Preliminary and Final Decisions

Penalty Ranch Ltd. v. Oil and Gas Commission

Decision Date:
June 22, 2018
File Numbers:
2016-OGA-001 2016-OGA-002 2016-OGA-003 2016-OGA-006 2017-OGA-004
Decision Numbers:
2016-OGA-001(b) 2016-OGA-002(b) 2016-OGA-003(b) 2016-OGA-006(b) 2017-OGA-004(a)
Third Parties:
Crew Energy Inc., Third Party

Decision Summary

Decision Date: June 22, 2018

Panel: Norman E. Yates

Keywords: Oil and Gas Activities Act – s. 72(2); oil and gas well; permit; groundwater; marsh; hydraulic fracturing

Penalty Ranch Ltd. (the “Appellant”) filed five appeals against five decisions issued by the Oil and Gas Commission (“Commission”): three appeals were against three decisions authorizing 10 permits for Wellpad 15-10; and, two appeals against two permits issued for Wellpad 15-9. Collectively, the permits authorized Crew Energy Inc. (“Crew”) to drill and operate twelve natural gas wells, subject to certain conditions.

The Appellant holds an agricultural lease over the Crown lands covered by Crew’s permits. The Appellant conducts cattle ranching on the Crown lands. A family owns and operates the Appellant, and owns and occupies a home on private land adjacent to the Crown lands. Four unnamed springs and a marsh are located on the Crown lands, and the Appellant relies on at least one of the springs for livestock and domestic use.

Before the permits were issued, Crew notified the Appellant of its plans to drill the wells. In response, the Appellant provided written submissions to the Commission expressing concerns about the potential adverse effects of the proposed wells on the aquifer that supplies the springs, and on the marsh. In particular, the Appellant was concerned about the location of the wellpads, the direction of drilling, and whether the drilling and hydraulic fracturing (“fracking”) may cause contamination of groundwater and surface water. The Appellant was also concerned about the potential adverse impacts of flaring, air pollution, and noise.

After the Commission issued the permits, the Appellant appealed to the Tribunal on the grounds that the Commission failed to properly consider the Appellant’s concerns. The Appellant requested that the Tribunal rescind the permits. The Appellant also requested that the Commission not allow any drilling or fracking within one kilometer of the marsh.

The Tribunal considered whether the Commission gave due regard to the Appellant’s concerns before issuing the permits. Based on the evidence, the Tribunal concluded that the Commission gave due regard to the Appellant’s concerns. For example, the Appellant’s concerns were noted and discussed in the Commission’s decision rationales, and the Commission added conditions to the permits to address the Appellant’s concerns, including requirements for Crew to conduct ground motion monitoring during hydraulic fracturing activities, and conduct baseline testing and periodic sampling of water quality and quantity at the springs.

Accordingly, the appeals were dismissed.