Alberta municipalities have no power over oil and gas development within city limits; Minister of Energy Diana McQueen appears to be setting up to synergize (silence) cities opposed

Neighbourhood wells, Municipalities have no power over oil and gas development within city limits by Suzy Thompson, February 27, 2014, Fast Forward weekly
In December 2011, Kaiser Exploration obtained a licence to drill four oil wells in a small parcel of southern Alberta prairie. Several months later, Goldenkey Oil received the rights to drill three exploratory fracking wells in a similar area. Before long, both of the Calgary-based oil companies’ projects faced heated public and political opposition. A petition against Goldenkey’s relatively small project has received [10,000] signatures to date, while a public information forum organized by opponents to Kaiser’s project was filled to capacity. “It was at the local church and we were told to expect about 100 people. I would say about 600 showed up,” says forum organizer Dawn Stewart. “The ERCB [Energy Resources Conservation Board, now the Alberta Energy Regulator] spokesperson that was there had said he never expected that many people to attend.” Both situations motivated MLA Ken Hughes, then energy minister, to initiate a policy review before a cabinet shuffle replaced him with Diana McQueen.

The sticking point for the companies’ drilling plans is their proximity to urban neighbourhoods. Kaiser’s original plan was to drill for oil behind a Walmart in the northwest Calgary neighbourhood of Royal Oak, 400 metres from the nearest homes.

Stewart says residents of Royal Oak and Rocky Ridge doubted the safety of placing an oil operation beside communities with a combined population of 18,000, on land containing an underground water storage facility for pre-treated drinking water, and with only one arterial road that could be used for evacuation in an emergency. “We were told an emergency plan was set for the drilling site, but the city was responsible for the residents,” Stewart adds.

Kaiser eventually compromised with the disapproving community and agreed to move the wells 2.3 kilometres away from the city. Goldenkey’s intention to drill within Lethbridge city limits, however, has not changed.

“The proposed exploratory wells are happening in the fastest growing area of our city,” laments Lethbridge Mayor Chris Spearman. “We’re putting in a $55-million aquatic centre, we’re putting in a $40-million ice centre with hockey rinks and a curling rink — it’s right next to high schools, there’s a private developer who wants to put in a $35-million mixed commercial development, and then this comes out of the blue that they want to drill for oil and gas exploratory wells and if it’s successful there will be more wells…. People who bought homes in the area and developers who want to build in the area are saying, what the heck?”

Spearman’s instinct was to tell Goldenkey they couldn’t drill in the city, which he did when the Lethbridge city council passed a resolution in November 2012 opposing urban oil and gas exploration within city limits on the grounds it would hinder development and burden the city with associated health and financial risks. Shortly after, Lethbridge learned what Calgary was coming to realize: municipalities have no power to prohibit oil and gas activities on city land — or anywhere else, for that matter.

Regardless of whether the city owns the land in question (in Lethbridge’s case it does; in Calgary’s case, the land where Kaiser holds a drilling lease belongs to the province), the provincial government retains the mineral rights. Spearman says the government sells tenures to drill based on geology, not compatibility with pre-existing activity in the area.

“We can control through municipal planning the location of all other industries. We create industrial parks and we can locate refineries and we can locate food processing plants, distilleries; we can put them all into an industrial park in an area of the city that doesn’t affect residential or commercial development.

The exception here is that oil and gas can happen anywhere. It can happen downtown if somebody gets the lease for that…. What’s frustrating from a municipal standpoint is there is no way to really combat this. We can go through the AER — the Alberta Energy Regulator — but really we would have no greater say than anybody.”  [And that’s no say, except if you’re an energy company. Rural Albertans have known for decades they have no say, not even to say no to toxic frac or sour operations 100 metres from their homes and livestock operations. The AER (when it was still the ERCB) wrote Ernst that she didn’t have any rights or standing, not even to participate in Appropriate Dispute Resolution or a hearing, and granted Encana approval to drill under her already dangerously methane and ethane contaminated land. The legally immune, “no duty of care” regulator continues to allow Encana to drill and frac more cumulative negative impacts to the already frac’d Rosebud drinking water aquifers.]

