Land Development. Remediation Stakeholders in a Challenging Economy. Jim Purves, B.Sc., P.Ag. Presented By:

Transcription

1 Land Development Remediation Stakeholders in a Challenging Economy Presented By: Jim Purves, B.Sc., P.Ag.

2 OUTLINE Former oil and gas activities on traditionally agricultural land are now being re-evaluated as part of development opportunities. New stakeholders in the oil and gas reclamation game. How the current economic environment is affecting land development?

3 OUTLINE Look at urban encroachment examples in Alberta. Well Closure Language Liability Gap Buyer Beware Examine three case studies in Alberta.

4 NEW STAKEHOLDERS Land Development Companies Financial Institutions MD and County Representatives Municipal Planners Business Owners Private Landowners

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

6 Urban Development Devon, Alberta Founded in 1947 following the discovery of oil at the Imperial Leduc 1 well

7 Town of Devon Year Population Oil and Gas Wells within 1 km radius

8 Town of Devon

9 Town of Devon

10 Town of Devon

11 Town of Devon

12 Town of Devon

13 City of Edmonton, Alberta Year Population Oil and Gas Wells within 1 km radius , ,159,

14 City of Edmonton, Alberta

15 City of Edmonton, Alberta

16 Former Wellsite Status

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

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, A total of 36,534 Rec Exempt Wells in Alberta Focused on surface reclamation and not contamination

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

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

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

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

23 Defunct Operator Liability Gap Increased liability associated with: 1) Reclamation Certified prior to ) Reclamation Exempt Requirements focused on surface reclamation and not contamination

24 SITE CLOSURE

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

26 Three Development Examples 1) Residential 2) Active Commercial Subdivision 3) New Commercial Subdivision

27 Case Study #1 Residential Development

28 Case Study #1 Residential Development

29 Case Study #2 Active Commercial Development

30 Case Study #2 Active Commercial Development

31 Case Study #2 Active Commercial Development

32 Case Study #3 New Commercial Subdivision

33 Case Study #3 New Commercial Subdivision

34 Case Study #3 New Commercial Subdivision

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

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

37 QUESTIONS?? Jim Purves, B.Sc., P.Ag. Technical Resource Manager