  by adding the following after subsection (4):

     (4.1)  Despite subsection (4), the Minister may direct that the
calculation of royalty bank credits for all or any of the production months
commencing with October, 2002 shall be determined on a basis different from
the method of calculation provided for in subsection (4)(a)(ii).

     (d)  in subsection (6)(b) by adding "of this Regulation or section
7(2) of Schedule 1 of the Natural Gas Royalty Regulation, 2002, as the case
may be," after "Schedule 1";

     (e)  in subsection (8) by adding "or the Natural Gas Royalty
Regulation, 2002" after "this Regulation".

(18)  Section 29 is repealed.

(19)  Schedule 1 is amended

     (a)  in section 6(7) by adding "ending with 2002" after "part of a
year";

     (b)  in section 7(5) by adding "ending with 2002" after "each year".

(20)  Schedule 3 is amended in section 4(4)(b) by striking out "after
December 31, 1996" and substituting "beginning with 1997 and ending with
2002".


Amends AR 263/97
35   The Petroleum and Natural Gas Tenure Regulation (AR 263/97) is amended
in section 23(2)(b) by striking out "pursuant to the Natural Gas Royalty
Regulation, 1994 (AR 351/93) for that month" and substituting "for that
month pursuant to the Natural Gas Royalty Regulation, 1994 (AR 351/93) or
the Natural Gas Royalty Regulation, 2002".


Repeal
36   The Natural Gas Royalty (Pre-1994) Regulation (AR 246/90) is repealed.


     Schedule 1

     Natural Gas and Residue Gas


Definitions
1   In this Schedule,

     (a)  "corporate average price" or "CAP", in relation to a royalty
client and a year, means the corporate average price for gas and ethane
established for that royalty client for that year pursuant to section 9 of
this Schedule;

     (b)  "gas" means natural gas or residue gas;

     (c)  "receipt meter station factor" means, in respect of a receipt
meter station for a production month, the meter station factor prescribed
for the receipt meter station under section 6(11) of this Regulation for
the month or, if no meter station factor has been so prescribed for the
receipt meter station for the month, 1.0;

     (d)  references to methane ISC, ethane ISC, propane ISC, butanes ISC
and pentanes plus ISC in relation to any gas shall be read as the methane,
ethane, propane, butanes and pentanes plus components respectively of that
gas.


     Royalty Share of Gas

Calculation of royalty quantity for gas
2(1)  Subject to section 3 of this Schedule, the royalty reserved to the
Crown on gas in respect of a production month is the percentage of the gas
recovered or obtained in that production month calculated in accordance
with the following formula:

     GR% = MiR%(MiQ)+ER%(EiQ)+PR%(PiQ)+BR%(BiQ)+PPR%(PPiQ)
                                        MiQ + EiQ + PiQ + BiQ +
PPiQ

     where

     GR%       is the Crown's royalty share of the gas expressed as a
percentage of the gas on which the royalty is payable;

     MiR% is the percentage calculated pursuant to subsection (2) as MiR%
in relation to the gas;

     ER%       is the percentage calculated under section 2 of Schedule
2 as ER% for the production month for new ethane or old ethane, according
to whether the gas is new gas or old gas, respectively;

     PR%       is the percentage calculated under section 1 of Schedule
3 as PR% for the production month;

     BR%  is the percentage calculated under section 1 of Schedule 4 as
BR% for the production month;

     PPR% is the percentage calculated under section 1 of Schedule 5 as
PPR% for the production month for new pentanes plus or old pentanes plus,
according to whether the gas is new gas or old gas, respectively;

     MiQ, EiQ, PiQ, BiQ and PPiQ are the quantities of methane ISC, ethane
ISC, propane ISC, butanes ISC and pentanes plus ISC, respectively,
contained in the gas.

(2)  For the purposes of subsection (1), MiR% is the percentage calculated
in accordance with the following formula, which shall not be less than 15%,
nor more than 30% or 35%, according to whether the gas is new gas or old
gas, respectively:

     MiR% = 15 SP + 40 (PP - SP)
                                      PP

     where


     SP        means the New Methane ISC Select Price or Old Methane ISC
Select Price for the year containing the production month, according to
whether the gas is new gas or old gas, respectively;

     PP        means the Methane ISC Par Price for the production month.


Gas royalty for low productivity wells
3(1)  In this section,

     (a)  "average daily production" with respect to any production month
means,

               (i)  in respect of natural gas recovered from a well
event, the volume of natural gas recovered in a month from the well event
in m3, or

               (ii) in respect of oil recovered from an oil well event,
the volume of oil recovered in a month from the well event in m3,

          divided by the number of hours of operation of the well event
in the production month and multiplied by 24;

     (b)  "oil well event" means a well event that is classified as an
oil well event by the Board.

(2)  Subject to subsection (3), where in a production month the average
daily production of natural gas from a well event is less than 16 900 m3,
the royalty reserved to the Crown on the natural gas recovered from that
well event or on the residue gas obtained from that natural gas, as the
case may be, in that production month is the percentage of the natural gas
or residue gas calculated in accordance with the following formula:

     GR% = RC - [ (RM - .05) x (16.9 - ADP)2 ]
                                                                
16.92

     where

     GR%  is the Crown's royalty share of the natural gas and residue gas
expressed as a percentage of the gas on which the royalty is payable;

     RC   is the royalty rate, expressed as a decimal fraction, that
would apply for the production month if the royalty were calculated under
section 2 of this Schedule;

     RM   is the amount calculated as MiR% for the production month for
the gas pursuant to section 2(2) of this Schedule, expressed as a decimal
fraction;

     ADP  is the average daily production of natural gas from the well
event for the production month divided by 1000 m3.

(3)  Subsection (2) does not apply where the well event is an oil well
event with an average daily production of oil of .15 m3 or greater in the
production month.


     Royalty Compensation for Gas


Aggregate Gas Reference Price
4   For the purposes of this Regulation, the Aggregate Gas Reference Price
for any gas for a production month is the amount determined in accordance
with the following formula:

     AGRP= MiRP(MiQ)+EiRP(EiQ)+PiRP(PiQ)+BiRP(BiQ)+PPiRP(PPiQ)
                                        MiQ + EiQ + PiQ + BiQ+ PPiQ

     where

     AGRP is the Aggregate Gas Reference Price for the gas for the month;

     MiRP, EiRP, PiRP, BiRP and PPiRP are the respective ISC reference
prices prescribed for the production month;

     MiQ, EiQ, PiQ, BiQ and PPiQ are the quantities of methane ISC, ethane
ISC, propane ISC, butanes ISC and pentanes plus ISC, respectively,
contained in the gas.
 


Transportation Allowance
5(1)  For the purposes of this Regulation, the Transportation Allowance for
any gas for a production month is the amount determined in accordance with
the following formula:

     TA = (RTF - 1) D

     where

     TA   is the Transportation Allowance for the gas for the production
month, which may be a positive or negative amount or zero;

     RTF  is the royalty trigger factor determined in accordance with
subsection (2) for the production month for the royalty calculation point
for the gas;

     D    is the adjusted intra-Alberta transportation deduction
determined in accordance with subsection (3) for the production month.

(2)  For the purposes of subsection (1), the royalty trigger factor for a
production month for the royalty calculation point for any gas is

     (a)  the receipt meter station factor for the receipt meter station
for the month if the gas can only be delivered into a single pipeline
through a single receipt meter station, or

     (b)  if the gas can be delivered into one or more pipelines through
more than one receipt meter station, the amount determined by rounding to
the nearest hundredth the amount determined by

               (i)  multiplying the quantity of gas delivered to each
receipt meter station from that royalty calculation point during the month
by its receipt meter station factor,

               (ii) determining the aggregate of the amounts calculated
under subclause (i), and

               (iii)     dividing the aggregate amount determined under
subclause (ii) by the total quantity of gas delivered to all those receipt
meter stations from that royalty calculation point in that production
month.

(3)  For the purposes of subsection (1), the adjusted intra-Alberta
transportation deduction for a production month for the royalty calculation
point for any gas is the amount determined in accordance with the following
formula:

     D = MiD(MiQ) + EiD(EiQ) + PiD(PiQ) +  BiD(BiQ) + PPiD(PPiQ)      
                                   MiQ + EiQ + PiQ + BiQ + PPiQ

     where

     D    is the adjusted intra-Alberta transportation deduction for the
production month for the royalty calculation point for that gas;

     MiD, EiD, PiD, BiD and PPiD are the Methane ISC Adjusted
Intra-Alberta Transportation Deduction, Ethane ISC Adjusted Intra-Alberta
Transportation Deduction, Propane ISC Adjusted Intra-Alberta Transportation
Deduction, Butanes ISC Adjusted Intra-Alberta Transportation Deduction and
Pentanes Plus ISC Adjusted Intra-Alberta Transportation Deduction,
respectively, for the production month;

     MiQ, EiQ, PiQ, BiQ and PPiQ are the quantities of methane ISC, ethane
ISC, propane ISC, butanes ISC and pentanes plus ISC, respectively,
contained in the gas.


Net Gas Reference Price
6   For the purposes of this Regulation, the Net Gas Reference Price in
respect of the Crown's royalty share of any gas for a production month is

     (a)  the Aggregate Gas Reference Price for the gas for the
production month

minus

     (b)  the Transportation Allowance for the gas for the production
month.


Calculation of royalty compensation for gas
7(1)  Subject to subsections (2), (3) and (4), the royalty compensation
payable to the Crown in respect of the Crown's royalty share of gas for a
production month is

     (a)  an amount calculated by multiplying the quantity of the royalty
share by the Net Gas Reference Price for the gas for that production month,
or

     (b)  if the royalty client in relation to the gas is eligible under
section 8 of this Schedule to calculate royalty compensation for the
production month on the basis of the client's corporate average price, an
amount calculated by multiplying the quantity of the royalty share by the
royalty client's corporate average price for gas and ethane for the year in
which the production month occurs.

(2)  If natural gas is

     (a)  consumed as a fuel, or delivered from a gathering system to a
mainline straddle plant, in a production month without having first been
processed at a gas processing plant or reprocessing plant, or

     (b)  disposed of in a production month without having first been
processed at a gas processing plant or reprocessing plant and subsequently
processed,

and royalty compensation in respect of the Crown's royalty share of that
natural gas would in the absence of this subsection be calculated in
accordance with subsection (1)(a), then, unless the Minister otherwise
determines in a particular case, the royalty compensation payable to the
Crown in respect of the Crown's royalty share of the natural gas is an
amount calculated by multiplying the quantity of the royalty share by 80%
of the Gas Reference Price for that production month.

(3)  Subject to subsection (2), if natural gas

     (a)  is removed from Alberta in a production month without having
first been processed at a gas processing plant or reprocessing plant,

     (b)  is subsequently processed, and

     (c)  royalty compensation in respect of the Crown's royalty share of
that natural gas would in the absence of this subsection be calculated in
accordance with subsection (1)(a),

then, unless the Minister otherwise determines in a particular case, the
royalty compensation payable to the Crown in respect of the Crown's royalty
share of the natural gas is 80% of the amount that would, in the absence of
this subsection, be calculated as the royalty compensation in respect of
that royalty share under subsection (1)(a).

