An Energy, Environmental & Regulatory Law Update On March 26, 2008, the Alberta Court of Appeal dismissed an appeal by Barbara, Larry and Darrell Graff of two Alberta Energy and Utilities Board (EUB) decisions approving well licenses to EnCana, for a sour gas well and a sweet gas well located at 4-22-16-25 W4M (the 4-22 well)and 1-25-16-25 W4M (the 1-25 well), respectively.
EnCana submitted an application for the sour gas 4-22 well in March 2006. As is the case with all sour gas wells, an Emergency Planning Zone (EPZ) was established around the well. An EPZ is an area in which a company must develop emergency response measures to be used in the event of an accident at the wellsite. The EPZ for the 4-22 was set at a radius of 140 metres from the wellsite. The Graffs’ residence was outside of the EPZ, approximately 2 km from the 4-22 well.
The Graffs objected to the well based on their concern that the well could potentially adversely affect their health. Barbara and Darrell Graff advised the EUB that they both suffer from a sensitivity to chemicals, however, they did not provide the EUB with the medical evidence to support their claim, though they said such evidence was available.
The EUB dismissed the Graffs’ objection as their residence was outside both the EPZ and the consultation radius for the well, which the EUB’s Directive 56 establishes as the greater of 200 metres from the well or the EPZ. Therefore, the EUB found that the Graffs had failed to demonstrate the potential for being directly and adversely affected by the 4-22 well. The EUB issued an approval for the 4-22 well. The Graffs requested a review of this decision, which the EUB denied for the same reasons.
EnCana submitted an application for the 1-25 well in June 2006. This well was located approximately 2.5 km from the Graffs’ residence. As the 1-25 well was a sweet gas well EnCana was not required to establish an EPZ and the Graffs’ residence was far outside the even smaller radius for mandatory notice for a sweet gas well (100 metres). The Graffs objected and asked to be consulted based on their medical conditions. Again, the Graffs did not submit to the EUB supporting medical evidence.
The EUB issued an approval for the 1-25 well. The Graffs requested a review, which was denied as the Graffs were unable to demonstrate that they were potentially adversely and directly affected.
The Graffs sought leave to appeal both EUB decisions. Key to their position was that the EUB had wrongly concluded that people outside the consultation radius (or EPZ) cannot be adversely and directly affected. The Graffs argued that Directive 56 sets minimum consultation criteria and requires consultation with persons with special needs, even if they reside outside the consultation radius. Leave to appeal each decision was granted and the appeals were consolidated and heard together.
In dismissing the Graffs’ appeal, the Court stated that it was not unreasonable for the EUB to require that they provide evidence of their medical condition (“unusual sensitivity” to chemicals) – a “mere assertion” of that sensitivity in an objection letter was not enough. The Graffs had failed to comply with the EUB’s requests and therefore the Board acted properly in dismissing their objections and review requests.
Both the Graffs and the Board sought leave from the Court to introduce “fresh evidence” on appeal. The Graffs introduced evidence of their medical condition to demonstrate how they would be adversely affected by EnCana’s wells. The Board introduced evidence to demonstrate that it did not have any medical evidence from the Graffs before it when it made the decision to dismiss their objections and review requests. The Court found that nothing in the fresh evidence established that the Board knew of the Graffs’ medical condition when it made its decisions, the Board’s decision was therefore reasonable.
When we previously prepared an alert on the Graffs obtaining leave to appeal on the 4-22 well, in January 2007, we cautioned that success on appeal could lead to persons whom companies are not required to consult (or include in an EPZ) nevertheless being found to be directly and adversely affected and thus be granted standing. While this possibility still exists, the Court of Appeal in this decision makes it clear that a mere assertion that one is affected is not enough; a person must provide real evidence that they are affected. In the case of persons who reside far enough away from a proposed facility that they do not fall within either the consultation radius or the EPZ, this will presumably not be so easy. This should be welcome news to industry.
This update is a general overview of the subject matter and cannot be regarded as legal advice. Please contact Ron Kruhlak at rkruhlak@mross.com, Gavin Fitch at gfitch@mross.com, or any member of our Energy, Environmental & Regulatory Practice Group for advice on this or any other energy and environmental law topic. |
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