Proposed Oil and Gas Wells, Pipelines, and Facilities - EnerFAQ

Under the Alberta Energy Regulator (AER) requirements and guidelines, a company applying to develop an energy resource development project may be required to provide notification and information about the proposed activities so persons receiving the information can fully understand the proposed project and its potential effects. A company must provide details about how and why it chose proposed locations for wells, facilities, pipelines, or access roads and what to expect regarding equipment use and operations during the production phase.

Public notices of application will be posted on the AER website, and landowners may file a statement of concern to an application.

Most land in Alberta carries two titles and two sets of rights.

• A surface title gives the landowner ownership of the land’s surface and the right to work it. The surface owner may lease these rights to another company or person.
• A mineral title gives a company or person who owns the minerals under that land the right to explore for oil and gas in the case of a petroleum and natural gas or an oil sands lease. The mineral owner may lease these rights to another company or person.
• A geothermal lease gives a company or person the right to explore, develop, and recover geothermal resources in the location of the lease. 

Sometimes, a title to land will give an owner both the surface and the mineral rights. If a land title is split, the mineral owner may need access to the land’s surface to drill and produce energy resources.

Two conditions apply to the company’s right to explore. First, drilling and production activity must be done in a way that is environmentally and technically acceptable. Second, a company must operate in ways that minimize interference with the landowner’s use of the land.

A survey is one early step in selecting a well site, facility site, or pipeline route. A survey helps a company identify the exact location for the proposed well, facility, access road, or pipeline and the surface area required. Alberta’s Surveys Act and Surface Rights Act give the surveyor the right to enter your property to survey. It is common practice—and common courtesy—for a company representative to contact you before surveying. The purpose of the visit will be to advise you of the approximate location of a proposed well and access road, pipeline, or facility.

The company is responsible for the cost of damages caused by the survey.

Pipeline right-of-way

A pipeline easement (right-of-way) is an agreement between a landowner and a company in which the landowner receives financial compensation in return for allowing a company to create right-of-way for a pipeline route. Typically, a pipeline easement (or facility surface agreement) is obtained before the AER approves an application to construct a pipeline or facility. However, in cases where a dispute exists between a landowner and a company, an agreement may not be in place before AER approval.

Pipelines link the oil and natural gas industry’s “upstream” sector (production of oil, natural gas, and related products from underground reservoirs and surface facilities) to the “downstream” sector (refining, marketing, and product distribution).

The upstream sector operates gathering or flow lines that move raw products from remote wells to processing facilities or larger transmission pipelines. The products in the pipelines are under pressure created by compressors and pump stations. Compressors powered by gas engines or electric motors compress natural gas in the pipelines up to one hundred times the normal atmospheric pressure.

Under AER requirements, the company proposing a pipeline on or near your land must

• give you a description of the project and tell you how it will affect you
• take steps to ensure you fully understand the proposed construction schedule and methods to be used
• make sure you are familiar with the product to be transported by the pipeline or handled at the facility and
• address all concerns about soil handling, site reclamation, and other issues related to the planned pipeline or facility.

Pipeline and facility construction must also meet Alberta Environment and Protected Areas' environmental protection guidelines. Pipelines will typically remain in the ground after abandonment and reclamation.

Public notices of pipeline applications will be posted on the AER website, and there will be the opportunity to file a statement of concern in response to an application.

Well Site Selection

Geologic and seismic data are important in choosing a well site. A company will normally select the location of a well based on the geology of nearby wells or on seismic information. Some of this information may be confidential.

However, a company should give you the basic geological information so that you know why they chose that location and the implication of choosing a different well location. For example, moving away from the best geological location could increase the risk of drilling a dry hole, a well with no significant amount of oil or gas, or recovering less oil or gas.

Geothermal resource development

Geothermal resource development is like oil and gas in many aspects. Like oil and gas, geothermal companies will share relevant information about the project with landowners and stakeholders. Geothermal companies are expected to share additional information about the technical aspects of their project, project schedules, and known future development plans.

However, unlike oil and gas, a geothermal company must receive written consent for the location of wells and roads, pipelines, and facilities from landowners where the development is planned, including consent from those whose land will be crossed to access the development. This important difference exists because the Surface Rights Act does not apply to geothermal resource development.

After a company initiates preapplication consultation and you begin negotiations, various situations could arise. You and the company might agree or disagree about the site of a well and related facilities or a pipeline route. If the proposed project is located directly on your land, you may agree or disagree about the compensation you should receive. Landowners receive financial compensation for allowing companies to place a well, facility, or pipeline on their land.

More compensation information is available from the Land and Property Rights Tribunal or your AER field centre. The AER does not deal with compensation issues. Note that the Land and Property Rights Tribunal, not the AER, deals with payments for rights-of-way, crop loss, and other damages.

