The Redwater Decision – Why citizens may soon be liable for more oil and gas industry messes

By Michael Ganley
June 26, 2018

All across this province, from the banks of the Peace River to the barley fields of Lethbridge County, 155,000 holes have been drilled in the ground that share four characteristics: They were made to release oil and gas from the Earth’s crust; they’ve produced as much hydrocarbon as they’re going to; the land around them has not been returned to its pre-drill-bit state; and they have not yet been rendered safe. In many cases, the holes and the fractured cracks around them have not yet been filled with cement as required. There may still be road access to the wellhead. In some cases the detritus of drilling operations rusts in place: oil tanks, separators, dehydrators and the like.

Most of these exhausted wells are still owned by one company or another. Generally the company will continue to pay the landowner a small yearly lease fee rather than pony up $100,000 or more to do a proper reclamation. This simple economic decision means most companies carry an inventory of old wells along with their producing ones.

Within this 155,000 number is a smaller but growing subset of wells that have no viable company to oversee a cleanup. Their last owner went broke. Recently estimated to number about 2,900, they’re known as orphan wells because the former owner left their care to other industry players and, potentially, to the public.

All of these wells pose a series of risks: to nearby homes and communities from released gas and explosions; to the local environment from water and soil contamination; and to the global environment from leaking greenhouse gases. Their kind has been around since the earliest days of the oil and gas industry, and mostly they haven’t made it onto the public’s radar. Companies paid the yearly lease fees and did some reclamation. Any wells that did come from bankrupt companies were managed by the Orphan Well Association (OWA), a non-profit unique to Alberta that remediates abandoned wells, pipelines and other oil and gas facilities. The association is funded in part by fees levied on all oil and gas companies and in part from any remaining assets of bankrupt companies, which are sold to pay the cleanup bills.

But two factors have recently clashed to turn these wells—particularly the orphans—into an urgent story. The first is the evisceration of the oil and gas industry since 2014, which has caused a lot of bankruptcies and foisted more wells on the OWA than it can manage. The second involves two matters of law that are central to determining whether or not the public will be on the hook for the cleanup. Over the last couple of decades, the federal government has made changes to the Bankruptcy and Insolvency Act (BIA) which, according to a decision of the Alberta Court of Queen’s Bench, allow creditors of bankrupt companies to jump in front of the provincial oil and gas regulator when it comes to divvying up bankrupt companies’ assets. Then there’s the doctrine of federal paramountcy, which boils down to the question whether a court may strike down a provincial law that frustrates the purpose of a federal law. In this case, should federal bankruptcy law trump Alberta’s rules around abandoned wells, or vice versa?

A time of reckoning is at hand for the province’s regulatory regime that oversees old wells and the protection of the environment.

That question was answered in the Court of Appeal’s April 2017 decision in Orphan Well Association v. Grant Thornton Ltd., better known by the name of the company at the centre of the dispute, Redwater Energy. Redwater was a relatively small oil and gas producer when it went bankrupt in 2015. It owned 127 wells but only about 20 of them were still valuable producers. The remainder were in various stages of decline or had stopped producing altogether but still needed to be capped and the surface reclaimed. The court ruled (in a split decision) that the federal law did trump the provincial.

This means Redwater’s orphaned wells—and those of many other bankrupt companies—pose risks to the established order, to the industry that might have to share in the cost of cleaning them up, and ultimately to the public, who could end up backstopping the operation. Redwater was appealed to the Supreme Court of Canada, which heard the case on February 15, 2018, and reserved its decision to spring or summer. Regardless of which way that decision goes, a time of reckoning is at hand for the province when it comes to the regulatory regime that oversees old wells, the assignment of bankruptcy risk and the protection of the environment.

It’s fair to say the regulations governing oil and gas exploration in Alberta have become exponentially better than they were in the wildcatting days of the 1960s and 1970s, when virtually no provision was made to ensure environmental liabilities would not be foisted on the public or on other industry players. Over a number of iterations, the arc of the rules has been to increase protection of the public interest, but it’s also fair to say we’ve a long way to go.

The industry is overseen by the Alberta Energy Regulator (AER), which issues a separate licence for each of the 450,000 oil and gas wells in the province and imposes conditions on licensees for the operation, disposition and eventual shutting-in of the properties. Those end-of-life obligations include cementing-in various formations deep underground, “capping” the well and restoring the surface to its original condition.

The C.D. Howe Institute took a crack last September at gauging the total cost of Alberta’s well liabilities. It estimated that the reclamation cost just for the wells orphaned at the time would be between $129-million and $257-million. Then the institute applied a financial stress test on still solvent companies and found the potential exposure ranges from $338-million to $8.6-billion, depending on future bankruptcy rates and well cleanup costs. Those numbers are set to climb steeply after the March bankruptcy of Sequoia Resources, which had licences for 2,300 wells.

