Decision Date: December 12, 2013

Panel: David H. Searle, CM, Q.C.

Keywords: Oil and Gas Activities Act – ss. 4, 22(5), 25(2)(b), 72(2); 72(6); burden of proof; standard of proof; “balance of probabilities”; remedy; notice; well; permit; amended permit; conditions; land owner; due regard; water quality; wildlife; access road; horizontal drilling; hydraulic fracturing; flaring; noise; traffic; dust; impact on quiet enjoyment; light; health impacts; proximity to residence; trapping; organic farm certification; dark-sky preserve; earthquakes; failure to consider submissions

James Bell appealed a permit and amended permit issued by the Oil and Gas Commission (“Commission”) authorizing Painted Pony Petroleum Ltd. (“Painted Pony”) to drill and operate a well for the purpose of exploring for and developing natural gas, and to conduct fracturing (also known as fracking) and flaring on Crown land adjacent to land owned by Mr. Bell and his two brothers (“the Bell Property”).

Prior to the hearing, the Commission challenged Mr. Bell’s standing to appeal on the basis that he is not “a land owner of land on which an oil and gas activity is permitted to be carried out” under the Oil and Gas Activities Act (the ”Act”); rather, his land is adjacent to the permitted activity. In a decision dated April 29, 2013, the Tribunal granted standing as the issue is whether the permitted activity has an effect “on” his “land”, which depends not on the property boundary, but on the nature and effects of the activity (see Bell v. Oil and Gas Commission, Decision No. 2012-OGA-003(a)).

The Bell Property is located near Fort St. John and is where the Bell family grew up. In 2005, the Bell family acquired the property so that their children could experience the peace and quiet that they grew up with. Mr. Bell also engages in organic farming on the property, uses it as a “Dark-sky Preserve” for astronomical observations, and conducts trapping activities associated with a Youth Wildlife Trapper Study.

The Bell Property has several buildings that were built in the past, including one 1700 square foot structure that was moved to a new foundation and restored to a usable condition. No one lives on the Bell Property year-round, however this building acts as a temporary residence for the Bell family approximately every second weekend, and in the winter. It is located approximately 2.3 kilometers from where the wellsite is to be located. There are two other infrequently used structures on the Bell Property referred to as trapper’s cabins. Mr. Bell moved these cabins to their present locations, just 256.2 meters from the proposed wellsite, shortly after receiving notification that Painted Pony intended to apply for a permit.

Mr. Bell provided submissions to the Commission regarding the application for a permit in May 2012. With the consent of the Commission, counsel for Mr. Bell provided further submissions in September 2012; however, the Commission did not receive those submissions due to an error in an email address that was not detected until after the permit had been issued.

Mr. Bell identified numerous concerns regarding the permit, including: proximity of the wellsite to the trapper’s cabins, the organic garden and the domestic water site; increased noise which denies the Bell family the quiet enjoyment of their land; lights at the wellsite that will impact the use of the land as a “Dark-sky Preserve”; pollution and dust which will impact the organic certification of the farming operations and human health; impacts to privacy and access to and egress from the residence; impacts to trapping activities and wildlife; and concerns that fracking may jeopardize personal safety and health by causing earthquakes, and by contaminating the water supply (from chemicals used in the fracking process).

In November 2012, the Commission issued the permit which contained a number of terms and conditions, including conditions regarding noise, traffic and dust. Mr. Bell appealed this permit and argued that the conditions did not adequately address his issues and concerns, and that it was unclear whether the Commission considered the written submissions provided by his counsel. When it became clear that the Commission had not received counsel’s submissions, they were resubmitted to the Commission. These submissions caused the Commission to suspend the permit in December 2012. On January 15, 2013, the Commission issued the amended permit, which includes conditions that relate expressly to water quality sampling, and reporting and responding to seismic activity.

The Tribunal found that Mr. Bell’s movement of the cabins was a deliberate attempt to prevent the wellsite from being located near his property boundary and that his concerns were designed in such a way as to be impossible of being addressed, except by moving the wellsite to another location.

The test on appeal, however, is not whether Mr. Bell’s concerns were addressed to his complete satisfaction. Rather, a land owner’s reasonable and legitimate concerns must be given “due regard” by the Commission. In making this determination the Tribunal found that the standard of proof in an appeal before the Tribunal is the civil standard of a “balance of probabilities”. Further, the appellant has the initial burden of proof, i.e. he must prove, on a balance of probabilities, the facts that he asserts are true, and only then does the burden shift to the other parties.

The Tribunal found that the issues in land owner appeals must relate to the failure to have “due regard” to the appellant’s written submissions. There must be some evidence to establish that the decision-making process below was flawed in some way and should now be changed. In regard to the September 2012 submissions, the Tribunal found that the additional submissions from counsel were given serious consideration by the Tribunal, thereby curing any error before the Commission, if there was such an error.

Mr. Bell led no evidence regarding the potential impact of fracturing and flaring that the Tribunal could consider as sufficient to rely upon to make a different decision. It is not sufficient to simply raise concerns; that does not discharge the burden of proof.

The Tribunal found the amended permit conditions and Painted Pony’s commitment for baseline testing and monitoring provides an adequate response to the concerns expressed by Mr. Bell about seismic activity and contamination of natural water sources.

The Tribunal also found that no one resides on the Bell Property; the trapper’s cabins do not constitute a “residence” as the use of the cabins was less than occasional. If there is a “residence” located on the Bell Property, the Tribunal was of the view that it is the 1700 square foot structure located 2.3 kilometers south of the proposed wellsite. The distance of the wellsite from this structure is an adequate buffer against any of the disturbances of concern to Mr. Bell. Ultimately, the Tribunal found that the Commission gave due regard to Mr. Bell’s concerns by imposing the conditions that it did in the permit.

In regard to the trapping activities on the property, Mr. Bell admitted that the Youth Wildlife Trapper Study had yet to be implemented and that the wildlife Mr. Bell referred to as being of particular concern had not been seen recently.

Further, a declaration of the property as a “Dark-sky Preserve”, which is an umbrella of protection from light pollution designated by the Royal Astronomical Society of Canada, cannot be made for privately owned land in any event. Also, Painted Pony submitted that any flaring will be limited in volume and duration, and there will be no permanent flare stack or other light source.

Therefore, the Tribunal found that the terms and conditions of the permit and amended permit adequately addressed Mr. Bell’s reasonable concerns. Further, the Tribunal found Mr. Bell had not discharged the burden of proving, on a balance of probabilities, that the determinations of the Commission were made without due regard for any of his reasonable or legitimate concerns. The appeal was dismissed.