Calgary Ward 1 Coun. Ward Sutherland got involved in the urban drilling issue in 2012 when he was still the president of the Rocky Ridge Royal Oak Community Association. Due to the time Sutherland spent learning about the arcane regulations that permit urban drilling [What about the arcane regulations that allow toxic oil and gas operations 100 metres from rural homes, schools, churches, hospitals, community centres and livestock operations?], he is now a local expert. Sutherland says that since joining city council in October 2013, Mayor Naheed Nenshi has tasked him with leading communication between council and the Alberta government on the subject. The AER states there are currently 16 oil wells operating within Calgary city limits. Calgary has been pushing the provincial government to rewrite its policies on urban drilling since 2012. … However, he does want municipalities to have the power to judge a drilling proposal the same way they judge other industrial activities, and be able to say “no.”

“From a city’s perspective, what we’re looking at is minimum setbacks to residential, minimum setbacks to businesses, zoning… egress and entrances, whether the roads are verified for hazardous goods depending on what’s going on…. So it would be basically going through all the departments — planning, zoning, all that stuff — and it would need to meet specification,” Sutherland explains. The councillor says he was alarmed when he learned Calgary doesn’t have the power over oil extraction that it does with other industries within its boundaries, and was further alarmed that the regulatory policy the government uses to sell extraction tenures was last amended 40 years ago. In 2012, Hughes pledged a review of the outdated policy and promised a new one would be ready by summer 2013. It wasn’t. Nor was the review complete by the revised December 2013 deadline.

Current Energy Minister Diana McQueen says she still plans to conduct the urban drilling policy review, but she hasn’t committed to a new deadline. “We’ve got a number of files we’re looking at, that’s certainly one,” she says. McQueen says the Energy Ministry will develop a stakeholder engagement process in “coming weeks.” [aka “Synergy Alberta”, sole purpose to exhaust and “engage” courageous outspoken citizens for years to create binders of industry “best practices” that companies ignore, while the drilling and frac’ing escalates around the community with the synergized too busy and worn out to notice] In the meantime, she is confident in existing processes that allow parties affected to file a statement of concern with the AER to review any drilling project. [Harmed citizens used to be allowed to submit “objections.” Why did the government have the ERCB, now disguised as the AER, disallow this?]

“A municipality, like any other [affected party] could file a statement of concern…. We have a really strong regulatory process in this province. The regulator looks at many things whether they be environmental, land issues, those things. We’ve got years of experience with regards to regulatory process and thousands and thousands of wells and so there’s a really effective process in place,” says McQueen. [Excellent foreshadowing for Alberta urbanites.]

Lethbridge has filed a statement of concern with the AER, but Spearman suggests the regulatory framework needs an overhaul to balance the interests of municipalities with energy companies. “I think it’s incumbent on the province to bring forward an urban drilling policy…. It’s been a contentious issue in the past two years in three different locations and it’s going to continue to happen,” he says. “I’d go so far as to say there should be a freeze on future urban drilling until that policy comes forward and I’ll be proposing that to our sitting council at our next council meeting [March 3].

Spearman points to the Athabasca Regional Plan and draft South Saskatchewan River Basin Plan to support his argument that the Alberta government’s first priority is supporting energy extraction, not balancing all stakeholders’ interests. “That’s the number one outcome for our land and water use under the proposed South Saskatchewan Regional Plan. The provincial legislation that’s referenced is the Responsible Energy Development Act, the Mines and Minerals Act, the Gas Resources Preservation Act, the Gas Utilities Act, the Oil and Gas Conservation Act, the Coal Conservation Act, the Coal Sales Act, the Environmental Utilities Act and the Hydro and Electrical Energy Act. So you can see that the Municipal Government Act is not referenced there, so municipalities have no say whatsoever,” he says. [Albertans, rural and urban, also, have “no say whatsoever.”]

