Michele Del Colle, energy, policy and utilities specialist at the Farmers’ Advocate Office (FAO), has been receiving calls from landowners asking if they can deny access to a wellsite.
“In light of the economic conditions in Alberta, some landowners are not receiving their surface lease payments. Despite this, landowners cannot deny access to energy infrastructure located on their land and title. It is important to note that denying access may result in the loss of surface lease payments.”
There are some reasons why companies other than the one listed on title may be accessing the site.
Orphan Well Association (OWA)
The OWA is the independent non‐profit organization that operates under the delegated legal authority of the Alberta Energy Regulator (AER). The OWA’s mandate is to safely decommission orphan oil and gas wells, pipelines and production facilities that do not have a legally or financially responsible party that can be held accountable, and to restore the land as close to its original state as possible.
The OWA is not responsible to pay arrears for annual rental payments that operators failed to pay. Recourse for landowners for unpaid rentals is available through the Surface Rights Board (SRB) in the Section 36 application process.
Through the AER, the OWA – along with their contractors – have the legal right to access and work on any well, facility, or pipeline declared as an orphan. The OWA does not take the place of the former operator, and they do not hold any surface lease or license for the well or infrastructure.
Working Interest Participants (WIP)
WIP is a company with a beneficial or legally undivided share in the licence, under provincial legislation. The WIP received some sort of financial benefit when energy resources were being developed. When a primary licensee becomes insolvent, the AER can look to the WIP to lead on the closure, abandonment or reclamation of the site.
The WIP is responsible for the cost proportionate to their share of the investment, with the rest covered by the OWA. It is not responsible to pay any overdue annual rental payments. Through the AER, the WIP has the legal right to access and work on any well, facility or pipeline identified in the closure or abandonment order that was issued to protect environmental and public safety.
“Both the OWA and WIP will work with the landowners and communicate openly about the process and timelines that will occur,” she explains. “They will engage all stakeholders during the abandonment and reclamation process.”
If a landowner denies the OWA, WIP or AER access to the site, the SRB may stop all future payments as per Section 36 (8) of the Surface Rights Act.
Section 36 Surface Rights Act:
(8) The Board may direct the Minister not to make any further payments due under subsection (6) if it considers that the person entitled to receive them is refusing access for operations, abandonment or reclamation allowed by law.
Connect with the FAO through the Alberta Ag-Info Centre:
Farmers' Advocate Office (FAO)
Suite 100, 7000 113 Street
Edmonton, Alberta T6H 5T6