Those numbers are why an unlikely alliance appeared before the Supreme Court in February to argue against the creditors. Environmentalists, the OWA, the AER, the Canadian Association of Petroleum Producers (CAPP), and the governments of Alberta, Saskatchewan and BC have all taken the position that bad wells should not be split from the good ones. They all know that the decision of the Supreme Court threatens to upend the regulatory system that has governed oil and gas development in the western provinces for decades.

Few people are paying attention. Lawyers are aware of the change, but the AER and industry have continued to play by the old rules.

Darren Baumgardner has been down and up the rabbit hole that is abandoned wells a few times over the years. The Edmonton businessman lives on 40 acres about 10 minutes’ drive west of the city. On one corner of his property sits an oil and gas well drilled in the early 1970s, together with the 600-metre road that was built to access it. The well was still producing when Baumgardner bought the property in 2001, but it was in decline. It stopped producing in 2013, but the company that owns the lease on his property prefers to pay him $3,500 a year rather than take the steps needed to fully remediate the land. He understands why. “If you have an orphan well that would cost you $250,000 to clean up, and you’re 50 years old, and your other option is to continue to pay me $3,500 per year.… Even your kids would be better off to pay the $3,500.”

Baumgardner is no anti-oil crusader—he even considered buying the well himself and re-fracking it to see if he could make a bit of money. But no deal was made, and when the owner came to him and said the company wanted to shut the well in and reclaim the land, Baumgardner had almost no negotiating power. “They have a half-mile of road on my farm going back to the well,” he says. “Just to reclaim that road, which has two feet of rock to be picked up and moved, I got a quote for $80,000. They said they were quoted $20,000.” Again, there was no resolution, and the well and road still sit on his property, both literally and figuratively. They’re on a prime part of his land and are driving down its market value. “The only way to fight would be to go to court,” he says, “which takes forever.”

Advocates of the current system—with the AER doing most of the regulation and the industry-funded Orphan Well Association taking care of any messes—say it provides a reasonable balance between competing interests. They support the AER’s appeal of the Redwater decision to the Supreme Court. “We welcome the high court’s deliberation and decision,” says Brad Herald, vice-president of western Canadian operations at CAPP. “The balance that was in the system between the credit community, landowners, the oil and gas industry and the government has been upset by the lower court determinations.”

That balance was struck primarily through two policies. The AER collects the industry levy that’s funnelled to the OWA to deal with orphan wells. The levy was set high enough to deal with the number of orphaned wells being created when the general market for oil and gas was good, but has not stood up well through the low prices of the last few years.

The second way the AER has managed old wells is with the Liability Management Rating (LMR), which requires companies to provide a bond if their financial strength falls below a set asset-to-liability threshold. Companies with more liabilities than assets were required to post a bond to bring them back to even.

At the time of Redwater’s bankruptcy, producers were playing by these rules and by court decisions affirming them and holding that the AER was not a “creditor” under the Bankruptcy and Insolvency Act, because it wasn’t trying to collect money owed, but instead trying to protect the public interest. Thus the regulator wasn’t subject to the priority provisions of the BIA, which grants the first money to secured creditors. That reasoning was cemented in law by the Alberta legislature, and an entire system of regulations grew up around those rulings, including the AER’s liability ratio and the rules surrounding orphan wells. The players in the oil and gas sector—including the lenders—therefore determined their risks and rewards based on those rules, apportioning liabilities as among the operators, the lenders and the public.

The federal government amended the BIA in 1991 and in 1997, however, and a 2012 decision by the Supreme Court signalled to anyone who was paying attention that the old rules governing the Alberta system were at an end. The problem, says University of Calgary law professor Fenner Stewart, is that few people were paying attention. “Some lawyers took note of this change, but the AER and the oil and gas industry continued to play by the old rules,” he says. “The AER’s well reclamation program and the ratio system—it’s all predicated on the idea that [the public] has first priority over well assets.”

For a while, times were good and few companies were going bankrupt, so nobody noticed the discrepancy. Then something happened that nobody predicted—hydraulic fracturing. “Oil was supposed to be $200 a barrel by now,” Stewart says, “and we’d stop paving the streets in Calgary with asphalt because it’s too expensive and we’d just move to gold instead.” But fracking did happen, the price of oil and gas went in the toilet and investments in the oil and gas sector suddenly didn’t look so good. Cue the effort to unload the worst of the liabilities.