Hope for municipal power may also lie in the long foretold city charters. The concept of rewriting the Municipal Government Act to give larger cities like Calgary greater autonomous powers through a city charter could theoretically include control over drilling rights within city limits. But that may be a long way off, and no politician is ready to speculate. “It’s way too early to talk about that,” says McQueen. [Emphasis and comments added]

2014 02 27 Calgary Fast Forward Weekly Urban Oil and Gas Drilling

[Refer also to:

FrackingCanada: Fracking Calgary

Synergy Transforms Regulatory Foes Into Friends – When It Works by Oil and Gas Inquirer, November 2006 [After Ernst sent this article to groups being currently synergized in Alberta, the damning article was pulled off the Internet and no longer available on the Synergy Alberta page snapped below.]

The article was previously available at:

2013 10 07 screen capture Synergy Alberta 2006 article

The Tay River Advisory Committee – a recently-formed synergy group in the foothills —aims at easing potential frictions in the development of a sour gas discovery. Near Caroline, however, the Butte Action Committee has failed to staunch a dispute over a shallow gas well along the Medicine River. Judy Winter, a farmer, retired teacher and synergy pioneer, says the two cases illustrate the goals as well as the limits of co-operation and neighbourly compromise.

At its core, synergy refers to people from various sides of an issue voluntarily working out a mutually acceptable solution. More than 60 local groups are active in Alberta, including Calgary and Edmonton, and the number continues to grow. At the end of October, Winter (shown here, on the left) was mistress of ceremonies for the three-day founding conference of Synergy Alberta. The non-profit organization, incorporated this summer, will provide training and other support to the province-wide movement.

Although sparked initially by local activism, synergy has acquired heavyweight backing. In particular, this approach is endorsed by the Alberta Energy and Utilities Board (EUB), which provides funding for Synergy Alberta. So do the Canadian Association of Petroleum Producers, Small Explorers and Producers Association of Canada and the Canadian Association of Petroleum Landmen. “For synergy to succeed, everyone must recognize that the others have a right to participate in the decision-making process,” Winter explains. “We try to think as a community, to move away from an ‘us versus them’ attitude. For example, the individuals involved in a discussion should sit at a round table. And I always insist that we eat together.”

Human details are important, says the mother of four, who has spent a lifetime coping with hormone-riddled junior high students and obstreperous cattle. In 1999, she co-founded the Butte Action Committee, triggered by a Petro-Canada application to withdraw groundwater for oilfield injection. “The earlier synergy groups, like ours, grew out of conflicts with oil and gas producers,” Winter says. “Now some committees are forming to address problems before they become confrontations.”

The Tay River committee is taking that pro-active approach. Off-road vehicle enthusiasts and green lobby groups – two factions prone to mutual loathing — discuss minimizing the human footprint in the district. Shell Canada and other producers are learning from trappers how to best avoid disrupting their livelihoods. Similarly, hunting guides let energy operators know when and where their high-paying clients will be looking for that prize buck. Other insights come from the Sunchild First Nation and provincial regulatory representatives.
“Shell, Talisman, Husky and other producers hope to be active in this area for at least 30 years,” Winter comments. As majors, they can afford to invest time and money to avoid the delay and expense of potential regulatory battles. The farmer concedes that smaller producers have fewer resources for synergistic work but she maintains that failure to co-operate will often mean higher costs in the long run.

After drilling an appraisal well, Shell recently reduced its estimate of the gas in place in the Tay River structure to 250 billion cu. ft. from its original assessment of 500-800 bcf. Even so, the company continues to explore for other Leduc reef opportunities in the central Alberta region.

Further east, groundwater has sparked a regulatory showdown between Intrepid Energy Corporation and two families backed by the Butte Action Committee. Intrepid, a privately-held junior, is applying to the EUB for a license to drill a sweet shallow gas target (13-18-36-1W5M) in the Tindastoll field. If the first probe proves successful, two more wells could follow on an adjacent property, with spacing of four wells per section.

Winter says the sweet gas well would penetrate an ample shallow aquifer which flows into the Medicine River, a tributary of the Red Deer River. “A frac could damage the aquifer by creating communication with other zones. We don’t want to risk losing that water,” the action group leader comments. Intrepid refused to participate in the synergy process. Matters weren’t helped when Winter received an email from the Calgary-based company complete with cursing.

