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Request for Regulatory Appeal by Clint and Ray Jacula Regarding Licences Issued to Husky Oil Operations Ltd., AER Application 1929563

Link to Decision Summarized

Appeal – Responsible Energy Development Act

In this decision, the AER denied a request under Section 38 of the Responsible Energy Development Act (“REDA”) for a regulatory appeal (the “Request”), filed by Clint and Ray Jacula (the “Jaculas”), of the AER’s decision to approve Licences issued to Husky Oil Operations Ltd. (“Husky”).

Parties’ Submissions

In their Request, the Jaculas submitted that Husky failed to meet with the the Jaculas and their neighbours about the project and its impact. The Jaculas requested relocation of the drilling and compensation for potential losses to cattle production, water, hazardous chemicals and vegetation. The Jaculas also requested proof from the AER showing how, according to Section 57 of the Law of Property Act, it can approve drilling and removal of their clay and marl from surface drilling.

AER Decision

The AER made its decision under the Oil and Gas Conservation Act (“OGCA”). The proposed project is located on land adjacent to the land owned by the Jaculas, but portions of drilling associated with the project will take place under the land owned by the Jaculas. As a result, the AER found that the Jaculas are potentially directly and adversely affected by the decision and eligible to request a regulatory appeal of the licenses under Section 36(b)(ii) of the REDA.

Merits of the Request

Under Section 39(4) of the REDA, the AER can dismiss a request for regulatory appeal if the AER considers the request to be frivolous, vexatious or without merit, or if for any other reason the AER considers that the request is not properly before it.

The AER found that Husky had contributed to establishing and maintaining a neighbourly relationship by demonstrating openness to resolving the Jaculas’ concerns outside of a formal AER process. The AER held that matters concerning compensation for potential losses to cattle production or damage from hazardous chemicals in general, and to vegetation in particular, as raised by the Jaculas, are outside of its jurisdiction. The AER also found that the Jaculas’ concerns regarding impacts to traffic was outside of its jurisdiction.

The Jaculas raised concerns with directional drilling. The Jaculas’ proposed relocation of the drilling on their land. Husky submitted that the drilling locations proposed by the Jaculas would result in duplication of resources and increased safety risk. These results would be contrary to Section 4(c) of the OGCA and Section 2(1) of the REDA.

 The AER found that approvals relating to drilling and removal of clay and marl are outside its jurisdiction. The AER noted that issues concerning potential jeopardy to the Jaculas’ water are adequately addressed as Husky must comply with the requirements in AER Directive 008 and Directive 009: Casing Cementing Minimum Requirements, which aims to design appropriate depths of surface casing and meeting the casing cement requirements to assist with well-control and groundwater protection. Husky also offered to cover all reasonable costs for the Jaculas to retain an independent consultant to test the water well before and after drilling.

While the AER has concluded that the Jaculas are eligible to request a regulatory appeal of the licenses, the AER found that their appeal is without merit and not properly before the AER.

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