Wednesday, June 7, 2017

and keep going as Jessica Ernst has done----- The Charter is the supreme law of Canada and guarantees that anyone whose rights or freedoms have been infringed or denied may apply to the courts to obtain a remedy the court considers appropriate and just in the circumstances. -----Cromwell also noted the provincial regulator had the public duty of balancing several potentially competing rights, interests and goals. Allowing people to bring claims for damages against the regulator had 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.


#RemoveTheImmunityClause--this was a troubling decision by the Supreme Court of Canada but the solution is easy. There is no point in asking for a judicial review of the work of the AER. And why should citizens go to this cost and bother?
Nope the solution is easy. The immunity clause needs to be removed so that we can sue the energy regulator for failed performance. After all if we can sue the GOA why can't we sue the AER? Is the AER and big oil immune from accountability in the court system? Why?
Isn't it enough that we have had the Tapcal Fund disaster as proof of DeMockracy in Alberta and we have to put up with this immunity clause junk as well?
Well then NDPCs? Are you going to represent us? Or are y'all entirely captured by the oil and gas industry like the good old boys and good old gals in the Progressive Conservative Party of Alberta? Are y'all the new good old boys and good old gals?


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when encountering trouble
you can ignore it and keep going
as if the trouble is not yours
so why decide?

but then when the trouble
arrives on beetle legs and nests in your home
what then?
do you stumble away as if a coward?

or do you work every day
to alter what is in our society?
do you speak despite retribution?
do you try to change the world?

and when finding the institutions fixed
and the government parties the same
do you tell  yourself best to forget
and think only of your own? it's hard to decide

but then the words of the song resonate
it's a matter of doing
because this is your own choice
you have the choice to decide

and when nothing works
and when the years pass like clouds in the sky
you can stand on the hill of determination
and keep going as Jessica Ernst has done


https://bccla.org/2017/01/shut-the-frack-up-ensuring-canadas-energy-regulators-are-accountable-for-rights-violations/

Shut the frack up!

Update: This morning the decision in Jessica Ernst’s case was delivered.
In a 5-4 decision, the Supreme Court of Canada has ruled that Jessica Ernst cannot use the Charter to hold an Alberta energy regulator accountable for an alleged violation of her right to freedom of expression.
The Court ruled that the regulator was protected by an immunity clause, and that Ms. Ernst should have pursued her rights through other legal avenues.
Everyone at the BCCLA is disappointed by the Court’s decision, which denies Ms. Ernst the ability to use the Charter to defend her right to free expression, and is a step in the wrong direction for the accountability of government regulators.
The Charter guarantees everyone the right to an appropriate and just remedy if their constitutional rights are violated, but a majority of the Court has now said that in some circumstances, legislatures may shield certain government administrative decision makers from Charter scrutiny. This decision has worrisome implications for people across the country seeking to hold government-appointed decision makers accountable for egregious unconstitutional actions


ORIGINAL POST- JANUARY 12, 2016

ENSURING CANADA’S ENERGY REGULATORS ARE ACCOUNTABLE FOR RIGHTS VIOLATIONS

Jessica Ernst burns off some of the methane that is in her well water in Rosebud, Alta. (Jeff McIntosh/Canadian Press)
Jessica Ernst burns off some of the methane that is in her well water in Rosebud, Alta. (Jeff McIntosh/Canadian Press)
Imagine the tap water in your home was so contaminated with toxic chemicals that you could light it on fire.
Imagine the government agency tasked with responding to these kinds of problems wasn’t taking action and seemed to be ignoring your repeated complaints. Now imagine that after doing everything you could to get your concerns taken seriously, including speaking out publicly and engaging the media, you were told by that agency that they would not accept further correspondence from you unless you stopped speaking out publicly, and they began returning your letters unopened. Your health and safety are at risk, and the government agency responsible is refusing even to hear from you unless you stop your public advocacy.
Would you feel silenced? Like your freedom of speech had been violated? Alberta resident Jessica Ernst went through just such an ordeal, and she’s fighting back, all the way to the Supreme Court of Canada. The British Columbia Civil Liberties Association will be there, joining the legal fight to ensure that Alberta’s energy authority – and regulatory bodies across the country – can be held to account when they violate people’s fundamental rights.

