Oil and Gas Appeal Tribunal

Transcription

1 Oil and Gas Appeal Tribunal Fourth Floor, 747 Fort Street Victoria, British Columbia Telephone: (250) Facsimile: (250) Mailing Address: PO Box 9425 Stn Prov Govt Victoria BC V8W 9V1 Website: DECISION NO OGA-003(a) In the matter of an appeal under section 72 of the Oil and Gas Activities Act, S.B.C. 2008, c. 36. BETWEEN: James Bell APPELLANT AND: Oil and Gas Commission RESPONDENT AND: Painted Pony Petroleum Ltd. THIRD PARTY BEFORE: DATE: A Panel of the Oil and Gas Appeal Tribunal Alan Andison, Chair Conducted by way of written submissions concluding on March 5, 2013 APPEARING: For the Appellant: For the Respondent: For the Third Party: Simon R. Wells, Counsel Sara Gregory, Counsel Rick Williams, Counsel PRELIMINARY ISSUE OF STANDING AND JURISDICTION [1] On November 26, 2012, James Bell appealed a permit that was issued on November 9, 2012, by Mohammad Farah, a Review Approval Resource Officer and delegated decision-maker with the Oil and Gas Commission (the Commission ). The permit authorizes Painted Pony Petroleum Ltd. ( Painted Pony ) to drill and operate well number WA and conduct flaring on Crown land that is adjacent to land owned by Mr. Bell and some members of his family (the Property ). [2] On January 25, 2013, the Commission requested that the Oil and Gas Appeal Tribunal (the Tribunal ) dismiss the appeal on the grounds that Mr. Bell does not have standing to appeal the permit, and that the Tribunal does not have jurisdiction over the subject matter of the appeal, pursuant to sections 69 and 72 of the Oil and Gas Activities Act (the OGAA ). The Tribunal provided each of the parties with an opportunity to comment on the preliminary issue of standing and jurisdiction raised by the Commission. [3] This preliminary matter was conducted by way of written submissions.

2 DECISION NO OGA-003(a) 2 BACKGROUND [4] The Property is located near Fort St. John, British Columbia. Mr. Bell grows certified organic grains and conducts activities associated with a Youth Wildlife Trapper Study on the Property. According to Mr. Bell, there is also an active wolf den, Whooping Crane feeding habitat, a dwelling, and a natural spring on the Property. Mr. Bell advises that he also uses the Property as a dark sky reserve for astronomical observations. [5] The Property is located south of the Crown land that Painted Pony s well permit pertains to. A number of other authorizations were issued to Painted Pony together with the well permit; namely, a licence of occupation for Crown land, a road works permit, a temporary occupation of Crown land permit, and a cutting permit. Part of the Property is immediately south of Gundy Creek Road, which Painted Pony is authorized under the road works permit to upgrade, use and maintain as an access road to the well site. [6] Painted Pony was required under the OGAA and the Consultation and Notification Regulation, B.C. Reg. 279/2010 (the Regulation ) to notify certain persons of its intention to apply for the well permit. In particular, the Regulation requires a permit applicant to notify and consult any land owner within a certain number of metres of a proposed oil and gas activity, depending on the nature of the proposed activity. Under section 22(5) of the OGAA, a person, other than the applicant, may make a written submission to the Commission with respect to a permit application or a proposed permit application. [7] By a letter dated April 17, 2012, Painted Pony notified Mr. Bell that it intended to apply for the permit and associated authorizations. Painted Pony proposed to conduct horizontal drilling and fracturing (also known as fracking) from the well site, up to the boundary of the Property. [8] In May 2012, Mr. Bell provided submissions to the Commission regarding Painted Pony s proposal. [9] On September 5, 2012, Mr. Bell s counsel advised the Commission that Mr. Bell opposed the proposed well permit, and that he would be making written submissions in that regard. [10] On September 14, 2012, Mr. Bell s counsel sent written submissions to the Commission via , stating Mr. Bell s opposition to the proposed well permit, and requesting a buffer of more than 100 metres between the well site and the Property line. However, the Commission did not receive those written submissions at the time due to an error in an address, and the miscommunication was not detected by Mr. Bell s counsel or the Commission until after the well permit had been issued. [11] On November 9, 2012, the Commission issued to Painted Pony the well permit, under section 25 of the OGAA, and the associated authorizations. The well permit contains a number of terms and conditions, including a condition regarding noise control, a requirement to conduct a noise impact assessment, and a requirement to discuss an Emergency Evacuation and Sheltering Response Plan and potential concerns about traffic and dust with the Bell family.

