Regulatory Appeal – Reclamation – Facilities
On May 2, 2014, Canadian Natural Resources Limited (“CNRL”) applied for a reclamation certificate for a well site and access road in 11-9-083-13W6M (the “11-9 Site”). On October 20, 2014, the AER refused to issue the reclamation certificate. Consequently, on November 17, 2014, CNRL requested a regulatory appeal of the AER’s decision to refuse the reclamation certificate.
CNRL had originally drilled a well at the 11-9 Site in 2001. The well was not productive, and was abandoned in October 2001. CNRL began conducting reclamation activities in 2002, seeding the 11-9 site with fescue, and spraying and mowing the 11-9 Site for noxious weeds.
The AER’s reclamation programs group (“RPG”) conducted an inspection of the 11-9 Site, and subsequently denied CNRL’s application, providing the following reasons:
Increased amount of incompatible vegetation (quackgrass patches) on portions of the well site and access road.
The exemption justification form provided with the application is not acceptable as the quackgrass present on the site interferes with the landowner’s use of the site for fescue production.
The AER set out the relevant legislation for land reclamations, noting that section 2 of the Conservation and Reclamation Regulation (“CRR”), specifies that the objective of conservation and reclamation is to ensure that specified land has an equivalent land capability. The CRR defines equivalent land capability to mean the ability of the land to support various land uses after conservation and reclamation similar to the ability that existed prior to an activity being conducted on the land, but that the individual land uses will not necessarily be identical.
Preliminary Matters
With respect to the appropriate point in time to consider when assessing whether the 11-9 Site meets the reclamation criteria, CNRL argued that the panel should not consider any information from before or after the site was assessed for compliance using the detailed site assessment (“DSA”) in 2013, or the site inspection from RPG in 2014, as it submitted this was the only times there was a full evaluation of the site.
The landowner of the 11-9 Site submitted that the DSA did not accurately represent the state of the site, being only a snapshot in time, urging the AER to consider a broader time period.
The RPG presented argument that the appeal hearing was both a hearing on the record of the initial application, as well as a hearing de novo, where new evidence could be presented.
The AER determined that both the DSA and the inspection from RPG were relevant points in time to consider, but also held that site visits from AER filed staff and other photographs filed on the record would be considered, given that the new information is relevant to the underlying decision.
Issues
The AER defined the issues at stake in the regulatory appeal as:
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Whether the 11-9 Site met the reclamation criteria?
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Whether CNRL’s application was complete and accurate?
Reclamation Criteria
The AER noted that section 137 of the Environmental Protection and Enhancement Act (“EPEA”) provides that where specified lands (such as oil and gas well sites) must be conserved and reclaimed, the conservation and reclamation must be carried out in accordance with:
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Terms and conditions in the approval or other codes of practice;
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Terms and conditions of any environmental protection order;
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The directions of an inspector or Director appointed under EPEA; and
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The EPEA itself.
In looking at the applicable reclamation criteria, the AER considered the effects of quackgrass found at the 11-9 Site, including whether quackgrass was an undesirable plant, whether it interfered with the landowner’s future use of the site, or ability to integrate the site.
The AER noted that the 2010 Reclamation Criteria for Wellsites and Associated Facilities for Cultivated Lands (the “2010 Reclamation Criteria”) describes weeds as undesirable or unwanted plants, and requires that such plants shall be controlled so that they do not impede land manager operability or management.
CNRL submitted that quack grass was not a prohibited weed under the Weed Control Act and submitted that it was not incompatible with the perennial pasture setting at the 11-9 Site.
The landowner submitted that he considered quack grass to be an undesirable plant and noted that it was difficult to eradicate its presence, and that it further reduced the value of certain seed crops on his land.
The RPG similarly submitted that quack grass can be an undesirable plant that can negatively affect cultivated crops, but could be used as pasture or hay and may be found on lists of preferred plants for rangelands.
The AER noted that Alberta Agriculture and Forestry categorized quack grass as a nuisance weed and that in this specific situation, Alberta’s Institute of Agrologists considered it to be an undesirable but not a designate noxious weed. The AER therefore concluded that quack grass could be an undesirable plant if it interfered with the landowner’s use of the site.
The landowner submitted that prior to the lease construction at the 11-9 Site, the 11-9 Site was planted to fescue from which the landowner harvested seed crops. The 11-9 Site had been maintained in fescue since 2201, while adjacent fields were rotated through different seed crops such as barley, wheat and canola since 2006.
