Return To Handbook IndexRoss Crain's Resume 
W
ELCOME  TO
CRAIN'S PERSONAL PAGES
Personal Pages  |  Denver, South Park & Pacific RR  |  Model Train / Train Travel  |  Search


 

SURFACE RIGHTS FOR RURAL LAND OWNERS
     Some Ugly Truths About "Easy Money"


Oil, gas, and mining companies may own mineral rights beneath the surface of land owned or leased by other people. The subsurface mineral rights owner has the right to explore and exploit their subsurface holdings. That right is balanced by the land owner's or lease holder's right to the use and quiet enjoyment of their property; these are known as "Surface Rights".

Where these rights overlap, the two parties must come to some agreement concerning the intrusion by the mineral rights holder onto the land surface. The landholder often loses the use of a portion of his landholding, and loses income derived from that land.

There is also general disturbance to the landholders operations, dust, noise, and many other tribulations. The mineral rights holder is expected to pay for the loss of income and compensate for the disturbance for as long as the conditions exist.


A number of surface rights organizations (with websites) have appeared and disappeared over the past 30 years. Government websites have also evaporated so easy access to information on your rights is difficult to locate.
Use your favourite search engine to find what is currently available.

DISCLAIMER
The author of this webpage is not a Lawyer nor a Land Agent. The opinions expressed are based on 45 years as a rural land owner dealing with Land Agents representing oil and gas, pipeline, seismic, and utility companies. My experiences may not reflect accurately the pertinent Laws and Regulations in any particular jurisdiction. No warranty is expressed or implied. This information is presented as examples only and we accept no responsibility for consequential loss or damages that may arise from using the information on this webpage. You use this material at your sole risk and responsibility. If you notice an error in facts, let me know.
 

WHO WANTS TO RUIN YOUR LIFESTYLE ?
If a well is to be drilled or a facility or pipeline built near your residence, deeded land, or leased land, you should receive a "Notice to Occupant" briefly describing the proposal. Who is entitled to receive these Notices varies with the type of facility, your distance from it, and the particular regulations of your jurisdiction. Stay in touch with your neighbours -- they may receive a notice and you may not.

Read this document carefully. It will always present the most benign, least intrusive case, and this may not represent reality. It may contain information vital to your operation or lifestyle. It may also contain numerous omissions and errors of fact. For example, I have received 5 Notices on a single facility across a 4 year period. Two of then claimed there would be no flaring of wells (this was a compressor application, no wells were ever contemplated) but failed to mention the flare stack for the facility. Two were for doubling the compressor capacity but failed to mention the added noise that such a facility would generate. When I complained to the contact on the form, all I got was voice mail and he never returned my call. There is no excuse for a careless or misleading Notice to Occupant. Keep the oil company honest by a critical review of all documents you receive and ASK QUESTIONS if it doesn't compute.


Surveyors have a right to enter land without compensation, but the residents expect the common courtesy of an introduction, explanation of the purpose of the survey, and who and what it is for, including contact information.

This is the barn in which surveyor's staked a well location on my ranch. There is no excuse for this level of ignorance.

A surveyor bombing unannounced across private land on an ATV without permission is rude and dangerous - the bulls in my bull yard thought so and I passed on their comments when I caught up with him.

Unfortunately, surveyors are trained to follow orders and to avoid thinking about the world around them. Witness the surveyors who staked a well center INSIDE my hay barn. Or the ones who staked a Level 3 critical sour gas well 100 feet from my driveway, the sole egress from my residence. Eventually, the oil company president showed up to explain that he would have a helicopter on stand-by to evacuate my family, my dogs? my cattle? in case of an H2S leak or blowout  - imagine a chopper pilot descending through an H2S plume to rescue us! The surveyor's then located the well center at the edge of an 80 foot cliff  - not a legal location and too small for a lease anyway. Finally, they found a 4 acre flat spot far enough away to be non-toxic. Three surveys, weeks of delay, expensive management and technical time wasted, all because the surveyors did not feed back the stupidity of the initial company requests. I'm not making this up - it really happened!!

 

The moral of this long story is that you DO NOT have to allow the lease to be placed where the operator initially asks for it. With modern technology, they can place the well almost anywhere and still reach their target. Force the operator to consider your needs. If you don't take part in this discussion, you will be stuck with the operator's choice of location for half a century or more.

