People living in close proximity to oil and gas facilities often have concerns about the potential impacts of these facilities on their health and wellbeing.  Where statutory or regulatory directives require consultation and notice of applications for approval of such facilities to those whose rights may be adversely affected, do those who may be affected only at certain times and under certain conditions have a legal right to consultation and notice?  Do they have to establish that they might be affected in a different way or to a greater degree than members of the general public?  What are the consequences if facilities are approved without consultation and notice to such persons?
 
In a recent decision of the Alberta Court of Appeal, the court considered an appeal by three landowners living in proximity to two sour gas wells which had been approved by the Alberta Energy Resources Conservation Board (ERCB) and constructed after the ERCB had denied these neighbours status to participate on the approval application.  In that case, statutory and regulatory directives required consultation and notice of the approval application where the proposed facilities “may directly and adversely affect the rights of a person”.  All three appellants resided outside of a defined Emergency Planning Zone (EPZ) but within a Protective Action Zone (PAZ) which is “an area downwind of a hazardous release where the outdoor pollutant concentrations may result in life threatening or serious and possibly irreversible health effects on the public.”  While the PAZ for the wells in question extended to a maximum of 9.25 km around the well sites, its actual boundaries at any time are dictated in part by the velocity and direction from which the wind is blowing.
 
The appellate court determined that, under these statutory and regulatory directives, the appellants had a legal right to consultation and notice entitling them to participate on the approval application.  The court concluded that the ERCB was wrong in denying these area residents standing to participate in the approval hearing and that the fact that they resided within the PAZ itself brought them within the definition of those whose legal rights might be directly and adversely affected.  The court held:

“The Appellants all reside outside the boundaries of the EPZ, but within the boundaries of the PAZ of the [company’s] wells.  The modeling [the company] prepared for these wells shows that if there is a sour gas escape with the wind blowing from the southeast, that gas could enter the PAZ and affect the residents in same, including the Appellants …

“In the decision under appeal, the ERCB stated that to have standing to be heard ‘… the objecting party must establish that he or she may be affected in a different way or to a greater degree than members of the general public’.  [The statutory directive] does not include this limitation in defining those who are entitled to a right to be heard … Nowhere is the requirement that the Appellants must establish that they may be affected in a different way or to a greater degree than members of the general public … the ERCB’s decision was incorrect and cannot stand for that reason.”

“The [company] alternately argued that because the PAZ is in part defined on the basis of wind conditions at a given time, and the Appellants accordingly each lived in locations which fell within the PAZ only at certain times, they were required to lead additional evidence of possible prejudice because the actual wind conditions during any emergency are unknown in advance.  In other words, prejudice cannot arise because it depends on which way the wind is blowing during or after the drilling of a well, a condition which can occur only after the time for hearing into whether it should be drilled is long over.  This argument ignores the wording of [the statute] which gives standing to those who may be directly and adversely affected.  The fact that events could arise which could prejudice the Appellants is enough; those events do not have to be occurring at the very moment the application to drill is made or considered by the ERCB.”

As a result of the errors of the ERCB, the court directed a new hearing by the ERCB at which the Appellants were to have standing.  Although the wells had already been approved by the ERCB and constructed, the court directed that “the fact that the wells have now been drilled shall not be treated as a limit on ultimately concluding that [the company] should not be permitted to operate them, or if in operation at the time of the rehearing, that it cannot be required to shut them down or that the right to operate cannot be made subject to appropriate conditions to be devised by the ERCB based on the evidence heard during the rehearing.”

Area residents living in proximity to oil and gas facilities may, by statutory or regulatory directive, have a legal right to consultation and notice of approval applications for such facilities   because of the potential impact of these facilities on their health and wellbeing.  Facilities proponents and regulators must recognize and give effect to these rights or risk the facilities being shut down.