3 DECISION NO OGA-003(a) 3 [12] On November 26, 2012, the Tribunal received Mr. Bell s Notice of Appeal. It states that Mr. Bell appeals the well permit on the grounds that the Commission: failed to properly consider the following issues and concerns raised by Mr. Bell in making its determination on the Permit (the Determination ): 1. the potential impact of fracturing and flaring on Mr. Bell s property (the Property ), which is located adjacent to the Site and particularly with respect to: (a) the use of the Property as an organic farm; (b) the potential impact on natural water sources on the Property; and (c) the use of the Property as a dark sky preserve; 2. the proximity of the Site to a residence on the Property; and 3. the potential impact on trapping and wildlife activity on the Property. [13] Mr. Bell submits that Painted Pony s nearest well site is only 100 metres from the boundary of the Property, and is 260 metres from a dwelling on the Property. [14] On December 12, 2012, counsel for Mr. Bell provided the Commission with Mr. Bell s previously undelivered September 14, 2012 objections to the issuance of the permit. [15] Also on December 12, 2012, the Commission sent a letter to Painted Pony advising that it was considering suspending the well permit and associated authorizations to receive, consider and, if necessary, address any written submissions made by counsel for Mr. Bell. The Commission s letter acknowledges that it had not received or considered the written submissions provided by Mr. Bell s counsel before the Commission issued the well permit. [16] On December 20, 2012, the Commission suspended the well permit. The Commission also sent a proposed amendment of the well permit to Painted Pony, and offered Painted Pony an opportunity to comment on the proposed amendment. Mr. Bell was not notified of the proposed amendment, and he was not given an opportunity to comment on it. [17] On January 15, 2013, the Commission issued the well permit amendment to Painted Pony. The amendment includes conditions that relate expressly to water quality sampling on the Property, and monitoring the magnitude of seismic activity in the vicinity of the well. [18] By a letter dated January 25, 2013, the Commission challenged Mr. Bell s standing to appeal the well permit, and the Tribunal s jurisdiction to hear the appeal. [19] By a letter dated February 1, 2013, the Commission advised Mr. Bell that the Commission had reconsidered and amended Painted Pony s well permit. [20] By a letter dated February 14, 2013, Mr. Bell requested that the Tribunal amend his appeal to address the amendment of the well permit. Mr. Bell also requested disclosure from the Commission of Painted Pony s submissions to the Commission in respect of the amendment of the well permit. On February 22,

4 DECISION NO OGA-003(a) , the Commission disclosed those submissions to both Mr. Bell s counsel and to the Tribunal. [21] In the present preliminary application, the Commission submits that Mr. Bell is not a land owner of land on which an oil and gas activity is permitted to be carried out as specified under the OGAA, and therefore, he has no standing to appeal the well permit, and the Tribunal has no jurisdiction over the appeal. [22] Painted Pony adopts and relies on the Commission s submissions on this preliminary matter. [23] Mr. Bell submits that the Commission has advanced a strict interpretation of the OGAA, and that the Commission s submissions presume that, for the purposes of appeals, oil and gas activity is limited to the physical location of the wells and related equipment. Mr. Bell disagrees, and says that the issue is whether the permitted oil and gas activity has an effect on his land, which depends not on the property boundary, but rather, on the nature and effects of the permitted oil and gas activities. ISSUE [24] This preliminary decision addresses the issue of whether Mr. Bell has standing to appeal the permit pursuant to sections 69 and 72 the OGAA, which also determines whether the Tribunal has jurisdiction over the appeal. RELEVANT LEGISLATION [25] The following sections of the OGAA are relevant to this preliminary matter. Other relevant legislation is provided in the body of the decision, where it is referred to. 1 (1) Words and expressions used but not defined in this Act or in the regulations for the purposes of this Act, unless the context otherwise requires, have the same meanings as in the Petroleum and Natural Gas Act, other than Part 17 of that Act. (2) In this Act: land owner means (a) a person registered in the land title office as the registered owner of the land surface or as its purchaser under an agreement for sale, and (b) a person to whom a disposition of Crown land has been issued under the Land Act, but does not include the government or a person referred to in paragraph (b) of the definition of "unoccupied Crown land" in section 1 of the Petroleum and Natural Gas Act;