FRACKING THE ROSEBUD AQUIFER

Jessica Ernst lives on a rural property near Rosebud, Alberta. Her home is supplied with fresh water by a private well that draws from the nearby Rosebud Aquifer. Between 2001 and 2006, EnCana, a North American oil and gas company, engaged in hydraulic fracturing, or “fracking”, for methane gas at dozens of gas wells adjacent to her property. The operation involved drilling into the ground and injecting large quantities of highly toxic fracking fluids. Soon after the operations began, Ms. Ernst’s well water became severely contaminated with hazardous and flammable levels of methane and other toxic chemicals. Her water became so contaminated with methane that it could be lit on fire.
Jessica Ernst repeatedly brought her concerns to the attention of the Alberta Energy Regulator, which is responsible for receiving public complaints, conducting investigations and taking enforcement action when the rules have been broken. She also voiced her concerns publicly, through the media and with fellow landowners and citizens. She was critical of the Regulator’s response to the contamination, alleging that despite clear knowledge of potentially serious industry-related water contamination and breaches of the law by EnCana, the Regulator had failed to respond or take appropriate action to address these concerns, and was basically ignoring her complaints.
In 2006, the Regulator took its disregard of Ms. Ernst’s complaints a step further: a manager informed Ms. Ernst that he had instructed staff to avoid any further contact with her. Her subsequent letters were met with silence and returned unopened. She was told by a member of the Regulator’s legal branch that they would not reopen regular communications with her until she agreed to raise her concerns only with the Regulator, and not publicly through the media or with other citizens. She was unable to lodge complaints, register concerns, or participate in the Regulator’s compliance and enforcement processes. She was essentially silenced in her attempts to register her serious and well-founded concerns that EnCana’s fracking activities were adversely affecting her groundwater supply. She believed she was being punished for publicly criticizing the Regulator and bringing unwanted attention to its failure to act.

SO SHE’S FIGHTING BACK.

Ms. Ernst launched a lawsuit against EnCana, the Alberta government and the Regulator alleging that EnCana had negligently fractured into the Rosebud Aquifer and that the Alberta government and the Regulator had been negligent in the way they investigated and enforced the law. She also alleged that the Regulator had violated her right to freedom of expression, protected by section 2(b) of the Canadian Charter of Rights and Freedoms, through its refusal to accept her complaints and pressure to cease her public advocacy.
However, in court, the Regulator pointed to a section of Alberta’s Energy Resources Conservation Act that it said barred her claim and gave the Regulator immunity from her lawsuit. And, disappointingly for those of us who believe that government agencies must be accountable to the public they are meant to serve, the Alberta courts agreed, holding that because of that section of the law, her lawsuit against the Regulator could not proceed. Ms. Ernst is now taking her fight to have her allegations against the Regulator heard all the way to the Supreme Court of Canada, which will hear her appeal today.

A PATTERN OF SILENCING DISSENT

At the BCCLA we’ve seen – and fought – these kinds of attempts to shut out and shut up community members and First Nations before. Unfortunately, in recent years, there have been numerous examples of energy regulators and legislatures seemingly attempting to narrow the opportunity for public input into resource decisions, and a negative attitude (or worse) on the part of government towards opponents of resource development. From the National Energy Board slamming shut the doors of its hearing rooms to the public; to the RCMP and CSIS spying on citizens opposed to the Enbridge Northern Gateway pipeline project, interfering with their rights to freedom of expression, assembly and association; to SLAPP suits brought against activists like the ones fighting Kinder Morgan’s Trans Mountain energy pipeline, we’ve publicly fought back against powerful interests trying to muzzle critics, stifle civic engagement, and avoid transparency and  public accountability for their actions. But a government agency telling a landowner that her complaints about flammable tap water will not be addressed until she stops speaking out publicly, and then a court telling that landowner she has no way to make a legal claim for this possible breach of her Charter-protected rights is, for us, unprecedented. So we’ll be at the Supreme Court of Canada today to fight back on this case, too.
As a human rights organization, we’re disturbed by the government’s argument, upheld by Alberta’s Court of Appeal, that provincial legislation can insulate a regulator from claims that it has violated an individual’s Charter rights. We’re intervening in the case at the Supreme Court of Canada to argue that governments cannot pass legislation that gives them a free pass to violate fundamental rights and freedoms without judicial scrutiny or oversight. The Charter is the supreme law of Canada and guarantees that anyone whose rights or freedoms have been infringed or denied may apply to the courts to obtain a remedy the court considers appropriate and just in the circumstances. What the Alberta legislation – and provincial legislation like it across the country – purports to do is to deprive the courts of their ability to determine an “appropriate and just” remedy when someone’s Charter rights have been violated. In our view, this violates a fundamental principle of our legal order: that where there is a right, there must be a remedy.
The Supreme Court of Canada has said that “a right, no matter how expansive in theory, is only as meaningful as the remedy provided for its breach.”[1] Ms. Ernst has been told by the Alberta courts that she will get no remedy for the alleged violation of her constitutionally protected free speech rights. We’ll be urging the Supreme Court of Canada to reverse that decision and affirm the importance of appropriate remedies for Charter breaches, no matter what kind of government agency commits them.
Ms. Ernst’s fight against the fracking operation in her backyard is far from over. But we hope that this part of her fight – to participate in important public debate, to speak out, and to obtain an appropriate remedy if Charter rights are violated – will soon be won.
[1] R v 974649 Ontario Inc, [2001] 3 SCR 575 at para 20.

