Calgary Oil & Gas Regulatory and Standards Day January 18th 2023

1. 2023 Oil & Gas Regulatory and Standards Workshop Welcome message starts at 9:25 AM Calgary Time

2. Speaker Jonathan Brun President at Nimonik inc. Jonathan graduated in materials and metallurgical engineering and founded Nimonik in 2008. He has worked with companies in all sectors of the economy to help them implement, improve and execute their compliance management programs with a focus on compliance obligations and auditing. Jonathan believes that organizations that proactively manage their compliance will reduce costs, risk and better protect their staff and their stakeholders.

3. History Nimonik inc. Founded in 2008 to help Canadian businesses comply with Federal, provincial and municipal environmental regulations Launched a mobile auditing solution in 2012 Acquired Toronto based Conformance Check inc. in 2016 Acquired Shanghai based Envitool in 2017 Acquired Calgary based Media Logic in 2022 and expanded operations in Calgary and Western Canada Nimonik services over 30 Oil & Gas companies in Canada

4. Goals 1. Networking with industry peers 1. Learn and discuss with peers and knowledge leaders 1. Share areas of expertise amongst participants 1. Determine potential services, gaps and resources that could be offered to the Oil & Gas industry for improved compliance

5. Agenda 9:25 Welcome message 9:30 CER regulated midstream operations 11:00 Coffee Break 11:20 Regulatory change management best practices and NimonikApp 12:15 Lunch 1:00 Air emission regulatory changes 3:00 Break 3:20 Emerging methane regulations 4:45 End of day – drinks in Sheraton Bar (cash bar)

6. Admin Photos, video and recordings Virtual people joining sessions Knowledge sharing Dietary restrictions Presentations and handouts Badges Satisfaction survey, next event and follow- ups

7. Speaker Jesse Diron Regulatory Manager – Environment (Canada) at Vertex Resource Group Experienced project leader and management professional with 22 years’ experience in the energy industry. I have spent the last 19 years progressively managing more complex projects for my clients in energy, infrastructure, mining and government. This role has included representing my clients and their contractors through litigation as an expert witness, open houses, town halls and, hearings.

8. CER OVERVIEW AND UPDATES Operations and Maintenance Presented by Joe Jesse Dirom January 18, 2023

9. Operations and Maintenance

10. Canadian Energy Regulator Onshore Pipeline Regulations (SOR/99-294) Insert text here and fill up the whole page by writing across the text box and waiting for the text to wrap. Insert text here and fill up the whole page by writing across the text box and waiting for the text to wrap. • Last amended September 2022 • Derives authority from the Canadian Energy Regulator Act ◦ Formerly the National Energy Board Act ◦ Still widely referenced as the National Energy Board Act (NEBA) ◦ Regulations made under the NEBA remain in force ◦ New regulations and updates are ongoing (phased approach) What and when was the most recent update

11. Canadian Energy Regulator Onshore Pipeline Regulations (SOR/99-294) The key changes that the Canadian Energy Regulator Act that impact the operations and maintenance activities are as follows: • Section 56 adds an obligation for the commission and designated officers to consider any adverse effects that a decision, order or recommendation they make may have on the rights of the Indigenous peoples of Canada • When holding public hearings concerning the issuing, suspending or revoking of certificates for pipelines or international or interprovincial power lines or applications to abandon a pipeline, the regulator has the discretion to establish processes to engage meaningfully with the public and, in particular, Indigenous peoples and Indigenous organizations Bill C-69

12. Canadian Energy Regulator Onshore Pipeline Regulations (SOR/99-294) • Section 94 – Reasonable Care • Permit Holders must take all reasonable care to ensure the safety and security of persons, the safety and security of regulated facilities and abandoned facilities and the protection of property and the environment. • Section 95-101 – Regulator Authority Expansion • Allows regulator to craft regulations around: • Requirements for management systems in place • Includes cyber security systems Bill C-69

13. Canadian Energy Regulator Onshore Pipeline Regulations (SOR/99-294) • Opinion/non legal Section 56 • Obligation to consult has been significantly expanded and potential to consult on exists on O&M activities • Opinion/non legal Section 94 • Reasonable care is the caution and concern used by companies in any given situation to prevent harm • Essentially pay attention to what your peers are doing across the industry as this can be considered “reasonable care” • Opinion/non legal Section 95-101 • Regulator has been given authority to issue new regulations around management systems that allows for an “ever-evolving” requirement • Cyber security around pipelines will become a contentious and auditable issue in the near future Bill C-69

14. Takeaways – Up for discussion • We have seen an increase in consultation recently with First Nations on O&M activities as well as First Nation participation on integrity programs • Reasonable care clause is being used to increase standards as technology and Best Management Practices change • For example in order to claim reasonable care. An environmental management system should identify, manage, and control the risk of harm to the environment, and should document the risks and actions taken. These need to be recent and updated are per Section 6.5 of the OPR • Updates to regulations will continue (phased approach as per Bill C69) • Regulator has ability to craft new regulations

15. Where have I seen Violations (non-compliance) under the OPR Recently? • Section 6.5/6.6 • Adequacy of management system processes • Section 48 • Adequacy of environmental protection program • Spill readiness • Contaminated Sites Management • Section 47 • Training Programs • Safety management (specifically emergency situation management programs) • Damage prevention as per Section 16 of CER Pipeline Damage Prevention Regulations

