The new rules will apply to industry practices such as flaring, venting and burning off gas and are to go into effect June 16.
Jim Ellis, president of the Alberta Energy Regulator, said the changes will help ensure the safe and environmentally responsible development of energy resources.
"Revisions to Directive 060 give the AER tools to require gas conservation, regardless of the economics of an oil and gas operation and addresses off-lease hydrocarbon odours,” Ellis said in a release Tuesday.
The changes give the regulator the power to order the mandatory conservation of gases for specific areas and projects.
The regulator can also take action against a company if odours from a project are determined to be a problem.
The change is partly the result of hearings into odours caused by oilsands processing in northwestern Alberta that prompted some families to move away from the area.
Ellis said the regulator has also accepted most of the recommendations in a report released in March by a panel into complaints that Baytex Energy Inc.'s (TSX:BTE) operations are creating powerful gassy smells in the Peace River area.
The report said steps must be taken to eliminate gas venting, reduce flaring and conserve all produced gas in the area where feasible because it could cause health problems.
"We will take immediate action to address the panel's recommendations and work to address odour issues in the Peace River area," Ellis said.
The regulator said existing heavy oil and bitumen operations in the region must capture all produced gas by Aug. 15.
New operations must have gas controls in place by May 15.
Calgary-based Baytex uses an unusual method of heating bitumen in above-ground tanks to extract oil. Four other companies in the area use a similar process.
Last month Baytex said the company is moving to install equipment to capture emissions from the tanks.
The regulator did not accept two recommendations in the report that pertain directly to health, saying they fall within the provincial government's jurisdiction.
One recommendation calls on the Alberta government to conduct studies to better understand the potential link between effects of oilsands odours and emissions on human health.
The other recommends that the government help local physicians consult with environmental health experts to help diagnose symptoms associated with odours and emissions from oilsands operations, and to help physicians provide proper treatment.
"The Alberta Energy regulator supports both of these recommendations, however, the AER does not have jurisdiction over health-related matters," reads the regulator's response to the report.
"The AER will collaborate with Alberta Health on these recommendations to deliver a response."
An Alberta Health official said these two recommendations are under review.
— By John Cotter in Edmonton