OH,
CANADA
"They
have industrialized a landscape as beautiful and ecologically
precious as Montana’s Rocky Mountain Front."
-
Canadian Judy Huntley, describing Shell’s Waterton gas complex
in Alberta.
It
was in December 1998 that Shell Canada first made the proposal.
The company wanted to drill for natural gas in an area of cen-tral
Alberta known as Rocky Mountain House. Alberta is one of the western
Canadian provinces located along the US boarder, north of Idaho
right between British Columbia and Saskatchewan. Alberta is a
big province, bigger, in fact, than Texas and Montana combined.
With the Canadian Rockies running through it, and a good share
of northern temperate zone biological diversity to its claim,
Alberta is a stunningly beautiful place, with much worth preserving
that isn’t preserved. This is the province of Banff National
Park and Lake Louise. It is also the province of hard working
ranchers and farmers. But, most of all, Alberta is an energy province,
rich in natural gas and other resources; a place that has had
the attention of Shell Oil and other big companies for decades.
But some of the natural gas in Alberta is a special kind of gas,
called "sour gas," which means it contains a high proportion
of hydrogen sulfide, or H 2 S, as the chemists call it. Sour gas,
known for its strong rotten-egg odor, can also be quite lethal,
killing a person in an instant after inhalation. The folks in
Rocky Mountain House weren’t very happy to learn that Shell
might be arriving in their community to drill for sour gas at
a site known as "Ferrier Well 7-7." In fact, as soon
as the Shell public information package began arriving in the
mail of Rocky Mountain House residents, the community began its
fight. "There was a public meeting held within 36 days of
receipt of this information," explains Eric Tait, a school
teacher and chair of the Clearwater Coalition, the group of landowners
that came together to oppose the well. "Approximately 50
people attended . . . and they were absolutely adamant that they
would do everything they could to oppose the well."*
The
people at Shell, however, saw it differently. "Shell has
had over 50 years of safe drilling and operating of sour gas wells,"
explained Georg Gerlach, Shell’s project manager, "and
we feel that there won’t be any issue at all with any kind
of exposure." Shell already had secured permission from the
subsurface owner to drill the well, and also had permission from
the surface owner to begin drilling. However, it didn’t have
final regulatory approval, and it also wanted to have community
support. So Shell began a process of negotiation with local landowners
and the community for their support. "We respect Shell for
coming to the table and talking about these issues," said
Colin and Felicity Manuel, landowners who had moved to Canada
from Kenya in 1975, wanting the protection that Canadian laws
presumably provided landowners that were not available in Kenya.
"[W]hat is happening in the wider community [in Rocky Mountain
House] is people like ourselves getting very angry with these
smaller companies that come in and just go in and do these things,
and there’s no discussion, and we’re left high and dry
regardless of what happens."
Shell
also had continuing pipeline problems, as the Alberta Energy and
Utilities Board ruled in October 1999 that a highly corroded section
of Shell’s Carbondale pipeline had to be replaced, two other
lines decommissioned, and a part of the operation then located
in Screwdriver Creek Valley had to be moved. The Carbondale line
sup-plied gas to the Shell Waterton Gas Plant, but the EUB found
a "significant risk of future failure" in the part of
the line located in the bottom of Screwdriver Creek Valley. An
EUB inquiry into this Shell operation had been held in March 1999,
when farmers Dave and Jean Sheppard, who lived a few kilometers
away, reported relentless flaring over the past three years, as
well as a 1997 pipeline leak that killed several animals —
the second such leak there within months of the lines opening.
"It suggested the pipeline was maybe not safe, in spite of
their assurances they had everything under control," said
Dave Sheppard. Although the EUB ruled in the Sheppards’ favor,
Dave Sheppard reported difficulty in finding experts that would
testify on his behalf in the fight. "Most of them work for
the big companies," he said, "and don’t want to
be critical of them."
So
it was not surprising, given this history, that Shell had a fight
on its hands during 1999 and 2000 as it sought to drill a new
well at Rocky Mountain House.