16. Where have I seen Violations (non-compliance) under the OPR Recently? • Section 6.5/6.6 • Adequacy of management system processes • Section 48 • Adequacy of environmental protection program • Spill readiness • Contaminated Sites Management • Section 47 • Training Programs • Safety management (specifically emergency situation management programs) • Damage prevention as per Section 16 of CER Pipeline Damage Prevention Regulations

17. Takeaways – up for discussion Non-Compliance • Follow your internal approved documents to the letter onsite • Example if your approved plan calls for soil to be stacked sideways stack it sideways (extreme I know) • Ensure that your spill readiness is constantly evolving and that staff are trained in both process and implementation of the management plan • Utilize web based platforms that tie site specific information to an area so that you avoid IR’s • When companies make positive changes internally to management systems these changes need to be updated and reflected to CER • Audits are going to be ongoing and become more regular

18. DFO MOU Updates for CER • New MOU is due out in May • Some changes expected around critical habitat and how the banks and offsets to streams will be treated • Expect more audits in its annual report to parliament DFO stated the following “With the modernization of the Fisheries Act, we decided to take a ‘boots on the ground’ approach to monitoring and enforcing the fish and fish habitat protection provisions. The hours spent by fishery officers doing this work increased by 7,279 hours compared to the previous fiscal year. It also helped that we hired 35 new fishery officers—and at least 35 of our additional fish and fish habitat biologists became designated fishery guardians under the Fisheries Act. This designation enables holders to inspect sites such as dock construction, culvert installations or mining operations to verify compliance”

19. Questions? Thank You!

20. Nimonik.com - info@nimonik.com - 1-888-608-7511 - +86 021 51720468 Oil & Gas Regulatory and Standards Workshop In Break: Will return at 11:20 Calgary Time

21. Comprehensive Compliance Best Practices for Regulatory Change Management and Nimonik App workflows

22. About Us Founded in 2008 with offices in Montréal, Calgary and Shanghai. Nimonik services over 500 customers around the world, with a focus on companies with 500 – 20,000 staff.

23. About Us Nimonik is not an EHS management software or just a content provider or simply an audit tool. Nimonik is an integrated compliance solution for regulations, standards and internal requirements.

24. ISO 37301 Compliance Management Systems Standard: - Leadership & management - Culture - Systems, tools and processes based on risk - Reporting and identification Upcoming webinar in March

25. Unique Each organization must design its own compliance obligation management program based on risk, priorities, resources and organizational structure. You must own your compliance program.

26. Why compliance matters How to get there 1 2 Workflow Types 4 Agenda Compliance Obligations Structure 3

27. Minimal Management Supervisor led Systems are in place and training is mandated. Most of the issues are pushed by supervisors and reports identify problematic areas. General staff do not feel a strong responsibility for compliance. Integrated Team based compliance All members of the organization believe that compliance to standards and regulations is good business. Strong comprehension by all of policies and procedures. Easy access to data and software that empower teams. Reactive Focus on putting out fires Organization reacts to EHS, Quality and Compliance issues as they arise. People and teams respond only when there is an immediate problem. Inconsistent Piecemeal approach Some processes and systems are in place. Most facilities or business units are independent and do not share best practices or systems. Compliance Maturity Proactive Forward thinking Meet with stakeholders and regulators. Conduct continuous improvement of compliance program.

28. Most organisations do not know ALL of their obligations, leading to “surprises”... A typical Facility has 3,000 Compliance Obligations and 200 new ones per year.

29. The Four Pillars of Compliance Prevention Risk profile Historicals Monitoring Detection Early detection Self-reporting Internal Audits Response Fast response Data analysis Action plans Correction Actions Corrective Effectiveness

30. A Comprehensive Compliance program captures all of your Obligations across your areas of compliance: Quality, environmental, safety, HR, OHS, product... ...and Sources: External: Regulatory, standards, And Internal: contracts, approvals, permits, stakeholders, customers,... ...and enables timely management of Actions and Audits.

31. Actions External actions when regulations & standards change. Internal actions issued by your team to come into compliance. Audits Inspect your facilities based on your Obligations. Verify for action completion and effectiveness of those actions. Obligations External obligations from regulations & standards Internal obligations from your files, permits and procedures.

33. Traditional Compliance Approaches Shared Compliance Obligations ● Inconsistency ● Loss of institutional knowledge ● Time consuming In-house Shared Compliance Obligations ● Compliance gaps ● Variability in work ● Expensive Consultants Shared Compliance Obligations ● Compliance gaps ● Variability in work ● Expensive Consultants Shared Compliance Obligations ● Integration is complex and can take years ● Expensive to build & maintain Enterprise software

34. Clause Level 250,000 identified obligations Obligations in internal documents Web & Mobile Audits Convert obligations and actions into audits Inspect & collect evidence Document Level 500,000 external documents + Internal documents Nimonik Solution Architecture Action Management Actions when obligations change Actions you create Audits Obligations Actions

35. Continuous Comprehensive Compliance: Nimonik Implementation Select obligations & personalize the system Map to responsible teams Establish your process Monitor for changes Follow-up on compliance findings Identify Obligations with Questionnaire Audit compliance on a regular basis Continuous Improvement Plan Do Check Act

36. Elements for Success: Nimonik Implementation Management Understands proactive compliance is an investment Project Lead Can prioritize implementation and has the necessary support Team Recognizes the benefit of a compliance system and has time for training Comprehensive Compliance with Nimonik

37. Speaker Luz Gomez Customer Success Expert at Nimonik inc. Luz Gomez has a master’s degree in Environmental Assessment (MEnv) from Concordia University. As a Customer Success Expert at Nimonik, she implements new accounts and guides customers to achieve regulatory compliance. Luz has over 5 years of experience in the Environmental sector and 2 years of experience in the Health and Safety sector. Throughout her career, she has been involved with many companies and non-profit organizations in Canada and South America. She is also the President of Net Impact Montréal, a volunteer- led non-profit organization that helps connect, engage, and inspire the local community to take sustainability action.