Negotiation often results in an agreement that meets the needs of both parties. The AER encourages a negotiated agreement and recommends that all commitments made by the parties be confirmed in writing. An agreement that meets the needs of both parties can help maintain a good working relationship for the life of the proposed project.

If the operating assets on your land are sold to another company, it is important to review any existing agreements with a representative of the new owner.

If you are having difficulty agreeing on a site, directional drilling could be a solution. It involves drilling the well diagonally instead of vertically. Sometimes landowners prefer a well located outside a target area or away from the best geological point. If this is the case, you can ask whether the well can be directionally drilled to the target from a surface location with less impact.

Though a directional well may be technically possible in some situations, it increases the cost of drilling and producing the well. The increased costs and benefits of directional drilling must be weighed against the effects of vertical drilling. You may want to ask the company to estimate the additional costs for a directional well.

Directional drilling technology has improved in recent years. It is common in some areas to drill several directional wells from the one surface location to reduce surface impacts. This practice is prevalent where well spacing occurs at higher densities than the standard gas well per section or oil well per quarter section.

Before agreeing to a well site, facility, pipeline, or access road, consider how it could affect your current and future land use (see EnerFAQs Setbacks). Also, ensure you understand the company’s soil handling, lease preparation, and reclamation methods. A company should consider land surface conditions, current and potential land use, environmental sensitivity, and reclamation. A company must apply for a reclamation certificate under the Environmental Enhancement and Protection Act.

A company must consider any negative effect of a project on land use and the environment and any associated visual effects and concerns of persons who may be directly or adversely affected. For example, a location on unproductive lands, such as a slough or hillside, may seem like a good choice to you; however, the company must consider effects that could prevent the use of a site, such as environmental effects, the ability to reclaim the site, and the effect on neighbours.

If you and the company agree on the location of a well, facility, pipeline route, or access road, the company must apply to the AER for a licence to proceed with the development. The AER will grant the licence if the application meets all legal and technical requirements.

You may register a private surface agreement (PSA) between you and the energy company operating on your property with the AER’s PSA registry. A landowner that feels a company is not meeting a term or condition of the agreement may ask the AER to determine whether the company has met the term or condition of the agreement. See EnerFAQs: How to Register a Private Surface Agreement to learn more.

If you and the company cannot agree on the location for a well, facility, pipeline, or access road, either party may ask the AER for its involvement through Alternative Dispute Resolution (ADR) program.

ADR offers concerned parties several options for managing disputes, including direct negotiation between the parties, AER staff mediation, third-party mediation, and arbitration.

AER staff can facilitate discussions between landowners and companies before or early in the application process. The goal is to identify and promote the resolution of concerns before they intensify.

Through ADR, the AER might suggest that parties

• attempt negotiations again,
• use AER ADR staff to facilitate, or
• use a neutral third party to mediate.

For more information on ADR, see EnerFAQs All About Alternative Dispute Resolution (ADR). The AER will also offer ADR to aid landowners and companies involved in proposed geothermal development with a view to increasing understanding of the issues and impacts that may be of concern.

The AER may decide a hearing on an energy resource development application is appropriate. As noted above, where geothermal activity is planned, an agreement with the landowner must be obtained. Where no agreement is made, the AER will not proceed to a hearing on geothermal proposals. An AER hearing is a formal proceeding that includes the presentation of evidence and the opportunity to question the positions of others. For more information on AER hearings, see EnerFAQs Having your Say at an AER Hearing.

If you continue to object to the company’s proposed location on your property, a well, facility, or pipeline licence alone does not give a company the right to enter your land. If this is the case, after a company obtains a licence from the AER (except in the case of geothermal development), it can apply to the Land and Property Rights Tribunal for a right-of-entry order granted under the Surface Rights Act. The order allows representatives of the company to enter your land to perform the tasks approved by the AER. The tribunal will then conduct a hearing to determine the compensation paid.

The Surface Rights Act does not apply to geothermal resource development; therefore, a geothermal company cannot access your land without your written consent.

If successful drilling leads to production, a wellhead or pump will be required on oil wells and a heater may be necessary for gas wells. Other equipment, such as pressure vessels and tanks, may be placed on the well site where it causes the least interference with farming operations (e.g., between the well and a nearby fence line).

Production facilities such as separators, heaters, and tanks make up what is called a battery. A company must discuss the location and details of production facilities with you and any other land occupants. Some facilities require separate licensing and you have the ability to continue to ask questions about these production facilities and to voice concerns about the construction of production facilities, even if a well site exists.

No. If a well is unsuccessful, it will likely be abandoned. The company must reclaim the site and obtain a reclamation certificate from the AER. This reclamation certificate is only issued after the AER is satisfied that the site has been properly reclaimed. The landowner may file a request for regulatory appeal regarding the issuance of a reclamation certificate. There are strict timelines for filing such a request.