(4)  Where

     (a)  gas is delivered pursuant to a contract under which the total
consideration for sale of the gas is paid on or before the date of
commencement of deliveries of gas under the contract, and

     (b)  the Minister determines that the contract is a prepayment
contract for the purposes of this section and that subsection (2) does not
apply to the gas,

the royalty compensation payable in respect of the Crown's royalty share of
the gas delivered under the prepayment contract shall be calculated in
accordance with subsection (1)(a).


CAP election
8(1)  Royalty compensation may be calculated for a production month
pursuant to section 7(1)(b) of this Schedule on the basis of the royalty
client's corporate average price for gas and ethane if

     (a)  the royalty client submits to the Minister in accordance with
this section an election to have the calculation of the royalty
compensation for which the royalty client is liable based on the royalty
client's corporate average price for gas and ethane, and

     (b)  the election is in effect in relation to that production month.

(2)  A CAP election submitted to the Minister under the 1994 Regulation is,
if otherwise valid, deemed for the purposes of this Schedule to be a CAP
election submitted under subsection (3) in October, 2002.

(3)  An application for a CAP election may be submitted only by

     (a)  a person who becomes a royalty client after September, 2002 and
who at the time of becoming a royalty client is not associated with any
person who is also a royalty client having no valid CAP election in effect,
or

     (b)  unless the Minister otherwise directs in a particular case, a
person who becomes a royalty client after September, 2002 and who at the
time of becoming a royalty client is associated with one or more other
royalty clients, each of whom either

               (i)  has a valid CAP election in effect, or

               (ii) submits a CAP election during the same month.

(4)  A CAP election must be submitted to the Minister not later than the
15th day of the 2nd month after the production month in respect of which
the person became a royalty client.

(5)  Subject to this section, a CAP election submitted in accordance with
subsections (3) and (4), if otherwise valid, is applicable to  the
production month in which it is submitted and succeeding months in the year
in which it is submitted and to succeeding years.

(6)  Where 2 or more royalty clients are associated persons then, unless
the Minister otherwise directs in a particular case, if the CAP election of
any one of those royalty clients is or becomes invalid, the CAP elections
of all of the other royalty clients also are invalid or become invalid, as
the case may be.

(7)  Unless the Minister otherwise directs in a particular case, a royalty
client's CAP election ceases to be valid for a year if

     (a)  the royalty client fails to comply with the requirements of
section 9 of this Schedule for the determination of the client's corporate
average price for gas and ethane for that year, or

     (b)  the royalty client or a person associated with the royalty
client refuses to give consent pursuant to section 9(5)(a) of this Schedule
to an audit or examination under that section relating to the determination
of the royalty client's CAP for that year or fails to comply with section
9(5)(b) of this Schedule with respect to that audit or examination.

(8)  Subject to subsection (12), if a royalty client has a CAP election in
effect in a year and during that year

     (a)  the royalty client becomes associated with a royalty client
then having no valid CAP election in effect,

     (b)  the royalty client amalgamates with a royalty client then
having no valid CAP election in effect, or

     (c)  the royalty client's business is in the Minister's opinion
effectively merged, otherwise than by amalgamation, with that of a royalty
client then having no valid CAP election in effect,

the royalty client's CAP election is not valid in respect of any subsequent
year.

(9)  If a CAP election ceases to be valid during a year because of the
operation of subsection (7),

     (a)  the CAP election does not apply to that year,

     (b)  the Minister shall, with respect to the production months in
that year for which the royalty compensation was calculated under section
7(1)(b) and (4) of this Schedule, instead recalculate the royalty
compensation in accordance with section 7(1)(a), (2) and (4) of this
Schedule, and

     (c)  any difference in royalty compensation calculated under clause
(b) shall be reflected as an adjustment in the royalty client account of
the royalty client.

(10)  A royalty client may, on or before March 1 of a year, notify the
Minister in writing that the royalty client's CAP election, if any, for the
preceding year will not apply to that preceding year and in that event the
CAP elections of the royalty client and all other royalty clients
associated with the royalty client are inapplicable to that preceding year
and all subsequent years.

(11)  If a royalty client does not have or ceases to have a valid CAP
election in effect for a year, neither the royalty client nor any other
person with which the royalty client is associated is eligible to submit a
CAP election for that year or any subsequent year.

(12)  If a royalty client applies to the Minister for a ruling as to
whether any existing or contemplated transaction or arrangement has
resulted or will result in the CAP election ceasing to be in effect by
reason of the operation of subsection (8), the Minister must make the
ruling and the ruling so made is binding on the Crown.


Determining a royalty client's annual CAP
9(1)  The corporate average price for a year for a royalty client having a
valid CAP election in effect for that year shall be determined in
accordance with this section.

(2)   A royalty client shall determine the client's CAP for 2002 and for
each subsequent year as the weighted average unit value of the royalty
client's sales of gas and ethane in that year, as determined by the
Minister, adjusted, in the case of each such price that is determined at a
place that is different from the place where the Crown's royalty share of
the gas and ethane that is sold is transferred pursuant to section 17(1) of
this Regulation, by increasing or decreasing the price to reflect the
reasonable costs, as approved by the Minister, of transportation.

(3)  A royalty client's CAP for a year may not be less than 90% of the
quantity-weighted average of the Gas Reference Prices for the production
months in the same year.

(4)  A royalty client's CAP for a year may be recalculated in accordance
with the Minister's directions.

(5)  A royalty client having a valid CAP election in effect for a year and
any person associated with that royalty client must

     (a)  whenever requested to do so by the Minister, consent to an
audit or examination of the records of the royalty client or associated
person that are or may be relevant to the determination of the royalty
client's CAP for that year, and

     (b)  cooperate with and give all reasonable assistance to the person
conducting the audit or examination requested under clause (a) for the
purpose of enabling that person to conduct the audit or examination
satisfactorily.

(6)  When an audit or examination is requested by the Minister under
subsection (5), the royalty client or the associated person has the choice
of having the audit or examination conducted

     (a)  by or on behalf of the Minister, at the Crown's expense, or

     (b)  by an independent auditor approved by the Minister, at the
expense of the royalty client and the persons associated with the royalty
client or any one or more of them.

(7)  A royalty client having a valid CAP election in effect with respect to
all or part of a year shall furnish to the Minister, on or before April 15
in the next year a report respecting the quantities of natural gas and gas
products disposed of by the royalty client in those production months in
that year and the consideration received for those quantities.


Recalculation of royalty compensation for gas sold under long-term
contracts
10(1)  Notwithstanding anything in this Schedule, the Minister may, in
accordance with this section, recalculate the royalty compensation payable
under this Regulation in respect of the Crown's royalty share of natural
gas and residue gas sold under a long-term contract during the whole of
2002 and each subsequent production year if

     (a)  an application was made under section 7 of Schedule 1 of the
1994 Regulation to have that section apply to the long-term contract, and

     (b)  the Minister approved the application.

(2)  This section applies to a contract referred to in subsection (1) in
respect of the remainder of the period of years specified by the Minister
pursuant to section 7(3) of Schedule 1 of the 1994 Regulation.

(3)  In respect of each year to which this section applies to a contract by
reason of subsection (2), the Minister shall, after the end of the year,

     (a)  recalculate the royalty compensation payable in respect of the
Crown's royalty share of natural gas and residue gas sold under the
contract in that year by multiplying the quantity of the gas royalty for
the year by the price payable to the seller for gas sold under the contract
in that year, and

     (b)  compute the amount by which the royalty compensation payable
under section 7(1)(a) and (2) of this Schedule exceeds or is exceeded by
the royalty compensation recalculated under clause (a) and have the
difference reflected in the royalty client account of the royalty client.

(4)  If this section applies to a contract in respect of a year, the
royalty client concerned shall furnish to the Minister a report respecting
the prices of natural gas and residue gas sold under the contract in the
preceding year on or before March 31 of the next year.

(5)  Notwithstanding subsection (2), this section does not apply to a
contract in respect of any year in which the royalty client has a CAP
election in effect or in respect of any subsequent year.


     Schedule 2

     Ethane

Definitions
1   In this Schedule,

     (a)  "corporate average price", in relation to a royalty client and
a year, has the same meaning as in Schedule 1;

     (b)  "gas" means natural gas or residue gas;

     (c)  "receipt meter station factor" has the same meaning as in
Schedule 1.

     Royalty Share of Ethane

Calculation of royalty quantity for ethane
2   Subject to section 3 of this Schedule, the royalty reserved to the
Crown on ethane obtained in a production month is the percentage of the
ethane calculated in accordance with the following equation:

          ER% = 15SP + 40(PP - SP)
                                             PP

          where

          ER%  is the Crown's royalty share of ethane expressed as a
percentage of the ethane on which the royalty is payable, which shall not
be less than 15%, nor more than 30% or 35%, according to whether the ethane
is new ethane or old ethane, respectively;

          SP   is the New Ethane Select Price or the Old Ethane Select
Price for the year containing the production month, according to whether
the ethane is new ethane or old ethane, respectively;

          PP   is the Ethane Par Price for the production month.


Ethane royalty for low productivity wells
3(1)  In this section,

     (a)  "average daily production" with respect to any production month
means,

               (i)  in respect of natural gas recovered from a well
event, the volume of natural gas recovered in a month from the well event
in m3, or

               (ii) in respect of oil recovered from an oil well event,
the volume of oil recovered in a month from the well event in m3,

          divided by the number of hours of operation of the well event
in the production month and multiplied by 24;

     (b)  "oil well event" means a well event that is classified as an
oil well event by the Board.

(2)  Subject to subsection (3), where in a production month the average
daily production of natural gas from a well event is less than 16 900 m3,
the royalty reserved to the Crown on the ethane obtained from natural gas
recovered from that well event is the percentage of the ethane calculated
in accordance with the following equation:

     ER%= RC - [ (RM - .05) x (16.9 - ADP)2 ]
                                                               
16.92

     where

     ER%  is the Crown's royalty share of the ethane expressed as a
percentage of the ethane on which the royalty is payable;

     RC   is the royalty rate, expressed as a decimal fraction, that
would apply for the production month if the royalty were calculated under
section 2 of this Schedule;

     RM   is the amount calculated as MiR% for the production month
pursuant to section 2(2) of Schedule 1 for the residue gas obtained from
the natural gas, expressed as a decimal fraction;

     ADP  is the average daily production of natural gas from the well
event for the production month divided by 1000 m3.

(3)  Subsection (2) does not apply where the well event is an oil well
event with an average daily production of oil of 0.15 m3 or greater in the
production month.


     Royalty Compensation for Ethane

Transportation Allowance
4(1)  For the purposes of this Regulation, the Transportation Allowance for
any ethane for a production month is the amount determined in accordance
with the following formula:

     TA = (RTF - 1) D

     where

     TA   is the Transportation Allowance for the ethane for the
production month, which may be a positive or negative amount or zero;

     RTF  is the royalty trigger factor determined in accordance with
subsection (2) for the production month for the royalty calculation point
for the ethane;

     D    is the Ethane ISC Adjusted Intra-Alberta Transportation
Deduction for ethane for the production month.