Bernie Goruk, Intrepid’s senior vice-president of engineering and operations, acknowledges that a rude email, unacceptable even as an internal corporate memo, was accidentally forwarded to Judy Winter. “We’ve apologized to her and internal discipline has been applied,” he says. The EUB reviewed the incident; Neil McCrank, the board’s chairman, wrote that “it is important not to assume this indiscretion by an individual translates into corporate policy or indifference to the public or regulation by the company.”

From: “Paul Mortensen” <email hidden; JavaScript is required>
Sent: Monday, April 24, 2006 7:26 AM
Subject: RE: Objection 13227 Intrepid Tinda 13-18-36-1 W5 Well Licence Application # 1451992

Frankly, the Butte (fu….) Action committee can go fuck themselves. I am
not wasting any time on this response since I do not have time. I am not
meeting with them.

[A Mr. Paul Mortensen now works for the National Energy Board]

Goruk stresses that his firm believes in the concept of social co-operation. “For instance, we belong to the Pembina-Nisku Operators Group. And we would be more than willing to participate in any Caroline area forum if it includes all producers. Naturally, the Butte Action Committee should participate in any discussion that addresses the intensity of development across the area.”

However, the company views its application to drill three shallow Tindastoll wells as a small-scale matter which should involve specific landowners only. If this was an application for a sour gas well with a number of families living inside the Emergency Planning Zone, Goruk comments, then involving a synergy group would make more sense.

“We don’t think the Butte Action Committee qualifies in this case as an affected party under the EUB guidelines,” he argues. The EUB itself has not granted intervenor status to the committee. Intrepid offered to go through an alternative dispute resolution process recommended by the EUB but it became clear that one landowner would oppose drilling under any circumstances whatever. With all other options exhausted, the EUB will schedule a public hearing early next year to consider the Intrepid application.

Goruk himself, working with his father and brother, happens to raise canola and barley along the Medicine River. The family’s land is located around six miles upstream of the proposed Tindastoll wellsite. By rural standards, the disputants are neighbours. ”When ConocoPhillips applied to drill a well on our property, we had the same concerns as any farmer about noise, smell and water,” the Intrepid operations chief says. In its Tindastoll application, the company has attempted to address those “valid and serious” questions.

Goruk believes the following points are relevant to this drilling application:

  • The shallow well will be drilled with tried and true precautions to protect and seal off the aquifer.
  • Any frac will be small and, at 350 metres or deeper, safely below the depth of the aquifer.
  • A well has already been drilled by another company about one mile to the west. Similar aquifers and wells are common in the area.

Higher density shallow gas drilling has occurred for decades in water-poor southeastern Alberta with no ill effects to aquifers. While acreage owners and farmers in west central Alberta may be less familiar with the practice, they have no special reason for concern. Goruk is sympathetic to landowner concerns about cumulative environmental and social effects in a district like Caroline or Tay River. He suggests that assessments of those impacts are best addressed by industry associations, not an individual producer like Intrepid. Further, he says that consistent standards and stewardship must apply to forestry, agriculture, tourism, construction and all other activities, not just to energy development.

Winter, a realist (as any cow-calf operator must be to survive), recognizes that some disputes will have to be settled through the EUB’s quasi-judicial authority. But wherever possible, she prefers the gentler technique of mutual influence and voluntary agreement. “The synergy process is really rewarding at an individual level,” the former teacher says. “Instead of crossing the street to avoid someone, you find yourself becoming friends.”

Synergy Alberta is largely controlled by Encana, Shell and CAPP:

Source of above screen capture: Synergy Alberta

Above two slides from Ernst presentation September 22, 2012, Whitehorse, Yukon

Slide from Chapter on Synergy Alberta Ernst Presentation to Eagle Hill Alberta, March 15, 2012

2013 10 07 Synergy Alberta Board of Directors Industry Reps Only Encana Shell and CAPP

Industry representation on Synergy Alberta’s Board of Directors is only Encana, Shell and the Canadian Association of Petroleum Producers (CAPP). CAPP is largely controlled by Shell and Encana; the Alberta Energy Regulator’s current Chair, Gerard Protti, founded and chaired CAPP for years, handed over the reins to Shell, and was VP of Encana.

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