SLIDE 1 Land Development
Remediation Stakeholders in a Challenging Economy
Jim Purves, B.Sc., P.Ag.
Presented By:
SLIDE 2 OUTLINE
- Former oil and gas activities on traditionally agricultural land
are now being re-evaluated as part of development
- pportunities.
- New stakeholders in the to the oil and gas reclamation game.
- How the current economic environment is affecting land
development?
SLIDE 3 OUTLINE
- Look at urban encroachment
examples in Alberta.
- Well Closure Language
- Liability Gap – Buyer Beware
- Examine three case studies in
Alberta.
SLIDE 4 NEW STAKEHOLDERS
- Land Development Companies
- Financial Institutions
- MD and County Representatives
- Municipal Planners
- Business Owners
- Private Landowners
SLIDE 5 Oil and Gas Activity in Alberta
- Alberta Energy Regulator (AER) oversees 449,000
wells that were drilled in the last century
- 76,500 inactive
- 66,500 abandoned
- 104,500 reclaimed
SLIDE 6 Urban Development
Devon, Alberta
- Founded in 1947 following
the discovery of oil at the Imperial Leduc 1 well
SLIDE 7 Town of Devon
Year Population Oil and Gas Wells within 1 km radius 1950 1000 91 2011 6510 166
SLIDE 8
Town of Devon
SLIDE 9
Town of Devon
SLIDE 10
Town of Devon
SLIDE 11
Town of Devon
SLIDE 12
Town of Devon
SLIDE 13 City of Edmonton, Alberta
Year Population Oil and Gas Wells within 1 km radius 1950 148,861 25 2011 1,159,869 480
SLIDE 14
City of Edmonton, Alberta
SLIDE 15
City of Edmonton, Alberta
SLIDE 16
“Former Wellsite Status”
SLIDE 17 “Former Wellsite Status”
Abandoned Well
Only means surface abandonment has been completed. Does not address whether the site has been assessed or not.
Reclamation Certified
But when was the certificate issued? Pre-2001: Requirements focused on surface reclamation and not contamination** Post-2001: Detailed requirements for assessing contamination implemented
SLIDE 18 Reclamation Exempt
Wells that were abandoned prior to reclamation legislation being enacted, known as Reclamation Exempt (Rec Exempt) wells. These are wells that either: a) In the White Area (private land) and were abandoned prior to June 1, 1963, or b) In the Green Area (Crown land) and were abandoned prior to August 15, 1978.
A total of 36,534 Rec Exempt Wells in Alberta
Focused on surface reclamation and not contamination
SLIDE 19
Operator Liability
Operators own a lifetime liability on contamination issues Operators own a 25 year liability on reclamation issues Orphan Well Association (OWA) Well, pipeline or facility without any legally responsible or financially able party to deal with it’s abandonment and reclamation
SLIDE 20 Operator Liability
- Stakeholder Engagement
- Significant Barriers to Development
- Wellbore Setbacks
- Sensitive Receptors
- Risk Ranking
- Active Facilities - Offsite Impact
- AER Enforcement Order
Impacts Timelines on Reclamation
SLIDE 21 Liability Gap
Reclamation Certified and Reclamation Exempt wells are not covered under OWA. So if your site has a Defunct Operator with No Transfer of Liability
- There is no operator to assume liability
- Does not fall under OWA
SLIDE 22 Rec Certified / Rec Exempt Defunct Operator Liability Gap
- Liability falls under the current landowner
- Buyer Beware Situation
- Developers generally complete due diligence (PH1 ESA)
- For Agricultural Land Sales – Private Landowners may be
unknowingly transferring liability
- Government Held Liability on Public Land
SLIDE 23
Defunct Operator Liability Gap
Increased liability associated with: 1) Reclamation Certified prior to 2001 2) Reclamation Exempt
Requirements focused on surface reclamation and not contamination
SLIDE 24
SITE CLOSURE
SLIDE 25 General Site Closure
Remediation Certificate
- Program initiated in 2009
- Applies to any site (oils and gas, commercial, industrial,
residential)
- Relatively simple application
- Provides CLOSURE AGAINST CHANGING CRITERIA
- Alberta Tier 1 has been revised six times since 2001
SLIDE 26
1) Residential 2) Active Commercial Subdivision 3) New Commercial Subdivision Three Development Examples
SLIDE 27
Case Study #1 Residential Development
SLIDE 28
Case Study #1 Residential Development
SLIDE 29
Case Study #2 Active Commercial Development
SLIDE 30
Case Study #2 Active Commercial Development
SLIDE 31
Case Study #2 Active Commercial Development
SLIDE 32
Case Study #3 New Commercial Subdivision
SLIDE 33
Case Study #3 New Commercial Subdivision
SLIDE 34
Case Study #3 New Commercial Subdivision
SLIDE 35 Developer’s Comments
Smaller Communities
- Allowing for staged utilities development – good incentive
- Typically don’t have qualified staff – requires consultant involvement
Larger Communities
- Require full utilities development up front which can be prohibitive
Overall
- Construction costs are down
- Municipalities should view development as partners vs revenue stream
- OWA should really be responsible
- Edmonton now requiring groundwater assessments on developments with
former oil and gas facilities
SLIDE 36 CONCLUSIONS
Goal is to improve the quality of decisions made by these new stakeholders when evaluating environmental risk associated with their development. Liability Gap – buyer beware, especially for agricultural land sales Equivalent Land Use Capability?
- former wellsites are being omitted from development plans
Closure timelines amongst stakeholders will be challenging
SLIDE 37
QUESTIONS??
Jim Purves, B.Sc., P.Ag. Technical Resource Manager jpurves@northshoreenv.com 780-913-6137 www.northshoreenv.com