(2)  For the purposes of subsection (1), the royalty trigger factor for a
production month for the royalty calculation point for any ethane is

     (a)  if the gas obtained at the same gas processing plant or
reprocessing plant as the ethane can only be delivered into a single
pipeline through a single receipt meter station, the receipt meter station
factor for the receipt meter station for the month, or

     (b)  if the gas obtained at the same gas processing plant or
reprocessing plant as the ethane can be delivered into one or more
pipelines through more than one receipt meter station, the amount
determined by rounding to the nearest hundredth, the amount determined by

               (i)  multiplying the quantity of gas delivered to each
receipt meter station from that royalty calculation point in the production
month by its receipt meter station factor,

               (ii) determining the aggregate of the amounts calculated
under subclause (i), and

               (iii)     dividing the aggregate amount determined under
subclause (ii) by the total quantity of gas delivered to all those receipt
meter stations from that royalty calculation point in the production month.


Net Ethane Reference Price
5   For the purpose of this Regulation, the Net Ethane Reference Price in
respect of the Crown's royalty share of any ethane for a production month
is

     (a)  the Ethane Reference Price for the production month

minus

     (b)  the Transportation Allowance for the ethane for the production
month.


Calculation of royalty compensation for ethane
6(1)  Subject to subsection (2), the royalty compensation payable to the
Crown in respect of the Crown's royalty share of ethane for a production
month is

     (a)  an amount calculated by multiplying the quantity of the royalty
share by the Net Ethane Reference Price for that production month, or

     (b)  if the royalty client is, in relation to gas, eligible under
section 8 of Schedule 1 to calculate royalty compensation for the
production month on the basis of the client's corporate average price, an
amount calculated by multiplying the quantity of the royalty share of
ethane by the royalty client's corporate average price for gas and ethane
for the year in which the production month occurs.

(2)  Where

     (a)  ethane is delivered pursuant to a contract under which the
total consideration for sale of the ethane is paid on or before the date of
commencement of deliveries of ethane under the contract, and

     (b)  the Minister determines that the contract is a prepayment
contract for the purposes of this section,

the royalty compensation payable in respect of the Crown's royalty share of
the ethane delivered under the prepayment contract shall be calculated in
accordance with subsection (1)(a).


     Schedule 3

     Propane

Propane royalty quantity
1   The royalty reserved to the Crown on propane obtained in a production
month is the percentage of the propane calculated in accordance with the
following equation:

     PR% = 15SP + 40(PP - SP)
                                         PP

     where

     PR%  is the Crown's royalty share of propane for the production
month expressed as a percentage of the propane on which the royalty is
payable, which shall not be less than 15% nor more than 30%;

     SP   is the Propane Select Price for propane for the year in which
the production month occurs;

     PP   is the Propane Par Price for the production month.


Propane royalty compensation
2(1)  The amount of royalty compensation payable to the Crown in respect of
the Crown's royalty share of propane for a production month is an amount
calculated by multiplying the quantity of the royalty share in cubic metres
by the Net Propane Reference Price applicable to the propane for the
production month.

(2)  For the purposes of this section, the Net Propane Reference Price
applicable to propane for a production month is the Propane Reference Price
for the production month minus the aggregate of the following:

     (a)  the Transportation Allowance applicable to the propane,
prescribed for the production month pursuant to section 6(9)(a) of this
Regulation for the region in which is located the gas processing plant or
reprocessing plant at which the propane is obtained;

     (b)  the Fractionation Allowance for the production month, if
applicable.


     Schedule 4

     Butanes

Butanes royalty quantity
1   The royalty reserved to the Crown on butanes obtained in a production
month is the percentage of the butanes calculated in accordance with the
following equation:

     BR% = 15SP + 40(PP - SP)
                                         PP

     where

     BR%  is the Crown's royalty share of butanes for the production
month, expressed as a percentage of the butanes on which the royalty is
payable, which shall not be less than 15% nor more than 30%;

     SP   is the Butanes Select Price for butanes for the year in which
the production month occurs;

     PP   is the Butanes Par Price for the production month.


Butanes royalty compensation
2(1)  The amount of royalty compensation payable to the Crown in respect of
the Crown's royalty share of butanes for a production month is an amount
calculated by multiplying the quantity of the royalty share in cubic metres
by the Net Butanes Reference Price applicable to the butanes for the
production month.

(2)  For the purposes of this section, the Net Butanes Reference Price
applicable to butanes for a production month is the Butanes Reference Price
for the production month minus the aggregate of the following:

     (a)  the Transportation Allowance applicable to the butanes,
prescribed for the production month pursuant to section 6(9)(a) of this
Regulation for the region in which is located the gas processing plant or
reprocessing plant at which the butanes are obtained;

     (b)  the Fractionation Allowance for the production month, if
applicable.


     Schedule 5

     Pentanes Plus

Royalty quantity of pentanes plus
1   The royalty reserved to the Crown on pentanes plus obtained in a
production month is the percentage of the pentanes plus calculated in
accordance with the following equation:

     PPR% = 22SP + RF (PP - SP)
                                              PP

     where

     PPR% is the Crown's royalty share of pentanes plus for the
production month, expressed as a percentage of the pentanes plus on which
the royalty is payable, which shall be not less than 22%, nor more than 35%
or 50%, according to whether the pentanes plus is new pentanes plus or old
pentanes plus, respectively;

     SP        is the Pentanes Plus Select Price for the year in which
the production month occurs;

     RF        is the royalty factor for new pentanes plus for the year
in which the production month occurs or the royalty factor for old pentanes
plus for the year in which the production month occurs, according to
whether the pentanes plus are new pentanes plus or old pentanes plus;

     PP        is the Pentanes Plus Par Price for the production month.


Royalty compensation for pentanes plus
2(1)  The amount of royalty compensation payable to the Crown in respect of
the Crown's royalty share of pentanes plus for a production month is an
amount calculated by multiplying the quantity of the royalty share by the
Net Pentanes Plus Reference Price applicable to the pentanes plus for the
production month.

(2)  For the purposes of this section, the Net Pentanes Plus Reference
Price for a production month and applicable to the pentanes plus for a
production month is the Pentanes Plus Reference Price for the production
month minus the aggregate of the following:

     (a)  the Transportation Allowance applicable to the pentanes plus,
prescribed for the production month pursuant to section 6(9)(a) of this
Regulation for the region in which is located the gas processing plant or
reprocessing plant at which the pentanes plus are obtained;

     (b)  the Fractionation Allowance for the production month, if
applicable;

     (c)  the Special Pentanes Plus Processing Allowance for the month,
if the pentanes plus is special pentanes plus.


     Schedule 6

     Sulphur

Definitions
1   In this Schedule,

     (a)  "corporate average price for sulphur" or "S-CAP", in relation
to a royalty client and a year, is the corporate average price for sulphur
established for that royalty client for that year pursuant to section 3 of
this Schedule;

     (b)  "Sulphur Default Price", in relation to a year, is the price
determined from time to time by the Minister for the year pursuant to
section 5 of this Schedule.


Royalty quantity of sulphur
2   The royalty reserved to the Crown on sulphur obtained by processing
natural gas is 16 2/3% of the sulphur obtained.


Determination of royalty client's annual S-CAP
3(1)  Subject to this section, a royalty client shall determine the
client's corporate average price for sulphur for 2002 and each subsequent
year if

     (a)  the royalty client is required to furnish a report under
section 4(4) of this Schedule, or elects to furnish a report under section
4(5) of this Schedule, in respect of the year, and

     (b)  the quantity of sulphur disposed of by the client in the year
to persons at arm's length from the client is not less than 10% of the
total quantity of sulphur allocated to the client in that year.

(2)  The corporate average price determined by a royalty client for a year
is the amount calculated by dividing

     (a)  the royalty client's total net revenue for sales of sulphur for
the year calculated in accordance with the Minister's directions

 by

     (b)  the total number of tonnes of sulphur sold in the same year
under sales referred to in clause (a).

(3)  A royalty client's S-CAP for a year cannot be an amount per tonne less
than zero.

(4)  A royalty client's S-CAP for a year may be recalculated in accordance
with the Minister's directions.

(5)  A royalty client required under subsection (1) to determine the
client's S-CAP for a year, and any person associated with that royalty
client, must

     (a)  whenever requested to do so by the Minister, consent to an
audit or examination of the records of the royalty client or associated
person that are or may be relevant to the determination of the royalty
client's S-CAP for that year, and

     (b)  cooperate with and give all reasonable assistance to the person
conducting the audit or examination requested under clause (a) for the
purpose of enabling that person to conduct the audit or examination
satisfactorily.

(6)  When an audit or examination is requested by the Minister under
subsection (5), the royalty client or associated person has the choice of
having the audit or examination conducted

     (a)  by or on behalf of the Minister, at the Crown's expense, or

     (b)  by an independent auditor approved by the Minister, at the
expense of the royalty client and the persons associated with the royalty
client or any one or more of them.


Report of sulphur disposition
4(1)  A royalty client shall furnish to the Minister for each production
month of 2002 and of each subsequent year a report respecting the
quantities of sulphur disposed of by the client in each month if the
Minister determines that the quantity of sulphur allocated to the client in
the preceding year was 30 000 tonnes or more.

(2)  A royalty client who is not required to furnish reports to the
Minister under subsection (1) in respect of the production months of 2002
or a subsequent year, shall nonetheless furnish those reports for the 2nd
and each subsequent production month of the year if the client elects to do
so by furnishing the report in respect of the first production month of the
year by the 15th day of the 2nd month following that first production
month.

(3)  A report furnished by a royalty client pursuant to subsection (1) or
(2) in respect of a production month may, to the extent consented to by the
Minister, include information regarding the quantities of sulphur disposed
of by the client in any preceding production month.

(4)  A royalty client shall furnish a report to the Minister for 2002 and
each subsequent year in respect of which the client is required to furnish
reports to the Minister under subsection (1) or (2) in relation to
production months of the year, respecting the total quantity of sulphur
disposed of by the royalty client in the year.

(5)  A royalty client who is not required to furnish a report under
subsection (4) in respect of a year may nonetheless elect to furnish a
report under subsection (4) by furnishing the report to the Minister by the
15th day of April of the following year.

(6)  A report required to be furnished

     (a)  under subsection (1) or (2) in respect of a production month
shall be furnished to the Minister by the 15th day of the 2nd month
following the production month, and

     (b)  under subsection (4) in respect of a year, shall be furnished
to the Minister by the 15th day of April of the following year.


Sulphur royalty compensation
5(1)  The amount of royalty compensation payable to the Crown by a royalty
client in respect of the Crown's royalty share of sulphur allocated to the
client in a production month is an amount calculated by multiplying the
quantity of the royalty share

     (a)  by the royalty client's S-CAP for the year containing the
month, in any case where clause (b) does not apply, or

     (b)  by the Sulphur Default Price for the year containing the month
if

               (i)  the quantity of sulphur disposed of by the royalty
client in the year containing the month to persons at arm's length from the
client is less than 10% of the total quantity of sulphur allocated to the
client in that year,

               (ii) the Minister determines that less than 30 000
tonnes of sulphur were allocated to the royalty client in the year
preceding the year containing the month, and the client is not required to
furnish a report under section 4(4) of this Schedule, and does not elect to
furnish a report under section 4(5) of this Schedule, in respect of the
year  containing the month, or

               (iii)     the royalty client was given a direction under
subsection (5) and the direction applies to the month.