Seismic crews will arrange for a Land Agent to negotiate a fee, usually based on mileage or number of seismic shotholes to be drilled (if any). Specifics about methods (dynamite or vibrators), helicopter usage, access routes, vehicular traffic (or not), clearing, cleanup, reclamation of shotholes, reclamation of artesian shotholes and stream crossings, timing (after harvest, after calving season), and other concerns must be in writing. Land owners and lease holders are not required to agree to a standard agreement unless it covers ALL your concerns. Be sure to add your concerns to the standard agreement when needed.

In one case, I was asked if my cattle were afraid of helicopters. I explained that it was only takeoff and landing that bothered them, not the actual flight in the chopper. True story.

Since the land and its use are relatively undisturbed, and the operation is short-lived, compensation is not high unless there are serious damages.

 

Drilling Operations for oil and gas require a great deal more effort during negotiation. The drilling operation will take weeks or months. Drilling creates noise, odours, and traffic, which in turn creates more noise, dust, and interference. The well and its facilities will be on site for 25 to 50 years, and numerous workover events will take place over the life of the well. There is also the risk of spills, leaks, blowouts, and motor vehicle accidents for the life of the well. The area needed for a well site is usually 4 to 5 acres plus use of an existing or new access road.
 

If it looks smooth and green, someone  made it that  way. Guess where they want to place the wellsite. Yup -- right in the middle of that nice pasture.
 

If the mineral rights are owned by a government (provincial, state, federal) the oil company must apply for a mineral surface lease and pay the government a royalty on the value of the production. The land owner or lease holder gets nothing from the production, but will be compensated for the surface area used, plus some other considerations. If the mineral rights are held by the landowner or another third party, the oil company must negotiate with that person as to royalties.

 

For the record, we have been blown off our place twice because of sour gas releases from oil wells- each a result of human error or faulty equipment assembly. Neither of the companies even admitted that the incidents had occurred (I have photos) and the companies did not report them to the regulators (I did), nor did they offer any compensation. We also put up with "non-toxic" levels of H2S for over 3 months due to a poorly managed sour gas blowout more than 50 miles away. And there was the rig fire that blackened the snow (and my house) with soot for two miles in all directions, and the floods, each time an oilfield access road washed out, and the off-site sump that leaked toxic oil-based mud into my creek for 26 years (still not reclaimed), and ..... well you get the point.
 

For those who are not aware, H2S (or sour gas) is hydrogen sulphide, a by-product of some oil and gas production operations. H2S is heavier than air and sinks into valleys and low areas, unless blown away by wind. H2S smells awful and if you can smell it, leave the area immediately. If the smell goes away, either the problem has been fixed or you are about to die! The occupational exposure limit is 20 parts per million for 15 minutes, then you go home for 48 hours to recuperate; 200 parts per million will knock you unconscious, and 700 parts per million is immediate death. The residential exposure limit for H2S is supposed to be ZERO - that is, no H2S is allowed to go beyond the lease boundary. Good luck on that one.

To reduce risks from H2S, the gas is supposed to be captured and pipelined to a processing plant. Where this is uneconomic, H2S will be flared (burned), creating sulphur dioxide (SO2) and water vapour. SO2 is less dangerous than H2S but still smells bad and has long term detrimental effects on the respiratory system of humans, cattle, and wildlife. Other by-products, such as benzene, are relatively odourless, but can still make you sick after sufficient exposure. The only cure is for the oil company to capture all gases and put them into a pipeline. Naturally, they will resist doing this unless extreme pressure is brought to bear upon them. Their motto is "The solution to pollution is dilution", hoping that the wind or rain will carry the problem away.

Compressor Sites and Gas Processing Facilities also need a surface lease similar to that needed for a wellsite. But wellsites are pretty quiet compared to a compressor. Three 1600 horsepower compressors will sound like a jumbo-jet during takeoff, all day, all night, every day, all year long. If you are within a mile of this, you will notice, within 500 feet, you will go stark raving mad. A "Noise Impact Assessment" (NIA) will be needed before construction and predicted sound levels must be below specific limits. If there are other noise sources nearby, an NIA for the combined facilities is required.

NIAs may be cooked to keep the predicted levels below these limits and always represent the most optimistic weather and ground conditions. It will always be noisier than predicted, especially under adverse weather conditions. See MORE at the end of this page.

