Alberta Energy Regulator has no confidence in Calgary oil and gas producer can operate safety

February 16, 2017
The Canadian Press
by Dan Healing

CALGARY — The Alberta Energy Regulator is taking the unusual step of shutting down all Lexin Resources operations, accusing the Calgary-based oil and gas producer of ignoring orders and regulations for months.

Lexin was ordered to shut down its estimated 1,660 sites, including 1,380 wells and 201 pipelines across the province.

“The AER has very little confidence in Lexin’s ability to conduct their operations safely and we’re taking measures to prevent any increase in public safety, environmental or financial risk,” said Mark Taylor, senior vice-president of the regulator’s closure and liability branch.

Lexin officials did not respond to requests for comment.

Taylor said AER field inspectors are paying special attention to 16 sour gas wells Lexin was operating just south of Calgary because of their proximity to the city. He said there is no present danger to the public.

Sour gas contains hydrogen sulphide, a poisonous, corrosive and flammable colourless gas that smells of rotten eggs.

Taylor said the AER doesn’t know how much oil and gas Lexin is producing because the company’s last reliable reports were filed nine months ago.

According to the regulator, Lexin owes more than $1 million in levies to the Orphan Well Association, which reclaims wells left by owners who can’t or won’t clean up depleted sites. The AER said the company also owes more than $70 million in security for its reclamation obligations.

The regulator said it has asked other operators with working interests in Lexin’s licensed operations to secure and shut down those sites. The Orphan Well Association has been asked to shut down the sites where Lexin has no partner.

Association chairman Brad Herald said Alberta’s orphan well total will jump from the current tally of 1,590 awaiting abandonment and cleanup. But it should be a temporary rise of six months or so because productive wells will either be returned to Lexin or sold by the AER to other operators.

Herald said he estimates the cost of caring for the Lexin wells will be somewhat less than $1 million this year.

An AER environmental protection order was also issued to Lexin requiring it to address issues at its Mazeppa sour gas plant 65 kilometres south of Calgary.

The regulator said Lexin only partly complied with an order to shut the plant down last August after it laid off all but six of its staff. The AER said all wells feeding the facility have been shut off.

Andrew Read, a senior analyst for the Pembina Institute, an environmental group, said he applauds the AER’s order but added that it should move more quickly and administer financial penalties.

“I would like to see faster enforcement of breaches of these licence conditions because it does have an impact to, ultimately, what the liability is to the public,” Read said.

Taylor said Lexin asked the AER in January to allow it to designate its sour gas wells as “orphans” because of its poor financial condition but allow it continue to operate its other assets, a suggestion that was rejected.

The AER says most of the Lexin assets were purchased about two years ago from MFC Industrial. MFC had bought the properties from Calgary-based oil and gas company Compton Petroleum in 2012.
News from © Canadian Press Enterprises Inc. 2016

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‘We have not issued an order like this to a company this size,’ AER spokesman says

Tracy Johnson · CBC News
CANADA-ENERGY/

The Alberta Energy Regulator will shut down 1,600 sites, including 1,380 wells owned by Lexin Resources. (Todd Korol/Reuters)

1.6k shares

The Alberta Energy Regulator (AER) has suspended the operation of natural gas and crude oil producer Lexin Resources, leaving more than 1,600 well sites, pipeline segments and other facilities to be cleaned up or sold off.

This is the largest suspension order ever by the AER.

Alberta Energy Regulator tries to stem tide of orphan wells

Calgary-based Lexin, which also operated a sour gas plant in southern Alberta, has 1,380 well sites, 201 pipeline licences and 81 facilities. Those have all been turned over to the Orphan Well Association to be suspended and locked up.

“We have not issued an order like this to a company this size,” said Cara Tobin, a spokesperson for the regulator. “We will be working with Lexin and with interested participants and the Orphan Well Association to shut in and secure the sites.”
Lexin unable to maintain sour gas wells

In making the suspension, the AER said Lexin failed to comply with orders made by the regulator to address hydrocarbon spills at its sour gas facility, to close and abandon wells, to pay its administration fees or its security deposit for well reclamation.