39. Robust and mature program A program with room for improvement 1 2 Poll Little to no program 3

40. Key Definitions Facility: They represent your physical sites, or business operations, and can be thought of as folders that contain and organize all of your Audits, Compliance Obligations, and other account items. Compliance Obligations: Obligations include both the requirements that your organization must comply with and the requirements your organization chooses to comply with. These can include laws and regulations, contracts, codes of practice, and voluntary commitments like industry standards. Audits: Lists of questions created from templates, that can be used to evaluate compliance on an item-by-item level at your facilities.

41. Key Definitions External Documents & Actions: Documents that may apply to your organization and that are issued by an external party such as a regulator, government or standards body. External Actions are created by Nimonik when documents are issued or modified. Internal Documents & Actions: Documents that are specific to your organization and have bene issued by you or through an interaction with an external party (agency, …). Internal Actions are action items that your orgnization issues to itself.

42. General Structure Overview Facilities Compliance Obligations Module Audits Module Document Level Compliance Obligations Clause Level Compliance Obligations Comprehensive Compliance Audits Templates Audits

43. Identify your physical operations and outline Obligations, Actions and Audits for each location. Control access by business unit, region or facility. Facilities

44. ● Tags help tie the elements in your account together - by business unit, by product line or by anything that you wish to report by. ● Tags can be created and edited by account administrators. ● They can be associated to facilities, audits, internal actions and (soon) obligations. ● They can be used to filter reports. Tags

45. Lists of documents from the Library, that you are tracking for changes. Compliance Obligations Registers can be associated to a Facility or to multiple Facilities Compliance Obligations

46. The Compliance Obligations Register contains the following fields (columns): ● Category ● Document ● Track ● Status ● Published Date ● Modified Date ● Obligations ● Assessment Status ● Responsible Party ● Notes ● Assessment History ● Internal Actions ● Custom Fields Compliance Obligations Registers

47. ● Help group the documents in CO registers ● Can be used to filter the information ● Are editable and can vary from one CO to another Categories

48. ● Provide additional context and information ● Editable types ‘Custom Fields’ (Text, Date, User, Multiple Choice, & Risk) ● Use custom fields to link Compliance Obligations to control measures and internal policies Custom Fields

49. ● Category ● Document ● Track ● Status ● Published Date ● Modified Date ● Obligations ● Assessment Status ● Responsible Party ● Notes ● Assessment History ● Internal Actions ● Custom Fields Compliance Obligations Registers The Compliance Obligations Register contains the following fields (columns):

50. Compliance Obligations where you can view and assess each clause of a document individually. (Abbreviation: CLCO) Clause Level ● Clause ● Original Text ● Track ● Assessment ● Assessment History ● Responsible Party ● Internal Actions ● Custom Fields ● Full clause text Clause Classifications: Obligation – Contains information about what a non government entity must or must not do Applicability – Contains information about the applicability of the document, or a subsection of the document Obligation for Government – Contains information about what the government may or may not do Information – Contains information that does not fall into any of the categories above

51. ● Category ● Document ● Track ● Status ● Published Date ● Modified Date ● Obligations ● Assessment Status ● Responsible Party ● Notes ● Assessment History ● Internal Actions ● Custom Fields Compliance Obligations Registers The Compliance Obligations Register contains the following fields (columns):

52. Actions created by Nimonik when documents are added or updated in your Compliance Obligations. External Actions There are 4 types of external actions: New CO Document - A new document that matches your compliance obligations’ settings has been published New CLCO Clause - A new clause has been added to a document in your compliance obligations Updated CO Document - A document that you are tracking has been updated Updated CLCO Clause – A clause that you are tracking has been updated

53. The compliance obligations register contains the following fields (columns): ● Category ● Document ● Track ● Status ● Published Date ● Modified Date ● Obligations ● Assessment Status ● Responsible Party ● Notes ● Assessment History ● Internal Actions ● Custom Fields Compliance Obligations Registers

54. Actions created by Users in your account. Specifically, they can be created for: ● Scheduling Audits ● Documents and Clauses in Compliance Obligations ● Independently Internal Actions

56. Too many opinions?

57. Not too hot, not too cold… Considerations • Reporting and audit trails • Internal resources to review regulatory changes • Subject Matter Experts

58. A PARENT Facility/CO receives ALL New & Updated Documents/Clauses, and then link the New Documents to the CHILD Facility/CO. Each facility receives ALL New & Updated Documents/Clauses in their Compliance Obligations (COs) separated. OR ONE facility receives ALL New Documents in their Compliance Obligations (COs). And then the documents are duplicated in the applicable registers. Unique Compliance Obligations Shared Compliance Obligations All facilities use the SAME COs, which receive ALL New & Updated Documents/Clauses. Connected Compliance Obligations Shared Compliance Obligations Facility 1 Facility 2 COs 1 COs 2 COs 1 COs 2 Facility 1 Facility 2 COs 1 COs 2 Facility 1 Parent COs 1 Facility 2 Facility 3 Child COs 1 Child COs 1 New / Updated Document New / Updated Document New / Updated Document New / Updated Document

