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Revision as of 17:21, 6 September 2020

 Landowners' Guide
 to Oil and Gas Development

Download the PDF version of the Landowners' Guide here


Download the PDF version of the Landowners' Primer here


Introduction to 3rd Edition

We are proud to release the third edition of the Landowner’s Guide to Oil and Gas Development both electronically and in print free to the public.[1] The intent of the new Landowner’s Guide is to provide all parties with access to a common body of information about citizens’ rights in Alberta as they relate to oil and gas development. We hope it will serve as a valuable tool for landowners, those who rent land, real estate professionals, the oil and gas industry, and any members of the public who may have oil and gas development close to or on their property.


First released in 2001 as When the Oilpatch Comes to Your Backyard, and revised in 2004, the guide was a resource that rural residents and landowners remember fondly more than a decade later as an impartial and comprehensive resource. It was seen as a tool to help landowners feel more empowered in their conversations, interactions and negotiations with oil and gas producers. These readers discovered what environmental issues they needed to consider before signing a surface lease or right-of-way agreement. They learned the roles of the various government bodies and where they could seek independent advice. As well, members of the public discovered what to do if they were affected by developments on adjacent property.


Since 2004, however, much has changed. New rules and technologies are impacting landowners differently. Specifically, the Alberta government has introduced new legislation, regulations and procedures; the responsibilities of some departments have changed; and since 2013, the Energy Resources and Conservation Board has been replaced with the Alberta Energy Regulator which is instituting significant changes in the regulatory space for oil and gas in the province.


The shale revolution represents a completely new and extensive type of oil and gas resource and this industry is developing at a rapid pace. Shale oil and gas development is also occurring in new locations, bringing activity to landowners who may have never experienced development in their area. While hydraulic fracturing uses some similar equipment and techniques as other conventional oil and gas wells, there are also considerable differences — its operations are generally more intensive (more equipment, large well sites, longer duration on site, etc.), and it comes with some unique considerations for maintaining your property and protecting the surrounding environment.


With new communication tools and styles it was also time to improve availability of the guide by providing electronic versions in addition to printed copies — although hard copies will still be available for those with internet connection challenges.


The third edition reflects the considerable changes that have occurred and provide readers with the information to understand how oil or gas operations and policy and regulatory system work.


One of the most significant learnings we’ve heard in our work with many knowledgeable people in the field is that early involvement is critical. The earlier that stakeholders start to discuss and get involved in in the planning and development stage, the more likely it is that all stakeholders can find ways to work out issues and settle on mutually beneficial solutions. We heard this advice from people across the spectrum —landowners, industry and regulators — and it reflects their experiences in both discussions that ended well and those that ended poorly.


It is with this in mind that we encourage readers to read Getting Started in its entirety, as it provides important background information and advice to keep in mind while reading through the guide. If a nearby oil or gas project is not yet approved by the Alberta Energy Regulator, Before the Project Starts will provide you with the context you need to know about being involved in the project before a decision is made. We understand that many readers may not read the guide from cover to cover, but instead choose to read what is most relevant. With this in mind, we have made the guide available online both in individual chapters (to download over slow internet connections), or as a whole. However, we do recommend taking the time review as much of the guide as possible as there are many linkages and internal references throughout that will provide a more complete understanding of oil and gas development in Alberta.


What This Guide Provides

The intent of the new Landowner’s Guide is to provide all parties with access to a common body of information about citizens’ rights in Alberta as they relate to oil and gas development. This guide is for landowners, those who rent land, people who do business related to land (real estate professionals, etc.), oil and gas companies and their employees, and members of the public who have an interest in the responsible development of oil and gas. It outlines what to expect with oil and gas development as well as ways to get involved in planning and decision-making processes to ensure the responsible development of oil and gas. It provides information on legally required minimum standards that apply to any company engaged in resource development activities. The guide also suggests ways you can encourage a company to adopt best practices to reduce possible impacts of energy development on air, land and water quality.


This guide can help those unfamiliar with the regulations, activities, etc. related to oil and gas development to quickly understand how the system works and what their rights are. It provides accessible answers to these complex questions:

  • If a permit agent knocks at your door and says a company wants to conduct seismic exploration on your land, how do you decide whether to grant permission?
  • If a land agent tells you a company plans to drill a well or put a pipeline on your land, what do you need to know before you start negotiations? How do you decide whether any special conditions are needed in a surface lease or right-of-entry agreement?
  • If there are plans to build a well or pipeline near your home, is the company obliged to tell you or consult with you?


The guide does not act as legal advice, and cannot take the place of legal advice. Although this guide should give you a good sense of where to start and what issues to consider, we would encourage you to seek out help from one of the numerous contacts described in Appendix B, or a consultant or lawyer familiar with land and surface rights issues with oil and gas development.


How to Find What You Need

The content is organized to help readers quickly find the information they need. A detailed index is included.


Before the Project Starts focuses on the many elements that you need to know before activity has started, such as when you should be notified about planned activities, how to engage a company about your concerns, and how to engage with others.


