| Last December 16, the Alberta Energy and Utilities Board (EUB) denied a well licence application from Polaris Resources for an exploratory gas well in the Whaleback region of Alberta. The public hearing that led to the Polaris decision attracted significant local media attention. Well licence applications, submitted to the Board by the thousands on an annual basis, rarely receive such attention.
One reason for the attention was because the application concerned Alberta’s Whaleback region, a unique area located along the eastern slopes of the Rocky Mountains southwest of Calgary. The Whaleback was the subject of another well licence denial in September 1994, when the Board denied an application submitted by Amoco Canada. Subsequent to this 1994 Amoco decision, the Whaleback region was designated as a protected area candidate under Alberta’s Special Places 2000 program. Ultimately, the Alberta government created two protected areas in the Whaleback: the Bob Creek Wildland Park and the Black Creek Heritage Rangeland.
The Polaris well was proposed for lands neighbouring the newly created protected areas. Some hearing participants, including the Canadian Parks and Wilderness Society (CPAWS), asked the Board to deny the application because the gas well would impair the ecological value of the protected areas. Other participants, including many local landowners, asked the Board to deny the application because sour gas exploration was simply an undesirable land use activity in the Whaleback region. Meanwhile, others agreed with Polaris that sour gas exploration and recovery, with special conditions and controls, was an appropriate land use activity for the area.
The Board denied the Polaris application based upon inadequacies in Polaris’ planning, public consultations, experience and financial resources. Essentially, the Board denied the application on technical grounds.
The outcome of the Polaris Decision is a victory for local landowners and others that opposed the application, and a bitter disappointment for Polaris. Beyond these immediate reactions, however, the Polaris decision is generally disappointing for what it failed to address. The Board did not offer any judgments as to whether energy exploration is a desirable land use activity in ecologically significant areas of Alberta. Consistent with its failure to do so in its 1994 Amoco Decision, the Board was silent concerning whether energy exploration is compatible with the ecologically unique features of the Whaleback region.
Nevertheless, the Board’s reliance on technical grounds to deny the application is not surprising given the Board’s historical reluctance to address broad socio-ecological concerns intertwined with an individual energy project.
Back in 1986, for example, the Board expressly denied having the legal authority to address broader environmental or social concerns regarding an applied-for well licence.
Over the years, however, the Board has become more sympathetic to broad socio-ecological concerns connected to energy projects. For example, in a March 2000 well licence decision that approved several gas wells in the eastern slopes, the Board called for updated provincial land use plans for the area in question, in response to broad ecological concerns raised during the hearing. In the 2003 Polaris Decision, the Board was unable to reach conclusions on the broader ecological concerns, however, the Board did indicate that "... while the potential for oil and gas exploration clearly exists for these lands, the fact that they are adjacent to protected areas cannot be ignored."
More importantly, the provincial government has enhanced the Board’s jurisdiction to address broad socio-ecological concerns associated with individual energy projects. A section of the Energy Resources Conservation Act, enacted in 1993, requires the Board to have regard for the social, economic and environmental effects of an energy project in its decision-making process.
The Board is increasingly asked to consider the broad social, economic and environmental implications of energy exploration in Alberta. Should energy projects be located in or near densely populated areas of the province? Should energy projects be located in ecologically unique regions? Should regional health concerns, human or otherwise, prevent the Board from approving an individual project decision?
Commentators have suggested that deficiencies in Alberta’s public land use policy and planning processes leave these broader-based issues to be addressed by the Board in its individual energy project reviews. Implicitly or explicitly, however, the Board assumes that the desirability of an individual energy project can be assessed apart from these broader concerns.
The Board, as the primary energy project decision-maker in Alberta, should play a crucial role in Alberta’s social fabric by making explicit socio-ecological choices with its energy project decisions. For example, the Board ought to make some statement as to whether energy exploration in ecologically unique regions of Alberta is, or is not, desirable. Similarly, the Board ought to state whether sour gas exploration is, or is not, desirable in populated areas of the province.
The Board’s governing legislation acknowledges this important decision-making role, requiring the Board to consider the social, economic and environmental effects of an energy project. The Board, however, has narrowly interpreted this statutory obligation as a requirement to assess the economic benefits of an individual energy project against its immediate social and environmental costs on a case-by-case basis.
Too often, this cost-benefit approach leads the Board to discount non-measurable information in submissions that ask the Board to judge the desirability of an energy project on broad socio-ecological values. The Board, in effect, sees itself as having a limited role in Alberta’s social fabric.
The Alberta Court of Appeal, as the reviewing body over Board decisions, has failed on two occasions to assess the sufficiency of the Board’s narrow interpretation of its socio-ecological jurisdiction. At the moment, there is a glaring absence of judicial analysis explaining why it is sufficient for the Board to interpret its Energy Resources Conservation Act obligation solely as a cost-benefit calculation that fails to consider non-measurable, broad socio-ecological concerns.
In my opinion, the Energy Resources Conservation Act assigns to the Board a legal obligation to judge the desirability of an individual energy project on broad socio-ecological concerns when confronted with them. The upcoming Compton Petroleum hearing presents the Board with another opportunity to exercise this authority.
Later this year, the EUB will begin hearing an application from Compton for regulatory approval to drill several sour gas wells southeast of Calgary. These new wells are intended to accelerate the recovery of gas from the area. This public hearing is strong evidence of a conflict over broad public values concerning resource recovery and the interests of people living in southeast Calgary.
The Board will be asked to judge the desirability of locating these new wells next to a highly populated area. Many people will object to the Compton application based on non-measurable, broad socio-ecological concerns about sour gas recovery near their homes. Others will argue that the gas wells, with proper mitigation and controls, are an appropriate land use activity in a highly populated area of Alberta.
The type of socio-ecological judgments that the Board was asked to make with its Polaris Decision will resurface again in the Compton hearing. Just as the Board was asked to judge the desirability of locating the Polaris well in the Whaleback, in the Compton hearing, the Board will be asked to judge the desirability of locating sour gas wells next to such a highly populated area.
Given its past practice, however, the Board will likely approve or deny the Compton application apart from these broader concerns. In other words, the Compton decision will not explain why it is, or is not, appropriate to locate sour gas wells next to highly populated areas of Alberta.
Not only will this be an error of law but, in a province where energy projects have significant socio-ecological implications, the Board’s reluctance to address the broad socio-ecological effects associated with an energy project is also socially irresponsible. |
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