One irony of the appeal to the Supreme Court is the role of a publicly owned bank, ATB Financial. ATB was Redwater’s principal creditor and petitioned the company into bankruptcy in the first place. The Court of Appeal’s decision makes clear that ATB was fully aware of Redwater’s environmental liabilities before lending it money. The bankers even had a third-party engineering report done on their estimated cost; ATB took these liabilities into account when determining the interest rate and other terms of the loan. Nonetheless, Redwater’s receiver, Grant Thornton Ltd., has chosen to pursue this case to have those liabilities hived out of the company. The consequences don’t sit well with CAPP’s Herald. “We see the financial community as the gatekeeper to that risk,” he says. “They’re in a terrific position to look into the balance of risks and to adjust their interest rates accordingly.” In a statement, ATB welcomed the certainty which the Supreme Court decision will give, “so all parties understand the rules of how assets are distributed in the case of a bankruptcy, and can conduct their business accordingly.”

In light of the Alberta Court of Appeal’s decision in Redwater, both the AER and the provincial government have taken steps to close some loopholes and tighten some requirements. The AER in 2016 doubled the liability management ratio required, meaning companies now need twice as many assets as liabilities to avoid having to post a bond. It has also worked with the provincial government to prevent operators who have a record of disclaiming liabilities from getting their hands on new well licences.

The provincial government, for its part, has loaned $235-million to the OWA to clean up orphan wells, although that amount is already insufficient in light of the Sequoia bankruptcy. Energy Minister Margaret McCuaig-Boyd has also pressured the federal government to amend the BIA to ensure that the public and responsible industry operators are not left with the environmental burden of irresponsible operators. The response McCuaig-Boyd got from Ottawa—essentially, to monitor the situation—was “not the response I’d hoped for,” she says.

McCuaig-Boyd’s department is also conducting a review of the entire system. “We know Albertans are anxious,” she says. “Redwater has shown how Albertan communities and industry are exposed to the risk of being forced to pay for inactive wells. This clearly violates Alberta’s polluter-pay principle.”

The Supreme Court decision in Redwater, whenever it is delivered, will inevitably look backward, at a former framework and at how it interacted with the BIA. Equally important for Albertans is the path forward, and how we ensure that no similar risks fall to the public—or to solvent industry players—in the future.

In its September report, the C.D. Howe Institute recommended a regulated combination of bonds and insurance for companies seeking new licences. Under the plan, a company would be required to post a bond to ensure some money is available to clean up the well at the end of its life. The value of the bond would be less than the expected cleanup cost, to recognize the public interest in encouraging economic activity and to allow the little guys a chance to get into the game. The institute also recommends mandated insurance for inactive and suspended wells. The idea is that the cost of premiums would prompt more companies to clean up more wells in timely fashion.

Minister McCuaig-Boyd wouldn’t commit to any of those recommendations, deferring to an upcoming report on the situation being prepared by her department. “There are a lot of good ideas out there,” she says. “We just have to make sure we find what works best for industry, what works best for Albertans and what’s doable.”

Environmental groups such as EcoJustice Canada, which had intervenor status at the Supreme Court hearing, call for full securitization of environmental liabilities. U of C’s Stewart, however, says a full bonding requirement would be prohibitively expensive for many smaller companies and would be considered by many in the industry as government caving in to Big Oil, because only the biggest companies could afford it. “The oil and gas industry has a long history of wildcatters and a mythology of the small business owner who can make it rich,” he says. “A 100 per cent bond would be spun as the provincial government in the back pocket of Big Oil. It’s prohibitive.”

Many Albertans hope the Supreme Court puts things back as they were. “We had a system that was working quite well.”

CAPP’s Herald agrees that the full securitization cure could be worse than the disease. “It would mean a lot of dead capital—in the multiple billions of dollars,” he says. He’s hoping the Supreme Court overturns the Court of Appeal and puts things back as they were. “We had a system that was working quite well, which involved the two parts: the liability management regime and the deposits. That system was continuing to evolve, but it worked quite well.”

As if the fate of thousands of abandoned and orphaned wells weren’t enough for a single court decision, Redwater will have repercussions for all kinds of contentious areas of federal–provincial interaction. That includes the construction of interprovincial pipelines, an issue that hits close to home for Albertans. BC has taken steps to delay Kinder Morgan’s expansion of its Trans Mountain pipeline, which would triple the amount of bitumen that can be carried from Alberta to a marine terminal at Burnaby. The federal government has constitutional jurisdiction over the pipeline and has approved it. If federal paramountcy means the BIA trumps Alberta laws at issue in Redwater, then it follows that the Kinder Morgan pipeline—duly approved by the federal government—will be built despite opposition from both the government of BC and the City of Burnaby.

But that’s a battle for another day. For now, we await the Supreme Court decision in Redwater. Then, whatever the result, it will fall to elected officials, industry and the public to ask whether Albertans are getting the results we want from the systems we’ve built up around the exploitation of our natural resources—and if not, what we’re going to do about that.