 

After the fact remediation is expensive and slow to arrive. It took me three years of constant harassment to get the compressor next door to my ranch tuned up enough to meet regulations. Be forewarned.

Pipeline rights of way, like powerlines, are placed on an easement that restricts building close to the line. The setback will vary with the size and type of fluid pushed through the line. Since the line is buried, the surface use, except as to buildings, will return a few years after laying the line. Compensation is based on that loss of use and some for general disturbance during construction. The actual reclamation after construction is problematic - many farmers and ranchers have had serious concerns trying to obtain compensation for poorly reclaimed land.

Sour gas and high vapour pressure lines have fairly large Emergency Planning Zones (EPZ) that can extend well beyond the pipeline setback distance. These will reduce the value of your property and limit where you can build. Plan ahead for future development.

SURFACE LEASE and PIPELINE LOCATION

BEFORE discussing compensation with a Land Agent, first negotiate the location of the proposed operation. If you discuss compensation first, you have tacitly agreed to the oil company's location and the compensation is related to that specific location. Be sure the location is suitable to your operation and as far from your residence as possible. With current technology, an operator can reach its target from anywhere on a given quarter section.

 

This rule also applies to "Consent of Occupant" agreements for wellsite or facilities on adjacent lands, but within a short distance where consent of occupant is required. I got caught sleeping on this once, when the Land Agent told me that the compressor would be built on the south west corner of the lease. This was not put in writing. The compressor was built on the northeast corner, as close to my residence as was possible. It took three years to get the noise level below regulatory limits, and I can still hear the roar in the early morning and early evening. Verbal promises are worthless.

Before agreeing to compensation, be sure the survey plan is attached to the agreement and corresponds to what you think you are agreeing to. If there is no survey plan DO NOT SIGN anything. If the company refuses to provide a survey plan, go immediately to a Right of Entry Hearing, where a survey plan is required by law.

There are many good reasons for a landowner to require a Right of Entry Order instead of a private agreement with an oil company. They are easier to find, easier to enforce, easier to arbitrate, and easier to modify than private agreements.
 


SURFACE LEASE and PIPELINE COMPENSATION
An oil company drilling on privately owned or leased land needs to negotiate a surface lease agreement with the land owner or lease holder. The compensation is based on an upfront payment and an annual fee until the wellsite is properly abandoned and reclaimed to the satisfaction of the appropriate government agencies. The table below itemized the specific items that need to be negotiated. However, keep in mind that it is the total compensation package that matters in the end. Dollar values shown below are 2010 averages.
 

1.

Entry Fee: In BC the entry fee is equal to $500 per acre of land granted to the company, to a maximum of $5,000. For example, if the company needs a 4.25-acre site, the entry fee would be: 4.25 acres x $500 = $2,125. The $5,000 maximum applies when the area is 10 acres or larger. If the area is less than one acre, then the fee is that fraction of one acre x $500. The minimum entry fee is $250, paid when the area is half an acre or less. In BC the entry fee is a fixed payment. All other payments are negotiated.

In other jurisdictions, the entry fee should be negotiated with the BC precedent in mind.
 

2.

Land Value: Usually the value of the land leased to the company is determined by the price expected if the land were sold on the open market by a willing seller to a willing buyer at the time when the lease was prepared or the Right-of-Entry Order issued. The value is also based on the highest approved use (agricultural, industrial, and residential) for the land. The value per acre for the well site is determined by dividing the value of the titled unit by the number of acres required.
 

3.

General Disturbance: Initial Nuisance, Inconvenience and Noise, this payment is for nuisance during the first year of the lease. For example, in the first year you will likely have to spend time dealing with the company's representatives and surveyors, preparing documentation, negotiating with the company and/or seeking advice from government agencies or lawyers. There may also be noise and inconvenience related to construction. The company should pay reasonable compensation to you for nuisance. Keep a record of all time spent, phone calls made, and expenses incurred.
 

4.

Loss of Use of the Land: The company pays an annual compensation for your loss of the normal use of the well site area during the well site's life (until the well is officially abandoned AND the leased area is renovated to the satisfaction of environmental regulations. The amount should approximate the value of the gross annual production reasonably expected from the area. To calculate the amount, you can use the greater of yield and price averages from the past five years, or today's street price. For example, assuming canola production at 35 bushels per acre on a well site and access road occupying four acres, the loss would be 4 x 35 = 140 bushels. At $8.50 per bushel, the total annual loss would be $1,190. Because you are asked to agree on losses for the next five years (see "Five-year Review" below), consideration should be given to future prices.
 