As well, in a letter to the AER dated Jan. 31, Lexin advised the regulator it was unable to provide proper health and safety overview and measures for its sour wells after Feb. 15.

In recent months, alarms were raised about Lexin’s sour gas wells and facilities in the province. Sour gas contains hydrogen sulphide and is toxic if released into the atmosphere.

Allan MacRae — a professional engineer who used to be responsible for the High River sour gas plant under a previous owner — said the company wasn’t injecting anti-corrosive elements into its pipelines.

He informed the AER of his concerns and the regulator told the company in August to suspend operations at the plant.

MacRae said now that the plant is shut down, it should remain so. “This is a very severe condemnation of the company,” said MacRae. “You don’t see these very often.”
Orphan Well Association workload to jump

The AER will now work with the Orphan Well Association and the company to determine what is to be done with the remaining well sites and facilities.

“What we’re doing now is to shut in and secure the sites and to make sure it’s left in a safe state,” said Tobin.

The Orphan Well Association currently has a list of nearly 1,600 wells that need to be plugged and reclaimed and a further 700 that are under reclamation. The suspension order of Lexin could potentially double the association’s workload.

Corrections

A previous version of this story stated wells operated by Lexin had not been maintained. CBC News has learned the wells were in fact maintained before and after the plant was shut down in the summer.
Feb 15, 2017 9:58 PM MT

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9 Feb 2017
Lethbridge Herald
Ian Bickis
THE CANADIAN PRESS — CALGARY

Anew report from the University of Calgary says there should be time limits on how long oil and gas wells in Alberta can be kept on standby because of the growing liability overhang.

Oil and gas producers partially close off, or suspend, wells rather than go ahead with a sometimes costly reclamation because the wells could be worth producing from again in the future.

The report by Lucija Muehlenbachs at the university’s School of Public Policy, however, says that most of the roughly 80,000 inactive wells in the province likely wouldn’t be restarted even if oil prices or technology significantly improve.

“Looking at what we’re seeing in the data of wells moving in and out of activity, it’s very rare,” Muehlenbachs said.

Her research has found that even if oil prices were to double, only about 12 per cent of oil wells would be reactivated. And if a technology breakthrough were to increase reserves five-fold, only about 10 per cent of oil wells and six per cent of gas wells would likely be restarted.

The report finds that most wells aren’t fully reclaimed to avoid the cost of doing so, and with no time limit on how long they can remain on standby, there’s a risk that companies might not be around in the future to pay for those liabilities.

“This is an accumulation of liability,” said Muehlenbachs. “If they’re allowed to leave them inactive, then why not just leave them inactive forever?”

The orphan well fund, which manages wells where the owner has gone bankrupt or can’t be found, has already gone from 162 in early 2015 to 1,395 as of last December.

Many other jurisdictions also don’t have limits on formally abandoning and reclaiming a well, but about a third of American states have a limit ranging from six to 300 months with possible extensions, Muehlenbachs noted.

Mark Salkeld, president of the Petroleum Services Association of Canada, asked the federal government last year for hundreds of millions of dollars to help clear the backlog of inactive wells and put members back to work.

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27 Jan 2017
Lethbridge Herald
Dean Bennett THE CANADIAN PRESS — EDMONTON

Jean says merger would be done under Wildrose rules

Wildrose Leader Brian Jean has opened the door to uniting with the Progressive Conservatives to end more than a decade of bruising political infighting between Alberta’s centre-right parties.

But Jean said if it’s going to happen, the Wildrose members have to say yes, and it will be done under the Wildrose umbrella and under Wildrose rules.

“While I am confident that Wildrose would defeat (Premier Rachel Notley’s) NDP on our own in the next election, consolidating and uniting like-minded conservatives under a single banner is the best chance that we’ll be successful,” Jean said Thursday in a video statement released online to the media and to party members.

Jean also said if the party votes to merge, he will step down as leader and run in a leadership race to be held this summer.