60. Unique Compliance Obligations Pros Cons Best for All registers receive New & Updated Documents/Clauses Duplicated work throughout the registers Companies who preferred that their teams oversee their obligations independently, and have enough capacity to invest time reviewing the registers Each register can be setup to receive documents related to specific sectors & topics Same documents in different registers Each Responsible Party oversees their registers Filtering process will be slower

62. Shared Compliance Obligations Pros Cons Best for Centralized registers used by all facilities Can get messy if too many facilities are using the same registers Small companies or teams that want to have visibility of ALL facilities’ compliance obligations All users will have visibility on the compliance obligations of the company Difficulty in closing actions as they might be applicable to other facilities using the register Saves time if the team is small Will receive a high number of documents, since ALL applicable sectors & topics are selected Information concerning applicability might have to me completed in other fields

63. A PARENT Facility/CO receives ALL New & Updated Documents/Clauses, and then link the New Documents to the CHILD Facility/CO. Each facility receives ALL New & Updated Documents/Clauses in their Compliance Obligations (COs) separated. OR ONE facility receives ALL New Documents in their Compliance Obligations (COs). And then the documents are duplicated in the applicable registers. Unique Compliance Obligations (2 Approaches) Shared Compliance Obligations All facilities use the SAME COs, which receive ALL New & Updated Documents/Clauses. Connected Compliance Obligations Shared Compliance Obligations Facility 1 Facility 2 COs 1 COs 2 COs 1 COs 2 Facility 1 Facility 2 COs 1 COs 2 Facility 1 Parent COs 1 Facility 2 Facility 3 Child COs 1 Child COs 1 New / Updated Document New / Updated Document New / Updated Document New / Updated Document

64. Connected Compliance Obligations Pros Cons Best for It is a centralized first review approach More responsibility to one party/team Companies that want to have a centralized register without document duplication and with the team capacity to review & connect the applicable documents Notes and custom fields can be connected to the child registers to maintain continuity Will receive a high number of documents, since ALL applicable sectors & topics are selected The Parent-Child relationship will keep the registers organized and avoid document duplication The responsible party of the Parent register must understand the operations of all facilties Independent review of the actions at the Child-Level

65. Each facility receives ALL New & Updated Documents/Clauses Unique Compliance Obligations Start ALL COs in ALL Facilities receive ‘External Actions’ published by Nimonik New & Updated Documents/Clauses Responsible Party of each CO reviews the ‘External Actions’ and closes non-relevant actions Responsible Party set the ‘Assessment Status’ to ‘Review’ Are the ‘External Actions’ relevant to the Facility’s operations? Responsible Party reviews the remaining ‘External Actions’ NO YES Change the ‘Assessment Status’ to ‘Applicable’ Change the ‘Assessment Status’ to ‘Non-Applicable’ Un-track the document if no further monitoring is required Update ‘Assessment Status’ to ‘Complying’ Once the ‘Internal Actions’ are completed, record closure notes and close the action Assign ‘Internal Actions’ & due date to the Responsible Party End Does the New & Updated Documents/Clauses require ‘Internal Actions’ to achieve compliance? Determine the ‘Internal Actions’ required YES NO

66. Connected Compliance Obligations Start A MAIN Facility/CO receives ALL ‘New Documents’ published by Nimonik Responsible Party of that CO reviews the New Documents and closes non-relevant External actions Responsible Party of each CO reviews the New Documents and all related ‘External Actions’ Change the ‘Assessment Status’ to ‘Non-Applicable’ Are the ‘External Actions’ relevant to the Facility’s operations? NO YES Change the ‘Assessment Status’ to ‘Applicable’ Un-track the document if no further monitoring is required A PARENT Facility/CO receives ALL New & Updated Documents/Clauses, and then link the New Documents to the CHILD Facility/CO. ONE facility receives ALL New Documents. And then the documents are duplicated in the applicable registers. Unique Compliance Obligations Responsible Party of that CO duplicates the document in the applicable COs Update ‘Assessment Status’ to ‘Complying’ Once the ‘Internal Actions’ are completed, record closure notes and close the action Assign ‘Internal Actions’ & due date to the Responsible Party End Does the New & Updated Documents/Clauses require ‘Internal Actions’ to achieve compliance? Determine the ‘Internal Actions’ required YES NO

67. All facilities use the SAME COs, which receive ALL New & Updated Documents/Clauses. Shared Compliance Obligations Start The COs shared by ALL Facilities receive ‘External Actions’ published by Nimonik New & Updated Documents/Clauses The Responsible Party of the shared COs reviews the ‘External Actions’ and closes non-relevant actions The Responsible Party of the COs set the ‘Assessment Status’ to ‘Review’ Are the ‘External Actions’ relevant to the Facilities’ operations? The Responsible Party of EACH Facility reviews the remaining ‘External Actions’ NO YES In a ‘Custom Field’ note which Facilities these documents apply to Add a ‘Note’ (Or use a ‘Custom Field’) to indicate the Facility that has completed the review Update ‘Assessment Status’ to ‘Complying’ Once the ‘Internal Actions’ are completed, record closure notes and close the action End Does the New & Updated Documents/Clauses require ‘Internal Actions’ to achieve compliance? The Responsible Party of EACH Facility determines the ‘Internal Actions’ required YES IF the ‘External Actions’ are NOT relevant to any Facility, the Responsible Party of the shared COs can change the ‘Assessment Status’ to ‘Non- Applicable’ Assign ‘Internal Actions’ & due date to the Responsible Party The Responsible Party of the shared COs closes the remaining ‘External Actions’ Change the ‘Assessment Status’ to ‘Applicable’ NO

