Nancy Olomon got a lot more than she bargained for after her family moved to an acreage south of Calgary in 1986.

They moved for the quiet, the space and the fresh air. What she got in return was more than a decade’s worth of an unexpectedly troubling education about how her family’s choice to live in a rural residential area would be affected by the industry that greases the wheels of Alberta’s booming economy.

In retrospect, she knows her family was naive. “We knew to look for good water,” says the mother of three. “We did not know to look for sour-gas wells.”

Some of those sour-gas wells were present before the Olomons bought their place; others may be on the way, pending the result of a January hearing by the Alberta Energy & Utilities Board (EUB).

Dave Olecko, Business Edge
Marilynn Christensen of Shepherd keeps track of proposed and existing well developments.

Under Alberta law, information about potential or existing oil and gas development does not have to be shared with prospective real estate buyers, unless the land being purchased is specifically affected by a lease that grants access to the property.

Olomon says that’s wrong. “I wouldn’t have bought this property had I known (about existing and planned wells in the area),” she says.

Past frustrations are compounded by the fact her home is located within four kilometres of another six sour-gas wells Compton Petroleum Corp. has applied to drill in the area. (According to the EUB, the new wells are 1.1 kilometres southeast of the city limits.)

Olomon is now part of a group, the Frontline Residents Group (FRG), that will contest the application at hearings the EUB will hold in January.

Calgary lawyer Gavin Fitch, who represents about 55 families in the FRG, predicts hearings about applications such as Compton’s will soon be increasingly common in Alberta as urban municipalities expand into areas with active oil and gas exploration – especially when sour gas is involved.

Concerns about the potential for decreased property values come second to health and safety issues, insists Fitch. With no legal responsibility to tell real estate buyers their new home could eventually be located within an emergency planning zone (EPZ) – as required by the EUB when wells are drilled, completed and brought into production – “it is just caveat emptor, buyer beware,” Fitch says.

Information about oil and gas development is available for those who do the extra research, “but is it reasonable to expect a purchaser of property in some suburban neighbourhood to dig so deep? I don’t know,” says Fitch, who also represents a number of home owners still living in the southeast community of Lynnview Ridge. (The site of a former refinery owned by Imperial Oil, the soil in Lynnview Ridge was found to be contaminated. Since then, most of the neighbourhood’s residents have sold their homes to Imperial Oil and vacated the neighbourhood.)

Marilynn Christensen of Shepherd, on the eastern outskirts of Calgary, shares Olomon’s stress about the Compton application and is adamant about staying put in the house she’s lived in for 32 years.

Her biggest fear is “this could be a precedent-setting case for industry to develop (sour gas wells) closer to heavily populated areas. That’s what we’re really scared of.”

Christensen, also part of the FRG, and Olomon, are active in the Indus Community Petroleum Industry Assoc., a group formed to ease face-to-face communication between area residents and petroleum companies. Both women say the process has been helpful, especially regarding some concessions regarding flaring – the burning of unwanted or uneconomical natural gas.

Derek Longfield, vice- president of special projects with Compton, disagrees that the EUB decision will set any precedents for drilling and well completion near urban settings, since some sweet and sour gas wells are already in place.

He also takes issue with FRG’s concerns regarding the company’s application for a modified EPZ.

A 15-square-km zone for well completion might be necessary if Compton did not plan for immediate ignition of the sour gas in the event of a blowout. By committing to ignite the gas immediately, however, four kilometres will be enough, says Longfield. “The bottom line is that (Compton’s plans, as outlined in the EUB application is), all predicated on safety.”

Christensen remains unconvinced. Her home is nine kilometres from the proposed wells. And with the sour gas in these wells predicted to be 35.6-per-cent hydrogen sulphide (high enough for the EUB to classify them as “critical sour”), she doesn’t think the application for their development should be approved given the city’s proximity.

Nor does she think the company’s proposal regarding “immediate ignition” merits a reduced EPZ. (At the 15- kilometre mark, the EPZ includes several of southeast Calgary’s newest neighbourhoods, accounting for more than 250,000 people.)

Compton’s Longfield disagrees. This is “not a method for us to shirk our responsibilities, it’s actually taking on more responsibilities, more cost,” he says.

On the flipside of an already complicated discussion, oil and gas development in the neighbourhood isn’t always bad news for real estate buyers and sellers, says Glenn Fisher, a Re/Max realtor in Morinville, northwest of Edmonton.

Some property owners like it when oil and gas companies seek access to a lease on their land “because now they get the lease revenue of maybe $2,000 a year or so,” says Fisher.

He’s talked to rural land appraisers who use the value of a lease to calculate a property’s increased value. “If you’re getting $2,500 a year revenue out of it, it’ll probably add between $3,500 and $10,000 to the price of the property, depending on the buyer.”

Fisher, who teaches rural realty courses to other real estate professionals, mostly in the Edmonton area, says concern about oil and gas development typically follows one of two paths. First, any developments with sour gas attract a lot of questions about public health and safety. Second, new exploration always elicits more concern than existing wells or pipelines. People who buy knowing there’s a well across the road “know what they’ve got before they go out there,” says Fisher.

Maybe or maybe not, says Olomon. Having worn out the view from the rose-tinted glasses she first applied to her own life in the country, she is not convinced Albertans are wary enough of resource development and the health implications, including those caused by the stress of fear.

With no law to make sure people find out about future exploration, ignorance reigns, says Olomon. “Most people still don’t know to look for it.”

Web watch:
www.eub.gov.ab.ca/BBS/ applications/Submissions/ comptonapplications.htm

(Joy Gregory can be reached at joy@businessedge.ca)