“Let me be clear on this point — I plan to be Alberta’s next premier,” said Jean.

“It is my vision and my plan to make Alberta a place of unparalleled greatness, leading the strongest period of job creation in our history.”

Jean said he is acting on the wishes of most party members who have told him over the past year that he should pursue unity, but only in a way that honours the Wildrose commitment to grassroots democracy. He said he and other caucus members will attend town hall meetings to gauge the interest and attain a clear mandate to hold such a vote “if the PC members select a dance partner that we’ve been looking for.”

The Progressive Conservative party is currently in a leadership race that has two of the four candidates running on a promise to get a deal with the Wildrose.

Candidate Jason Kenney said if he wins the March 18 delegated vote, he will seek a mandate to dissolve the party and merge it with a dissolved Wildrose party to create a new conservative entity, possibly titled the Conservative Party of Alberta.

He wants party members to make major decisions and to have a united party ready to fight the next provincial election in the spring of 2019.

Kenney lauded Jean’s announcement.

“This demonstrates real leadership on Brian’s part and it demonstrates that he’s in touch with the common sense of common Albertans who are telling us to bury the hatchet, park the egos, park the brands and labels and get past a decade of division,” he said.

Asked about Jean’s plan to keep the Wildrose framework and funding intact, Kenney said that will be sorted out.

“I’m not going to get into legal argy-bargy at this point. The fundamental question is whether or not we seek unity.”

Earlier Thursday, PC leadership candidate Richard Starke, a staunch critic of Kenney’s unity plan, reversed course and said he, too, would seek some kind of accommodation with the Wildrose, although he didn’t give details on what that might look like.

The other two PC candidates, Calgary lawyer Byron Nelson and former PC MLA Stephen Khan, are running to rebuild, not merge, the party, which finished third in the last election after governing Alberta for more than four decades.

Kenney’s campaign has polarized debate within the party. Critics say he is moving the PCs to the fringe and away from the political mainstream by embracing the Wildrose brand of social conservatism.

PC party members also voted overwhelmingly last spring to rebuild the party and not pursue any mergers.

Both Kenney, Jean and Starke say time is of the essence to avoid future vote-splitting that will allow the NDP to come up the middle in 2019 for a second consecutive majority government.

They say the NDP’s economic policies, including a carbon tax and higher minimum wages, are impeding an economic recovery from low oil prices.

While Jean spoke of working together, his speech revealed scars that remain from the bruising right fight.

“Our party must never be a home for cronies who want to use government and politics for their own personal gain,” he said.

“In the last election, Albertans soundly rejected those who put personal ambition ahead of principles.”

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27 Jan 2017
Lethbridge Herald
Ian Bickis THE CANADIAN PRESS — CALGARY

TransCanada Corp. has submitted a new presidential permit application to the U.S. Department of State for approval of the Keystone XL pipeline.

The application comes only days after U.S. President Donald Trump asked the company to reapply and signed an order to help expedite the project.

The pipeline would ship oil 1,900 kilometres from Alberta to Steele City, Neb., where it would connect with other lines leading to refineries along the U.S. Gulf Coast.

TransCanada CEO Russ Girling said the project, which would carry some 830,000 barrels of oil a day, remains in the interests of both Canada and the U.S.

“This privately funded infrastructure project will help meet America’s growing energy needs as well as create tens of thousands of well-paying jobs and generate substantial economic benefit throughout the U.S. and Canada,” Girling said in a statement.

On Tuesday, Trump directed the State Department and other agencies to make a decision within 60 days of a final application and declared that a 2014 environmental study satisfies required reviews under environmental and endangered species laws.

A day later, Girling, speaking publicly for the first time since Trump’s move, said the company was talking with shippers to determine if they still support Keystone XL.

The company still faces bitter opposition from environmentalists, landowners and aboriginals who are determined to block Keystone XL, with hundreds protesting in front of the White House on news of Trump’s order.