Back
at Rocky Mountain House
But Shell thought it was making progress in its talks with the
lo-cal residents in that community, seeking to talk through the
concerns and get to a negotiated agreement. But the talks broke
down. Still, Shell insisted it could do the job right and without
incident. "We have engaged in almost two years of community
consultation and six months of mediation in an effort to understand
the community’s concerns," explained Ian Kilgour, a
Shell Canada manager. "Our ongoing commitment is to continue
to develop natural gas resources in an environ-mentally, socially
and economically responsible manner consistent with our corporate
policy on sustainable development." But now it was up to
the Alberta Energy and Utilities Board (EUB). For two weeks beginning
in early November 2000, the EUB held forth at the Dovercourt Community
Hall, listening to all sides during an extensive public hearing.
But in the end, the EUB rejected Shell’s application for
the $12 million (C$) deep well, saying that public safety could
notreasonably be assured by Shell’s emergency response plan.
The ruling, coming in April 2001, stunned Shell and all of Alberta’s
natural gas industry.
In
its decision, the EUB paid special attention to the unique topographic
and demographic conditions in the vicinity of the proposed well
and the potential release rate of gas from the well "under
reasonable worst-case conditions." In its decision, the EUB
explained: "Having carefully considered all of the evidence,
the Board is of the view that the emergency response plan proposed
by Shell Canada has not adequately addressed these unique conditions.
Since public safety cannot be acceptably assured, the Board does
not believe the drilling of the well, as currently proposed, to
be in the public interest. Therefore, the Board denies Application
No. 1042932 without prejudice to any future application."
The
EUB found some unique geographic and demographic prob-lems that
could confront the community in the event of a gas-release emergency.
The Clearwater River, for example, created a significant barrier
to effective evacuation. The area is also frequented by large
numbers of recreational users, some pursuing activities in steep
river valleys. In the winter, snowbound roads could be a special
problem. Communicating with dispersed and rural populations could
also be a problem in an emergency situation. In examining the
potential impacts on land use and land values from the development,
the EUB found a somewhat uneven playing field, noting that when
it came to evaluating economic benefits of energy development,
there were well established and simple tools available. But this
same level of analysis was lacking, and not easily available for
assessing the costs of such development to nearby landowners.
(This was not necessarily a fault of Shell’s, but a kind
of analysis that Shell, as a leader, could help advance and bring
to a higher level of standing on behalf of communities.) But the
EUB held particularly strong objection to some of Shell’s
failings in dealing with the community:
[I]t
is clear that in designing its initial public consultation program,
Shell significantly underestimated the concerns of the area residents.
It is equally clear that Shell made a number of additional errors
in the early stages of its consultation program. Shell acknowledged
that these included assuming that the presence of regional oil
and gas development meant that public concern about new development
would be reduced. Other concerns included concluding negotiations
for the well site prior to initiating community discussions, initially
relying on a mail-out of information packages as the primary communication
tool, and providing a narrow time period, over a holiday season,
for the public to read and respond to that information package.
In the Board’s view, the result was a serious erosion in
public trust in Shell from the outset. The Board accepts the interveners’
views that these initial errors very likely made future effective
consultation al-most impossible, despite Shell’s subsequent
efforts.
For
Shell, the Rocky Mountain House rejection was perhaps just a little
skirmish — a rare loss in the broader global stream of dozens
of Shell projects that are typically approved in any given year.
Even in Canada, where Shell is one of the largest companies and
biggest employers, the company has numerous and major ongoing
projects. In northern Alberta, Shell holds a controlling 60 percent
share of the Athabasca Oil Sands Project, which includes the Muskeg
River Mine, 75 kilometers north of Fort McMurray, and the Scotford
Upgrader, a processing facility adjacent to Shell’s Scotford
refinery north of Fort Saskatchewan, Alberta. The Muskeg River
Mine site and lease area contains more than five billion barrels
of oil sands targeted for strip mining. Shell is expecting to
extract about 1.65 billion barrels over 30 years. With large trucks
and shovels, a mixture of sand and oil is mined, then mixed with
warm water to separate out the oil, which is then sent to an upgrader
for further refining. Shell says that oil sands have the potential
to supply up to 50 percent of Canada’s crude oil needs by
2007. Currently, the oil sands share is about 18 percent. Oil
sands conversion, however, is not the most energy efficient or
environmentally- clean of hydrocarbon processes. By late 2002,
however, Shell expects that an estimated 155,000 barrels of bitumen
will be produced every day at the Muskeg River mine. Shell also
holds offshore and onshore interests in the Sable gas fields off
Nova Scotia, produces heavy oil through thermal recovery at the
Peace River project, and is part of a consortium involved with
the Norwest Territory Aboriginal Pipeline Group in Arctic Canada,
with plans to build a $1.9 billion pipeline to transport natural
gas from the MacKenzie River Delta to markets in lower Canada
and the US. Shell also operates refineries and chemical plants
in Montreal, Sarnia, and Scotford.