Michael Ganley is a former editor of Alberta Venture. He’s now project manager with Edmonton’s Ketek Group.


 

Farmers play waiting game as flooding delays seeding

 

Tim Kalinowski
Lethbridge Herald
[email protected]
April 18, 2018

During this time last year, local farmer Colten Bodie was seeding his land, but this year’s unusual weather and overland flooding will cause delays. He estimates about 40 per cent of his farmland in Lethbridge County is underwater.

While in the short term overland flooding in local districts is a threat to infrastructure and property, for farmers the recent flooding means losing a good portion of their spring seeding season.

“The flooding has been pretty substantial,” says Colten Bodie, one of several farmers near Wilson Siding dealing with flooding at the moment. “The frost is still in the ground, and being that we have had so much snowfall, nothing is soaking in and everything is running off. We do have some land where the water isn’t draining away or is draining onto our land. There is going to be a couple hundred acres we can’t seed because of it.”

Bodie says his family started seeding by April 22 in 2017, but May 22 might not be an unrealistic start date this year, depending on how things go weather-­wise the next few weeks.

“Based on temperature, soil and the amount of water we have on the ground, we are a couple weeks away yet,” he said. “And it will be interesting to see where we end up. Me and a couple of buddies are actually taking bets on when we are going to start. We’ll also have to see what we can and cannot seed on the dryland acres, where a lot of that water is flowing into our land.”

On a more positive note, irrigated acres are substantially easier to drain, says Taber Irrigation District manager Chris Gallagher, but the irrigation season will definitely be delayed as TID works to clear out ice-choked canals.

“We have not yet set a start-up date,” confirmed Gallagher. “That means farmers have got lots of water on their land, and it’s going to be a delayed start-up (for seeding). We do understand there are some crops that do need early water, especially sugar beets and canola, and we know there is going to be some demand to have water sooner. But we are indicating to them we expect to be delayed this year, and to expect that seeding will need to be delayed also. They should be checking with us to confirm start-up dates for water supply before they seed.”

TID has obtained permission to allow its members to pump out standing water in their irrigated acres once canal flows return to stable and manageable levels.

“Our major focus is getting free-flow to the river so we can safely match our (rising) reservoir levels,” Gallagher states. “The next step then is to address our farmers who have ponded water on their fields. We have obtained a blanket approval from Alberta Environment so that any TID member on our assessment rolls can obtain written permission from us to start pumping across their (irrigated) fields into our works. We are looking at maybe a week from now we will be able to start pumping out those fields where needed. We can’t start pumping out those fields until we are sure our canals can handle it.”

Gallagher says it has been a challenging spring for all local irrigation districts, but he hopes the flood concerns will soon recede and their farmers can get back into their fields before too long.

“For our district we are now kind of out of the woods for inflow unless the forecast changes. The vast majority of the snow that was on the land has melted. The ground is still saturated, however, so sometimes we do find some diurnal cycles where when the temperature gets up during the day the water starts to seep out of the soil and then into our canal systems. But we are not finding the surges we had previously.

“However,” he cautions, “we know our neighbours to the east and to the north are still having some issues (in Vauxhall and Bow River Irrigation District). We are working with them to take some of their water into our Horsefly reservoir to relieve some of the pressure as that water moves east.”

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Overland flooding in area results in other concerns

Dave Mabell
April 18, 2018
Lethbridge Herald

[email protected]

While southern Alberta crews continue the battle against overland flooding, officials have issued warnings about additional dangers.

Landowners who depend on cisterns and wells which have been flooded are being warned not to use the water – but to consider it contaminated. Owners are, meanwhile, being asked not to pump water off their land if it’s likely to affect their neighbours adversely.

The “local state of emergency” has been lifted in Lethbridge but remains in effect in the hard-hit M.D. of Taber.

In Taber, M.D. officials have given notice to anyone who moves or alters barricades placed to keep drivers out of danger. Police may lay charges, they point out.

“I don’t think there’s anyone here who has seen this kind of overland flooding,” says Derrick Krizsan, chief operating officer for the M.D. “We have about 100 roads closed.”

Apart from damaging homes, buildings and roadways, he points out the floods will mean a serious delay in spring planting.

“Specialty crops here are usually planted by May 1.”

Water levels have been dropping in the municipality’s southwest corner, Krizsan reports – good news for producers in the Barnwell and Cranford areas. But there’s still plenty of snow to melt in the M.D.’s northern areas – Hays, Enchant and Vauxhall – as well as east to Grassy Lake.

That could take three to seven days to melt.

“It’s really quite variable.”

And there are still ice jams in the St. Mary River Irrigation District’s main canal east of Taber, he adds.

As soon as conditions are dry enough – and the threat of more flooding has passed – Krizsan says the M.D. will be sending gravel trucks and graders to repair damaged roads.