5.

Adverse Effect: This payment is related to your inconvenience, nuisance, and extra costs on the rest of the quarter section where the well site is located. For instance, farming around the well site may require constantly turning corners, which can cause overlaps, extra strain on machinery, soil compaction, loss of seed and grain, and extra field and labor costs. Other factors related to adverse effect can be noise, dust, odor, additional traffic on the land, and proximity to a residence or farm site.

Click Here for a thorough discussion of Adverse Effect
 

6.

Other Relevant Factors: If there are other considerations specific to your situation, include them when negotiating compensation. This might consist of signing bonuses, material and assets left at the end of construction or other non-cash transactions.

The type of land (examples are bush, cultivated, pasture) and location (boundary, inside, home quarter) will have an effect on the total compensation package.

The BC Surface Rights Board website lists 11 items to be considered, most of which are included in the table above.
 

The sum of Items 1 through 6 is to be paid at the time of signing the surface lease agreement with the energy company and covers the first year of operations. No machinery moves on the lease until the cheques clears the bank.


The annual compensation, sometimes called the "annual rent", is the sum of items 4 and 5. This amount should arrive automatically 20 to 30 days before the anniversary date of the lease agreement. If the payment doesn't arrive on time, raise hell with the surface land administrator in the oil company. If a company goes bankrupt, your lease compensation goes on the Receiver's list of debt's owing, and you may get nothing for a while. When a new company takes over the lease, you may get paid immediately or you may want to negotiate a whole new agreement.
 
EXAMPLE: 4 acre lease plus 1 acre access road, total 5 acres
   1. Entry Fee       $500  per acre times 5 acres    = $ 2500
   2. Land Value    $3600  per acre times 5 acres = $18000
   3. General Disturbance                                     = $ 4000
   4. Loss of Use    $500   per acre times 5 acres   = $ 2500
   5. Adverse Effect                                               = $ 4000

TOTAL 1st year compensation                             = $41000 including Entry Fee

ANNUAL COMPENSATION: Sum of items 4 and 5 = $ 6500 per year

For a pipeline right-of-way, only items 1 and 5 are usually paid, but damages may be claimed against the company.


Damages may be paid if demonstrated, for example damaged roads or fences, culverts, cattle guards, lost cattle, or failure to properly renovate and reseed a lease, right of way, or temporary workspace to the satisfaction of the land owner.


Alberta 2009 Sample Data Sets and Definitions
Alberta Ag once provided online maps for the components of lease and pipeline agreements. Their purpose was to provide price transparency for rural land owners to aid them in negotiating a fair deal. The webpages are no longer active but are listed here to show what used to be available. One can only speculate as to why the maps disappeared.

List Of Obsolete Links to maps of Alberta showing:
  land value for surface lease per acre
  land value for pipeline right of way
 
general disturbance payments paid per well site
 
loss of use payments paid
 
adverse effect payments paid per well site)

Price transparency, suggested by the publication of the above links, was a bit of fiction anyway. The data used in the maps was from a database developed by W. H. Marriott and Associates for use by Land Agents through subscription. The database is no longer visible on the Internet. Posting of prices was voluntary. Self-interest on the part of individual Land Agents would reduce the likelihood of posting freely negotiated high values. No new data have been published since the 2009 data went missing, except in SRB Orders in Alberta and BC.
 


Sample listing from the Marriott database. Land Agents have access to this kind of data -- landowners do not.

 

The Canadian Association of Landmen (CAPL) published two articles in their magazine (May and October 2010) about the Marriott database. The articles indicated that CAPL members were in favour of such a database as it "would lower the prices paid for compensation" and reduce costs to the oil companies. 

Do CAPL members still share compensation values paid to landowners? If so, is that a breach of privacy laws? Or a breach of the Canada Competition Act?

Land Agents have access to large in-house data sets of compensation values paid out over the years, plus word-of-mouth knowledge via personal networking that land owners do not have access to.  Land Agents do not show "comparables" to the landowners, like real estate agents do. It is a very one-sided negotiation. Land Agents are not above stretching the truth, although their Code of Ethics suggests that they shouldn't do this. I know my compensation agreements have been discussed among Land Agents working for different companies - this is a breach of privacy since no one has the right to discuss my private financial affairs with anyone, period.