68. Connect the New Documents to the applicable CHILD COs Connected Compliance Obligations Start The PARENT CO receives ALL ‘External Actions’ published by Nimonik New & Updated Documents/Clauses Responsible Party reviews the ‘External Actions’ and closes non-relevant actions Responsible Party reviews the New Documents in the PARENT CO Change the ‘Assessment Status’ to ‘Non-Applicable’ Are the New Documents applicable to the CHILD Facilities/CO? NO YES Change the ‘Assessment Status’ to ‘Applicable’ Un-track the document if no further monitoring is required Update ‘Assessment Status’ to ‘Complying’ Once the ‘Internal Actions’ are completed, record closure notes and close the action Assign ‘Internal Actions’ & due date to the Responsible Party End Does the Updated Documents/Clauses require ‘Internal Actions’ to achieve compliance? A PARENT Facility/CO receives ALL New & Updated Documents/Clauses, and then link the New Documents to the CHILD Facility/CO. The CHILD COs will receive the same updates to Documents/Clauses as the PARENT CO Determine the ‘Internal Actions’ required YES NO

69. Conclusion There is no turn-key solution. Each organization must design its own compliance obligation management tool based on organizational constraints and operational realities.

70. Any Questions?

71. Nimonik.com - info@nimonik.com - 1-888-608-7511 - +86 021 51720468 Oil & Gas Regulatory and Standards Workshop In Break: will return at 1:00 PM Calgary Time

72. Speaker Hillary Yeung Co-Founder of Horizon Compliance, Managing Partner, Emissions & Sustainability, B.A.Sc., P.Eng Hillary is a co-founder and managing partner of Horizon Compliance Group, a consulting company that provides comprehensive solutions for air, emissions and regulatory compliance. At Horizon Compliance, she is the subject matter expert in emissions quantification for regulated reporting programs, including greenhouse gas pricing programs and methane reduction. Throughout her career, Hillary has been heavily involved in guiding industry in managing and reducing their carbon liabilities. Hillary is a Professional Engineer and holds a Bachelor of Applied Sciences in Chemical Engineering from the University of Waterloo.

73. Presented By: Hillary Yeung, B.A.Sc., P.Eng. Co-Founder, Managing Partner Horizon Compliance Group Inc. Overview of Recent Regulatory Changes Updates to Industrial Carbon Pollution Pricing Alberta TIER & Saskatchewan OBPS

74. ▪ Alberta TIER and Saskatchewan OBPS documents were released at the end of 2022. ▪ Not all documents have been released ▪ Some documents still in draft ▪ Information sessions are planned: ▪ Saskatchewan OBPS – Thurs Jan 19, 8am ▪ Alberta TIER – Mon Jan 23, 1:30pm ▪ Information summarized in this presentation are subject to change Disclaimer 76

75. ▪ Regulatory drivers ▪ Common updates ▪ Alberta TIER review ▪ Saskatchewan OBPS review ▪ Discussion Overview 77

76. ▪ Aug 2021 – updates made to the Pan-Canadian Approach to Carbon Pollution Pricing (2023-2030) ▪ Increase reductions to meet Canada’s 2030 and 2050 targets ▪ 2030 – 40% below 2005 levels ▪ 2050 – net-zero ▪ Maintain the carbon pollution price signal by adjusting the stringency of output-based pricing systems ▪ Ensure carbon pollution pricing systems are comparable across Canada ▪ Provinces had until Sept 2022 to align with strengthened benchmark requirements to maintain equivalency with federal program ▪ Updated benchmark will apply for 2023-2030 period Regulatory Drivers 78

77. ▪ Global Warming Potential update CH4 = 28 (previously 25) N2O = 265 (previously 298) ▪ Applicable to the 2022 reporting year ▪ Confirmed in SK OBPS, Federal OBPS ▪ Not yet confirmed in AB TIER, updates to be made to Standard for completing greenhouse gas compliance and forecasting reports ▪ Carbon Pricing Update (Schedule 4 GHGPPA, excess emissions charge) ▪ Confirmed in AB TIER, SK OBPS ▪ Schedule 2 GHGPPA, Fuel Charge Rates, has not been amended ▪ Rates of charge applicable after March 31, 2022 remain applicable in 2023, for now? Common Updates 79 Product 2022 2023 2024 2025 2026 2027 2028 2029 2030 Carbon Price $50 $65 $80 $95 $110 $125 $150 $155 $170

78. Alberta TIER

79. ▪ Tightening rates are listed in the Standard for Developing Benchmarks, which has not yet been updated ▪ Currently unclear if 2% tightening rate is applied to the Aggregate Tightening Benchmark Type Old Tightening Rate New Tightening Rate LFE/Opt-in Facility Specific Benchmark 1% annually 2% annually High Performance Benchmark Fixed 2% annually Aggregate Facility Specific Benchmark Fixed at 10% ? 81

80. ▪ New high performance benchmarks for electricity, hydrogen, industrial heat ▪ Other high performance benchmarks are repealed: High Performance Benchmarks • Ammonia • Ammonium nitrate • Bituminous coal • Cement • Ethylene glycol • Hardwood kraft pump 82 Product 2022 2023 2024 2025 2026 2027 2028 2029 2030 Electricity (tCO2e/MWh) 0.3700 0.3626 0.3552 0.3478 0.3404 0.330 0.3256 0.3182 0.3108 Hydrogen (tCO2e/tH2) 9.068 8.993 8.919 8.844 8.769 8.694 8.620 8.525 8.470 Industrial Heat (tCO2e/GJ) 0.06299 0.06173 0.06047 0.05921 0.05795 0.05669 0.05543 0.05417 0.05291