Several chapters outline the activities and relevant details related to the initial stage of resource development, from exploration for oil or gas to the location and construction of wells, pipelines and facilities. Exploration for Oil and Gas, Oil and Gas Wells, Pipelines and Oil Batteries and Gas Compressor Plants each contain a series of questions that you may want to ask before signing a permit, lease or right-of-way agreement. Emergencies addresses emergencies, while Potential Environmental Impacts During Oil and Gas Operations describes issues that may arise during operations and some potential impacts on land, air or water. Well and Pipeline Abandonment and Reclamation outlines the requirements for abandoning wells and reclaiming land.


While Sections Exploration for Oil and Gas to Well and Pipeline Abandonment and Reclamation primarily address the physical environment, later chapters provide information and advice on dealing with administrative issues, including compensation for surface rights access and right-of-entry orders (Compensation and Surface Rights Access). The public hearing process is outlined in Public Hearings and Regulatory Board Processes.


Appendix A provides contact information for a range of government departments and boards, and Appendix B for lawyers, professional bodies and non-profit organizations. The remaining appendices contain a summary of government legislation (Appendix C), a handy example checklist of costs you should keep track of (Appendix D), and a glossary (Appendix E). Words that are defined in the glossary are italicized the first time they appear in a section. Text boxes throughout the document highlight information of special importance or interest.


In this document we use the words “landowners” and “residents” as specific terms, although for brevity we may only refer to landowners in the text. While all major terms are defined in the glossary (Appendix C) it is helpful to clarify three of these here.


A landowner is the person or persons whose name(s) appears on the certificate of title to the land issued under the Land Titles Act.[2]


A resident is person occupying a residence on a temporary or permanent basis. Although similar and often used interchangeably, an occupant is the person, other than the owner, who has certain rights to the land. The occupant may also be referred to as the tenant. The occupant may be in actual possession of the land or be shown as a person who has an interest in the land (which may be noted by a caveat on a certificate of title under the Land Titles Act). In the case of government-owned land, such as a Crown grazing lease, the occupant is the person shown in the records to have an interest in the land. Sometimes the occupant on a Crown lease is also referred to as the lessee. The AER distinguishes between landowners, occupants, residents and Crown disposition holders, which is important in the context of who a company is obligated to consult or notify before they submit an application (see Public Consultation, Notification and Involvement).


An operator is the person or company that has the right to conduct surveys or extract the oil, gas or other minerals. In this document we use the term “company” as well as operator.


A Note on Mineral Rights

Most Albertans do not own the minerals that lie under the surface of their land. This guide focuses on the rights of landowners and others who lease or occupy the land but do not own the mineral rights. Those belonging to the minority who actually own the mineral rights on their land (as indicated on their legal mineral title) should conduct additional research before starting negotiations or entering into an agreement with any company seeking access to their mineral rights. They may find it helpful to contact the Freehold Owners Association who has many resources about freehold mineral rights (see Freehold Owners Association). While the ownership issues are different, much of the general information in this guide will still be relevant.


Those who own or legally occupy land have specific rights with respect to development on their land. As well, the Alberta Energy Regulator (AER) requires a company to consult or notify certain groups adjacent to development who may be directly and adversely affected by oil and gas activity (see, for example, Public Consultation, Notification and Involvement). People who can demonstrate that they may be directly and adversely affected are entitled to submit a statement of concern to the AER; this may allow you to be involved in the regulatory process to bring forward changes or issues that could change the project. Regardless of the AER processes and requirements, if you want more information and/or want to see changes to some development near to you, you should reach out to the company as well as the AER.


Consultation and notification requirements for Aboriginal and Métis people are managed differently than requirements for landowners and occupants, and are primarily handled through the AER’s aboriginal consultation unit in collaboration with the Aboriginal Consultation Office.[3] While the general environmental information presented is relevant irrespective of land ownership, there are other pieces of legislation that govern consultation and development of oil and gas on Aboriginal land, and these are outside the scope of this guide.


An individual’s rights vary according to the activity in question. For example, an individual’s rights with respect to seismic lines or surveying are different from those that pertain to drilling an oil or gas well. In geophysical operations on private land the landowner or occupant can refuse entry, while in other cases they can negotiate but have no right to refuse entry. [4] It is thus important to be aware of your rights for specific circumstances.


A Note on the New AER

The regulation of the oil and gas industry has changed significantly in the last decade. Previously, several ministries and bodies were involved in approving energy resource projects. In 2013, the new Alberta Energy Regulator was set up as a “one-stop shop” to create a more streamlined process for upstream oil, gas and coal development within Alberta and to remove overlapping jurisdictions. Its responsibilities include applications for exploration and development; inspections, compliance, and environmental protection; and reclamation, remediation and abandonment. Appendix A outlines how different government bodies are involved in the regulation of the industry.