Posted in Features Blog



Poor decision by the Supreme Court. It basically told citizens to "shut the frack up" about problems with the energy regulator. Why? Because the PCs in Alberta basically subverted the right of citizens to hold the energy regulator accountable by an immunity clause. This is the clause that gave the Supreme Court an out in the case brought before it. This clause folks was put in by the Tories as a Trojan horse that will eventually result in the loss of any citizen's war against the energy sector's regulator.
What is the solution? The solution is simple. The NDPCs have to simply REMOVE the immunity clause. I mean it's the job of the politicians to do the legislation and the amendments to the legislation. Their duty to the citizens of Alberta is clear.Remove the immunity clause so we can sue the regulator for failures in performance. The GOA should know by now that the government won't hold the energy sector accountable so at least let the landowners impacted by big oil to sue the AER for its failures with reference to their property damages.
Will the NDPCs remove the immunity clause? Why would they? They are not working in the public interest and are even worse than the PCs in sucking up to big oil. We had the Stelmach hand over $30 million to the orphan well program which is the responsibility of and liability of big oil. In some sort of amazing on her knees gesture we have the Notley hand over $235 million with $30 million from the federal government folks who left the economic stimulus plan to the Notley crew to mess up.
It's pretty neat. We have captured political parties. We have a heroine in Jessica Ernst who has worked by herself for over a decade being financially broken while Albertans ignore all the problems of the industry and focus on jobs, jobs, jobs. What the heck? What are y'all going to do when your water is on fire?
March 3, 2009
Province announces three-point incentive program for
energy sector
Short-term initiative to stimulate new and continued economic activity
To encourage the clean-up of inactive oil and gas wells, the province will invest $30 million
in a fund committed to abandoning and reclaiming old well sites. This will reduce the
environmental footprint of the energy sector by returning well sites to their former states, while
also helping to keep industry service crews at work.
Alberta to loan industry $235 million for orphan well cleanup
BY REID SOUTHWICK, POSTMEDIA
FIRST POSTED: THURSDAY, MAY 18, 2017 11:26 AM MDT | UPDATED: THURSDAY, MAY 18, 2017 01:06 PM MDT
The Alberta government will loan an industry group $235 million to accelerate the cleanup of oil and gas wells left behind by bankrupt producers after a prolonged downturn crippled many operators.
The industry-funded Orphan Well Association will use the loan to clean up a third of its inventory of inactive sites, which could translate into remediating roughly 700 wells.
The group will repay the loan through higher levies from industry, while a $30-million injection from Ottawa is expected to cover interest costs.


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…
CALGARYHERALD.COM

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http://calgaryherald.com/business/energy/supreme-court-rules-jessica-ernst-cant-sue-alberta-regulator-in-fracking-case

Supreme Court rules Jessica Ernst can’t sue Alberta regulator in fracking case

Published on: January 13, 2017 | Last Updated: January 14, 2017 9:29 AM MDT
Rosebud resident Jessica Ernst reopened the debate about responsible coal bed methane development when she set her well water on fire for the news media last year. Here she sets a jug of well-water on fire.
Rosebud resident Jessica Ernst reopened the debate about responsible coal bed methane development when she set her well water on fire for the news media last year. Here she sets a jug of well-water on fire. TIM FRASER / CALGARY HERALD
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 and Calgary-based Encana (TSX:ECA) in 2007 and later amended her statement of claim to include Alberta Environment.
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.
Jessica Ernst iat her Rosebud, Alberta home
Jessica Ernst iat her Rosebud, Alberta home JEFF MCINTOSH / THE CANADIAN PRESS
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 must 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 by restricting her communication — effectively punishing her for the public criticism and preventing her from speaking out further.
The Alberta courts exempted the Alberta Energy Regulator from the case, citing immunity provisions in provincial law.
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 Friday, 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 provincial regulator had the public duty of balancing several potentially competing rights, interests and goals. Allowing people to bring claims for damages against the regulator had 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.

