Perspectives

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The Alberta Energy Regulator Grants Standing to Environmental Group for Oil Well License Hearing

By its letter decision issued on November 19, 2018, found here, the Alberta Energy Regulator ("AER") granted the Southern Alberta Group for the Environment ("SAGE") full participation rights in a hearing for Granite Oil Corp.'s ("Granite Oil") applications to drill oil wells in the Milk River area of southern Alberta (the "Application"). This decision demonstrates how the AER applies the test in granting standing when an interested person is not directly and adversely affected by the application before the Board. Of particular importance is how the AER standing test compares with the proposed regulatory participatory rights under the federal Bill C-69. This raises questions as to the applicable test in joint review panel hearings upon Bill C-69 becoming law.  

Background

Granite Oil renewed an application in July, 2017 to the AER for licenses to drill four horizontal enhanced recovery wells from two pad sites producing crude oil in the Milk River area of southern Alberta. The application had been advanced initially by a predecessor in 2015 but had never been brought to a decision. The proposed well pads are one quarter-section away from the boundary of the Twin River Heritage Rangeland Natural Area ("Twin River") and the horizontal wells will extend under its boundaries. Twin River is a "natural area" as defined by the Wilderness Areas, Ecological Reserves, Natural Areas and Heritage Rangelands Act.1The Crown may not grant any disposition in a natural area except under the Public Lands Act or Forests Act. Granite Oil has cooperated with environmental AER approval conditions thus far, including proposing to minimize operations during grassland bird nesting periods.

On October 15, 2018, the AER issued a notice of hearing for the Application. On October 30, 2018, SAGE filed a request to participate and Granite Oil filed a response on November 7, 2018. SAGE is being represented by a professional botanist, Chreyl Bradley.

SAGE is a non-profit organization in Lethbridge, Alberta that advocates for increased grasslands conservation in southern Alberta. SAGE submitted a Statement of Concern in May 2017, and a formal Request to Participate in October 2018. SAGE argued that it had a direct interest in the subject matter due to its long involvement in advocating for conservation of the southern Alberta grasslands eco-system, and that this experience in grasslands conservation would provide a valuable historical context for the panel.

Shortly after the AER made its decision, on December 13, 2018, Granite formally withdrew its application to drill the wells, meaning that no hearing will ultimately be held in this matter.

Issue

The single issue determined by the AER at this stage of the Application was whether and how SAGE's participation would assist the panel.

Decision

In a short decision, the AER granted SAGE full participation rights in the hearing.  

The Alberta Energy Regulator Rules of Practice ("Rules of Practice")2provides that a person who wishes to participate in a hearing on an application must file a request to participate containing, among other things:

  1. the person's statement of concern or an explanation for its absence;
  2. a concise statement outlining why and how that person may be directly and adversely affected by the decision, alternatively, if the person will not be directly and adversely affected by the decision, what the nature of the person's interest in the matter is and why the person should be permitted to participate; 
  3. if the person will not be directly and adversely affected by the decision, an explanation of how the person's participation will materially assist the Regulator in deciding the matter that is the subject of the hearing, the person has a tangible interest in the subject-matter of the hearing, the person's participation will not unnecessarily delay the hearing, and the person will not repeat or duplicate evidence presented by other parties;
  4. the outcome of the application that the person advocates and the nature and scope of the person's intended participation; and
  5. if the person is acting on behalf of a group or association of persons, the nature of the person's membership in the group or association, and the person's efforts, if any, to resolve issues associated with the proceeding directly with the applicant.3

Relying on section 9(2)(c) of the Rules of Practice, the AER found that SAGE's participation will materially assist it in deciding the matter, due to SAGE's local knowledge of the area, interest in native grasslands, fauna, wetlands and specific knowledge of the history of the Twin River Heritage Rangeland. The AER also found that SAGE has been involved in the activities associated with the development of Twin River Heritage Rangeland Natural Area and thus has a tangible interest in the subject-matter of the hearing.

SAGE particularly stressed its attachment to and longevity in the local area, and its commitment to protecting southern Albertan grasslands. One of the issues to be determined in the Application is whether the Twin River falls within a conservation area to be protected under the South Saskatchewan Regional Plan ("SSRP") made pursuant to the Alberta Land Stewardship Act.4 SAGE participated in developing the SSRP.  A map showing a proposed expansion of Twin River was included in the SSRP. A comparison of the survey plans accompanying the Application shows that the proposed drilling would occur within the proposed expansion area.

SAGE also undertook, in accordance with the standing test, to prevent duplication of evidence and unnecessary delay by coordinating with other ENGOs and directly affected parties participating in the hearing.

Implications

The AER's decision granting full participatory rights demonstrates how the AER applies the test for standing when an interested person is not directly and adversely affected, and the nature of the participation that will be eligible to "materially assist the Regulator in deciding the matter." The AER test is similar to the test in the current federal legislation such as the Canadian Environmental Assessment Act5 and National Energy Board Act,6 which both generally allow only persons directly affected by the granting or refusing of the application, and persons who have relevant information or expertise, to participate in hearings.  

However, these legislation are undergoing significant amendments that affect participatory rights. The Government of Canada ("GOC") introduced Bill C-69 - An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts on February 8, 2018. The Bill is undergoing the legislative process. This omnibus legislation has 4 parts. Part 1 enacts the Impact Assessment Act and repeals the Canadian Environmental Assessment Act, 2012. Part 2 enacts the Canadian Energy Regulator Act and repeals the National Energy Board Act. Part 3 amends the Navigation Protection Act and Part 4 makes consequential amendments to numerous other federal laws and regulations. Among other key proposed changes is a requirement for increased public participation. In this regard, the "directly affected" standing test in environmental impact assessment proceedings will be eliminated.

A comparison of the AER's application of its standing test pursuant to its Rules of Practice and the proposed public participation rights under Bill C-69 raises questions as to the applicable standing test in the context of a joint assessment by a joint review panel7 upon Bill C-69 becoming law.

BLG will continue to monitor these issues and provide updates.


1 RSA 2000, c W-9.
2 Alta Reg 99/2013.
3 Section 9(1) and (2) Rules of Practice.
4 SA 2009, c A-26.8.
5 2012, SC 2012, c 19, s 52, at ss. 2(1) and (2).
6 RSC 1985, c N-7 at s. 55.2.
Impact Assessment Act, s. 39.