To find some compensation awards by the various provincial Surface Rights Boards, Google "Surface Rights" "Compensation" "Comparables", and see what you get.


FIVE YEAR REVIEWS

Some jurisdictions provide for an automatic review of the "annual rent" every 3 or 5 years. If this is not a regulatory feature where you live, put the review into the agreement. Think of what a dollar could purchase 25 years ago !   In many cases, oil and gas companies fail to give the required notice or give notice claiming that no change in compensation is warranted. Since inflation of agricultural costs increases by 4 or 5% per year, this statement is clearly untrue. The landowner can request the review and if the company does not respond appropriately, the landowner can apply to the Surface Rights Board for a review, and it will force the company to attend and respond. While the 5 year review is mandatory in Alberta and BC (3 years in SK), there is no penalty for non-compliance, so it is up to land owners to force the issue.

 

One of my agreements was dated June 1981, so it should have been reviewed before June 2011. The oil company, for reasons unknown, claimed it was dated November 1979 so no review was needed until the end of 2014, even though they gave notice of the review in November 2013. After 9 months of non-response to my emails, I threatened to apply to the Surface Rights Board to correct the date of the agreement and to update a 35 year old compensation package. Amazing attitude adjustment!! We had an agreement in 24 hours, a cheque in 3 days, retroactive to 2011, but no apology for their arrogant attitude or the effort needed to get them on track.  

 

DEALING WITH A LAND AGENT

A surface lease or pipeline right of way is an encumbrance on your land and affects its value forever. Some people think oil field revenue enhances a property's resale value because of the cash flow it represents. This value is offset by the odors, noise, dust, traffic, loss of use, and adverse effect of the lease. The cash may look good now, but even with compensation reviews every 5 years, that cash flow won't be enough 20 years down the road, especially if you want to subdivide or build new structures or change the primary use of the land. And you pay tax on all the compensation, including the upfront cash.


Land Agents, often called Landmen regardless of gender, come in many flavours, from the "Nice Boy Next Door" to "The Cowboy", from the "Farmer Charmer" to "That Arrogant Bastard". Most field agents are male; many surface land administrators in the office are female. They work for, or are contracted agents for, the energy company. THEY DO NOT work for you ! They are your adversary and don't forget it.


Land Agents understand the agreements, surface land regulations, and negotiating tactics better than most farmers and ranchers. They appear to be in a position of power and can be intimidating. You know your land, your operation, and your long tern goals far better than the Land Agent. So you are equal but different.

The Land Agent will try to take charge of any meetings, and will do his best to make you feel inferior. Be assertive, polite, and state your case clearly. Take notes of what you said and what the response was. Prepare for the meeting and research costs and values in advance. Check out comparables as well as you can via the internet and neighbours.

Most Land Agents believe they are working in the best interests of both parties, and believe they are behaving in an ethical manner. This is not really true - they have a boss and he has a boss .... And they do "shade the truth", hide the truth, make promises they can't keep, and can easily misrepresent your negotiating position to their employer. Many Land Agents are independent contractors paid by the oil company to negotiate with you. They will not be hired again if they do not follow orders, so don't expect too much from a "hired gun". He often has no authority to change the terms he was instructed to obtain. Land Agents who are employees of the oil company are no better - their annual review, raises, and bonuses will depend on how well they followed the "company line".

A serious breach of ethics or privacy can be reported to the Land Agent licensing agency (if one exists in your jurisdiction), or to a Land Agents Association, or directly to the Land Agent's boss. If you have a legitimate and serious complaint, notify everyone in sight.

Document all your meetings, what was discussed, time spent, and especially discrepancies in proposals between visits. These notes will be helpful if a dispute arises before the agreement is signed. You are entitled to be paid for your time. At a Hearing, you could be awarded $50 per hour for your preparation and research time. If you use a lawyer or representative or appraiser you might get some or all of their time covered, but the time has to be very closely linked to the negotiation and not on side issues.

This is what you are trying to protect.
Take the time needed to do it right.

The Land Agent will present an agreement
drafted by company lawyers and will offer the lowest compensation that he thinks might fly.  DO NOT SIGN THIS DOCUMENT. It will not contain all the terms and conditions you need to protect yourself and your land. READ the links below:
    
Alberta Standard Surface Lease

     26 Clauses to add to a Surface Lease
    
27 Clauses to add to a Pipeline Agreement.

You will need time to assess the terms of the agreement and the amount of the compensation. Take that time. Talk about the 5 components of the compensation separately - never accept the first offer without a serious review of each component and the overall compensation. They may have been a bit generous on one item and a bit stingy on another - keep a balanced view.