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28 Jan 2017
Lethbridge Herald
Ian Bickis THE CANADIAN PRESS — CALGARY

NEB to restart hearings

TransCanada won’t be getting a regulatory decision on its Energy East pipeline any time soon. The National Energy Board panel tasked with reviewing the $15.7-billion project decided Friday to throw out nearly two years of decisions made by the previous panel, which stepped down after concerns about a potential conflict of interest.

The board said all hearing steps and related deadlines for the TransCanada project no longer apply as it begins to determine a new list of issues, list of participants and new process for reviewing the application.

“After much thought and consideration, we feel that restarting the Energy East and Eastern Mainline hearings with a clean slate is the best course of action,” NEB spokesman Marc Drolet said in an email.

“We understand there have been process missteps in the past, and that our decision may be an inconvenience to some.”

The previous Energy East pipeline panel, which had been reviewing the project since TransCanada submitted its application in October 2014, stepped down last September after concerns were raised about a potential perception of bias after members met privately with Jean Charest while he was a paid TransCanada consultant.

A new panel was appointed earlier this month, with all three members committing not to speak with any members of the previous panel to avoid any real or perceived conflict of interest.

Much has changed in the pipeline world since the last panel stepped down, including federal approvals of Kinder Morgan’s Trans Mountain and Enbridge’s Line 3 pipeline projects, while the election and recent actions of U.S. President Donald Trump have opened the potential for TransCanada’s Keystone XL to go ahead.

“From the perspective of how much supply we have in the basin and how much potential pipeline capacity we have, things have changed quite dramatically,” said Jackie Forrest, vice-president of energy research at ARC Financial Corp.

She said there’s still the potential for Energy East, with its 900,000 barrels a day of committed shipments, to go ahead, even if there was excess capacity.

“That’s the old way of thinking, that supply must equal pipeline capacity. Really what Canadian industry needs is access to new markets,” Forrest said.

TransCanada spokesman Tim Duboyce said they will be reviewing the NEB’s decision to understand its impact on the project and the company, but similarly said the project remains important.

“Energy East remains of critical strategic importance because it will end the need for refineries in Quebec and New Brunswick to import hundreds of thousands of barrels of foreign oil every day, while improving overseas market access for Canadian oil,” said Duboyce in an email.

TransCanada isn’t starting entirely from scratch, with the NEB saying the company does not need to refile the more than 30,000-page application it submitted after 18 months of public consultations.

The new panel will, however, have to decide if the application is complete, and only then will the 21-month countdown start again.

Those who have already submitted an application to participate in the review process also don’t need to reapply.

The new panel will review all of the filed applications and release a new list of participants.

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23 Jan 2017
Lethbridge Herald
Cathy Bussewitz and Geoff Mulvihill
THE ASSOCIATED PRESS — HONOLULU

States that depend heavily on federal renewable energy tax credits, grants and research, much of which comes from the Energy Department, are unsure what to expect with Donald Trump in the White House President Donald Trump has disputed climate change, pledged a revival of coal and disparaged wind power, and his nominee to head the Energy Department was once highly skeptical of the agency’s value. What this means for states’ efforts to promote renewable energy is an open question.
Associated Press photo
In this 2013 file photo, wind turbines lining the Altamont Pass near Livermore, Calif., generate electricity. California, Hawaii, Oregon, New York and many other Democratic-leaning states have ambitious goals to wean themselves off fossil fuels, but they rely heavily on federal grants, tax credits and research to support their efforts, programs that could evaporate or be cut significantly under the new Trump administration.

States that are pushing for greater reliance on wind and solar power are not quite sure what to expect as Trump takes over. Many of them depend heavily on federal renewable-energy tax credits, grants and research, much of which comes from the Energy Department.

Former Texas Gov. Rick Perry, Trump’s pick to lead the department, presents a contradictory figure: A Texas oil promoter, he also oversaw a huge expansion of wind-energy production while governor. When he ran for president in 2011, he included Energy on a list of departments he thought should be abolished, though he disavowed the idea Thursday at his Senate confirmation hearing.

“We don’t know what version of Perry is going to show up,” said Michael Webber, deputy director of the Energy Institute at the University of Texas, Austin.