Julie Ali · 

It is troubling that the Supreme Court of Canada decided that Jessica Ernst could not sue the regulator and told her to go back and that she could have asked a court for a judicial review of the AER.

Let me think about this. The AER is unwilling to communicate with citizens. We have to go to court to get the review of the AER? What the heck?

Why not instead remove the immunity clause? This would allow citizens to sue the AER directly and we don't have to take up court time for reviews.

The NDP folks need to remove the immunity clause. Why should the AER be above the laws of the land? Is the energy sector our government or do we still hire politicians to government to manage our resources?

This is so messed up in Alberta that I believe it is time that citizens kept changing the political parties until we get representation rather than having a Tapcal Trust Fund to simply keep them in power too long like the PCs or be too cowardly like the NDPCs to do the job.
LikeReplyJust now
Graydon Tranquilla · 

So are there other residents of Rosebud having the same issue?
Beware of the sound of one hand clapping..... here is the other side of the fracking story....
https://www.youtube.com/watch?v=e9CfUm0QeOk
Diana Daunheimer
Yes, many. To find out about the other residents with dangerous methane, ethane and other hydrocarbon contaminated drinking water at Rosebud and elsewhere, read Andrew Nikiforuk's recent award-winning book Slick Water.
Or there is this Petition to the Supreme Court of Canada:

Re: Jessica Ernst vs Alberta Energy Regulator (AER) Supreme Court of Canada Docket #36167

"We, the undersigned residents of the Hamlet of Rosebud, wish to add our voices to an urgent call to allow the AER to be held accountable for any damages incurred to our water source and reservoir as a result of fracking operations by Encana. Beforehand, the AER and Encana failed to consult with us about fracking planned in our drinking water zones. Since then, they have never confessed that Encana fracked our water source, the exact chemicals injected or what dangers residents are living with and the AER continues to let Encana frack in the fresh water zones here.

The only reason we know anything about the illegal fracking here is through Jessica Ernst’s legal case and investigative journalist Andrew Nikiforuk who recently released a book called Slick Water.

For the AER, mandated to protect the public, to be legally immune from violating our charter rights in such an important drinking water contamination case is wrong and must be overturned."

74 Rosebud residents signed. Which is nearly the entire hamlet.
UnlikeReply1Feb 22, 2017 8:34am
Steve English
Every human being in every city as well as the countryside should be concerned about this decision. If you think that you are safe from the actions of this regulator, which is above the law, because you live in an urban environment, guess again. Air circulates and water flows. It's not just the rural population that is endangered by a regulator which has no mandate to consider the public interest. The water system which is contaminated by fracking is not limited to a few rural water wells, but is an entire integrated system. The aquifers contaminated also connect with our rivers and streams through underground channels. Experts predict a near 50% cancer rate in Alberta. These facts are not unconnected. So don't think, "Those poor rural people who are affected." This is everyone's health and well-being and everyone's Charter rights that are violated.
UnlikeReply1Jan 15, 2017 7:24am
Diana Daunheimer
"Ernst began legal action against the regulator and Calgary-based Encana (TSX:ECA) in 2007 and later amended her statement of claim to include Alberta Environment."

J. Ernst began the legal action in 2007 against the regulator, Alberta Environment, Encana, Alberta Health and Wellness, EUB Chair Neil McCrank and Manager Jim Reid (who wrote the judgement ruling her a criminal without her having committed a crime and without any trial or evidence), and Alberta Environment Lead Investigator Kevin Pilger. Alberta Environment was always in the Statement of Claim from the first filing.
UnlikeReply1Jan 14, 2017 5:57pmEdited
Diana Daunheimer
"In addition, Cromwell wrote, it could “chill” the regulator’s ability to carry out its duties in the public interest."