The Responsible Energy Development Act (REDA) has fundamentally changed how the oil and gas industry is regulated in Alberta. The new Regulator now has responsibility for both environmental management and energy development —mandates that were previously the responsibility of two different government bodies. Project proponents are no longer required to seek approvals from multiple provincial authorities. This has resulted in a streamlined process where projects are often approved faster and with fewer guaranteed opportunities for public involvement in a formal process such as a hearing.


There are very few examples in the regulations where the Regulator is required to hold a hearing and thus far, the Regulator has recommended very few applications for a hearing. This may be due in part to the fact that the AER has been given considerably more discretion to determine when a hearing will be held for a project approval, and that it is not obligated to hold a hearing under most circumstances. Generally there is a better chance to resolve concerns through negotiation and dispute resolution as this usually results in less cost, less time, and less frustration for all parties. But hearings can be a tool for considering larger, more complex concerns in depth and can be useful in situations where parties can not come to a resolution. However as a result of changes to the AER requirements to hold hearings and the resulting reduction in hearings, landowners or others who consider themselves to be directly and adversely affected have had a considerable reduction in their bargaining power and ability to get unwilling companies to come to mutually satisfactory outcomes.


The AER has rolled out many internal efforts to engage stakeholders such as landowners and nearby residents earlier and in less formal ways to avoid a lengthy hearing. There is a greater emphasis by the Regulator for companies to build relationships before a project begins, and to resolve conflicts through their Alternative Dispute Resolution process (see Alternative Dispute Resolution). Because of this, as a person who may be impacted by development nearby, you are more likely to influence a project outcome by building relationships with the company in the early stages of a project’s development, before the company applies to the AER for their approval. If these discussions don’t lead to a satisfactory outcome but the company applies to the AER anyway, and the AER sees that you have acted in good faith, it is more likely that the project will be recommended for a hearing should that be necessary. If the AER doesn’t believe you have acted in good faith, REDA’s regulations provide the AER with the discretion to dismiss your request for a hearing, and you may be left with fewer opportunities to address your concerns.


Acknowledgements

The Pembina Institute wishes to thank the Alberta Real Estate Foundation and the Edmonton Community Foundation for their generous support.


It was through the support from these charitable foundations that we were able to provide all parties with access to a common body of information about citizens’ rights in Alberta as they relate to oil and gas development.


Many people provided help with the new edition of this guide. In particular we appreciate those who read, reviewed and clarified the revised text and offered encouragement.


We would especially like to recognize and thank the various experts and landowners, including Graham Gilchrist who acted as a consultant on many topics, Nielle and Howard Hawkwood, Leanne and Larry Walton, and Wayne Groot; Jason Unger from the Environmental Law Centre; Martin Steel, Biome Land Use Consulting Ltd.; Benjamin Misener, Brazeau County; Soledad Mills, Equitable Orgins; and real estate professionals Glenn Fisher, Brad Woodward and Bill Fowler.


We are grateful to the Alberta Energy Regulator’s stakeholder engagement team for their help, specifically Jennifer Lutz, Behn Morris, Jennifer Lough, and Eric Berg; and the AER’s Hearing Commissioners and Hearing Services office, specifically Dean Campbell, Rob McManus, and Cecilia Low. Both Jeana Les and Michele Del Colle from the Farmers’ Advocate Office; Gary Redmond and Rick Anderson of Synergy Alberta, as well as all the Synergy members who attended our workshops, of which there are too many to name.


We’d also like to thank staff from several companies including Encana and Shell, and Dennis Eisner, Robert Telford, Brad Batten of Canadian Association of Petroleum Landmen (CAPL).


We’d like to acknowledge all the various help from our colleagues at the Pembina Institute that made this possible, including help from our interns Shelley Jodoin and Luke Wilson. We’d also like to extend a special thanks to Mary Griffiths as one of the original authors of When the Oilpatch Comes to Your Backyard, and who provided much insight as a reviewer and encouragement for the third edition.


Finally, we would like to acknowledge all those who assisted with the production of the first and second edition of this guide.


The contents of this guide are entirely the responsibility of the Pembina Institute and do not necessarily reflect the view or opinions of those acknowledged above.


The purpose of this guide is to provide Albertans with accurate, factual and unbiased information on oil and gas development and landowner rights. We have made every effort to ensure the accuracy of the information contained in this guide at the time of writing. However, the authors advise that they cannot guarantee that the information provided is complete or accurate and that any person relying on this publication does so at their own risk. This guide should not be treated or relied upon as legal advice. This document cannot take the place of professional advice from a lawyer, professional in land and energy issues, or other qualified experts.


Links to third party websites are provided for the convenience of users, and do not constitute an endorsement of their contents or a representation as to their accuracy.



References

  1. This material is from the Pembina Institute publication 'Landowners' Guide to Oil and Gas Development, 3rd edition (2016)'
    https://www.pembina.org/pub/landowners
  2. All Alberta government acts and regulations are available on the government website at
    http://www.qp.alberta.ca/
  3. AER, “Aboriginal Consultation.” http://www.aer.ca/rules-and-regulations/by-topic/aboriginal-consultation
  4. This does not apply to agricultural leases on Crown land.