Both the county and the MD are posting updated lists of road closures on their websites.

The M.D. has also issued a heavy load ban, restricting trucks to 75 per cent of their usual load on gravel routes to reduce damage to their water-softened road structure.

A mandatory evacuation order had been considered a possibility around Taber, but officials say that won’t likely be required. Some rural residents left their homes voluntarily, however.

In Lethbridge, county officials say the situation was improving Tuesday.

No new road closures were announced since 9 a.m. Tuesday and floodwaters were receding “in most areas of concern.”

Some county roads remain closed, however, and drivers are advised to use caution on roads that have been softened or are covered with water.

County officials also remind residents who have flood damage to document that damage with photos, dates and details for their insurance company.

Alberta Health Services also offers information for residents affected by floodwater, at https://myhealth.alberta.ca/alberta/pages/What-do-i-do-if-my-private-water-well-has-flooded.aspx

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High snowpack across Alberta has river forecasters on alert this spring The immediate concern is in low-lying areas on the prairies

Colette Derworiz
CBC News
Posted: Apr 08, 2018 7:40 PM

Provincial officials are keeping a close eye on creeks and streams across Alberta as temperatures start to rise.

During last week’s monthly snow survey by Alberta Environment and Parks, all of the river basins across the province still had higher than average snowpacks.

“In the mountains, there is a little bit more snow than average,” said David Watson, a river forecast engineer. “We’d say above average to much above average.”

In southern Alberta, he said the Oldman River basin is about 144 per cent of average. The Bow River through Calgary is around 120 per cent, while the Athabasca River north of Edmonton is around 130 per cent.

Although the snowpack is higher than average across Alberta, Watson said the immediate concern is in low-lying areas on the prairies.

Calgary’s Bow River is higher than average this year.

“The plains snowpack is a little bit of a different animal and impact than the mountain snowpack,” he said. “It’s a little bit untypical to have a remaining plains snowpack this late in the year, especially in southern Alberta.

“We’ll be closely watching how the weather unfolds in the next couple of weeks and even in the next couple of days.”

With longer days and a forecasted temperature swing, Watson said that snowpack could melt faster than usual.

“There could be a lot of overland ponding in low-lying areas, ditches, areas where people have typically noticed areas to be wet in the spring.”
Snowpack only one factor

Watson said creeks and streams could also see some minor flooding, but officials don’t expect larger rivers such as the Bow or Athabasca to be affected in the coming days and weeks.

Both he and other experts noted that snowpack is only one factor determining droughts or floods across the province.

In June 2013, when major flooding swept through southern Alberta, heavy rain fell on top of a high snowpack in the mountains.

More snow expected for Taber, as floods leave town under state of emergency.

John Pomeroy, a University of Saskatchewan hydrologist who studies snowpack in the Rockies, said there isn’t a major concern — yet.

Weather stations at Sunshine and Lake Louise in Banff National Park and in Kananaskis Country are recording average to above-average snowpacks.

“They are above, but they are not a record,” said Pomeroy, noting many of those areas saw record-high snowpacks last spring.

Despite the big snowpack in 2017, he said much of the snow melted early and then led to a record drought later in the summer.

Pomeroy said the long-term forecast is still calling for a cooler spring, which means the snow in the mountains will likely melt slower this year.

“Rainfall is necessary to cause flooding and we would not expect large rainfalls until later May and into June,” he said.

Yet, he noted that everything could change with one bad storm.

“With a changing climate, we can experience unprecedented weather extremes so it is important to stay vigilant.”


Alberta power system in a state of change

March 23, 2018
Dave Mabell
Lethbridge Herald
[email protected]

Albertans will see plenty of change in their electrical power system over the next decade. As coal-fired generating plants are retired, natural gas thermal facilities will take their place.

Meanwhile wind, solar and other renewable resources will be developed to provide up to 30 per cent of the province’s power needs.

And a change in government isn’t likely to interrupt that process, the Southern Alberta Council on Public Affairs learned Thursday.

“A lot is changing now,” said Chris Hunt, the province’s utilities consumer advocate. And “there’s a lot in development.”

One of the major changes is already underway, as Alberta’s oldest coal-fired plants reach the end of their life. Energy officials say they’re creating about 39 per cent of the province’s energy now, but all will be retired by 2030.

Cleaner-burning natural gas now accounts for 17 per cent of our power generation, Hunt said, and with Alberta’s vast supply of gas that level could climb to 70 per cent. Private companies’ ongoing investment in new wind farms could see its contribution rise to about 30 per cent from its current level of nine per cent, he said.

In time, he told a questioner, Albertans could also see power come from the massive Site C hydro dam now being built west of Fort St. John for BC Hydro.

Nuclear power could be another option, he conceded – but Albertans apparently don’t want to consider it.