(2)  Subject to subsections (3) and (4), the Sulphur Default Price for a
year is the price determined by dividing

     (a)  the total net revenue for sales of sulphur by all royalty
clients in the year to persons at arm's length with the clients, calculated
in accordance with the Minister's directions,

by

     (b)  the total number of tonnes of sulphur sold in the same year
under sales referred to in clause (a).

(3)  In determining the total net revenue referred to in subsection (2)(a),
the net revenue from any sale included in the determination shall not be
less than zero.

(4)  Subject to section 38 of the Act, the Minister may from time to time
recalculate the Sulphur Default Price for a year.

(5)  If a royalty client or a person associated with the royalty client
refuses to give consent to an audit or examination pursuant to section
3(5)(a) of this Schedule or fails to comply with section 3(5)(b) of this
Schedule with respect to an audit or examination conducted under that
section, the Minister may direct that the royalty compensation payable in
respect of the Crown's royalty share of sulphur allocated to the royalty
client in that year be calculated in accordance with subsection (1)(b).

(6)  Subject to subsection (7), if a royalty client who is required to
furnish a report under section 4(4) of this Schedule in respect of a year
fails to furnish the report by the 15th day of April of the following year,
the Minister may direct that the royalty compensation payable in respect of
the Crown's royalty share of sulphur allocated to the royalty client in
that year be calculated in accordance with subsection (1)(b).

(7)  Subject to section 38 of the Act, if a royalty client for whom the
calculation of royalty compensation is subject to a direction by the
Minister under subsection (6) subsequently furnishes the report required to
be filed by it under section 4(4) of this Schedule in respect of a year,
the Minister may recalculate in accordance with subsection (1)(a), the
royalty compensation payable in respect of the Crown's royalty share of
sulphur allocated to the royalty client in that year.


     Schedule 7

     New Gas, New Ethane and New Pentanes Plus

New gas categories
1(1)  For the purposes of this Regulation, natural gas qualifies as new gas
where the Minister determines that the natural gas falls within any of the
descriptions in the following clauses:

     (a)  natural gas recovered from a pool that was initially discovered
on or after January 1, 1974;

     (b)  natural gas that is recovered from a pool initially discovered
before January 1, 1974 but only if none of the natural gas recovered from
that pool before January 1, 1974 and none of the residue gas or other gas
products obtained therefrom were sold or consumed for some useful purpose
before that date;

     (c)  natural gas that is recovered from the gas cap of a pool
initially discovered before January 1, 1974 (excluding natural gas produced
unavoidably with crude oil), but only if none of the natural gas so
recovered and none of the residue gas or other gas products obtained
therefrom were sold or consumed for some useful purpose before January 1,
1974;

     (d)  natural gas recovered from a pool initially discovered before
January 1, 1974, but only if the natural gas is recovered from a drilling
spacing unit or unit area located wholly outside the area that has been or
is designated for the pool under the Oil and Gas Conservation Act on the
basis of a well or wells drilled into the pool before January 1, 1974;

     (e)  natural gas recovered as a result of the operation of a scheme
for the conservation of natural gas produced unavoidably with crude oil,
but only if none of the natural gas so recovered and none of the residue
gas or other gas products obtained therefrom were sold or consumed for some
useful purpose before January 1, 1974.

(2)  For the purposes of subsection (1),

     (a)  natural gas is sold when it is recovered from a well for the
purpose of being delivered to a purchaser,

     (b)  residue gas and other gas products are sold when they are
obtained from a gas processing plant for the purpose of being delivered to
a purchaser, and

     (c)  references to natural gas or residue gas or other gas products
obtained therefrom consumed for some useful purpose shall be construed as
excluding gas products that are consumed for some useful purpose but not
sold.

(3)  Notwithstanding subsection (1), the Minister may determine that
natural gas recovered from one or more wells does not qualify or ceases to
qualify as new gas for the purposes of this Regulation in the following
cases:

     (a)  where the Minister is satisfied that natural gas which
qualifies as new gas under subsection (1)(d) is being or has been recovered
at excessive rates from a well or wells located outside the designated pool
area referred to in subsection (1)(d) in relation to the rate at which
natural gas is being produced from a well or wells within that area and
that the primary purpose of recovering the natural gas at such excessive
rates is to increase the amount of natural gas that may qualify as new gas;

     (b)  where natural gas is recovered from 2 or more pools through a
well without segregation in the well bore and the natural gas in at least
one of the pools does not qualify in whole or in part as new gas under
subsection (1).

(4)  A determination made by the Minister under subsection (1) or (3) may
be made on the Minister's initiative except that the Minister may direct
that a determination under subsection (3) is to be made only on
application.

(5)  A determination by the Minister under subsection (1)

     (a)  may be made effective as of

               (i)  the first day of the month in which the recovery of
natural gas from the production entity commenced, where the determination
is made on the Minister's initiative, or

               (ii) where the determination is made on application, the
first day of the month in which the application for the determination is
actually received by the Department, unless the Minister specifies an
earlier effective date,

     and

     (b)  shall state the date on which the determination is effective.

(6)  A determination by the Minister under subsection (3)

     (a)  may be made effective as of

               (i)  the first day of the month in which the well
commenced production, where the Minister initially determines that the
natural gas does not qualify as new gas,

               (ii) the first day of the month in which the well
commenced production, where the initial determination under subsection (1)
was made in error or without the Minister's knowledge of any of the
circumstances described in subsection (3) which would, if known, have
resulted in a determination that the natural gas did not qualify as new
gas, or   

               (iii)     where the Minister determines that the natural gas
ceases to qualify as new gas by reason of any of the circumstances
described in subsection (3)(a) or (b), the first day of the month in which
that circumstance initially occurred,

     and

     (b)  shall state the date on which the determination is effective.

(7)  The Minister, on application or the Minister's initiative, may review
a determination made under subsection (1) or (3), or a refusal to make a
determination under subsection (1), and may, after concluding the review,
revoke or replace the determination or make the determination, as the case
may be.

(8)  Notwithstanding anything in this section,

     (a)  the Minister may determine that natural gas recovered from a
production entity is only partly new gas and in that event shall also
determine the proportion in which new gas recovered from the production
entity bears to the whole of the natural gas recovered from well production
entity;

     (b)  the portion of the natural gas recovered from the production
entity that is new gas by reason of a determination under clause (a) is new
gas for the purposes of this Regulation and the remainder is old gas.


Residue gas and ethane
2   For the purposes of this Regulation, residue gas and ethane qualify as
new gas and new ethane, respectively, only if the natural gas from which
they are obtained qualifies as new gas.


New pentanes plus
3   For the purposes of this Regulation, pentanes plus is new pentanes plus
if

     (a)  it is obtained from new gas, or

     (b)  it is determined by the Minister in a particular case to be new
pentanes plus.


     Schedule 8

     Royalty Exemptions

     Exemption for Otherwise Flared Solution Gas

Interpretation
1(1)  In this section and section 2 of this Schedule,

     (a)  "approved well event" means a well event approved by the
Minister under section 2(1) of this Schedule, but does not include a
qualifying well event;

     (b)  "average daily production", in relation to solution gas
recovered from a well event in a production month, means the volumes of
solution gas recovered from the well event in that production month in m3,
divided by the number of hours of operation of the well event in the
production month and multiplied by 24;

     (c)  "crude oil battery" means a battery that is, according to the
records of the Board, a crude oil battery;

     (d)  "qualifying battery" means a crude oil battery

               (i)  from which crude oil was first delivered before
March, 1998,

               (ii) to which solution gas was delivered during
November, 1998, all of which was subsequently flared or vented to the
atmosphere, and

               (iii)     from which no solution gas has been delivered after
April, 1989,

          according to the records of the Board, but does not include a
battery listed in subsection (2);

     (e)  "qualifying well event" means a well event for which, according
to the records of the Board,

               (i)  the mode status at any time during November, 1998
was flowing, pumping, gas lift or testing, and

               (ii) the fluid status at any time during November, 1998
was crude oil or oil.

(2)  The crude oil batteries assigned the following battery numbers by the
Board are not qualifying batteries for the purposes of section 2 of this
Schedule:

     42292          57809
     44804          370006
     46486          1570064
     49988          3220023
     51889          4050104
     53394          5950034
     53444          6670009
     54091          7500528
     55748          7530010
     55934          8870112
     57765          9230005


Exemption for solution gas
2(1)  The Minister may, on application from the operator of a crude oil
battery that is not a qualifying battery and on the recommendation of the
Board,

     (a)  approve, for the purposes of the exemption from royalty under
subsection (3), a well event from which solution gas is recovered and
delivered to the battery, and

     (b)  specify an apportionment factor for the approved well event
that is not more than 1.0, expressed as a decimal fraction.

(2)  Subject to subsections (5) to (9), solution gas that is

     (a)  recovered in a production month after 1998 from a qualifying
well event, and

     (b)  delivered to a qualifying battery

is exempt from the payment of royalty otherwise payable to the Crown under
this Regulation.

(3)  Subject to subsections (4) to (9), solution gas that is

     (a)  recovered in a production month after September, 2002 from an
approved well event,

     (b)  delivered to a crude oil battery, and

     (c)  used or consumed for some useful purpose and not injected

is exempt from the payment of royalty otherwise payable to the Crown under
this Regulation.

(4)  Where an apportionment factor is specified for an approved well event,
the royalty exemption under subsection (3) applies only to the portion of
the solution gas referred to in that subsection that is equal to the
product of the quantity of the solution gas and the apportionment factor.

(5)  Subject to subsections (7) to (9),

     (a)  a royalty exemption under subsection (2) applies in respect of
solution gas recovered from a qualifying well event in production months
commencing with September, 2002 and ending with December, 2008, and

     (b)  a royalty exemption under subsection (3) applies in respect of
solution gas recovered from an approved well event during the period of 120
consecutive months commencing with the month in which the application under
subsection (1) in respect of the well event is received by the Minister.

(6)  Where a well event was approved under section 12.1(2) of the 1994
Regulation,

     (a)  the well event is deemed to be an approved well event for the
purposes of this section, and

     (b)  subject to subsections (7) to (9), the royalty exemption
provided for under section 12.1(4) of the 1994 Regulation in respect of
solution gas recovered from that approved well event continues for the
remainder of the period of 120 consecutive months referred to in section
12.1(6)(b) of the 1994 Regulation.

(7)  The Minister may terminate a royalty exemption under subsection (2),
(3) or (6) in respect of solution gas recovered from a qualifying well
event or approved well event if

     (a)  according to the records of the Board, the average daily
production of solution gas recovered from the well event has exceeded 15
000 m3 in each of 3 consecutive production months commencing with any month
after July, 2002,

     (b)  the Minister receives a recommendation from the Board to
terminate the exemption, and

     (c)  the Minister is of the opinion that solution gas recovered from
the well event should not be exempt from the payment of royalty under this
section.