81. ▪ Types of credits available ▪ Credit usage limit Credit Usage Credit Type Previous Expiration Proposed Expiration Emission Performance Credits (EPC) 8 years 5 years Emission Offsets (EO) 8 years 5 years Sequestration Credit (SC) NEW! N/A 5 years Years Credit Use Limit 2023 or earlier 60% 2024 70% 2025 80% 2025 and subsequent 90% 83

82. ▪ Large final emitter definition ▪ Exceeds over 100,000 tCO2e, or; ▪ Import more than 10,000 tonnes of hydrogen NEW! ▪ Emissions intensive trade exposed (EITE) sector ▪ Opt-in threshold reduced to 2,000 tCO2e (previously 10,000 tCO2e) Large Final Emitters & Opt-In Facilities 84

83. ▪ Large emitters and opted-in facilities that utilize carbon capture can claim reductions by the following: ▪ Generate emission offset (EO) credit from geologically sequestering CO2 ▪ Offset projects have 8-year crediting period (possibility of extension) ▪ Convert EO to a sequestration credit (SC) (sequestration occurs 2022 or later) ▪ Enable recognition under Clean Fuel Regulations ▪ Convert SC to a carbon reduction tonne (CRT) (sequestration occurs 2023 or later) ▪ Only if sequestration occurred at the TIER site in question. ▪ CRTs reduce total regulated emissions (TRE) TRE = DE – ICO2 + ECO2 + UCO2 - CRT Carbon Capture & Storage 85

84. ▪ Total Regulated Emissions ▪ Stationary Fuel Combustion, and; ▪ Flaring NEW! TRE = ESFC + EF + ECO2A ▪ Re-benchmarking and quantification requirements TBD ▪ Deadlines: ▪ New aggregate applications – due Nov 15th of the requested compliance year NEW! ▪ Additions to aggregate facilities – due Nov 15th of the requested compliance year NEW! ▪ Removals to aggregate facilities – due Dec 1st prior to the requested compliance year (no change) Aggregate Facilities 86

85. Saskatchewan OBPS

86. ▪ Updates: ▪ Management and Reduction of Greenhouse Gases (Standards and Compliance) Regulations ▪ (Baselines, Returns and Verification) Standard ▪ (Upstream Oil and Gas Aggregate Facility) Standard ▪ Performance Credit Standard ▪ New: ▪ (Electricity Compliance and Verification) Standard ▪ (Quantification, Measurement and Sampling) Standard ▪ Carbon Capture Utilization and Storage (CCUS) Credit Standard ▪ CCUS Credit Plan ▪ CCUS Credit Report Program Documents 88

87. ▪ Gross electricity generation as a product/sector is a new addition ▪ Two emissions options: ▪ Gas to power electricity emissions ▪ Generated by associated gas (gas produced from a well) ▪ Regulated electricity emissions ▪ All other electricity generation ▪ Two facility options: ▪ Electricity generation facility ▪ Industrial facility with integrated electricity generation Electricity 89

88. Electricity Emissions Intensity Standards Compliance Year Electricity (tCO2e/GWh) Heat (tCO2e/GJ) Solid Fuel Existing Gaseous Fuel1 New & Expanded Gaseous Fuel2 Liquid Fuel Sold Heat 2023 556 370 288 550 0.058 2024 538 370 247 550 0.058 2025 510 370 206 550 0.058 2026 482 370 164 550 0.058 2027 454 370 123 550 0.058 2028 426 370 82 550 0.058 2029 398 370 41 550 0.058 2030 370 370 0 550 0.058 1 applies to existing units (before January 1, 2023) 2 applies to new and expanded units (on or after January 1, 2023) 90

89. ▪ Opt-in threshold lowered to 0 tCO2e, except for electricity generation ▪ Large Emitter Definition ▪ Regulated electricity sector = 10,000 tCO2e NEW! ▪ All other sectors = 100,000 tCO2e (no change) ▪ Upstream Oil & Gas sector emissions sources: ▪ Stationary fuel combustion ▪ Includes gas to power and regulated electricity NEW! ▪ Flaring NEW! ▪ On-site transportation NEW! ▪ Industrial product usage NEW! Large Final Emitters & Opt-in Facilities 91

90. ▪ Upstream Oil & Gas sector emissions sources: ▪ Stationary fuel combustion ▪ Includes gas to power and regulated electricity NEW! ▪ Includes drilling operations (optional) NEW! ▪ Flaring NEW! ▪ On-site transportation NEW! ▪ Industrial product usage NEW! ▪ Change in definition of Part 2 and Part 3 (does not include drilling emissions) ▪ Part 2 aggregate <15,000 tCO2e (previously <10,000 tCO2e) ▪ Part 3 aggregate ≥15,000 tCO2e (previously ≥10,000 tCO2e) Aggregate Facilities 92

91. ▪ Total Regulated Emissions (TE) = Direct Emissions (DE) + Drilling Emissions (Di) ▪ Drilling operations benchmark (BD): 0.0255 tCO2e/metres drilled Aggregate Facilities - Drilling 93