5 DECISION NO OGA-003(a) 5 69 (1) In this Part: determination means (b) with respect to a land owner of land on which an oil and gas activity is permitted to be carried out under this Act, (i) a decision made by the commission (A) under section 25 to issue a permit to carry out an oil and gas activity on the land of the land owner, and (B) under section 31 to amend a permit, if the amendment changes the effect of the permit on the land of the land owner, and eligible person means (c) a land owner of land on which an oil and gas activity is permitted to be carried out under this Act, 72 (1) Subject to subsection (2), an eligible person may appeal to the appeal tribunal (a) a decision made under section 71, if the eligible person was a party to the review under that section, and (b) a determination, if the eligible person has not, by the date the person commences the appeal, applied under section 70 (1) for a review of the determination. (2) A land owner of land on which an oil and gas activity is permitted to be carried out under this Act may appeal a determination under this section only on the basis that the determination was made without due regard to (a) a submission previously made by the land owner under section 22 (5) or 31 (2) of this Act, or (b) a written report submitted under section 24 (1) (c) or 31 (6).... (6) On an appeal under subsection (1), the appeal tribunal may (a) confirm, vary, or rescind the decision made under section 71 or the determination, or (b) send the matter back, with directions, to the review official who made the decision or to the person who made the determination, as applicable.

6 DECISION NO OGA-003(a) 6 DISCUSSION AND ANALYSIS Whether Mr. Bell has standing to appeal the permit pursuant to sections 69 and 72 the OGAA, and whether the Tribunal has jurisdiction over the appeal. Parties submissions [26] The Commission makes reference to section 72(2) of the OGAA, which states that A land owner of land on which an oil and gas activity is permitted to be carried out under this Act may appeal a determination to the Tribunal. The Commission submits that, although Mr. Bell is an owner of land, he can only file an appeal if his land is considered to be land on which an oil and gas activity is permitted to be carried out under the OGAA. The Commission argues that Painted Pony s well permit and associated authorizations do not permit any oil and gas activity to be carried out on the Property; rather, they permit an oil and gas activity to be carried out on a specific project area within Crown lands that are adjacent to the Property. [27] Similarly, the Commission refers to subsection 72(1)(b) of the OGAA, which provides that an eligible person may appeal a determination. Section 69(1) of the OGAA defines the eligible persons who may file appeals to the Tribunal. In particular, the Commission refers to paragraph (c) of that definition, which provides that a land owner of land on which an oil and gas activity is permitted to be carried out under this Act is an eligible person. The Commission argues that Mr. Bell does not fit within the definition of eligible person because he is not an owner of land on which an oil and gas activity is permitted to be carried out under the OGAA. [28] The Commission also refers to the definition of determination in section 69(1) of the OGAA, which sets out the determinations that may be appealed to the Tribunal. Paragraph (b) specifies determinations that may be appealed by a land owner of land on which an oil and gas activity is permitted to be carried out under this Act. [29] The Commission submits that its interpretation of sections 69(1) and 72(2) is consistent with the scheme of the OGAA and its regulations, which requires project proponents to identify the land owner(s) of the land(s) on which the proponent intends to carry out the oil and gas activity. The Commission argues that interpreting the phrases in the legislation to mean the owner(s) of the land(s) in the project area makes practical sense, because proponents can easily identify the project area of a proposed activity, and this interpretation ensures that proponents, land owners, other interested persons, and the Commission can understand and evaluate whether the proponent has met its consultation and notification obligations. In this regard, the Commission refers to section 22(2) of the OGAA, which requires proponents to notify the land owner of the land on which the person intends to carry out an oil and gas activity, and provide information regarding how the land owner may make submissions to the Commission in respect of the proposed activities in accordance with section 22(5) of the OGAA. The Commission submits that the obligations on proponents under section 22(2) of the OGAA are different from those under section 22(3), which include obligations to notify and consult with owners of neighbouring lands. The Commission also notes