Make sure all the special terms you need are included in the final draft, either in the body of the Agreement or as an Addendum. If it is as an Addendum, the body of the Agreement must refer to the Addendum and both the Agreement and the Addendum will need to be signed by both parties. See the links immediately above for possible clauses that you need to add, or add them all - none of them will hurt you and may come in handy later.

If the Land Agent arrives without appointment, you may be busy harvesting, planting, calving, or whatever - tell him to come back at a more convenient time. If the Agent does not leave when asked, he is trespassing and can be removed from your land by the police. Don't use force yourself - dial 911 and watch him skedaddle.

When convenient to your schedule, review the text of the agreement, and the survey plan for road and lease layout. You can do this with or without the Land Agent present. See how the plan interferes with your operation, drainage, land/crop quality, and proximity to residences and other buildings. Request changes that make your situation better. For example, a lease in the middle of your best pasture is inconvenient and could be pushed to a bushy, rocky area close to the edge of the property. The Land Agent does not have the authority to say "No" without first discussing the changes with his boss.

You are being paid for the pipeline right of way or the surface lease area specified on the survey plan, but there may be setback distances that prevent certain activities some distance beyond these boundaries. This will "sterilize" a large area of land  and prevent building or subdivision near the encumbrance, so think carefully about future possibilities for your land. Although a lease may be entirely on your land, the setback requirements may overlap onto your neighbours land, causing him some possible financial loss that cannot be compensated. Always check the setback distances before you think you have a deal.

 

The only pot of gold at the end of the rainbow is your land. It is your land and lifestyle - protect it. 


Always have the agreement reviewed by your own lawyer. That might cost $400 but the original agreement will be very one-sided. Get every concern of yours embedded in the final agreement. If your requests are reasonable, the company has no reason to refuse them. Such requests might include location and locking of gates, quality and specifications for fences and gates, grading and plowing of roads, seed quality, species, weed control, berms for pollution control, and much more.


Do not give away any rights to the land other than those needed by the company for its specific operation. For example, the company does not need the right to offer the use of an access road to another company - only the land owner has that right. And just because one company has paid for an access road, other companies do not get to use it for free. The agreement should not include construction of other facilities on the same site, without further negotiation and payment.

Verbal promises are worthless - all the terms of the deal have to be in writing, in plain unambiguous language and in one agreement. Check the final agreement carefully - "accidental" errors of omission have been known to occur. Initial every page as you read them before you sign. Be sure the survey plan has not been "revised" without your knowledge. If the agreement is taken away to be signed by the company, check the copy you get back - make sure your initials are on every page and that nothing has been added or deleted.

This agreement will probably last for most of your life or beyond and will be binding on whoever buys or inherits your land. The term of the lease must run until the well is abandoned and the lease is reclaimed to the satisfaction of government regulators and the land owner. Energy companies often want shorter term leases but you must insist on the "life of the well" approach. With the 5 year review, required by Regulation or built into the agreement, you are protected from inflation and changes in land values.

The well will likely change hands numerous times during its lifetime so a satisfactory assignment clause is needed that forces the new owner to notify you of their ownership. You do not want the annual payments to stop because of paperwork problems.

Negotiating both the terms and compensation is your responsibility, but the negotiation can be undertaken by an owner's agent or representative. This could be a lawyer, a neighbour with some experience with lease agreements, a relative of the owner, or a retired (and sympathetic) Land Agent. An owner's agent should always confirm that the owner is satisfied with the agreement before the owner signs. 

No matter how friendly the Land Agent appears to be, he is not there to give you the best deal possible without a fight. Each time the Agent has to return to continue negotiation costs the company money. You can use this to your advantage, up to a point. Eventually, the company will insist that you agree or will threaten to go to a "Right of Entry" hearing. They may suggest an alternative dispute resolution (ADR) approach before this. Most ADRs are not binding on either party and may be a waste of time, but the Right of Entry is binding on both parties. On a Right of Entry Order, legal costs and personal time spent can be awarded against the oil company. Appeals to a higher Court are possible but expensive if you lose. Most judges are pretty ignorant about the realities of farming, ranching, and oil field operations so you probably don't want to go here.