(8)  The Minister may make the termination of a royalty exemption pursuant
to subsection (7) effective commencing with the production month following
the 3-month period referred to in that subsection or commencing with any
subsequent production month.

(9)  If the Minister terminates a royalty exemption pursuant to subsection
(7), the Minister shall

     (a)  give written notice of the termination to the operator of the
crude oil battery to which solution gas recovered from the well event is
delivered, and

     (b)  specify in the notice the production month specified by the
Minister under subsection (8) as the initial production month in the which
the termination is effective.


     Exemptions for Qualifying Intervals
     in Deep Gas Wells

Definitions
3(1)  In this section and sections 4 to 8 and Table 1 of this Schedule,

     (a)  "Crown interest in production" means, in relation to natural
gas production from a qualifying interval, an interest in the production
equal to the proportion that Crown production from the qualifying interval
bears to the total production of natural gas from the qualifying interval;

     (b)  "deepening" means, in relation to a well, the drilling of the
well beyond the depth referred to in the licence for the well, pursuant to
an amendment to the licence;

     (c)  "designated pool" means a pool that, as of June 1, 1985, has
been designated as a pool by the Board pursuant to the Oil and Gas
Conservation Act;

     (d)  "eligible well" means a well

               (i)  the spudding in or commencement of deepening of
which occurs after May 31, 1985,

               (ii) that is drilled or deepened in a drilling spacing
unit that is not wholly or partly within the boundaries of a designated
pool,

               (iii)     that is drilled to a depth of more than 2500
metres, and

               (iv) that produces natural gas from a qualifying pool,

     but does not include

               (v)  a well that is the subject of a subsisting
certificate for an incentive exploratory well, in respect of its drilling
or deepening, under a former incentive regulation,

               (vi) a well in respect of which the Minister approved an
application for a royalty exemption under section 7 of the pre-1994
Regulation or section 7 of  Schedule 6 of the 1994 Regulation,

               (vii)     a well completed in a drilling spacing unit
containing a well that at any time has been the subject of a royalty
exemption under a former incentive regulation or under section 8, 12 or 13
of Schedule 6 of the 1994 Regulation or section 5 or 6 of this Schedule,

               (viii)    unless otherwise approved by the Board, a
well that is off-target within the meaning of the Oil and Gas Conservation
Regulations (AR 151/71), or

               (ix) a well whose production of crude oil or oil sands
is exempt from royalty under the Oil Royalty Incentive Regulation (AR
403/91) or the Third Tier Exploratory Well Royalty Exemption Regulation (AR
16/93) and that exemption has not been wholly revoked;

     (e)  "former incentive regulation" means

               (i)  the Exploratory Drilling Incentive Regulations (AR
378/72),

               (ii) the Exploratory Drilling Incentive Regulations,
1974 (AR 18/74),

               (iii)     the Exploratory Drilling Incentive Regulation, 1978
(AR 27/78),

               (iv) the Exploratory Drilling Incentive Regulation, 1981
(AR 212/81),

               (v)  the Exploratory Drilling Incentive Regulation, 1983
(AR 210/83), or

               (vi) the Exploratory Drilling Incentive Regulation, 1984
(AR 137/84);

     (f)  "licensee", in relation to a well, means the holder of the
licence in respect of that well under the Oil and Gas Conservation Act;

     (g)  "pre-1994 Regulation" means the Natural Gas Royalty (Pre-1994)
Regulation (AR 246/90);

     (h)  "qualifying interval" means,

               (i)  in relation to the spudding of an eligible well,
the portion of the drilled depth of the well that is below a depth of 2500
metres and that extends to the base of the natural gas bearing interval of
the deepest zone from which the well is, in the opinion of the Minister,
producing natural gas in paying quantities, and

               (ii) in relation to the deepening of an eligible well,
the portion of the deepened depth of the well that is at least 2500 metres
below the surface and that extends to the base of the natural gas bearing
interval of the deepest zone from which the well is, in the opinion of the
Minister, producing natural gas in paying quantities;

     (i)  "qualifying pool" means a pool, other than a designated pool,
that, in the opinion of the Minister, is in a zone the top of which is at a
depth of more than

               (i)  2500 metres, or

               (ii) a number of metres less than 2500 metres specified
by the Minister for that zone, if the zone is partly below and partly at or
above a depth of 2500 metres and the Minister considers it appropriate to
so specify either generally or for the purpose of a specific case;

     (j)  "twin well", in relation to an eligible well, means a well that
is

               (i)  spudded after May 31, 1985,

               (ii) located in the same legal subdivision or drilling
spacing unit, whichever is of lesser area, as that in which the eligible
well is located, and

               (iii)     drilled to produce natural gas that, in the opinion
of the Minister, is not initially recoverable from the eligible well due to
inadvertent damage to the eligible well;

     (k)  "volumes sold" means volumes sold as defined in the pre-1994
Regulation;

     (l)  references to the "Foothills Area", the "Plains Area", the
"Northern Area" or the "Central Area" are references to the respective
areas described in Table 2 of this Schedule.

(2)  For the purposes of section 5 of this Schedule, the "value of the
exempted royalty quantity" with respect to a qualifying interval is the
aggregate of the amounts of royalty compensation that would have been
payable under the 1994 Regulation and this Regulation after January 1, 1994
in respect of the Crown's royalty share of natural gas, gas products and
field condensate produced from the qualifying interval in the absence of
the exemption and without any deductions for allowable costs.


Application for exemption
4(1)  A licensee of an eligible well may apply to the Minister for an
exemption under section 5 of this Schedule from the royalty otherwise
payable to the Crown on the natural gas which is produced from a qualifying
interval of the well.

(2)  The Minister may approve an exemption applied for under subsection (1)
if

     (a)  the application is in the form prescribed by the Minister and
is received by the Minister no later than 6 months after the finished
drilling date applicable to the drilling or deepening,

     (b)  the application contains the data and information required by
the Minister,

     (c)  the Minister determines that the applicant is eligible to apply
under subsection (1), and

     (d)  the drilling or deepening of the well was conducted diligently
and continuously to the satisfaction of the Minister.

(3)  The Minister may extend the time by which an application must be
received under subsection (2) if the Minister considers an extension
warranted in the circumstances.

(4)  Despite anything in this section, the Minister may approve an
exemption under section 5 of this Schedule without an application.


Nature of exemption
5(1)  Subject to subsection (2), if the Minister approves an application
under section 11 of the pre-1994 Regulation, section 11 of Schedule 6 of
the 1994 Regulation or section 4 of this Schedule in respect of the
drilling or deepening of an eligible well, natural gas production from the
qualifying interval of the well is exempt from royalty otherwise payable to
the Crown in accordance with this section.

(2)  Natural gas production from a qualifying interval is not exempt, in
the case of a qualifying interval determined for the deepening of an
eligible well, to the extent that the production occurs from a zone that is
not below the deepest zone to which the well was previously drilled.

(3)  A royalty exemption under subsection (1)

     (a)  commences with the later of the month in which production of
natural gas from the qualifying interval is first obtained and the month in
which the application was received by the Minister pursuant to section 11
of the pre-1994 Regulation,  section 11 of Schedule 6 of the 1994
Regulation or section 4 of this Schedule, and

     (b)  continues until the value of the exempted royalty quantity with
respect to the qualifying interval equals

               (i)  the remaining value of the exemption determined for
the qualifying interval in accordance with subsection (4), if production of
natural gas from the qualifying interval commenced before January, 1994, or

               (ii) the value of the exemption determined for the
qualifying interval in accordance with subsection (5), if production of
natural gas from the qualifying interval commenced during or after January,
1994.

(4)  If the production of natural gas from a qualifying interval commenced
before January, 1994, the remaining value of the exemption for the
qualifying interval shall, unless otherwise determined by the Minister in a
particular case, be determined in accordance with the following:

     (a)  the Minister shall determine for the qualifying interval as of
the end of December, 1993 the maximum amount of the exemption for the
qualifying interval under the pre-1994 Regulation and the remaining balance
of that amount after deducting the aggregate of the amounts that would have
been payable to the Crown in the absence of the exemption in respect of the
disposal of the Crown's royalty share of volumes sold attributable to the
qualifying interval for production months ending with December, 1993;

     (b)  the Minister shall increase the remaining balance for the
qualifying interval determined under clause (a) by multiplying that amount
by a conversion factor prescribed by the Minister;

     (d)  the remaining value of the exemption for the qualifying
interval for the purposes of subsection (3)(b)(i) is the increased amount
calculated for the qualifying interval under clause (b).

(5)  If the production of natural gas from a well commenced during or after
January, 1994, the value of the exemption for the qualifying interval
shall, unless otherwise determined by the Minister in a particular case, be
determined in accordance with the following:

     (a)  the Minister shall increase the respective Cumulative Values
and Incremental Values in Table 1 of this Schedule by multiplying them by a
conversion factor prescribed by the Minister for the qualifying interval;

     (b)  the value of the exemption for the qualifying interval for the
purposes of subsection (3)(b)(ii) is an amount determined in accordance
with Table 1 of this Schedule as modified pursuant to clause (a).

(6)  A royalty exemption under this section does not apply in respect of
any month that occurs after the 10-year period following the finished
drilling date applicable to the drilling or deepening, and terminates if
the well is abandoned.


Determina-tions by Minister
6(1)   If

     (a)  a well in respect of which an application for a royalty
exemption has been approved under section 7 or 11 of the pre-1994
Regulation, section 7 or 11 of Schedule 6 of the 1994 Regulation, section 4
of this Schedule or section 12 of the Petroleum Royalty Regulation (AR
248/90) was drilled or deepened below a depth of 2500 metres to an interval
of depth that was below the base of the crude oil or natural gas bearing
interval of the deepest zone from which the well was, in the opinion of the
Minister, producing crude oil or natural gas in paying quantities, and

     (b)  the Minister is satisfied that production of natural gas from a
qualifying pool in the deeper interval was subsequently obtained in paying
quantities from a drilling spacing unit that, on the date the spudding in
or commencement of deepening of the well occurred, was not wholly or partly
within the boundaries of a designated pool,

the Minister may, on application by the licensee, determine a qualifying
interval for the deeper interval as if the well has been deepened.

(2)  If the Minister determines a qualifying interval pursuant to an
application under subsection (1), natural gas production from the
qualifying interval determined by the Minister is exempt from royalty
otherwise payable to the Crown in accordance with the following:

     (a)  the royalty exemption commences with the later of the month in
which production of natural gas from the qualifying interval is first
obtained and the month in which the application is received by the Minister
pursuant to subsection (1);

     (b)  the royalty exemption continues until the value of the exempted
royalty quantity with respect to the qualifying interval equals the value
of the exemption determined by the Minister for the qualifying interval in
accordance with Table 1 of this Schedule, as modified pursuant to section
5(5)(a) of this Schedule.

(3)  A royalty exemption under this section does not apply in respect of
any month that occurs after the 10-year period following the finished
drilling date applicable to the drilling or deepening, and terminates if
the well is abandoned.