Perhaps relevant when the AER was the ERCB, but under the regulatory rebrand in 2013, the AER rebuked their public interest mandate. To further, the legally immune regulator has no public health mandate, is not beholden to the Public Service Act and operates at arms length of the Government of Alberta. The AER are experts at disregarding public health, public interest, public safety and violating a person's basic constitutional rights, and maintain immunity from action, when and if they do so.
Diana Daunheimer
"Removal of the Public Interest Test
A related omission is the disappearance of the public interest test currently found in section 3 of the ERCA. Section 3 is the general provision that currently requires the ERCB to make decisions on energy projects “in the public interest, having regard to the social and economic effects of the project and the effects of the project on the environment”. It is fundamental to the ERCB’s current mandate. The fact that it is not included in Bill 2, nor replaced with anything obvious is surprising.

But the more glaring change in Bill 2 is the removal of the right to a hearing for someone who has convinced the ERCB that they have rights that may be directly and adversely affected by a Board decision on an application (ERCA, s 26(2))."
LikeReplyJan 14, 2017 12:45pm
Diana Daunheimer
"Under Bill 2, even if someone is directly and adversely affected and has filed a statement of concern, section 33 states that the AER “shall decide in accordance with the rules and subject to section 34, whether to conduct a hearing on the application.”

...that Bill 2’s approach of allowing Cabinet to appoint the hearing commissioners (including the chief hearing commissioner) for indefinite terms and to set their remuneration raises important questions about the level of independence of the AER from the government. As he states, “[o]ne of the defining characteristics of quasi-judicial administrative processes in Canada is independence from the executive.”

Unfortunately, as noted by Massicotte, there is no mention of the policy management office in Bill 2, nor is there any information “as to the degree of interaction between the policy functions of Alberta Energy and AESRD, and the regulatory functions of the single Regulator.”
LikeReplyJan 14, 2017 12:45pm
Diana Daunheimer
"Moreover, the Discussion Document also talked about public engagement and consultation in the creation of policy. Unfortunately, there is nothing in Bill 2 discussing such avenues for public participation in energy and resources development policy-making."

http://ablawg.ca/.../an-overview-of-bill-2-responsible.../

“It is unclear why the Alberta government has chosen to omit any reference to “public interest” in REDA or the Regulations made under REDA.
...While the omission of any reference to “public interest” in both REDA and the Responsible Energy Development Act General Regulation can be assumed to be deliberate and purposeful, it is not entirely certain what effect this omission will have. Unless otherwise clarified, this is an issue which will likely have to be determined by the Regulator or the Courts at some point in the future.”

http://blg.com/en/News-And-Publications/Publication_3402
LikeReplyJan 14, 2017 12:46pm
Rena Woss · 

Supreme Court doesn't always get it right; this being case in point. Justice Thomas Cromwell's statement that ruling in favor of Jessica Ernst could - “chill” the regulator’s ability to carry out its duties in the public interest" to me smacks of fear vs common sense and opportunity to protect the environment. Reality is that it's in corporate interest not public. Public wants clean water. AER should be held to the highest standard, not get off on a technicality. He and the 4 others really blew it. We owe Jessica Ernst much gratitude; she's a true heroine fighting to protect water from companies like Encana. Hope many people will send her thanks and support and a letter to government to drop the 'immunity' clause.
https://thetyee.ca/.../01/13/Landlord-Loses-Fracking-Case/
http://www.ernstversusencana.ca/
UnlikeReply3Jan 14, 2017 9:45amEdited
Julie Ali · 

I agree completely with you.

Jessica Ernst is doing the work that successive political parties in Alberta have failed to do which is protect the public interest. The PCs made the energy regulator immune from legal action. One only ask the question why? I imagine that the PCs wanted to ensure that the regulator could do what it wanted to do without any push back from citizens. This isn't in the public interest in my opinion.

Not only did the Tories set up the system for the benefit of the oil and gas industry they also did not do anything to ensure the timely remediation of the tailings ponds.

We now have the NDP folks in government continuing the pattern of abdicating the public interest by giving the industry $235 million in the form of a "loan" that is interest free courtesy of $30 million from the feds. This loan is to get the industry's orphan well program. Why are we paying for this liability?
LikeReply4 mins


https://www.youtube.com/watch?v=B6fA35Ved-Y


MercyMe - Even If (Official Lyric Video)



https://www.alberta.ca/release.cfm?xID=25402CDEFE818-F1BC-5D66-DF309066E457F2A4


Resourceful. Responsible.