Renewable energy accounts for about 15 per cent of the electricity generated in the United States. And 29 states have set targets for boosting their reliance on such power.

Officials, experts and advocates in more than a half-dozen states with some of the most ambitious goals told The Associated Press that they are on course to meet their targets. Most said that while Trump policies could slow the expansion, they won’t stop it.

The price of harnessing the power of the sun and wind has dropped so much that in many areas of the country, experts say it could be competitive with traditional power sources such as coal and natural gas even without federal subsidies. Further, they do not expect a fast repeal of the key federal tax credits that have propelled the industry for years.

Still, policies aimed at bringing more renewable power online quickly are not expected while Trump is in office.

“We need to be moving faster, not slower,” said Jeff Forward, president of the trade group Renewable Energy Vermont. “I fear we’re tapping on the brakes right now.”

Those who promote renewable energy are concerned because Trump has expressed doubts about whether climate change is real, even though scientists agree that it is happening and that the burning of fossil fuels is a major reason for it.

Trump also has called for reviving the coal industry, which has struggled in part because of the rise of renewable energy. And he has criticized wind turbines near Palm Springs, California, both for killing birds and for looking like a “junkyard.”

Perry, at his confirmation hearings, said he believes climate change is happening and that some of it is caused by human activity. He also said he favours an “all of the above” energy policy, the way he did in Texas, and wants the federal government to continue research on renewable energy. He didn’t say what he thought of green energy tax credits and other incentives.

The federal wind credit is set to be phased out in 2019, and the solar one, four years after that. Those incentives and other federal spending on renewable energy in fiscal year 2015 totalled about $10 billion, nearly twice as much as similar subsidies for fossil fuels.

In Hawaii, federal tax credits reduced the price for developers and homeowners by about $125 million annually from 2011 to 2014, according to an analysis by Blue Planet Foundation. During that time, the portion of the state’s electricity coming from renewables nearly doubled from 12 to 21 per cent.

Randy Iwase, chairman of the Hawaii Public Utilities Commission, said incentives are important to the state’s goal of having 100 per cent of its power generated from renewable sources by 2045, the nation’s most aggressive target.

“We are in a toddler stage,” he said. “When you lose focus, when attention is distracted, when you make it less of a priority, the toddler kind of wobbles.”

The Energy Department said in a report last year that the cost of getting power from wind fell more than 40 per cent from 2008 to 2015, and solar panel prices dropped more than 60 per cent in that period.

Market forces have made green power big in Republican-led states, with wind turbines springing up along the Great Plains from Iowa to Texas. In those places — many of which have low or no green-energy requirements — the arguments for renewable power are more often cost savings and job creation, rather than the environmental benefits.

In December, Republican Gov. John Kasich of Ohio vetoed a bill that would have delayed the requirements there. This month, Phil Scott, the new GOP governor in Vermont, affirmed his commitment to Vermont’s goal of 90 per cent green power by 2050.

Meanwhile, some Democraticleaning states have been pushing their requirements upward. Since 2015, both New York and California have increased their targets to 50 per cent by 2030, and New York Gov. Andrew Cuomo has indicated he would like to go further than that.

Hawaii Gov. David Ige, a Democrat, said he is committed to meeting the state’s target regardless of what policy changes come from Washington.

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22 Jan 2017
Lethbridge Herald
Stephanie Labbe Southern Alberta Newspapers

The Oldman Watershed Council (OWC) is excited for its new proposed Water Charter 2017 which is targeted to benefit the southwest part of the province.

Anna Garleff, communications specialist for the OWC, says this water charter is important because it is a formal confirmation from both citizens and their municipal leaders they are not only standing behind watershed protection on a theoretical level, but people throughout the Oldman Watershed now recognize there is a heightened sense of urgency and people are ready to act.

“We hope that all the municipal, county and industry leaders will sign on and that key community organizations and schools will also want to throw their support behind the movement and show the rest of the province that southern Alberta can demonstrate leadership,” says Garleff.