7 DECISION NO OGA-003(a) 7 that section 22(4) allows the Commission to exempt a proponent from the obligations under section 22(3), but not the obligations under section 22(2). [30] The Commission acknowledges that permitted oil and gas activities may affect not only the owners of land in a project area, but also neighbouring land owners. The Commission submits, however, that this does not make all of the Commission s determinations appealable by all persons who may be affected by permitted oil and gas activities. The Commission argues that, if the Legislature had intended to make all determinations appealable by all affected persons, it could have used broader language in the OGAA. In this regard, the Commission refers to the appeal provision in section 100(1) of the Environmental Management Act, which states that A person aggrieved by a decision of a director or a district director may appeal the decision to the Environmental Appeal Board. Similarly, the Commission points to the appeal provisions in section 92(1)(b) of the Water Act, which provides for appeals by an owner whose land is or is likely to be physically affected by the order. [31] In support of those submissions, the Commission refers to the Supreme Court of Canada s decision in Rizzo & Rizzo Shoes Ltd. (Re), [1998] 1 S.C.R. 27 [Rizzo Shoes]. At paragraph 21, the Court adopted the following modern principle of statutory interpretation from Elmer Driedger (in The Construction of Statutes (2 nd ed. 1983), at page 87): Today there is only one principle or approach, namely the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. [32] The Commission also refers to section 8 of the Interpretation Act, R.S.B.C. 1996, c. 238, which states: Every enactment must be construed as being remedial, and must be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects. [33] For all of these reasons, the Commission submits that Mr. Bell s appeal should be rejected on the basis that he lacks standing under sections 69 and 72 of the OGAA to bring the appeal because he is not an owner of land on which an oil and gas activity has been permitted, and the appeal does not concern a determination within the Tribunal s jurisdiction. [34] As noted above, Painted Pony adopts and relies on the Commission s submissions. [35] Mr. Bell submits that the Commission advances a strict interpretation of sections 69 and 72 of the OGAA that purports to deny a land owner s standing to appeal a permit authorizing works as close as one foot from his property, and drilling up to the boundary of his property. He further submits that the Commission, by its own conduct, acknowledges and accepts that Mr. Bell is sufficiently affected by the permit to accept and consider his submissions regarding Painted Pony s permit application, and to amend the original permit in response to Mr. Bell s concerns.

8 DECISION NO OGA-003(a) 8 [36] Mr. Bell submits that the Commission s interpretation is inconsistent with the Regulation, and the defined purposes of the Commission as set out in section 4 of the OGAA. He submits that the operative legislation in this case must be interpreted according to the legislation s objectives and purposes, as well as the Commission s practices. [37] Mr. Bell argues that the Commission s submissions presume that, for the purposes of appeals, the permitted oil and gas activity is limited to the physical location of the wells and related equipment. Mr. Bell disagrees. He says that the issue is whether the permitted oil and gas activity has an effect on his land, which depends not on the property boundary, but on the nature and effects of the permitted oil and gas activities. Mr. Bell submits that Painted Pony is permitted to undertake oil and gas activities a very short distance from the Property, and evidence of a material risk of an effect on a neighbouring property from permitted oil and gas activities constitutes an oil and gas activity that is occurring on that neighbouring land, so as to give that land owner standing to appeal the permit. Mr. Bell submits that the extent to which a risk of an oil and gas activity affecting adjacent land may be speculative, so as to refuse standing, should be decided on a case by case basis. Mr. Bell argues that he has a strong case that the permitted activities will have a direct effect on his land. [38] In particular, Mr. Bell submits that the phrase oil and gas activity has a broader meaning than the mere physical works. He notes that oil and gas activity is defined in section 1 of the OGAA to mean several things, including the production, gathering, processing, storage or disposal of petroleum, natural gas or both. He submits that the permit authorizes the production and disposal of oil and gas, and he is concerned about the effects of the production of oil and gas by fracking, and the disposal of oil and gas by flaring. Mr. Bell submits that these activities will occur both on the Property and on the well site. Specifically, he argues that seismic activity and the contamination of soil and water caused by the permitted activities, such as fracking and flaring, are an integral part of producing, gathering, processing and disposing of oil and gas, as authorized by the permit. Moreover, he submits that the Commission acknowledges this, given that the amended permit expressly regulates seismic activity and requires water quality sampling on Mr. Bell s property. Mr. Bell argues that he has a strong case that oil and gas activities will have a direct effect on his land, based on the close proximity of the wellhead to the Property, and given that the conditions in the amended permit implicitly recognize that the permitted oil and gas activities will have specific effects on the Property. [39] Moreover, Mr. Bell submits that the Legislature could not have intended for the Commission to regulate oil and gas activity by determining the extent of permissible water contamination and seismic activity on the Property arising from the production and disposal of oil and gas on an adjacent property, but deny him standing to challenge the Commission s determination based on a restrictive interpretation of the same words when it comes to interpreting the legislation s appeal provisions.