So at some point, you will have an agreement. Be sure it is the best agreement you can obtain. Then be sure the company lives up to every obligation that has been agreed to. Keep a copy of the agreement with your other important papers so you or your loved ones can find it easily.



Sign at a property near Grande Prairie, Alberta, reprinted from CAPL Course Notes. CAPL thinks it's funny!

 

NOISE IMPACT ASSESSMENTS (NIA)
A Noise Impact Assessment (NIA) will be needed before construction of compressor sites and other permanent noise sources. Predicted sound levels must be below specific limits. If there are other noise sources nearby, an NIA for the combined facilities is required. NIAs may easily be "cooked" to keep the predicted levels below these limits and always represent the most optimistic weather and ground conditions. The facility will usually be noisier than predicted, especially under adverse weather conditions.

Noise Impact Assessments are public documents in most jurisdictions. You have the right to read it and comment or ask questions concerning its contents.

Noise Impact Assessments in Alberta are governed by AER Directive 038. It covers general requirements for short term noise, such as drilling operations, and long term noise such as compressor sites and gas plants. The regulations dictate how the facility noise level is to be added to the assumed ambient background sound level. This sum cannot exceed 50 dB in daytime and 40 dB nighttime at a distance of 1500 meters.

Some of the required environmental conditions specified in the Alberta regulations are routinely ignored by both the regulator and the oil company operator, in particular those dealing with cold weather, temperature inversion, combining multiple noise sources, and extremes in weather conditions.

For example, AER D038 specifies in Paragraph 3.1 that a 5 dB "safety margin" be made to account for adverse conditions. This effectively reduce allowable noise levels by 5 dB, since the NIA is performed using conditions that minimize predicted noise levels. However, this requirement is routinely ignored and no allowance is made for adverse conditions. In the four NIAs I have reviewed on a nearby facility, all predicted noise levels were above the allowable when the 5 dB safety margin was used. My objection was refused on the grounds that "the predicted noise level is well below the required value", even though it was not. So much for truth and fair play.

The regulations require that the maximum allowable limit not be exceeded at a radius of 1500 meters from the noise source. However, if there are no residences affected by the noise, no one is allowed to file a complaint even if the facility is well above the legal limit. D038 claims there is no evidence that noise affects wildlife. This is nonsense, if you were a bird who couldn't hear a mating call, or a deer who couldn't hear a wolf or coyote sneaking up, how long would you survive?

My advice: If you can hear it over other background noise, file a written complaint with the appropriate regulatory agency and with the President or CEO of the oil company. Send it by Registered Mail - that gives proof of delivery. I know, "Nothing will happen". But if enough complaints are received, over time there may be a sea-change and common sense will prevail. If we don't speak up, I guarantee nothing will change.

There are two calculations that you might want to do yourself if you receive notice of a facility expansion or receive an NIA for a facility near you.

 

Distance Calculator: Use this if you have an NIA with a predicted noise level at a specified distance from the source. Enter the Distance (r1) and noise level at that distance (L1) into the shaded boxes. Enter the distance to your residence from the nearest corner of the facility (r2), then click "Calculate" button. In my case, the r1 distance is 1500 meters, the L1 sound level is 38.0 dB (not including the 5 dB safety margin). My residence is 2490 meters (r2). This gives a noise level at my house of 36.9 dB. This is the optimum case. If 5 dB is added for adverse conditions, the result is 41.9 dB at my residence. What this means is that under optimum conditions, I might not notice the compressor but under adverse conditions, I will (and do).

The lower half of this calculator can be used to find the distance that the facility would have to be located so as not to impact your residence.

Summation Calculator: Use this to calculate the sum of several sound levels. Suppose you receive notice that the oil company wants to double the capacity of an existing facility and also add a 5 million BTU heater and a 2750 HP refrigeration unit. The original facility has a sound level of 36.2 dB at the 1500 meter boundary. On the calculator, enter 36.2 dB in the box beside Level 1, put 36.2 in the box for Level 2 (the second compressor), and 34 dB for the heater and refrig unit in Level 3, then click the "Calculate" button. The result is 40.4 dB, which is over the legal limit of 40.0 dB, even without counting the 5 dB safety margin. So some redesign or retrofit would be needed to be compliant.
 


Copyright E. R. (Ross) Crain, P.Eng.  email