The RPG submitted that the landowner’s current use of adjacent lands for crops was a reasonable basis to determine that quack grass could be considered an undesirable plant since it competes with seeded crops, and could be costly to control.
CNRL submitted that the 11-9 Site was not currently being used for fescue or fescue seed production, and has been used as pasture for cattle grazing and equipment storage. CNRL submitted that quack grass did not interfere with these uses of the 11-9 Site.
The landowner replied that if he were to take control of the 11-9 Site at this time, it would need to be separated from the rest of his lands for several years and that herbicides would need to be applied for approximately three years.
The AER noted that the adjacent fields had not been used for pasture since 2006, and that reintegration of the site may include fescue seed production. The AER held that the landowner was therefore not using the site for pasture, and that the landowner’s land management objective was to integrate the 11-9 Site into the landowner’s existing crop rotation.
The AER therefore held that quack grass was an undesirable plant, holding that it would interfere with the landowner’s use of the site.
The RPG provided evidence that the initial inspection was assessed against the 1995 reclamation criteria, instead of the 2010 Reclamation Criteria and that the 11-9 Site would not have passed inspection otherwise.
The RPG submitted that the 11-9 Site should be reclaimed to a condition that would be manageable for the landowner, and would not be an obstacle to normal farming methods.
The AER determined that while the 2010 Reclamation Criteria does not require the complete eradication of weed and noxious plants in order to issue a reclamation certificate, it does require that prohibited noxious weeds be destroyed and noxious plants be controlled. The AER held that CNRL had not sprayed the 11-9 Site for weeds since its inspection in 2013, and that CNRL therefore did not continue to control quack grass on the site.
Accordingly, based on the presence of quack grass on the 11-9 Site, the AER held that the 11-9 Site did not meet the reclamation criteria and had not been returned to an equivalent land capability.
Completeness of CNRL Application
CNRL stated that it sprayed the 11-9 Site for quack grass with Assure II in September 2012 and in June 2013, which it submitted killed or suppressed all above-ground growth of the grass, so it was not visible at the time of its inspection and application.
During the complaint inspection however, both the landowner and RPG identified patches of quack grass on the 11-9 Site. Further testing confirmed the presence of quack grass.
The RPG submitted that the application was therefore not complete or accurate, as the inspection and application failed to document the presence of quack grass at the 11-9 Site.
The AER held that the applications of Assure II to the 11-9 Site could reasonably have suppressed or controlled quack grass, and that it was therefore entirely reasonable that the inspection and application did not identify quack grass on-site. The AER therefore determined that the application was not incomplete or inaccurate, as the inspection and application were simply a “snapshot” in time, where there was no observable quack grass.
Other Issues
The RPG argued that the application was not complete since it did not include signed release letters setting out that the perimeter fence and culvert would remain in place. The RPG noted that the 2010 Reclamation Criteria provides that facilities or features that are to remain in place must be approved by the landowner.
CNRL argued that these sorts of releases would normally be considered a “minor” deficiency that could be rectified within 30 days of the application, and that in any event, the culvert was the property of Alberta Transportation. CNRL also later provided a letter of release from Alberta Transportation during the hearing, allowing the culvert and other facilities to remain in place.
The AER held that the perimeter fence would need to be taken down before a reclamation certificate may be issued. However, as the landowner expressed a preference for the reclamation certificate to be issued prior to the removal of the fence, the AER did not find that the application was incomplete due to the absence of the fence release.
The AER also noted that communication between CNRL and the landowner, based on the record of the proceeding, was insufficient, and in its determination, not effective. The AER found that timely and effective communication would have likely addressed many of the difficulties and concerns raised during the course of the hearing.
The AER therefore reminded CNRL and the landowner that the AER’s alternative dispute resolution was available for operational energy disputes of this nature.
The AER also noted that the passage of time, including significant delays in the inspection, application and complaint complicated the process greatly regarding the evidence in the proceeding. The AER held that a shorter timeframe would have reduced any potential for inaccuracies or discrepancies at the 11-9 Site between the application, inspection and subsequent visits.
Order
Based on the determinations above, the AER found that the 11-9 Site did not meet the 2010 Reclamation Criteria and that CNRL’s reclamation certificate application was accordingly incomplete. The AER therefore refused to issue a reclamation certificate for the 11-9 Site, but invited CNRL to apply for a reclamation certificate once the site met the 2010 Reclamation Criteria.
