Alberta Court of Appeal increases setback of sour gas pipeline from Native Reserve

Alberta's Energy Resources Conservation Board (ERCB) approved an application by Suncor to construct two pipelines, one of which would carry sour gas.  The lines were proposed to cross in the vicinity of the Stoney Nakoda/Eden Valley Reserve, which consists of 100 separate homes and approximately 650 residents.  The Stoney Indian Band appealed the ERCB decision to the Alberta Court of Appeal on the basis that the ERCB had erred in failing to characterize the Reserve as an "urban centre" (in which case the setback requirements would be more stringent).

Setback requirements for level three sour gas pipelines in Alberta are listed in Directive 056: Energy Development Applications and Schedules as follows:

0.1 km to an individual permanent dwelling up to eight dwellings per quarter section;

0.5 km to an unrestricted country development;

1.5 km to an urban centre or public facility.

Urban centre is defined as: “a city, town, new town, village, summer village, hamlet with not fewer than 50 separate buildings, each of which must be an occupied dwelling, or similar development the [Board] may designate as an urban centre”.

Before the hearing, in response to a request from Suncor, the ERCB staff found that the Reserve was not an urban centre. This was challenged at the hearing. The ERCB did not change the designation. It reaffirmed that the Reserve did not qualify as an urban centre because “the area of the [Reserve] nearest the trunk line has an estimated average residence density of five residences per quarter section, less than the residence density of eight residences per square section necessary to qualify for an urban centre designation.”

The Court found that the fact that the Board embarked on a “density analysis” was not in and of itself problematic as it may have served as a relevant factor to the Board’s analysis, given the Board’s statutory discretion.  However, it could not be the only relevant factor. Simply looking at the “density criteria” is incomplete and insufficient. The definition of urban centre in Directive 056 requires two considerations. First, is it a “city, town, new town, village, summer village, hamlet with not fewer than 50 separate buildings, each of which must be an occupied dwelling”, or, second, a “similar development”? In analyzing whether the Reserve was a “similar development”, the Board had to have recourse to the concepts of “city, town, new town, village, summer village, and hamlet”, which are not defined in Directive 056, but in the Municipal Government Act, RSA 2000, c. M-26.

A hamlet is defined in section 59 of the MGA as a community which “(a) consists of 5 or more buildings used as dwellings, a majority of which are on parcels of land smaller than 1850 square meters, (b) has a generally accepted boundary and name, and (c) contains parcels of land that are used for non-residential purposes.” The Reserve has more than 100 homes and houses schools, a church, band offices and a food bank.

The Court allowed the appeal and remitted the matter back to the ERCB for its consideration and redetermination in accordance with the Court of Appeal ruling.

Read the decision at: Big Loop Cattle Co. Ltd. v. Alberta (Energy Resources Conservation Board).

B.C. Oil and Gas Commission Reports on Sour Gas Leak

CBC News - British Columbia - EnCana unprepared for toxic gas leak: report

The B.C. Oil and Gas Commission has released a report on a leak from an EnCana sour gas (H2S)pipeline last November. The report concludes that pipe failure was caused by internal erosion resulting from sand; that the company had not followed its established criterion for sand recovery; EnCana's public information package failed to get residents to call EnCana when they had suspected a release of gas had occurred; leak detection and emergency isolation at the site did not detect or control the leak in a timely fashion; EnCana's response did not fully conform to its own emergency response plan and no notification was given to the B.C. government for nearly two hours after the leak was discovered; EnCana took more than an hour to begin notifying residents after the leak was detected; the erosion of the pipe and the rupture occurred before any inspection of the piping had been conducted under EnCana's "integrity management program".

Read the report at: http://www.ogc.gov.bc.ca/documents/reports/OGC%20Investigation%20Report%2004.02.10.pdf

Damages awarded for sour gas contamination of water well

The Alberta Court of Queen's Bench has awarded a family $30,000 for damage caused to its water well by Impact Energy Inc. Under a surface lease agreement, the Blatz family had granted to Impact the right to use an area of 4.45 acres to drill a sour gas well. The well was directionally drilled. Shortly thereafter, the family began to notice changes in its water supply (cloudiness and odour). The Court was satisfied that the damage to the quality of water was a result of the drilling of the sour gas well. A report of the case is available at the link below.

http://www.canlii.org/en/ab/abqb/doc/2009/2009abqb506/2009abqb506.html