Municipal leaders can add themselves to this charter and be a part of the initiative.

It was a good day for the OWC, when on Nov. 3 the City of Lethbridge added itself to the charter. By signing the charter, the community pledges it will do what it can to help better the watershed. Other communities or groups that have signed up include the M.D. of Pincher Creek, Coalhurst, Nobleford, Pogo Bros and Vauxhall.

Garleff says Nanton has also expressed interest in signing the charter and will be following up with the OWC in the new year. Many irrigation district administrators have shown interest as well.

“We hope that people will find out that watershed stewardship is very rewarding and that it is easy and fun to make positive change. We hope people will make new connections and friendships and experience the satisfaction of having done something truly beneficial for everyone who lives, works and plays in the Oldman including for our furred and finned friends,” adds Garleff.

Garleff says the activities of the charter will kick off on the May long weekend and organizations can participate at any time. Water acts can range anywhere from garbage pick-ups and weed pulls to stopping the purchase of bottled water.

People can also take part in storm drain clean ups, stream bank restoration work and bridge decking. These activities can be done anywhere in the watershed. With this charter, the OWC will also organize classroom presentations.

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20 Jan 2017
Lethbridge Herald
J.W. Schnarr
[email protected]

The disconnect between the agriculture industry and consumers, and the truth behind some of the myths surrounding the beef industry, were explored by guest speaker Jude Capper at this year’s Tiffin Conference.

“( The disconnect) seems to be getting bigger with the rise of media people who like to tell the consumer what they think we do rather than what we actually do,” said Capper.

Capper is an independent Livestock Sustainability Consultant based in Oxfordshire, U.K. Her research focuses on modelling the environmental impact of livestock production systems, specifically dairy and beef — projects include the effect of specific management practices and technology use upon environmental impact.

Some popular media myths explored by Capper include the effectiveness of the “Meatless Monday” campaign; ecological impact of beef production; differences between grass-fed and grain-fed beef; the image of the “factory farm” versus the reality; and the perceived dangers of hormones in beef.

“Meatless Monday” as an environmental movement doesn’t have the impact some believe it does, according to Capper.

She said the total carbon footprint from meat in Canada amounts to about 3.9 per cent.

“What that means is if everyone in Canada went meatless every Monday for a whole year, the national carbon footprint would come down less than 0.55 per cent,” she said. And because the meat needs to be replaced with another food, the idea is misleading to the public.

In regards to the ecological impact of beef production, Capper said efficiencies at all levels of production have led to larger yields. Between 1977 and 2007, water use in the U.S. was reduced by 12 per cent, land use reduced by 33 per cent, and carbon footprint by 16 per cent.

“They are all really good gains simply made because they were getting better at caring and breeding and feeding those animals,” she said. “Not because anybody was thinking about carbon.”

There is a perception that grass-fed beef must be better than corn-fed beef, which is part of the image of the “factory farm,” sometimes mistaken as feedlots.

But what they fail to see is how most of a feedlot cow’s life was spent on pasture, and that they are moved to feedlots for the final few months before being processed.

Capper said in Canada, the average cow-calf operation has 59 cows.

“There is a perception to the consumer that (ranchers) have these big factory-type farms,” she said. “But it’s completely wrong.”

Finally, the idea of hormones in beef and dairy has been overblown, according to Capper, and has not been helped by marketing campaigns aimed at providing “hormone-free” meat.

“There are hormones in just about everything we eat with the exception of maybe salt and sugar,” she said.

The total concentration of estrogen in implanted beef is about 5.1 nanograms of estrogen per 200gram steak, according to Capper. Compare that to the estrogen in a single birth control pill, which has 35,000 nano-grams of estrogen.

“If any person was going to be biologically affected by the estrogen in beef, they would have to eat more than 1,500 kilograms per day,” she said.

Capper said the ag industry needs to be better at informing the public. The reality of farmers and ranchers as stewards of the land and caretakers of their animals is a message that more people need to hear.