9 DECISION NO OGA-003(a) 9 [40] For all of these reasons, Mr. Bell argues that he is an eligible person within the meaning of subsection (e) of the definition in section 69, and therefore, he has standing to appeal under section 72 of the OGAA. Tribunal s findings [41] The Tribunal agrees with the Commission that, in interpreting the relevant provisions of the OGAA and its regulations, the Tribunal should apply the modern principle of statutory interpretation adopted in Rizzo Shoes; namely that the words of an Act are to be read in their entire context and in their grammatical and ordinary sense harmoniously with the scheme of the Act, the object of the Act, and the intention of Parliament. The Tribunal also finds that, in interpreting the relevant legislation, it must apply section 8 of the Interpretation Act, whereby the legislation must be construed as being remedial, and must be given such fair, large and liberal construction and interpretation as best ensures the attainment of its objects. [42] In the present case, the parties agree that Mr. Bell is an owner of land, but the parties disagree on whether he is an owner of land on which an oil and gas activity is permitted to be carried out. The importance of that phrase arises from sections 72(2) and 69(1) of the OGAA. [43] Section 72(2) of the OGAA states that certain land owners may appeal a determination, as follows: A land owner of land on which an oil and gas activity is permitted to be carried out under this Act may appeal a determination under this section [underlining added] [44] Similar language is found in section 69(1) of the OGAA, in which the Legislature has defined determination for the purposes of appeals. Paragraph (b) of that definition states that a land owner of land on which an oil and gas activity is permitted to be carried out under this Act may appeal certain determinations. Further, the definition of eligible person in section 69(1) states in paragraph (c) that a land owner of land on which an oil and gas activity is permitted to be carried out under this Act in an eligible person. [45] Given that the phrase a land owner of land on which an oil and gas activity is permitted to be carried out under this Act is common to the appeal provision in section 72(2) and the definitions of eligible person and determination in section 69(1), the question becomes: what did the Legislature intend when it provided that appeals may be filed by a land owner of land on which an oil and gas activity is permitted to be carried out under this Act? Paraphrasing, from the Rizzo Shoes decision, these words must be interpreted in their grammatical and ordinary sense harmoniously with the scheme of the OGAA, the object of the OGAA, and the intention of the Legislature. [46] The purposes or objects of the OGAA are not expressly stated in the legislation, but section 4 of the OGAA states the purposes of the Commission. Section 4 states, in part:

10 DECISION NO OGA-003(a) 10 4 The purposes of the commission include the following: (a) to regulate oil and gas activities in British Columbia in a manner that (i) provides for the sound development of the oil and gas sector, by fostering a healthy environment, a sound economy and social wellbeing, (ii) conserves petroleum and natural gas resources, (iii) ensures safe and efficient practices, and (iv) assists owners of petroleum and natural gas resources to participate equitably in the production of shared pools of petroleum and natural gas; (b) to provide for effective and efficient processes for the review of applications for permits and to ensure that applications that are approved are in the public interest having regard to environmental, economic and social effects; [underlining added] [47] The Tribunal finds that, read together, sections 4(a)(i) and 4(b) indicate that, in regulating oil and gas activities and considering permit applications, the Commission is obliged to take into account environmental, economic and social considerations. This implies that, in regulating oil and gas activities and approving permits that authorize oil and gas activities, the Commission should seek to balance environmental, economic, and social considerations. There is no indication that the Legislature intended for environmental or social considerations to be any less important than economic considerations in the Commission s decisionmaking with respect to permits. [48] The Commission argues that, based on practical considerations related to the notification and consultation requirements in the Regulation, land on which an oil and gas activity is permitted to be carried out should be interpreted to mean the land(s) in the proponent s project area. However, the Tribunal notes that sections 69(1) and 72(2) of the OGAA do not refer to a land owner of land in the project area. Sections 69(1) and 72(2) also do not use the phrase proposed site of the oil and gas activity, which is used in sections 24(1) and 25(5) of the OGAA in relation to permit applications and permits, respectively. [49] Further, the Tribunal also notes that sections 69(1) and 72(2) of the OGAA do not use phrases found in the Regulation that may be similar to project area, such as proposed area and approved area. The Regulation defines proposed area to mean the area on which an applicant intends to carry out proposed activities. The Regulation defines approved area to mean an area, specified in a permit, on which a permit holder has permission to carry out an oil and gas activity. It is also notable that sections 69(1) and 72(2) of the OGAA do not use the relatively site-specific phrases wellsite, oil and gas road, or facility area, which are also defined in the Regulation. [50] Similarly, the appeal provisions in sections 69(1) and 72(2) of the OGAA do not use the phrase operating area, which is defined in section 1 of the

11 DECISION NO OGA-003(a) 11 Environmental Protection and Management Regulation, B.C. Reg. 200/2010, to mean a seismic line, wellsite, facility area and pipeline corridor. [51] Based on these provisions of the OGAA and its regulations, the Tribunal finds that the phrase land on which an oil and gas activity is permitted to be carried out is not limited to the proponent s intended project area, the proposed site of the oil and gas activity, or any of the other more site-specific words and phrases found in the OGAA and its regulations. If the Legislature had intended for the right of appeal to be limited to owners of land within the proponent s intended project area, land within the proposed site of the oil and gas activity, or some other more sitespecific area, it could have used more site-specific words or phrases in sections 69(1) and 72(2) of the OGAA, but it did not. [52] In interpreting the phrase land on which an oil and gas activity is permitted to be carried out, it is also important to consider the types of matters that may be appealed by a land owner of land on which an oil and gas activity is permitted to be carried out under the OGAA. Paragraph (b) of the definition of determination in section 69(1) of the OGAA states that such persons may appeal a decision made by the Commission: (A) under section 25 to issue a permit to carry out an oil and gas activity on the land of the land owner, and (B) under section 31 to amend a permit, if the amendment changes the effect of the permit on the land of the land owner... [underlining added] [53] The Tribunal finds that the language in paragraph (B) implies that the permit referred to in paragraph (A) will, or is likely to have, an effect on the land of the land owner. Given that a permit amendment is appealable if the amendment changes the effect of the permit on the land of the land owner, then by necessary implication, the original permit (which was appealable) will have, or will likely have, an effect on the land of the land owner. Based on the words in the above definition of determination, the Tribunal finds that it is logical to infer that the appealable decision referred to in paragraph (A) includes a permit to carry out oil and gas activities that will, or is likely to have, an effect on the land of the land owner. [54] This finding is supported by the language in section 31 of the OGAA, which sets out certain requirements regarding permit amendments. Section 31(1) requires that, before submitting an application under subsection 31(4) for an amendment to a permit, a permit holder must provide notice to the land owner of the land on which an oil and gas activity is permitted to be carried out under the permit. Under subsection 31(2), such land owners may make written submissions to the Commission regarding the proposed amendment. After complying with subsection 31(1), the permit holder may apply for an amendment under subsection 31(4). The Commission may amend the permit under subsection 31(7), after considering any submissions made under subsection 31(2) and the results of consultations carried out or notices provided under subsection 31(5). Most notably, subsection 31(9) states as follows:

12 DECISION NO OGA-003(a) (9) If the commission amends a permit under subsection (7) and the amendment changes the effect of the permit on the land of the land owner referred to in subsection (1), the commission must provide notice to the land owner in accordance with subsection (10). [underlining added] [55] Subsection 31(10) requires the Commission to notify the land owner of the amendment and their right under section 72 to appeal the amendment. This supports the finding that, if a permit amendment is appealable if the amendment changes the effect of the permit on the land of the land owner, then by necessary implication, a permit that is appealable also will, or will likely have, an effect on the land of the land owner. [56] Another key element of the phrase land on which an oil and gas activity is permitted to be carried out under this Act is the meaning of oil and gas activity. Under section 1 of the OGAA, oil and gas activity is defined as follows: oil and gas activity means (a) geophysical exploration, (b) the exploration for and development of petroleum, natural gas or both, (c) the production, gathering, processing, storage or disposal of petroleum, natural gas or both, (d) the operation or use of a storage reservoir, (e) the construction or operation of a pipeline, (f) the construction or maintenance of a prescribed road, and (g) the activities prescribed by regulation; [57] The activities in Painted Pony s permit fit under paragraphs (b) and (c) of the above definition, as the permit authorizes Painted Pony to: drill and operate a well for the purpose of exploring for, developing and producing petroleum, natural gas or both, and flare for the purposes of well cleanup and testing. Mr. Bell submits that certain inherent effects of the permitted oil and gas activities will occur on his land. Based on the fact that the permit and its amendment contain conditions that expressly relate to the Bell family and the Property, the Tribunal finds that there is a strong prima facie case that the permitted oil and gas activities will, or will likely have, specific effects on the Property. [58] In particular, the original permit includes conditions aimed at ensuring that the noise emitted from the wellsite during drilling and operations meets the Commission s Noise Control Best Practices Guideline, and requiring Painted Pony to carry out a Noise Impact Assessment within 3 months of the wellsite being put into operations. Two other conditions specifically refer to the Bell family: one requires Painted Pony to discuss its Emergency Evacuation and Sheltering Response Plan with the Bell family for their information and input ; and another requires Painted Pony to make reasonable efforts to meet with the Bell family to discuss potential traffic and dust concerns before the commencement of activities, and provide a

13 DECISION NO OGA-003(a) 13 written report to the Commission confirming that that a meeting occurred or documenting its efforts to arrange a meeting. [59] The permit amendments add conditions that expressly refer to the Property. Painted Pony must sample and analyze water from a natural spring or water source on the edge of Mr. Bell s property and contiguous to the well site before and after initial drilling and completion operations. A copy of the water sampling results and analysis must be provided to the owners of the Property and the Commission. Painted Pony must also report to the Commission any seismic event in the vicinity of the well above magnitude 2, and must suspend fracturing operations at the well if Painted Pony becomes aware of a seismic event in the vicinity of the well that is equal to or greater than magnitude 4. [60] The Tribunal finds that these permit conditions imply that the Property will, or will likely, be affected by noise, dust, seismic activity, and a risk of water contamination as a result of the permitted activities. In addition, the Tribunal finds that, in imposing the permit conditions, the Commission was carrying out its responsibilities in compliance with the purposes of the Commission as set out under sections 4(a) and (b) of the OGAA; namely, regulating oil and gas activities and the environmental effects of the permitted oil and gas activities, not only in relation to the Crown land on which the wellsite is located, but also in relation to the Property. The Tribunal emphasizes, however, that these findings are for the limited purpose of deciding this preliminary matter of standing and jurisdiction. These findings are not made in respect of the merits of the appeal. [61] In summary, after considering the relevant sections of the OGAA and its regulations, the Tribunal finds that Mr. Bell has standing to appeal the permit, as a land owner of land on which an oil and gas activity is permitted to be carried out within the meaning of sections 69(1) and 72(2) of the OGAA. Consequently, the Tribunal has jurisdiction over the determinations that Mr. Bell has appealed; namely the issuance of the permit and the permit amendment to Painted Pony. DECISION [62] In making this decision, the Tribunal has considered all of the relevant documents and evidence, whether or not specifically reiterated herein. [63] For the reasons provided above, the Tribunal finds that Mr. Bell has standing to appeal the permit and the permit amendment, and the Tribunal has jurisdiction over the subject matter of the appeal. [64] The application to dismiss the appeal is denied. Alan Andison Alan Andison, Chair Oil and Gas Appeal Tribunal April 29, 2013