Hunt, named chief of the government’s Utilities Consumer Advocate’s office three years ago, said its mandate includes consumer education, legal intervention in industry hearings, and mediation for individuals and businesses who run into a dispute with their power retailer.

Rather than trying to get positive response from someone in a retailer’s overseas call centre, he said, Albertans can talk directly with a mediator at 310-4822 – no area code – to seek resolution. The mediators are handling about 2,000 cases each month, Hunt reported.

“They have a direct line to the companies’ head offices.”

In addition to the consumer help line, he said, recent government initiatives relating to the power system include promotion of energy-saving devices, incentives for businesses and industries that instal solar panels, and the transition to a power purchase mechanism that rewards on-demand peak capacity.

Businesses in Alberta and beyond are buying into these newer approaches, Hunt noted. He told a questioner today’s political parties know the risks involved if programs or policies were suddenly changed after an election.

“Parties of all stripes are very aware of the investor confidence factor.”

The Alberta system is rated at 16,423 megawatts, he said, while the highest demand, 11,458 MW, occurred n December 2016. The province’s energy experts calculate how much more power will be required in years to come, taking into account such changes as the transition to electric battery-powered vehicles.

Hunt suggested Albertans check his office’s website – ucahelps.alberta.ca – to learn more about the province’s power prospects.

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Rural landowners ‘free prey’ – Rural residents worried about crime, property rights

Lethbridge Herald
13 Mar 2018
Lauren Krugel
THE CANADIAN PRESS

David Reid says he’s become more diligent about locking up on the land his family has farmed in Alberta for more than a century and is more watchful of strange vehicles along rural side roads. “Neighbours have been broken into in the middle of the day and early in the morning when they’re still in their houses asleep and had items stolen right from the middle of their farmyards,” Reid said from Cremona, northwest of Calgary.

“Certainly you hear more about these criminals being armed. And if they’re not armed, then on drugs and certainly unpredictable.”

In Okotoks, about an 80-minute drive to the southeast, RCMP last month arrested a man on aggravated assault and firearms charges after he caught two people rummaging through his vehicles. One of the suspects, who was later found with a wounded arm, faces numerous charges that include trespassing, mischief and theft.

That case — along with the acquittal of Saskatchewan farmer Gerald Stanley in the shooting death of an Indigenous man — has renewed a simmering debate about what rights rural residents have to use force against a perceived intruder.

Reid doesn’t believe farmers defending their property should face tougher repercussions than those attempting to steal from them. But he said he’s not inclined to use firearms himself. “I guess I’m not the vigilante type.” Kevin Avram with the Grassroots Alberta Landowners Association said property owners shouldn’t be penalized for taking matters into their own hands.

“If the guy doesn’t want to get shot in the arm, just stay away from breaking into people’s property,” Avram said.

“Many landowners are getting the very distinct impression that the criminal element of the province is being sent a signal — and the signal is that landowners are free prey.”

Alberta RCMP Supt. John Bennett said property crime in rural areas has increased 23 per cent over the last five years. Offences include break and enters, vehicle theft, theft under $5,000 and possession of stolen goods. Violent crimes, however, are down, he said. “We understand completely that people feel vulnerable and frustrated,” said Bennett, who is in charge of a squad that focuses on criminals who appear to be behind a disproportionate number of calls.

He’s encouraging people not to take on intruders themselves, but to leave it to police.

“You never know how someone may react when confronted. We don’t want to see anyone getting hurt.”

Bev Salomons with the Alberta Citizens on Patrol Association said rural residents are clamouring to take action against crime in their communities — but that shouldn’t involve resorting to force.

“It’s not worth going to jail over,” she said in an interview from her home in Sherwood Park, where she has installed a security system and gate.

Citizens on Patrol volunteers work in pairs to look out for anything suspicious.

“Eyes and ears only. We do not confront anyone. We do not get out of our vehicles,” said Salomons.

Three years ago, there were 50 to 55 Alberta communities with patrol groups, she said. That grew to 70 in 2017 and another 16 are being added.

At a recent town-hall meeting in Biggar, Sask., residents of the rural community west of Saskatoon complained of repeated thefts and break-ins, lenient punishments for culprits and long police response times. Many wanted to know what right they have to use force against an intruder.

Biggar is near Stanley’s farm where Colten Boushie, 22, was shot and killed. Boushie was in an SUV that had driven onto the property. Stanley testified he thought he was being robbed and the fatal shot went off accidentally.

RCMP Sgt. Colin Sawrenko referred residents to the Criminal Code section on defence of person and property. He urged people to trust officers trained to handle volatile situations.

“There’s a million and one what-if scenarios. The key word is reasonableness — that’s what you have to remember,” he told residents. “If it’s somebody stealing gas, what is reasonable? I don’t have that answer for you.”