Value of Crown's royalty share
7   If the eligible well produces from a production entity in which the
title to the natural gas is not owned solely by the Crown, the value of the
exempted royalty quantity with respect to a qualifying interval within that
production entity shall for the purposes of section 5 or 6 of this Schedule
be equal to an amount calculated by multiplying

     (a)  the remaining exemption determined for the qualifying interval
in accordance with section 5(4) or the exemption determined for the
qualifying interval in accordance with section 5(5), as the case may be,

by

     (b)  the Crown interest in production in relation to natural gas
production from the qualifying interval

               (i)  for the month immediately preceding the month in
which the royalty exemption commenced, in the case of a well other than a
well described in subclause (ii), or

               (ii) for the month immediately preceding the month in
which the natural gas became subject to a unit agreement, in the case of a
well that produces natural gas that became subject to a unit agreement
before the royalty exemption commenced.


Transfer of exemption
8(1)  The Minister may approve the transfer of a royalty exemption under
section 12 or 13 of the pre-1994 Regulation, section 12 or 13 of Schedule 6
of the 1994 Regulation or section 5 or 6 of this Schedule from an eligible
well to its twin well.

(2)  If the Minister approves the transfer of a royalty exemption pursuant
to subsection (1),

     (a)  the royalty exemption on production from the eligible well from
which the exemption was transferred terminates on the effective date of the
transfer of the exemption to the twin well, and

     (b)  the royalty exemption period applicable to the twin well is the
balance of the royalty exemption period that would have been applicable to
the eligible well from which the exemption was transferred.


     Table 1

     Value of Crown Royalty Share of Natural Gas
     Exempted per Eligible Well


Depth of Eligible Well to Base of Natural Gas Producing Interval in Deepest
Zone Producing in Paying Quantities
Cumulative Value

Incremental Value



     (metres)
     ($000)
     ($/metre)


              2500
                        0
               1000


              3000
                  500
               1000


              3500
                1000
               1000


              4000
                1500
               1300


              4500
                2150
               1300


              5000
                2800
               1600


              5500
                3600




     Table 2

     Areas

Foothills Area

The Foothills Area consists of the lands in Alberta listed below and those
lands within Alberta located south and west of the listed lands:

          Township 1, Range 24; Township 2, Range 25; Township 3, Range
26; Township 4, Range 27; Township 5, Range 28; Townships 6 to 11
inclusive, Range 29; Townships 12 and 13, Range 30; all west of the 4th
Meridian;

and

     Townships 12 and 13, Range 1; Townships 14 to 20 inclusive, Range 2;
Townships 21 and 22, Range 3; Townships 23 to 28 inclusive, Range 4;
Townships 29 and 30, Range 5; Townships 31 to 34 inclusive, Range 6;
Townships 35 and 36, Range 7; Township 37, Range 8; Township 38, Range 9;
Townships 39 and 40, Range 10; Township 41, Ranges 11, 12 and 13 inclusive;
Township 42, Range 14; Township 43, Ranges 15 and 16; Township 44, Range
17; Townships 45 and 46, Range 18; Townships 47 and 48, Range 19; Township
48, Range 20; Township 49, Ranges 21 and 22; Township 50, Range 23;
Townships 51 and 52, Range 24; Townships 53 and 54, Range 25; Township 54,
Range 26; Townships 55 and 56, Range 27; all west of the 5th Meridian;

and

     Township 56, Range 1; Townships 57 and 58, Range 2; Township 58,
Range 3; Townships 59 and 60, Range 4; Township 60, Ranges 5 and 6;
Township 61, Ranges 7 and 8; Township 62, Ranges 9 and 10; Township 63,
Range 11; Townships 64 and 65, Range 12; and Township 66, Ranges 13 and 14;
all west of the 6th Meridian.

Plains Area

The Plains Area consists of the lands in Alberta contained within the outer
perimeter of the lands listed below:

     On the east by Townships 1 to 66 inclusive, Range 1, west of the 4th
Meridian;

and

     On the north by Township 66, Ranges 1 to 27 inclusive, all west of
the 4th Meridian; and Township 66, Ranges 1 to 4 inclusive; and Township
34, Range 5, all west of the 5th Meridian;

and

     On the west from Townships 35 to 66 inclusive, Range 4, west of the
5th Meridian;

and

     On the west from Townships 1 to 34 inclusive, the lands immediately
adjacent to the Foothills Area;

and

     On the south by Township 1, Ranges 1 to 23 inclusive, all west of the
4th Meridian.

Northern Area

The Northern Area consists of the lands in Alberta listed below and those
lands within Alberta located north and east of the listed lands:

     Township 77, Ranges 1 to 26 inclusive, all west of the 4th Meridian;

and

     Township 77, Ranges 1 to 12 inclusive; Townships 77 to 79 inclusive,
Range 13; Township 80, Ranges 14 to 18 inclusive; Townships 81 to 104
inclusive, Range 18; Township 105, Ranges 19 to 25 inclusive; Township 106,
Range 25; Townships 107 to 120 inclusive, Range 24; all west of the 5th
Meridian;

and

     Township 121, Ranges 1 to 12 inclusive, all west of the 6th Meridian.

Central Area

The Central Area consists of the remaining lands in Alberta not included in
the Foothills Area or the Northern Area or the Plains Area.


     ------------------------------

     Alberta Regulation 221/2002

     Natural Gas Marketing Act

     NATURAL GAS MARKETING AMENDMENT REGULATION

     Filed:  October 22, 2002

Made by the Lieutenant Governor in Council (O.C. 499/2002) on October 22,
2002 pursuant to sections 14 and 27 of the Natural Gas Marketing Act.


1   The Natural Gas Marketing Regulation (AR 358/86) is amended by this
Regulation.


2   Section 19 is amended

     (a)  in subsection (5) by adding "other than marketable gas to which
subsection (5.1) applies," after "subsequent month,";

     (b)  by adding the following after subsection (5):

     (5.1)  If marketable gas is removed from Alberta in October, 2002 or
any subsequent month by a person who owns the gas at the point of its
removal from Alberta and removes it for the purpose of distributing it
through one or more gas utility distribution systems outside Alberta owned
and operated by that person, that person shall, in accordance with this
Part, furnish to the Commission

               (a)  a report relating to the quantities of that
person's marketable gas removed from Alberta in that month for distribution
and that were purchased in Alberta from sellers not associated with that
person;

               (b)  a report relating to the quantities of that
person's marketable gas removed from Alberta in that month for distribution
and that were acquired in Alberta but not required to be reported under
clause (a);

               (c)  a report relating to the quantities of that
person's marketable gas removed from Alberta in that month for
distribution.

     (c)  by adding the following after subsection (6):

     (6.1)  If gas is processed at a mainline straddle plant in October,
2002 or any subsequent month, the operator of the mainline straddle plant
shall furnish to the Commission a report relating to

               (a)  the removal of heat content from the gas processed
at that mainline straddle plant in that month, and

               (b)  the products obtained by processing gas at that
mainline straddle plant in that month.

     (d)  in subsection (9)

               (i)  by adding the following after clause (a):

                         (a.1)     must be furnished in the medium or by
the mode prescribed or approved by the Commission,

               (ii) in clause (c) by adding "except in the case of a
report furnished under subsection (6.1)," before "must be accompanied";

               (iii)     in clause (c)(ii) by striking out "in some other
form" and substituting "in some other medium or by some other mode".


3   Section 20(2) is amended

     (a)  in clause (a) by striking out "in the offices of the
Commission" and substituting "by the Commission";

     (b)  in clause (b) by striking out "or" at the end of subclause (i),
by adding "or" at the end of subclause (ii) and by adding the following
after subclause (ii):

               (iii)     is not furnished in the medium or by the mode
prescribed or approved by the Commission,


4   Section 21(3)(d) is amended by adding "or section 6(1) of the Natural
Gas Royalty Regulation, 2002" after "section 6(1) of the Natural Gas
Royalty Regulation, 1994 (AR 351/93)".


5   Section 23 is amended

     (a)  in subsection (2)(c) by striking out "or" at the end of
subclause (ii), by adding "or" at the end of subclause (iii) and by adding
the following after subclause (iii):

               (iv) be furnished in the medium or by the mode provided
for in the direction.

     (b)  in subsection (5)(b) by striking out "or" at the end of
subclause (ii), by adding "or" at the end of subclause (iii), and by adding
the following after subclause (iii):

               (iv) is not furnished in the medium or by the mode
provided for in the direction.


6   Section 27 is amended

     (a)  by adding the following after subsection (3):

     (3.1)  A person who operates a mainline straddle plant in Alberta
during October, 2002 or any subsequent month shall keep that person's
records relating to

               (a)  the quantity of heat content removed from the gas
processed at that plant in that month, and

               (b)  the products obtained by processing gas at that
plant in that month,

     and shall keep those records for a period of at least 5 years after
the end of that month.

     (b)  in subsection (4) by striking out "subsection (1), (2) or (3)"
and substituting "subsection (1), (2), (3) or (3.1)";

     (c)  by adding the following after subsection (4):

     (4.1)  A person required to keep records under this section shall
keep those records

               (a)  at the person's place of business in Alberta, or

               (b)  subject to any terms and conditions the Commission
may impose, at a place in Alberta or elsewhere approved in writing by the
Commission.

     (d)  in subsection (5) by striking out "subsections (1) to (3)" and
substituting "subsections (1) to (3.1)".


7   The Schedule is amended

     (a)  in section 1 by renumbering clause (a) as (a.1) and by adding
the following before clause (a.1):
               (a)  "component analysis" means an analysis of a sample
of gas to determine the respective volumes and quantities of in-stream
components of the gas;

     (b)  in section 1(b) by adding ", for the purposes of section
3(1)(a)," after "means";

     (c)  in section 1 by adding the following after clause (c):

               (c.1)     "in-stream component" means a component of gas
including, without limitation, methane, ethane, propane, butanes, pentanes
plus, carbon dioxide, hydrogen, hydrogen sulphide, helium and nitrogen;

     (d)  in section 2 by adding the following after clause (c):

               (c.1)     volumes of in-stream components shall be expressed
in thousands of cubic metres, to 3 decimal places;

               (c.2)     quantities of in-stream components shall be
expressed as heat content in gigajoules, to 3 decimal  places;

     (e)  by repealing section 3 and substituting the following:

     3(1)  Where the Commission requires quantities of gas to be reported
in any document furnished to the Commission under the Act or this
Regulation,

               (a)  volumes of gas shall be converted to gigajoules by
multiplying the volumes of the gas by the gross or higher heating value of
the gas, and

               (b)  if the gross or higher heating value used under
clause (a) is calculated from a component analysis of the gas, the gross or
higher heating value of the gas shall be calculated in accordance with the
Calculation of Gross Heating Value, Relative Density and Compressibility
Factor for Natural Gas Mixtures from Compositional Analysis (GPA Standard
2172) published from time to time by the Gas Processors Association.