92. Performance Standards Allocation Reductio n Period Upstream Oil and Gas Previous PSA Proposed PSA 1 1.25% 1.67% 2 2.50% 3.33% 3 3.75% 5.00% 4 5.00% 6.67% 5 6.25% 8.33% 6 7.50% 10.00% 7 8.75% 11.67% 8 10.00% 13.33% 9 11.25% 15.00% 10 12.50% 16.67% 11 13.75% 18.33% 12 15.00% 20.00% Reductio n Period Gas to Power Proposed PSA 1 0.62% 2 1.25% 3 1.87% 4 2.50% 5 3.12% 6 3.75% 7 4.37% 8 5.00% 9 5.00% (assumed) 10 5.00% (assumed) 11 5.00% (assumed) 12 5.00% (assumed) 94

93. ▪ Quantification methodology for stationary fuel combustion, on-site transportation, and flaring ▪ Generally align with AB TIER, ECCC GHGRP ▪ Measurement and fuel sampling requirements for: ▪ Fossil fuel use in regulated electricity generating units ▪ Marketable natural gas ▪ Liquid fuels ▪ Solid fuels ▪ Drilling operations Quantification, Measurement, Sampling 95

94. ▪ CCUS credits can be generated by: ▪ CCUS Credit Plan – project registration ▪ CCUS Credit Report – credit serialization ▪ CCUS credits may only be used for OBPS compliance by regulated emitter that generated the credits ▪ CCUS credits cannot be sold or transferred to other regulated emitters. Carbon Capture Utilization & Storage 96

95. Discussion

96. ▪ CCUS ▪ Implication of third-party carbon hubs on compliance ▪ Aggregate facilities ▪ Addition of flaring source – how will this impact compliance? ▪ How will this affect benchmarking? ▪ Alberta TIER ▪ How can we forecast compliance with tightening rates? Aggregate vs. LFE/Opt-in ▪ Repealed HPBs, will these facilities have to establish FSBs? ▪ Saskatchewan OBPS ▪ Gas to Power operations with associated gas – does this heavily impact compliance? Suggested Discussion Topics 98

97. Contact: Hillary Yeung, B.A.Sc., P.Eng. Co-Founder, Managing Partner Horizon Compliance Group Inc. hillary.yeung@horizoncompliance.com www.horizoncompliance.com Questions?

98. Nimonik.com - info@nimonik.com - 1-888-608-7511 - +86 021 51720468 Oil & Gas Regulatory and Standards Workshop In Break: Will return at 3:30 Calgary Time

99. Presented By: Hillary Yeung, B.A.Sc., P.Eng. Co-Founder, Managing Partner Horizon Compliance Group Inc. Overview of Upcoming Regulatory Changes Methane Reduction Requirements Federal, Alberta and Saskatchewan

100. ▪ Regulatory drivers ▪ Current regulations and timelines ▪ Review of proposed changes ▪ Discussion Overview 102

101. ▪ Nov 2022– proposed regulatory framework for reducing oil and gas methane emissions to achieve 2030 target ▪ Previous target: 40-45% reduction below 2012 levels by 2025 ▪ New target: at least 75% reduction below 2012 levels by 2030 ▪ Proposed amendments expand the scope of existing regulations: ▪ Apply to more sources ▪ Eliminate exclusions ▪ Require zero emissions as much as possible Regulatory Drivers 103

102. Federal ▪ Regulations Respecting Reduction in the Release of Methane and Certain Volatile Organic Compounds (Upstream Oil and Gas Sector) ▪ Reduction in the Release of Volatile Organic Compounds Regulations (Petroleum Sector) ▪ Proposed: A proposed approach to control volatile organic compounds (VOC) emissions from the storage and loading of petroleum liquids Alberta ▪ Alberta Directive 060 Upstream Petroleum Industry Flaring, Incinerating, and Venting: Chapter 8 Saskatchewan ▪ Saskatchewan Oil and Gas Emissions Management Regulations ▪ Saskatchewan Directive PNG036: Venting and Flaring Requirements Current Regulations 104

103. ▪ Alberta and Saskatchewan currently have equivalency with federal methane regulations ▪ Equivalency can be terminated earlier by either government with at least 3 months written notice ▪ AER expects draft federal regulations to be released by Q1/Q2 2023. ▪ Alberta stakeholder engagement is planned to begin shortly after Timeline 105

104. Hydrocarbon Gas Conservation and Destruction Equipment Jurisdiction Approach Proposed Federal ▪ Destruction = 99%+ control efficiency ▪ Conservation = 98%+ efficiency ▪ Fuel combustion = 95% control efficiency Current Federal ▪ Destruction = must satisfy requirements from AB D060, SK S-20, BCOGC Flaring & Venting Guideline ▪ Conservation = 95%+ efficiency ▪ Fuel combustion if using conserved gas = 95% control efficiency Alberta ▪ Flares and incinerators must be properly designed ▪ Incinerators ≥ 99%, otherwise treated as a flare Saskatchewan ▪ Flares and incinerators must be properly designed ▪ Incinerators ≥ 99%, otherwise treated as a flare 106

105. ▪ Flare conversion efficiency adopted from USEPA studies and summarized in TIER AQM (Ver 2.2) ▪ 98% for unassisted flares (typically in remote oil and gas production operations) ▪ 99.5% for properly-operated, highly turbulent, air-or steam- assisted flares (typically in gas plants, upgraders, refineries, chemical plants) ▪ Minimum incinerator conversion efficiency defined and as required by D060 and PNG036 ▪ 99% for all incinerators Conversion Efficiency 107