March 3, 2009

Province announces three-point incentive program for energy sector


Short-term initiative to stimulate new and continued economic activity Edmonton... The Government of Alberta has announced a new three-point incentive program designed to help keep Albertans working in the province’s energy sector during the current global economic slowdown. “The oil and gas industry remains the lifeblood of Alberta’s economy and communities throughout the province,” said Premier Ed Stelmach. “We cannot directly influence the global economic climate. However, we can introduce measures to encourage new investment and help keep Albertans at work.  This will benefit families and local businesses, while generating provincial revenues we can invest in programs that are important to Albertans.” The highlights of the province’s three-point plan include the following. A drilling royalty credit for new conventional oil and natural gas wells. This one-year program will provide a $200-per-metre-drilled royalty credit to companies on a sliding scale based on their production levels from last year. This will ensure that the maximum benefits will be available for small and mid-sized producers, while freeing up available capital for all companies. A new well incentive program, which offers a maximum five-per-cent royalty rate for the first year of production from new oil or gas wells. This one-year program is intended to help free up cash flow, and in turn, help provide access to the capital necessary for reinvestment by Alberta’s oil and gas industry.


To encourage the clean-up of inactive oil and gas wells, the province will invest $30 million in a fund committed to abandoning and reclaiming old well sites. This will reduce the environmental footprint of the energy sector by returning well sites to their former states, while also helping to keep industry service crews at work. “While we cannot make up for the impact that global financial markets are having on Alberta, we are doing what we can,” said Energy Minister Mel Knight. “This short-term incentive program introduces innovative ways to help spur activity in our energy drilling and service sector during this economic downturn.” The introduction of the package follows consultation with representatives from the energy industry and the financial community about the current challenges facing investment and oil and gas activity in Alberta. The province will monitor the impact of the incentive program, and at the end of the year, assess whether it is necessary or appropriate for it to be continued. -30- Backgrounder: Additional details on the three-point stimulus plan and drilling activity in Alberta Media inquiries may be directed to: Jason Chance Director of Communications Alberta Energy 780-422-3667 To call toll free within Alberta dial 310-0000. NOTE: Technical questions from industry or the financial community regarding these programs can be emailed to response.energy@gov.ab.ca March 3, 2009 Additional details on the three-point stimulus plan and drilling activity in Alberta Drilling royalty credit Applies to new conventional oil and natural gas wells drilled between April 1, 2009 and March 31, 2010. Provides a $200 per meter royalty credit for new oil and gas wells. Credits will be available on the following sliding scale with the maximum benefit to be provided to small producers. The maximum credits available will be determined by a company’s production levels from 2008 and its drilling activity in 2009-10. 2008 Production levels Maximum credit as a percentage of royalties owed for fiscal year 2009-10 Less than 10,000 barrels of oil per day equivalent* (boe/day) 50% 10,001-15,000 boe/day 40% 15,001-20,000 boe/day 30% 20,001-25,000 boe/day 20% Greater than 25,000 10% * Barrels of oil equivalent is a measurement used by industry that is based on the amount of energy contained in a barrel of crude oil. For example, consider a company which produced 8,000 boe/day in 2008. The total value of available credits would be based on the company’s cumulative measured depth of new drilling in 2009-10. The company would then receive a credit of up to 50 per cent of the total royalties it owed in 2009-10. Based on forecasted drilling activity levels, the estimated potential royalty impact of the drilling royalty credit program is $466 million. New well incentive program Applies to all new wells that begin producing conventional oil or natural gas between April 1, 2009 and March 31, 2010. Provides a maximum five-per-cent royalty rate for the first 12 months of production, up to a maximum of 50,000 barrels of oil or 500 million cubic feet of natural gas. For example, as long as production caps were not reached, a well producing on April 5, 2009 would be eligible through to April 5, 2010; a well producing on March 25, 2010 would be eligible through to March 25, 2011. Based on forecasted drilling activity levels, the estimated potential royalty impact of the drilling royalty credit program is $1.04 billion. Orphan well fund When an oil or gas well has no legally responsible or financially able party to deal with abandonment and reclamation, it is considered an “orphan.” The province is providing $30 million to be invested by the Orphan Well Association in abandonment and reclamation projects with a focus on high-priority, very old “legacy” sites and on final reclamation efforts for abandoned sites—all of which pre-date the creation of the Orphan Well Association and the establishment of modern industry practices and regulatory standards. There are more than 600 estimated sites that fall into these categories. Energy industry employment A drilling rig drills holes to determine whether oil or gas is present in commercial quantities. A working drilling rig will usually employ up to four crews of four to six people. Once a viable pool has been reached, the drilling rig will usually be replaced with a service rig, which is specifically equipped to bring the well into production. Service rigs generally work on existing wells, including completing wells that have just been drilled, fixing wells that are not producing oil or gas, and abandoning wells that have stopped producing. According to the Canadian Energy Research Institute (CERI): an average well drilled to a depth of 2,300 meters generates approximately $1.65 million in economic activity, mainly covering labour and supply costs; each new oil or gas well drilled supports approximately 120 jobs including those directly employed by the energy industry, supplies and service sector; indirectly in other support industries, including hotels and restaurants; and induced jobs including those that provide supplies and services to the support industries; and one job in the oil and gas sector is supported by two jobs in other support industries, and the support industries are supported by 1.7 jobs in other industries. -30- Media inquiries may be directed to: Jason Chance Director of Communications Alberta Energy 780-422-3667 To call toll free within Alberta dial 310-0000. NOTE: Technical questions from industry or the financial community regarding these programs can be emailed to response.energy@gov.ab.ca Alberta Government | Newsroom | Ministries Listing | Energy Home Page | News Releases | Top of Page | Send us your comments or questions Copyright(©) 2009 Government of Alberta