     (2)  Where the Commission requires volumes or quantities of in-stream
components of gas to be reported in any document furnished to the
Commission under the Act or this Regulation,

               (a)  the respective volumes of the in-stream components
of the gas shall be determined from a component analysis of the gas,

               (b)  the respective volumes of the in-stream components
of the gas shall be converted to gigajoules by multiplying those volumes by
the gross or higher heating value of the respective in-stream components as
shown in any edition of the Table of Physical Constants of Paraffin
Hydrocarbons and Other Components of Natural Gas (GPA Standard 2145)
published by the Gas Processors Association, and

               (c)  the quantities of the in-stream components
calculated under clause (b) shall be normalized so that the aggregate
quantities of those in-stream components equal the aggregate quantities of
the gas.

     (f)  by repealing section 5.


     ------------------------------

     Alberta Regulation 222/2002

     Protection for Persons in Care Act

     PROTECTION FOR PERSONS IN CARE AMENDMENT REGULATION

     Filed:  October 22, 2002

Made by the Lieutenant Governor in Council (O.C. 503/2002) on October 22,
2002 pursuant to section 9 of the Protection for Persons in Care Act.


1   The Protection for Persons in Care Regulation (AR 159/98) is amended by
this Regulation.


2   The following is added after section 1:

     1.1(1)  The following institutions and organizations are designated
as agencies for the purpose of section 1(b)(v) of the Protection for
Persons in Care Act if the institution or organization is operated by the
Government of Alberta or receives part or all of its operating funds,
directly or indirectly, from the Government of Alberta:

               (a)  a place of care for persons who are aged or infirm
or who require special care;

               (b)  a hostel or other establishment operated to provide
accommodation and maintenance for not less than 4 unemployed or indigent
persons;

               (c)  an emergency shelter;

               (d)  a residential alcohol and drug abuse treatment
centre;

               (e)  a group home or shelter for physically or mentally
handicapped persons;

               (f)  a vocational rehabilitation and training centre for
physically or mentally handicapped persons.

     (2)  Subsection (1) does not include the following institutions and
organizations:

               (a)  Alberta Hospital Edmonton;

               (b)  Alberta Hospital Ponoka;

               (c)  Raymond Care Centre;

               (d)  Claresholm Care Centre;

               (e)  a housing accommodation as defined in the Alberta
Housing Act;

               (f)  a correctional institution as defined in the
Corrections Act.

     1.2   For the purposes of an institution or organization referred to
in section 1(c)(ii) of the Act, the appropriate Minister is the Minister.


     ------------------------------

     Alberta Regulation 223/2002

     School Act

     CLOSURE OF SCHOOLS AMENDMENT REGULATION

     Filed:  October 23, 2002

Made by the Minister of Learning (M.O. 032/2002) on October 17, 2002
pursuant to section 58 of the School Act.


1   The Closure of Schools Regulation (AR 238/97) is amended by this
Regulation.


2   Section 1 is repealed and the following is substituted:

Definitions
     1   In this Regulation,

               (a)  "closure" means any action referred to in section
2;

               (b)  "school year" means the 12-month period beginning
on September 1 and ending on the following August 31.


3   Section 6(3)(b) is amended by striking out "Minister" and substituting
"Ministers determined under section 16 of the Government Organization Act
as the Ministers responsible for Part 7 of the School Act".


4   Section 8 is amended by striking out "November 1, 2002" and
substituting "November 1, 2005".


5   Section 9 is repealed.


     ------------------------------

     Alberta Regulation 224/2002

     Fisheries (Alberta) Act

     FISHERIES (MINISTERIAL) AMENDMENT REGULATION

     Filed:  October 23, 2002

Made by the Minister of Sustainable Resource Development (M.O. 54/2002) on
October 23, 2002 pursuant to section 44 of the Fisheries (Alberta) Act.


1   The Fisheries (Ministerial) Regulation (AR 220/97) is amended by this
Regulation.


2   Section 5(2) is amended by striking out "5th" and substituting "10th".


3   Section 7 is amended by striking out "2002" and substituting "2012".


4   Schedule 1 is amended

     (a)  by adding the following after item 1(c):

               (c.1)     non-resident of Canada (1 day)     2.85

     (b)  in item 2(a) by striking out "$75" and substituting "$500";

     (c)  in item 2(b) by striking out "3 times the number of gill nets
authorized by the licence" and substituting "$1 for each gill net
authorized by the licence";

     (d)  by repealing item 2(e);

     (e)  in item 6(a) by striking out "trout" and substituting "fish".


5   Schedule 2 is amended

     (a)  by adding the following after section 1(p):

          (q)  Apple snail    Pomacea paludosa

     (b)  in section 3(2) by striking out "Subject to subsection (3),
tilapia" and substituting "Tilapia";

     (c)  by repealing section 3(3).


6   Schedule 3 is amended in item 2 by striking out "and gold fish" and
substituting ", goldfish and the Western Silvery Minnow".


7   Sections 4(a), (b), (c) and (d) come into force on April 1, 2003.


     ------------------------------

     Alberta Regulation 225/2002

     Real Estate Act

     REAL ESTATE (MINISTERIAL) AMENDMENT REGULATION

     Filed:  October 24, 2002

Made by the Minister of Government Services (M.O. C:008/02) on October 22,
2002 pursuant to section 84(2) of the Real Estate Act.


1   The Real Estate (Ministerial) Regulation (AR 113/96) is amended by this
Regulation.


2   Section 1 is amended by renumbering it as section 1(1) and by adding
the following after subsection (1):

     (2)  References in this Regulation to classes of industry members are
to be taken to refer to the classes of industry members as established by
rules made by the Council under section 12(h) of the Act, being

               (a)  with respect to the trades undertaken by a real
estate broker,

                         (i)  a brokerage,

                         (ii) a broker,

                         (iii)     an associate broker, and

                         (iv) an agent,

               and

               (b)  with respect to the dealings undertaken by a
mortgage broker,

                         (i)  a brokerage,

                         (ii) a broker,

                         (iii)     an associate broker, and

                         (iv) an agent.


3   The heading after section 1 is repealed and the following is
substituted:

     PART 1

     ALBERTA REAL ESTATE FOUNDATION


4   Section 8(1) is amended by striking out "real estate brokerages within
the meaning of the rules under section 12 of the Act" and substituting
"industry members of the brokerage class referred to in section
1(2)(a)(i)".


5   The heading after section 8 is repealed and the following is
substituted:

     PART 2

     REAL ESTATE ASSURANCE FUND

Application of Fund provisions
     8.1(1)  The classes of industry members prescribed for the purposes
of section 57(3) and (5) and 60(1) of the Act are all the classes referred
to in section 1(2).

     (2)  The classes of applicants to become industry members prescribed
for the purposes of section 57(5) of the Act are all applicants to become
industry members of all the classes referred to in section 1(2).


6   Section 9 is amended

     (a)  by striking out "56(3)" and substituting "57(3)";

     (b)  by adding "of any class referred to in section 1(2)" after
"member".


7   Section 10 is amended by striking out "and applicants to become
industry members" and substituting "of all classes referred to in section
1(2) and all applicants to become industry members of all such classes".


8   Section 11(1) is amended by striking out "59" and substituting "60".


9   Section 12 is amended

     (a)  in clauses (a) and (b)

               (i)  by striking out "a real estate broker, associate
broker or agent" and substituting "an industry member of any class referred
to in section 1(2)(a)(i) to (iv)";

               (ii) by striking out "the real estate broker, associate
broker or agent" and substituting "that industry member";

     (b)  in clause (c)

               (i)  by striking out "a mortgage broker, associate
broker or agent" and substituting "an industry member of any class referred
to in section 1(2)(b)(i) to (iv)";

               (ii) by striking out "the mortgage broker, associate
broker or agent" and substituting "that industry member".


     Alberta Regulation 226/2002

     Oil and Gas Conservation Act

     OIL AND GAS CONSERVATION AMENDMENT REGULATION

     Filed:  October 25, 2002

Made by the Alberta Energy and Utilities Board on October 21, 2002 pursuant
to section 10(1)(c) of the Oil and Gas Conservation Act.


1   The Oil and Gas Conservation Regulations (AR 151/71) are amended by
this Regulation.


2  The following is added after section 17.030:

     Part 17.5
     Enforcement of Lien

     17.510   In this Part, "debtor" and "payor" have the same meaning as
in section 103 of the Act.

     17.520   A notice of garnishment served on a debtor and a payor
pursuant to section 103(4) of the Act must be in the form set out in
Schedule 17.

     17.530   A notice of garnishment may be served on the payor as
follows:

               (a)  if the payor is an individual, by leaving the
document with the individual or by sending the document by registered mail
addressed 

                         (i)  to the individual at the individual's
residence, or 

                         (ii) to the name and address of any business
of the individual; 

               (b)  if the payor is a partnership, on all members of
the partnership

                         (i)  by leaving the document with one or
more of the general partners or a person having control or management of
the partnership business, or

                         (ii) by sending the document by registered
mail addressed to

                                   (A)  the partnership,

                                   (B)  any one or more of the
general partners, or

                                   (C)  any person having control
or management of the partnership business,

                              at the address of the partnership
business; 

               (c)  if the payor is a corporation, other than a
municipality, 

                         (i)  by leaving the document with an officer
or director of the corporation or person in charge of any office or place
of business of the corporation, 

                         (ii) by leaving the document at, or by
sending the document by registered mail addressed to, the registered or
head office of the corporation, or 

                         (iii)     where the corporation has its
registered or head office outside of Alberta, by leaving the document with,
or by sending the document by registered mail addressed to, its attorney
for service appointed under Part 21 of the Business Corporations Act; 

               (d)  on a municipal corporation, by leaving the document
with, or by sending the document by registered mail addressed to, the
principal office of the corporation or the chief administrative officer of
the corporation; 

               (e)  on an association, 

                         (i)  by leaving the document with an officer
of the association, or 

                         (ii) by sending the document by registered
mail addressed to an officer of the association at the address of the
officer. 

     17.540   A notice of garnishment is deemed to have been served on and
received by the debtor when

               (a)  it is delivered by registered mail or by courier
service to the last address of the debtor known to the Board,

               (b)  it is sent by facsimile to the last facsimile
number of the debtor known to the Board, or

               (c)  it is served in accordance with section 95 of the
Act, if the debtor is a licensee or approval holder.

     17.550   If the payor is required by section 103 of the Act to
forward money and revenue to the Board, the Payor shall forward it to the
Board together with

               (a)  the notice number and date of the notice of
garnishment,

               (b)  the name of the debtor, and

               (c)  an expected payment schedule setting out the
following information, if known by the payor:

                         (i)  the date or dates on which the payor
expects to have money or revenue owing to the debtor; 

                         (ii) the amount that is expected to be
payable on each date referred to in subclause (i);

                         (iii)     the date or dates on which the payor
will forward the money or revenue referred to in subclause (i) to the
Board.


3   The following is added after Schedule 16:

     Schedule 17

     Form
     Alberta Energy and Utilities Board

     Notice of Garnishment
     (section 103 Oil and Gas
     Conservation Act)

Notice Number:

To:       (payor)   

Regarding a debt owed to the
Alberta Energy and Utilities Board  from:    (debtor)   

In the amount of:     ($ amount)   

1   This Notice of Garnishment is issued for the amount of   ($ amount)  
against the following:

     (a)  money owed by you to   (debtor)  as a result of a sale of  
(debtor's)   proportionate share of any gas, oil or other hydrocarbon
produced from a well or facility;

     (b)  money held or received by you on behalf of   (debtor)   as a
result of a sale of   (debtor's)   proportionate share of any gas, oil or
other hydrocarbon produced from a well or facility;

     (c)  revenue held or received by you that is owing to   (debtor)  
resulting from

               (i)  the use of a well or facility by another person, or

               (ii) the provision of services by   (debtor) ;

     (d)  money and revenue described in clauses (a), (b) and (c) that
you may hold or receive in the future.