You’d
Fight Too! . . .
Imagine you live in a country where the government owns almost
everything under your feet: the rocks, the gas, the oil —
you name it. This state in turn makes billions by selling these
mineral rights to a 1,000 different companies. Over time, these
companies industrialize the landscape with a million kilometers
of seismic lines, 300,000 kilometers of pipelines, hundreds of
gas plants and tens of thousands of wells — and all in a
pretty ad hoc fashion. Even parks must sport wells and pipelines.
. . . Now imagine you are a landowner in this Soviet-style state.
A company comes along and proposes to put a sour-gas well in front
of your dining room. Someone might explain that the good people
of California need to stay cool in the summer and the good people
of Ontario need to stay warm in the winter. You’re offered
$25,000 for the inconvenience and annual rent of $5,000 as "hush
money."
Generally
speaking, no one will tell you that sour gas is a cyanide-like
poison. Or that it’s so toxic that the Canadian government
even used it in its secret chemical-warfare program during the
Second World War. Or that one gas well might to lead to another
four; or a pipeline. Or ceaseless traffic, access roads and a
fax machine in your kitchen so the gas company can contact you
night and day in case there is an emergency. Now imagine you have
an objection to this intrusion. You are given a public hearing
before a state board that receives most of its funding from the
oil and gas industry. The board has a funny technocratic name:
the Energy and Utility Board. It claims to operate in the public
interest, which means its job is to generate more revenue for
the state. It will often patiently listen to objections and then
declare that "there is a need" for the well. The landowner
is damned. Imagine four decades of damn-ing decisions. Now something
goes wrong with the nice well in your backyard and the pipeline
fragmenting your crop land and the shiny sour-gas plant upwind
of your property. There is a leak; an upset; a 30-foot high burning
flame that sounds like a jet airplane and rattles your house.
Your family and your livestock then breathe hydrocarbons that
the medi-cal literature has identified as brain-melters, lung-wasters
and sex-changers. Your cattle die and your children pass out cold.
Someone develops facial paralysis, multiple sclerosis, or other
neurological symptoms. Well, that’s just too bad because
industry does most of the monitoring and the self-policing in
Alberta. You might wait months for redress — even years.
According
to the state, these emissions are harmless; it’s just an
odor problem; it’s in the public interest for rural Albertans
to smell these odors. (For years the EUB had only one mobile air
monitor.) . . . Not much has changed in Alberta since [Wiebo Ludwig’s
sabo-tage incidents] made international headlines. Tensions remain
so high in the countryside that many pipelines and wells now have
24-hour guards. Industry even reports people to the RCMP for merely
taking pictures of flaring wells. In fact, Alberta has the highest
rate of "eco-terrorism" of any jurisdiction on the continent
and some of the nation’s highest rates of respiratory and
neurological diseases. Every week a family is exposed to toxic
poisons or displaced by energy development. . . . And each week,
industry and government mostly refuse to compensate those people
harmed — or even recognize the legitimacy of their claims.
As a result, groups of landowners routinely contest sour-gas developments
and have launched more than 30 toxic torts against industry. .
. . Rural Albertans deserve a separate agency that upholds their
rights and that has the power to duly compensate them for damages.
The state needs to impose density controls on sour-gas development
in areas of high population. That means the government must learn
to say no to industry. Tough regulations on air pollution and
flaring need to be introduced and enforced. Oil executives should
be fined for bad practices that affect the property rights of
down-winders. Last but not least the EUB needs a dozen environmental
forensic teams to investigate air pollution and water contamination
in a timely fashion . . .
Excerpted
from Andrew Nikiforuk, "Maybe You’d Fight Too,"
Globe & Mail, November 14, 2001, p. 25. Nikiforuk is author
of Saboteurs: Wiebo Ludwig’s War Against Big Oil, which tells
the story of Dutch-born cleric and Alberta landowner Wiebo Ludwig
who rose up against Alberta’s oil and gas industry commiting
acts of oilfield violence and sabotage, served 18 months in Canadian
prison for his actions.
For a copy of the book send e-mail to info@shellfacts.com
