Decision Date: November 23, 2016

Panel: Cindy Derkaz

Keywords: Oil and Gas Activities Act – ss. 31, 72(2); natural gas pipeline; permit amendment; sour gas; hydrogen sulfide; safety

Karl Bryce Mattson appealed a decision of the Oil and Gas Commission (“Commission”) to amend a pipeline permit held by ARC Resources Ltd. (“ARC”). The amendment increased the maximum permitted hydrogen sulfide content from 0.5% to 1.4% in the pipeline, which crosses private lands including land owned by the Appellant. Gas containing hydrogen sulfide is known as “sour gas” and is highly toxic. The pipeline is part of a system used to transport sour gas to a processing plant near Rolla. The pipeline was authorized by a permit issued in 2010. At that time, the permit authorized a maximum hydrogen sulfide content of 0.5%.

The Appellant and his family live in a house on a farm near Rolla, outside of Dawson Creek, BC. There is also an art studio and guest house on the farm. The house and the art studio are located approximately 91 metres and 40 metres, respectively, from the pipeline. The pipeline is buried at least 1.5 metres underground.

In 2014, ARC drilled a new natural gas well which initially showed a hydrogen sulfide content of 0.9%. ARC sought to tie in the new well to its existing pipeline, but it required a permit amendment to allow the flow of gas with a higher hydrogen sulfide content.

In early 2015, ARC began the process of notifying and consulting with land owners about the proposed permit amendment. Of the 12 landowners who were notified, only the Appellant responded. ARC’s representatives met with the Appellant in June 2015 to discuss the proposal. The minutes of that meeting were forwarded to the Appellant for his review. ARC sent two more emails to the Appellant requesting his comments on the minutes. After receiving no response from the Appellant, ARC forwarded the meeting minutes to the Commission. The Commission issued the permit amendment in August 2015 after considering ARC’s application, including the meeting minutes.

The Appellant appealed the permit amendment on several grounds. The Appellant submitted that the increase in the maximum hydrogen sulfide level exceeded ARC’s needs given that the new well tested at 0.9%, ARC should have a better emergency response plan for the pipeline, and there should be better and wider consultation zones.

Based on the scope of appeals by land owners as provided in section 72(2) of the Oil and Gas Activities Act, the Tribunal considered whether the Commission decided to issue the permit amendment without giving due regard to a submission previously made by the Appellant. The Tribunal reviewed the minutes of the June 2015 meeting between the Appellant and ARC, and found that the Commission gave due regard to the Appellant’s concerns. The Tribunal also found that the increase in the permitted maximum concentration of hydrogen sulfide to 1.4% was reasonable given ARC’s test results which showed a trend towards higher hydrogen sulfide concentrations in the areas where it was drilling new wells that would tie in to the pipeline. Regarding the Appellant’s safety concerns, the Tribunal found that the evidence established that the pipeline was constructed to standards that apply to pipelines which carry gas with a hydrogen sulfide concentration of 1.4%, and there would be no change in the pipeline’s operating pressure or temperature.

Finally, during the appeal hearing, ARC agreed to update its emergency response plan for the pipeline to show the location of the art studio and guest house on the Appellant’s land, and to note that the Appellant has requested immediate evacuation in the event of an incident. The Tribunal directed ARC to make those changes, and to advise the Appellant when the updates were complete.

Accordingly, the appeal was dismissed.