|Authors:||Duncan Kenyon, Nikki Way, Andrew Read, Barend Dronkers, Benjamin Israel, Binnu Jeyakumar, Nina Lothian|
|Publish Date:||October 2016|
|PDF Download:||[Landowners' Guide] [Landowners' Primer]|
|Pipelines and Other Infrastructure|
|Abandonment and Reclamation|
|Compensation, Rights, and Hearings|
Alberta Energy Regulator
Other Alberta Departments
Energy Industry Associations
Provincial Non-profit Organizations
Surface Rights and Local Groups
Responsible Energy Development Act
AER Oil and Gas Related Legislation
AER Energy Related Legislation
Other Provincial Acts
Glossary of Terms
As a landowner who may sign or has signed a surface lease agreement, you should track any time or expense that occurs as a result of having a well, pipeline or facility on your land. You should start logging this as soon as the seismic equipment shows up, and finish when you have a reclamation certificate in hand that you are happy with.
A landowner’s compensation offer for a surface lease considers five main criteria:
Although there may be other considerations specific to your situation, these are the criteria outlined in the Surface Rights Act. For more information about compensation, refer to Compensation and Surface Rights Access.
Compensation should be negotiated early in your discussions in order to ensure that you and the company can agree on the reasonable reimbursement for your time. Keep track of all your time and expenses while negotiating with the company including activities like phone calls, researching, dealing with the company’s representatives and surveyors, negotiations, preparing documentation, and reaching out to third parties, lawyers, and government representatives.
If you begin as early as the project conception, you can include your records as evidence toward the reimbursement of your costs. If you provide a reasonable and detailed outline of time and expenses, the company may be persuaded to reimburse you; if they do not, the Surface Rights Board might award your costs. The Surface Rights Board has determined in the past that even if compensation was negotiated outside the Surface Rights Board process, lessors should be granted reasonable costs incurred while negotiating.2
Table 8 provides an example of cost tracking for activities during negotiations that you can adapt for your own use. You should number for each item for ease of reference.
Table 8. Example cost tracker for negotiations
|1||05-02-2015||Meeting with land agent to seismic testing,||1 hr|
|2||06-27-2015||Land agent kitchen table talks, discuss surface lease access||1.5 hr|
|3||06-28-2015||Research on company, phone call with AER||1 hr|
|4||06-29-2015||Research on company history, reclamation, enforcement orders
Environmental Enforcement Search history through Environmental Law Centre
|5||06-30-2015||Cost of landowner consultant (preliminary investigation) ($250/hr)||$250 (1 hr)|
|6||07-05-2015||Land agent kitchen table talks, cont. discuss concerns on well placement||1 hr|
|7||07-05-2015||Cost of landowner consultant (additional investigation) ($250/hr)||$500 (2 hr)|
|8||07-02-2015||Printing costs of application and relevant documentation||$25|
|9||07-15-2015||Land agent kitchen table talks, cont. discuss concerns on flaring||1 hr|
|10||07-15-2015||Cost of landowner consultant (kitchen table talks, preparation) ($250/hr)||$500 (2 hr)|
|11||07-27-2015||Cost of landowner consultant (follow up to discussions) ($250/hr)||$375 (1.5 hr)|
|12||08-07-2015||Travel to and from SRB ADR process ($0.505/km)||$25.25 (50 km)||1 hr|
|13||08-08-2015||SRB ADR process negotiations||2.5 hr|
|14||08-09-2015||Surface Lease Agreement signed||1 hr|
Adverse effect is calculated at the time of signing for a surface agreement, and should consider probable effects in a future five-year period.
The Farmers’ Advocate Office has a good resource explaining the items that you may typically include in your adverse effect calculation. It captures tangible and intangible impacts as a result of the well, pipeline, or facility. Additionally, you should consider past Surface Rights Board decisions, such as the decision to grant annual compensation for a pipeline agreement for several residents.
Adverse effect could include:
As these are probable future effects, anticipated costs and expenses may be hard to justify if they are speculative. However, every surface lease can be renegotiated every five years. In order to prove additional adverse effects that were not captured in your first lease agreement, being diligent about documentation can help make you whole in the next surface lease agreement for all costs and time caused by dealing with the lease on your land. The Surface Rights Board may consider a reasonable hourly rate for your time.
Table 9 provides an example of cost tracking for adverse effects that you can adapt for your own use. You should number for each item for ease of reference.
Table 9. Example cost tracker for adverse effects
|36||09-04-2015||Fence damaged by truck crews; repaired fence (include photos)||$50 (barbed wire)||0.5 hr|
|37||09-10-2015||Cattle gate left open; rounded up escaped cattle (include photos)||1 hr|
|38||09-17-2015||Weekly rounds to check fencing, gate closing||.25 hr|
|39||09-24-2015||Weekly rounds to check fencing, gate closing||.25 hr|
|40||09-30-2015||Weekly rounds to check fencing, gate closing||.25 hr|
|41||10-07-2015||Weekly rounds to check fencing, gate closing||.25 hr|
|42||10-14-2015||Weekly rounds to check fencing, gate closing||.25 hr|
|43||10-20-2015||Pump-valve failure - uncontrolled release; moved cattle upwind, closed gates, contacted company and AER||2.5 hrs|
|44||10-21-2015||Company trucks responding to release caused ruts in field; repaired ruts||4 hrs|
|45||10-28-2015||Weekly rounds to check fencing, gate closing||.25 hr|
|65||06-01-2016||Controlled weeds on lands adjacent to lease road - scentless chamomile removal and disposal (include photos)||1.5|
|66||06-10-2016||Cattle gate left open; rounded up escaped cattle (include photos)||1 hr|
|67||06-11-2016||Phone call with AER and Company staff re: fencing||.5 hr|