Current Obligation
2   On receiving this Notice you must pay to the Board the lesser of 

     (a)  all money and revenue described in section 1(a) to (c) of this
Notice, and

     (b)  the amount of the debt owing to the Board by the debtor, as
shown on this Notice.

Future Obligation
3   Until you are notified by the Board that the debt of   (debtor)   has
been paid in full you must, if any money or revenue described in section
1(a) to (c) of this Notice later becomes owing by you to    (debtor)   ,
pay to the Board the lesser of

     (a)  that money or revenue, and 

     (b)  the amount of the debt then owing to the Board by the debtor.

Information That Must Accompany Payments
4   You must include with any payment forwarded to the Board

     (a)  the notice number and date of this Notice,

     (b)  the name of the debtor,   (debtor)  , and

     (c)  an expected payment schedule setting out the following
information:

               (i)  the date or dates on which you expect to have money
or revenue owing to the debtor; 

               (ii) the amount that is expected to be payable on each
date referred to in subclause (i);

               (iii)     the date or dates on which you will forward the
money or revenue referred to in subclause (i) to the Board.

Board Address 
5   You must forward all payments and the information referred to in
section 4 to the Board at the address below.  

Date:                    
Alberta Energy and Utilities Board Signed:   


Failure to Comply

If you fail to comply with this Notice of Garnishment, or if you make
payments to   (debtor)   in contravention of this Notice of Garnishment,
you will be indebted to the Board for an amount equal to the amount you are
required to pay pursuant to this Notice of Garnishment, or the amount you
paid to   (debtor)   in contravention of this Notice of Garnishment,
whichever is less.

If you become indebted to the Board, it will be entitled to collect the
debt from you using all remedies available to it.

Failure to comply with this Notice of Garnishment also constitutes an
offence under the Oil and Gas Conservation Act, punishable on conviction by
a fine, or on default of payment of the fine, by imprisonment.


     ------------------------------

     Alberta Regulation 227/2002

     Environmental Protection and Enhancement Act

     LUBRICATING OIL MATERIAL RECYCLING AND MANAGEMENT BYLAW

     Filed:  October 28, 2002

Made by the Alberta Used Oil Management Association on October 16, 2002
pursuant to section 8 of the Lubricating Oil Material Recycling and
Management Regulation.


     Table of Contents

Definitions    1
Recycling fund established    2
Registration   3
Security  4
Environmental handling charge 5
Return and payment of environmental handling charge    6
Assessments    7
Interest  8
Charges in trust    9
Recovery of charge  10
Records   11
Confidentiality     12
Repeal    13


Definitions
1(1)  In this Bylaw,

     (a)  "calendar quarter" means a period of 3 months beginning on the
first day of January, April, July or October in each calendar year;

     (b)  "environmental handling charge" means the environmental
handling charge referred to in section 5;

     (c)  "Fund" means the Lubricating Oil Material Recycling and
Management Fund;

     (d)  "process oil" means oil that is not recoverable because it is
fully consumed in a process or is incorporated in another product;

     (e)  "registrant" means a supplier or end user who is registered
under section 5 of the regulation;

     (f)  "regulation" means the Lubricating Oil Material Recycling and
Management Regulation.

(2)  Terms that are defined in the regulation have the same meaning when
they are used in this Bylaw.


Recycling fund established
2(1)  There is hereby established an industry operated recycling fund to be
called the "Lubricating Oil Material Recycling and Management Fund", which
shall be used to provide or pay for any or all of the following:

     (a)  establishing and administering a lubricating oil material waste
minimization, recycling and management program;

     (b)  education programs for the purpose of the lubricating oil
material waste minimization, recycling and management program;

     (c)  expenditures incurred in the collection, transportation,
storage, processing and disposal of lubricating oil material;

     (d)  research and development activities related to lubricating oil
material management;

     (e)  promotion and development for marketing the products of
lubricating oil material recycling.

(2)  The following shall be deposited into the Fund:

     (a)  environmental handling charges on lubricating oil material, as
provided for in this Bylaw;

     (b)  gifts, donations and bequests to the Fund.

(3)  Investment income earned on deposits of the Fund accrues to and forms
part of the Fund.

(4)  Salaries, fees, costs, expenses and liabilities incurred in the
administration of the Fund shall be paid out of the Fund.

(5)  The Association shall administer the Fund in accordance with the Act,
the regulation and this Bylaw.


Registration
3(1)  An application for registration by a person referred to in section 5
of the regulation must be in a form acceptable to or provided by the
Association and must contain the information required by the Association.

(2)  The registration fee to be paid by an applicant for registration is
$200.

(3)  If the Association registers an applicant it shall assign a
registration number and issue a certificate of registration to the
registrant and shall notify the registrant in writing of the number and the
effective date of registration.


Security
4   The Association may require an applicant for registration or a
registrant

     (a)  to provide security to the Association, or

     (b)  to provide to the Association evidence of security

in a form and amount that is acceptable to the Association for the purpose
of ensuring that the applicant or registrant exercises the powers and
carries out the duties as registrant in accordance with the Act, the
regulation and this Bylaw.



Environmental handling charge
5(1)  A registrant who, being a supplier, supplies lubricating oil material
through any of the transactions described in section 1(j) of the regulation
shall levy and collect as a surcharge from the person to whom the
lubricating oil material is supplied an environmental handling charge in
the amount prescribed for that class of lubricating oil material by Bylaw
of the Association.

(2)  A registrant who, being an end user, imports lubricating oil material
into Alberta for the end user's own business use shall pay to the
Association as a surcharge an environmental handling charge in the amount
prescribed for that class of lubricating oil material by Bylaw of the
Association.

(3)  No environmental handling charge shall be levied or paid in the case
of a transaction for the following types of lubricating oil:

     (a)  two-cycle oil;

     (b)  chain oil;

     (c)  rockdrill oil;

     (d)  marine oil;

     (e)  metal working oil;

     (f)  saw guide oil used to cool and lubricate cutting operations;

     (g)  waylube oil used to lubricate metal machining operations;

     (h)  textile oil used to lubricate sewing needles.

(4)  Subsection (3) does not exempt the oil container in which the
lubricating oil is contained.

(5)  It is the intent of this Bylaw that the environmental handling charge
in respect of a particular lubricating oil material be levied or paid only
once.


Return and payment of environmental handling charge
6(1)  A registrant shall

     (a)  complete and file with the Association at its head office a
return in respect of each reporting period not later than 30 days after the
end of the reporting period, and

     (b)  remit to the Association with the return all environmental
handling charges the registrant has collected or for which the registrant
is liable under section 5 during the reporting period.

(2)  A return shall be in a form acceptable to the Association.

(3)  Unless the Association directs otherwise, the reporting period for the
purposes of this section is a calendar quarter.

(4)  The Association may in writing at any time extend the time for filing
a return.


Assessments
7(1)  Where

     (a)  a registrant fails to file a return in accordance with section
6, or

     (b)  the Association reasonably believes that a return that has been
filed is incorrect or misleading,

the Association may assess the amount of environmental handling charges to
be remitted by the registrant in respect of the reporting period.

(2)  Where a registrant fails to collect or remit an environmental handling
charge during a reporting period, the Association may assess the
environmental handling charge in an amount equal to the amount of the
environmental handling charge that the registrant failed to collect or
remit.

(3)  Where the Association makes an assessment under subsection (1) or (2),
the registrant shall remit

     (a)  the amount of the assessment, or

     (b)  where a return has been filed and a remittance made, the
amount, if any, by which the amount of the assessment exceeds the amount
remitted,

and the remittance is due and payable from the time the person receives
notice of the assessment.


Interest
8   Interest is payable by a registrant on environmental handling charges
that the registrant fails to remit as required by this Bylaw, and is
payable at the rate of 1% per month, compounded at a rate of 12.68% per
year, from the date the unpaid amount is due until the amount is paid.


Charges in trust
9   A registrant holds all environmental handling charges referred to in
section 5 in trust for the Association.


Recovery of charge
10   An environmental handling charge and any interest owing in respect of
it are recoverable by the Association in an action in debt.


Records
11   A registrant shall

     (a)  keep records of the registrant's transactions in lubricating
oil material and of the amount of the applicable environmental handling
charge,

     (b)  make those records available

               (i)  for inspection by the Association and
representatives of the Department of Environment, and

               (ii) for audit at the times and by a person designated
by the Association, and

     (c)  provide to the Association on request information in respect of
the registrant's transactions in lubricating oil material.


Confidentiality
12   Where the Association or a representative of the Department of
Environment acquires information under this Bylaw from a registrant and the
information relates to a trade secret, process or technique that the
registrant providing the information keeps confidential, the Association or
the representative, as the case may be, shall take all reasonable steps to
ensure that the information is not used or released in a form or manner
that is likely to undermine the confidentiality.


Repeal
13   The Lubricating Oil Material Recycling and Management By-law (AR
141/97) is repealed.


     ------------------------------

     Alberta Regulation 228/2002

     Environmental Protection and Enhancement Act

     LUBRICATING OIL MATERIAL ENVIRONMENTAL
     HANDLING CHARGE BYLAW

     Filed:  October 28, 2002

Made by the Alberta Used Oil Management Association on October 16, 2002
pursuant to section 8 of the Lubricating Oil Material Recycling and
Management Regulation.


Definitions
1   Terms that are defined in the Lubricating Oil Material Recycling and
Management Regulation (AR 82/97) have the same meaning when used in this
Bylaw.


Handling charge
2   The following environmental handling charges are prescribed for the
following lubricating oil materials for the purposes of section 5(2) of the
Lubricating Oil Material Recycling and Management Bylaw:

     (a)  for lubricating oil, $0.05 per litre or per kilogram;

     (b)  for lubricating oil containers, $0.05 per litre of container
size;

     (c)  for filters, $0.50 for a filter less than 203 mm in length, and
$1 for a filter 203 mm or more in length.


Repeal
3   The Lubricating Oil Material Environmental Handling Charge By-law (AR
160/97) is repealed.


     Alberta Regulation 229/2002

     Marketing of Agricultural Products Act

     ALBERTA MILK PLAN MINIMUM PRICE FOR
     SUB-CLASS 1A MILK ORDER

     Filed:  October 30, 2002

Made by the Alberta Energy and Utilities Board on October 28, 2002 pursuant
to section 5(4) of the Alberta Milk Plan Regulation.



1   The minimum price for sub-class 1a milk to be paid by processors for a
hectolitre of sub-class 1a milk is $73.03.



2   The Alberta Milk Plan Minimum Price for Sub-class 1a Milk Order (AR
196/2002) is repealed.



3   This Order comes into force on November 18, 2002.