Rob Danychuk, a farmer and local councillor, said he wasn’t surprised so many property rights questions came up after the Stanley case.

“Colten Boushie’s death was terrible and it’s not something that should have ever happened, but it’s a result that was going to happen,” he said.

“You can’t have people coming into somebody’s yard every day and there not eventually being an accident.”


Oil firm ceasing operations, leaving thousands of Alberta wells untended

By Staff The Canadian Press

Sat, Oct 31: They are littered across the country and practically cover Alberta- oil and gas wells that have done their time and no longer in use. Once an oil well is no longer in use, the company is responsible for shutting it down and bringing the land back to way it was before. But that doesn’t always happen. Some companies would rather leave a well inactive than pay for the cleanup. Vassy Kapelos reports.
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A massive number of oil and gas wells, facilities and pipeline segments stand to be added to the already bulging files of the Alberta Orphan Well Association in the wake of the likely failure of Sequoia Resources Corp.

All of the Calgary-based company’s operating licences were ordered suspended after the privately held oil and gas company warned the Alberta Energy Regulator late last month it was ceasing operations “imminently” and, as a result of “defaults in municipal tax payments,” would not be able to afford to reclaim all of its properties.

The AER said Sequoia owns licences for 2,300 wells, almost 200 facilities and nearly 700 pipeline segments.

That list doesn’t include 700 to 800 Sequoia wells where production has been stopped and the wellbore has been cleaned up but the surface hasn’t been restored, said Lars De Pauw, executive director of the Orphan Well Association.

That means the list may rise to almost 4,000 properties.

“We’re going to get a fairly sizable chunk of those sites when this is all done but none of them have been designated an orphan (yet). We’re anticipating around 75 per cent of those sites are going to come to us,” he said on Thursday.

Last spring, the province announced it would lend $235 million to the association to speed up remediation of about 700 orphan wells over the next three years.

Through an annual industry levy, petroleum producers are to pay the principal back over 10 years, while $30 million provided to the province by the federal government will be used to pay interest.

The association listed nearly 2,900 orphan wells awaiting abandonment or reclamation as of as of Feb. 28, along with 2,350 pipeline segments set for abandonment.

“With the funding we had received, the surge loan that came from the government that’s being repaid by industry, we were in a good place to deal with our current inventory over the next three years,” De Pauw said.

“But this is … basically going to negate that.”

Sequoia did not respond to an emailed interview request and a phone call to its Calgary office wasn’t answered.

PricewaterhouseCoopers Inc. said on its website it has been named trustee for Sequoia after the company filed a notice of intention in court last week to make a proposal under the Bankruptcy and Insolvency Act.

In the AER order, addressed to Sequoia director Wentao Yang and director and president Hao Wang, the regulator warns that Sequoia is responsible for its licensed properties even if it is insolvent.

“So basically, it means the company still has to address their (oil and gas well) end-of-life obligations, post security or transfer the site to appropriate parties,” AER spokesman Ryan Bartlett said.

“Currently all the licences are suspended, the company has to ensure the sites are in a safe state, shutting them down or closing them, and they have 30 days to come into compliance with the order.”

The AER also warned Sequoia’s partners could be invited to bid to take over licences in which they hold an interest.


 

Ag Expo and North American Seed Fair take over Exhibition Park

By Martin, Tijana on February 27, 2018.
Joel Maljaars helps set up a robotic milking system from GEA Farm Technologies at the Lethbridge Dairy Mart Ltd. booth at Exhibition Park on Monday in advance of the annual South Country Co-op Ag Expo and North American Seed Fair.

Herald photo by Tijana Martin @TMartinHerald

Tijana Martin

Lethbridge Herald

[email protected]

The annual South Country Co-op Ag Expo and North American Seed Fair, one of Exhibition Park’s largest events, kicks off on Wednesday.

The seed fair was established in 1897 and has grown and transformed into a three-day expo that sees an average of more than 20,000 visitors annually.

There are over 350 exhibitors registered this year, 40 of which are making their Ag Expo debut, and more than 150,000 square feet of outdoor space will be filled with machinery displays.

Fortis Alberta will display and judge products from southern Alberta.

“We are the only show, I believe, in North America that actually does judging for the seeds and the grains,” said Doug Kryzanowski, manager corporate relations and marketing for Exhibition Park.

And judges have their hands full.

“We’ve got probably over 200 samples,” he said. “I think it’s important to recognize the importance of seeds and where our food does come from.”

The event also helps showcase the “economic rotation of what a farm and ranch community does,” Kryzanowski added. “You plant it, you harvest it, you buy equipment, you feed people around the world and still at the same time, we’re pretty fortunate around our area to have great soil, good weather and people make a great living off being a farmer.”