In many communities, neighbours meet with AER representatives and area energy resource development companies to resolve local issues together. You are strongly encouraged to participate in these local synergy groups. Synergy groups are in communities throughout Alberta, and each group is structured to meet the unique needs of the community and local operators. Members of such groups have found that they are stronger and better informed together than they may be as individuals. If you would like to join or form a synergy group, contact your nearest AER field centre, as the AER participates in almost all the synergy groups in Alberta. See Synergy Alberta’s website for a list of synergy group phone numbers.

Remember, you can ask questions at any time about drilling, pipeline, and production operations that affect you and your neighbours.

Public notices of application will be posted on the AER website, and a statement of concern can be filed in response to an application.

Proposed energy development

• Is there a community-based group dealing with energy issues in my area?
• What kind of development is being proposed?
• How was the surface location selected?
• How will drilling activities and production affect my land/farming operations?
• What authorizations will the company be seeking from the AER (energy, water, etc.)?
• How long is the proposed development expected to operate?

Sour gas and emergency response planning

• Will the well encounter hydrogen sulphide (H₂S)?
• Will the pipeline transport H₂S?
• What is the company doing to protect public safety?
• What are the details of the emergency response plan?
• Will I be compensated for any damage done during an emergency situation?
  Setbacks
• What is the setback for the proposed development?
• May I develop my land if it falls within a setback?

Flaring, incinerating, and venting

• Will the proposed project involve any flaring or incineration of waste gas?
• If so, when and under what circumstances will flaring or incineration occur?
• What steps has the company taken to eliminate or reduce flaring, incineration, and venting?
• Will the company notify me when servicing work results in flaring or venting?
  Odours, noise, and traffic
• What can cause odours during drilling and production operations?
• What are the plans to minimize noise levels?
• What type and volume of traffic should I expect at various stages of development?
• How will the company respond to issues or concerns that may arise in day-to-day operations of the facility, and whom may I contact?

Environmental issues: soil, water, and visual

• What steps will be taken to protect the environment and have the least effect?
• How will the soil quality be protected?
• What are the company’s water needs?
• How will the company protect the supply and quality of aquifers and water wells at all stages of exploration and during ongoing operations?
• How will the company reduce potential visual impacts associated with facilities?

Animal health

• Will my livestock and pets be evacuated if there is an emergency? If not, who will feed and water them?
• Who will monitor the health of my livestock after an emergency, and for how long?

Several publications on well, pipeline, and facilities applications are available at the AER. These publications form part of Directive 056: Energy Development Applications and Schedules. In particular, section 2 on participant involvement describes the minimum requirements a company must meet regarding public consultation and notification when making a well, pipeline, or facility application to the AER. Contact the AER directly at 403-297-4369 or by email at Directive56.help@aer.ca with inquiries related to Directive 056.

For more information on the AER and its processes or if you wish to speak with your local field centre or have questions about energy resource development in Alberta, contact the AER Customer Contact Centre, Monday to Friday (8:00 a.m. to 4:30 p.m.) at 1-855-297-8311 (toll free).

Related information and AER publications include:

• EnerFAQs: The AER and You: Agreements, Commitments, and Conditions
• EnerFAQs: Having Your Say at an AER Hearing

This document is part of the EnerFAQs series, which explains the AER’s regulations and processes relating to specific energy issues.

Each year the AER collects, compiles, and publishes a large amount of technical data and information about Alberta’s energy development and resources for use by industry and the public. This includes raw data, statistics, hearing materials, and information on regulations, policies, and decisions.

Publications may be downloaded free of charge from the AER website or made available through the Products and Services Catalogue by contacting Data & Information Services (email: InformationRequest@aer.ca).

The following agencies provide supplementary information on oil and gas development in Alberta for use by both industry and the general public:

The Farmers’ Advocate Office
Helps resolve disputes on matters relating to the farming community and provides information on farming community matters.

305, 7000 – 113 Street
Edmonton, Alberta T6H 5T6
Phone: 310-3276 (FARM)
Fax: 780-427-3913
Website: http://www.farmersadvocate.gov.ab.ca

Land and Property Rights Tribunal
Provides information on entry or compensation related to all energy resource development except geothermal resources on privately-owned or Crown-occupied lands.

1229 91 Street SW
Edmonton, Alberta T6X 1E9
Phone: 780-427-2444 (toll free by first dialing 310-0000)
Fax: 780-427-5798
Website: https://www.alberta.ca/land-and-property-rights-tribunal.aspx

The Registrar of Land Agents
The registrar may investigate complaints that deal with matters pertaining to the Land Agents Licensing Act or the Land Agents Licensing Regulation.

Land Agents Licensing
7th Floor, Labour Building
10808 – 99 Avenue
Edmonton AB T5K 0G5
Phone: 780-415-4600 (toll free by first dialing 310-0000)
Fax: 780-422-7173
Website: https://www.alberta.ca/land-agents-licensing