“The perception to the consumer is the image of big, bad farmers throwing stuff in the water, not caring for animals, and so on,” she said. “And it isn’t true at all.”

The Tiffin Conference is a one-of-a-kind event in southern Alberta and has been an important platform for discussing current issues and trends in the red meat industry.

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14 Jan 2017
Lethbridge Herald
Jim Bronskill THE CANADIAN PRESS — OTTAWA

Supreme Court rules against woman

The Supreme Court of Canada says an Alberta woman cannot sue the province’s energy regulator as part of her claim that hydraulic fracturing so badly contaminated her well that the water can be set on fire.

In a 5-4 ruling Friday, the high court rejected Jessica Ernst’s argument that a provincial provision shielding the regulator from legal action was unconstitutional.

Ernst began legal action against the regulator, Calgary-based energy company Encana and Alberta Environment in 2007.

She alleges that fracking on her land northeast of Calgary released hazardous amounts of methane and other chemicals into her well and that her concerns were not properly investigated.

Ernst sought damages of $50,000 in claiming the regulator breached her constitutional right to free speech.

She said that from November 2005 to March 2007, the regulator’s compliance branch cut off contact with her, saying she would have to raise her concerns only with the regulator and not through the media or other public means.

Ernst claimed that infringed her charter right to free speech — effectively punishing her for the public criticism and preventing her from speaking out further.

The Alberta courts cited the immunity provision in provincial law and exempted the Alberta Energy Regulator from the lawsuit.

Ernst argued at the Supreme Court that the immunity clause in the Energy Resources Conservation Act was unconstitutional because it barred her claim for charter damages.

In the court’s reasons for judgment, Justice Thomas Cromwell said Ernst could have asked a court for judicial review of the regulator’s purported bar on communication with her. If she had established a case, the court could have set aside the regulator’s directive, he wrote.

“While an application for judicial review would not have led to an award of damages, it might well have addressed the breach much sooner and thereby significantly reduced the extent of its impact as well as vindicated Ms. Ernst’s charter right to freedom of expression.”

Cromwell also noted the regulator has the public duty of balancing several potentially competing rights, interests and goals. Allowing people to bring claims for damages against the regulator has the potential to deplete its funds and time.

In addition, Cromwell wrote, it could “chill” the regulator’s ability to carry out its duties in the public interest.

In a dissenting opinion, four judges, including Chief Justice Beverley McLachlin, said it was “not plain and obvious” that Ernst’s claim was barred by the immunity provision. They said it was arguable that the regulator’s allegedly punitive actions fell outside the scope of the provision.

The judges added it was premature to address the constitutionality of the immunity provision, and Ernst’s claim should be returned to the Alberta courts to decide “the important issues of free speech and charter remedies that her case raises.”

Ernst said she is “horrified” by what the ruling will mean to other Canadians whose drinking water could be affected by fracking chemicals.

“If they get contaminated or harmed, or their children get cancer from the fracking chemicals or get sick, and they present evidence to the regulator, and the regulator violates their charter rights in response and engages in abuse of process as they did with me — it is really terrible,” she said.

Cory Wanless, one of Ernst’s lawyers, said the ruling was actually a 4-4-1 split as one judge dismissed the appeal on technical grounds.

Wanless said the ruling does not resolve some of the key issues, including whether a government can pass a law that prevents people from going to court to challenge a regulator if they believe their charter rights have been breached.

“This judgment is going to cause some head-scratching among the legal community,” he said.

Ernst said she plans to focus her time and money on continuing her lawsuit against Encana and Alberta Environment.

She said she expects others will file similar lawsuits over regulators and fracking. “I worked as hard as I could to get as far as I could and now it is somebody else’s turn. I throw the gauntlet down.”

A spokesman for the Alberta Energy Regulator said the agency was reviewing the decision.

The British Columbia Civil Liberties Association, an intervener in the case, said it was disappointed with the court ruling.

“This decision has worrisome implications for people across the country seeking to hold government appointed decision-makers accountable for egregious unconstitutional actions,” said Laura Track, the association’s lawyer.

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