The event runs daily from 9 a.m. to 5 p.m. Wednesday through Friday.

Admission is $7 per person, with children under 10 free. Parking on Exhibition grounds is an additional $5 per vehicle.

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Grain industry raising concerns over growing backlog of grain shipments

By The Canadian Press on February 26, 2018.

CALGARY – Grain shippers and producers are raising concerns about a growing backlog of rail shipments that they say is leading to lost sales and unreliable exports.

The Ag Transport Coalition that represents several grain associations says that car order fulfilments from Canada’s two major railways was 38 per cent during the week of Feb. 12.

The coalition says Canadian National Railway Co. delivered 17 per cent of the rail cars that grain shippers ordered, while Canadian Pacific Railway Ltd. delivered 66 per cent.

Wade Sobkowich, executive director of the Western Grain Elevator Association, says shippers are starting to pay penalties because delayed rail shipments mean they don’t have the grains ready to load at ports.

Grain producers say passage of Bill C-49 would be an important step in solving the problem by creating penalties for delayed railway shipments.

CN and CP did not immediately respond to a request for comment.


 

New enviro assessment bill revealed – New system will provide clarity about how process works for energy projects

Lethbridge Herald
9 Feb 2018
Mia Rabson
THE CANADIAN PRESS — OTTAWA
Catharine McKenna

Major new energy projects will have to be assessed and either approved or denied within two years under a massive new national assessment bill being introduced in the House of Commons. Environment Minister Catherine McKenna, who introduced the 341-page Impact Assessment Act Thursday morning, said it will provide clarity and certainty about how the process works, what companies need to do, and why and how decisions are made.

“Canada just upped its game today,” McKenna said.

She said the new system will help improve certainty to attract investments and prevent the polarization of sides and legal battles such as those currently affecting the Trans Mountain pipeline project. That project, to triple the capacity of an existing line between Alberta and British Columbia, was approved under interim principles put in place by the Liberals in early 2016, but is still mired in controversy.

McKenna said the new system sets legislated time lines for making a decision, lifts the restrictions on who can participate in an assessment process to allow more people to weigh in and requires the reasons behind a decision to be made public, including access to the science used in each case. She believes all those things will help return confidence to a system she says is broken.

Under the new act, the Canadian Environmental Assessment Agency will be renamed the Impact Assessment Agency of Canada and reviews will look at far more than just the impact on environment. Health, social, and economic effects will also be considered, as will the effect on Indigenous rights. A gender-based analysis will also take place on every project.

Decisions will be made based on the pros and cons of a project, including its contribution to sustainability, the extent of any adverse effects and how they will be mitigated, the impacts on Indigenous lands and rights and how it will affect Canada’s ability to meet its environmental and climate change commitments.

The assessment agency is to become a one-stop shop for all assessments, including trying to coordinate with provincial governments so any project proponent only has to go through one review before a decision. The biggest or most involved projects will be assessed by a review panel appointed by the minister, while smaller projects will be looked at by the assessment agency.

Review panels will have 600 days, rather than 720, to complete their work and cabinet will make the decision whether a project goes ahead, within 90 days. The agency assessments will take a maximum of 300 days — down from 365 — and decisions made by the minister of environment in no more than 30 days.

Before a proponent even submits an application for review, they will be required to undergo an early planning phase, of a maximum of six months, to try and work with various stakeholders, including Indigenous communities, ahead of time to see what issues and concerns might arise.

McKenna said “smart proponents already do this.”

“If you don’t do the work on the front end you’re just not going to get to a conclusion quickly and you may end up in court or having protests,” she said.

The National Energy Board is being remade into the Canadian Energy Regulator, with some changes including requiring at least one board member be Indigenous and that expert panels used by the regulator include expertise in Indigenous knowledge, municipal issues, engineering and environmental issues. The CER, as it will be known, will remain based in Calgary, an official rejection of a recommendation last year to move at least some of the board’s functions to Ottawa.

The federal government will spend $1 billion over the next five years to implement the new process, including hiring more scientists to review impact statements from project proponents.

Both the Canadian Energy Pipeline Association and the Canadian Association of Petroleum Producers said they were pleased with the legislated timelines and the “one project, one assessment” philosophy behind the new act.

Tim McMillan, president of the petroleum producers, said the early-engagement requirement could be great, but he wants more information.

“There may be some work that needs to be done before the clock is started,” he said. “If that is more cumbersome or onerous than what we had before, it may actually be a net negative.”

The CEPA is concerned issues such as climate change will be taken into consideration, saying it is subjective and could make decisions political.

University of Ottawa law professor Stewart Elgie, who specializes in environmental and natural resource law, says the bill will make Canada the only country in the world with national assessment legislation that requires the government to consider sustainability and climate change commitments when deciding whether to approve a project or not.