106. Flaring Jurisdiction Approach Proposed Federal ▪ Prohibited at all oil sites ▪ Enclosed combustion must have auto-igniter ▪ Operators required to ensure equipment is working Current Federal ▪ N/A Alberta ▪ Routine or continuous flaring at oil facilities can flare within the parameters of facility licenses Saskatchewan ▪ Routine or continuous flaring at oil facilities can flare within the parameters of facility licenses 108

107. General Facility Venting & Flaring Jurisdiction Approach Proposed Federal ▪ No conditional requirements ▪ Oil facilities >5 m3/day (flare + vent volume) required to eliminate venting (gas conservation) ▪ Surface casing vents required to be controlled (conservation/destruction) Current Federal ▪ Upstream oil and gas facility must not vent >15 e3m3/year (excludes liquids unloading from gas well, blowdown, glycol dehy, pneumatics, compressor vent, start up/shut down, well completion, emergencies) Alberta ▪ Overall vent gas limit – 15 e3m3/month Saskatchewan ▪ Oil facilities >900 m3/day must flare non-conserved gas (except for emergencies) ▪ Oil facilities (corporately) must not exceed OGEMR emissions intensity limit per production class 109

108. Pneumatic Devices Jurisdiction Approach Proposed Federal ▪ All pneumatics required to be non-emitting or captured Current Federal ▪ Pneumatic controllers – 0.17 m3/h ▪ Pneumatic pumps cannot vent unless permit is approved Alberta ▪ New pneumatic devices and pumps (after Jan 1, 2022) cannot vent ▪ Existing pneumatic devices – 0.17 m3/h Saskatchewan ▪ Oil facilities >900 m3/day must flare non-conserved gas (except for emergencies) ▪ Oil facilities (corporately) must not exceed OGEMR emissions intensity limit per production class 110

109. Fugitive Emissions Jurisdiction Approach Proposed Federal ▪ All facilities required to have monthly inspections ▪ Leak repair must be completed immediately, or request extension ▪ Non-producing wells required to have annual inspections Current Federal ▪ Triannual inspections required ▪ Single wellhead sites excluded ▪ Leak repair within 30 days Alberta ▪ Triannual or annual inspections based on facility type ▪ Well-sites require annual screenings ▪ Leak repair within 30 days Saskatchewan ▪ Semi-annual inspections for gas facilities based on subtype 111

110. Compressor Engine Exhaust Jurisdiction Approach Proposed Federal ▪ Compressor engines would be required to achieve complete combustion and reliable ignition ▪ Methane emissions cannot exceed 1 g/kWh methane ▪ Smaller compressors would be included in vent limits Current Federal ▪ Compressor venting limits for units ≥ 75kW Alberta ▪ Compressor venting limits for units ≥ 75kW Saskatchewan ▪ N/A 112

111. Planned Blowdowns Jurisdiction Approach Proposed Federal ▪ Planned pipeline blowdown activities required to be controlled (conservation, destruction, or re-routing) Current Federal ▪ N/A Alberta ▪ Blowdown activities allowed to vent (some limitations) Saskatchewan ▪ Blowdown activities allowed to vent (some limitations) 113

112. Distribution Pipelines Jurisdiction Approach Proposed Federal ▪ Fugitive management, pneumatic device and blowdown rules would be applied. Current Federal ▪ N/A Alberta ▪ Must follow Chapter 6 and 7 in D060: Venting events cannot exceed 2 e3m3 and must not exceed 24 hours. Saskatchewan ▪ General limitations for non-routine venting. 114

113. Liquids Unloading Jurisdiction Approach Proposed Federal ▪ Well liquids unloading activities required to use capture/recovery or install control device (minimum 95%). Current Federal ▪ N/A Alberta ▪ Short-term venting for well unloading allowed Saskatchewan ▪ Short-term venting for well unloading allowed as long as corporate OGEMR venting limits are met 115

114. Glycol Dehydrators Jurisdiction Approach Proposed Federal ▪ Required to reduce emissions by at least 95%, or emissions need to be captured Current Federal ▪ N/A Alberta ▪ Methane and benzene emissions limits apply Saskatchewan ▪ Benzene limits apply 116

115. Discussion

116. ▪ How will this impact current provincial requirements? ▪ Feasibility of proposed changes: ▪ Flaring elimination – what is the impact to operations? ▪ Venting elimination – what is the impact to operations? ▪ Availability of service providers ▪ Ability of current technology Suggested Discussion Topics 118

117. Contact: Hillary Yeung, B.A.Sc., P.Eng. Co-Founder, Managing Partner Horizon Compliance Group Inc. hillary.yeung@horizoncompliance.com www.horizoncompliance.com Questions?

118. Wrap-Up Slides and videos will be distributed Satisfaction survey is in your inbox. Please provide feedback for next event and follow-ups Drinks downstairs in the hotel bar! Thank you and please do not hesitate to reach out to us at info@nimonik.com

119. Next Webinars ECO Canada Impact Conference & Awards: January 19th-20th, Calgary, AB NimonikApp Training & Demonstration: January 24th, 2023, Online ISO 37301 - Compliance Management System Guidelines: March 14th, 2023, Online Another Oil & Gas Conference?

120. Nimonik offices Solution Partners Montréal HQ Shanghai Nimonik.com - info@nimonik.com - 1-888-608-7511 - +86 021 51720468 Thank you! Calgary

Calgary Oil & Gas Regulatory and Standards Day January 18th 2023

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