Alberta to loan industry $235 million for orphan well cleanup


BY REID SOUTHWICK, POSTMEDIA
FIRST POSTED: THURSDAY, MAY 18, 2017 11:26 AM MDT | UPDATED: THURSDAY, MAY 18, 2017 01:06 PM MDT
Notley oprhan wells 2017 Alberta Premier Rachel Notley, centre, makes an announcement regarding work to speed the cleanup of Alberta’s old energy infrastructure near Carstairs, Alta., Thursday, May 18, 2017.THE CANADIAN PRESS/Jeff McIntosh
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The Alberta government will loan an industry group $235 million to accelerate the cleanup of oil and gas wells left behind by bankrupt producers after a prolonged downturn crippled many operators.
The industry-funded Orphan Well Association will use the loan to clean up a third of its inventory of inactive sites, which could translate into remediating roughly 700 wells.
The group will repay the loan through higher levies from industry, while a $30-million injection from Ottawa is expected to cover interest costs.
Speaking on a farm north of Calgary where a company had walked away from a well three years ago, Premier Rachel Notley said the funding addresses a big industry problem while putting people to work during a muted recovery that isn’t creating scores of jobs.
Notley said the funding deal is in line with the government’s polluter-pay philosophy, which means the industry that benefited from production must be responsible for the cleanup.
Premier Rachel Notley announces the loan to the Orphan Well Association at a farm near Carstairs.
“The agreement will put people to work as early as this summer and will go towards cleaning up orphaned wells over the next three years,” Notley said. “In fact by the end of this summer, you won’t be able to tell that there was even a well here.”
Alberta has seen rising numbers of abandoned oil and gas wells dotting the landscape during the downturn, driving up the inventory of wells in need of cleanup to nearly 2,100.
The Orphan Well Association charges industry an annual levy to cap and seal old wells and return the landscape to a natural state, but the $30-million yearly budget has not been enough to keep up with demand.
The group plans to increase the spending envelope to $60 million in the 2019-2020 fiscal year, which means oil and gas companies will have to pay more as the industry grapples with the mess left by bankrupt operators.
Lexin Resources Ltd., a Calgary natural gas producer, is among the failed companies that are driving up the inventory of wells in need of cleanup, after the Alberta Energy Regulator forced Lexin into receivership earlier this year.
Industry officials believe the inventory will grow even further after the Alberta Court of Appeal upheld an earlier ruling that found the money raised by selling the assets of bankrupt energy producers should go to their creditors instead of cleaning up their wells.
The province's energy regulator is seeking an appeal of the Redwater Energy case at the Supreme Court of Canada, in the hopes of setting a precedent that would divert more money to well cleanup.
Notley called the $235-million loan a good first step to address Alberta's well inventory, but the government and energy regulator are conducting a wider review to identify measures designed to prevent the stockpile from growing much further.
Brad Herald, chairman of the Orphan Well Association, said the latest downturn has exposed gaps in the system, which his group wants to address.
"All we want to see is that the changes are done in a predictable way and the effects of them are managed so they're not draconian," Herald said.
"We want to see a system where the public does not accrue costs from our business."
rsouthwick@postmedia.com



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