WHEREAS the development of oil and gas wells and energy industry projects can place burdens on municipal resources, emergency services, transportation infrastructure, affect land use planning, municipal services, and communities under the jurisdiction of municipal governments;

WHEREAS municipalities are obligated by section 3 of the Municipal Government Act to provide emergency services to ensure the safety of our residents;

WHEREAS the oil and gas wells and energy industry projects in a number of regions of Alberta are requiring greater expenditure of municipal staff resources and participation particularly as it relates to sour gas developments and emergency response planning;

WHEREAS section 617 of the Municipal Government Act makes municipalities responsible for land use planning and achieving the orderly, economical and beneficial development and use of land;

WHEREAS improperly located oil and gas activities can negatively impact the ability of a municipality to achieve the planning goals of its Municipal Development Plan and Land Use Bylaw;

WHEREAS the decision on whether to approve oil and gas wells and energy projects is vested with the Energy Resources Control Board (ERCB), a provincial regulatory body responsible for ensuring that the development of Alberta’s energy resources take place in a manner that is fair, responsible, and in the public interest;

WHEREAS the ERCB has denied some municipalities the right to have standing and participate in the ERCB hearings for developments within their municipality;

WHEREAS the ERCB Rules of Practice and other governing legislation and guides are not clear in terms of a municipality having the right to participate in ERCB hearings;

WHEREAS other government boards such as the Natural Resources Conservation Board give municipalities the automatic right to participate in decision-making processes such as a hearings in matters that affect the municipality;

THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties request that the Government of Alberta amend the appropriate governing legislation for the ERCB to grant municipalities the automatic right to participate in ERCB hearings as a local intervener in response to applications for energy resource projects being proposed within the boundaries of the municipality.

In 2008, Parkland County requested intervener status to participate in hearings pertaining to sour gas wells proposed for the Tomahawk area in Parkland County and was denied by the ERCB, citing the following reasons:

“The Board notes that the hamlet of Tomahawk is not located in the EPZ for the proposed wells that will be considered at the June Hearing. The proposed wells that will be considered at the June Hearing will not directly or adversely affect citizens who live in the hamlet of Tomahawk, given the distance between the proposed wells and the hamlet.  The Board notes that Parkland County appears to assert that because persons within its boundaries may be directly and adversely affected, it by extension is directly and adversely affected. The Board notes that Parkland County has not raised any concerns which would be specific to the rights of the County, and how the County itself may be directly and adversely affected by these applications.”

Although Parkland County was not granted standing, it was offered the opportunity to make statements at the hearing to present the County’s concerns:

• Municipal responsibility for public safety and emergency response
• Duty of preparation and review of Emergency Response Plans
• Emergency response resources and emergency exercises
• Emergency response training and personal protective equipment
• Environmental impacts
• Impact on land values
• Accelerated community growth
• Province of Alberta’s Land Use Framework
• Setbacks and proximity of development to occupied buildings
• Parity with other municipalities in having concerns for resident safety addressed

The Board’s decision to not grant Parkland County standing at the June hearing is contradictory to the statements made by the Board in two Cost Order decisions regarding municipal participation:

“Each of the City [of Calgary], [Calgary Health Region] and [MD of Rockyview] were acting in accordance with their statutory mandates in participating in the Compton Hearing … the Board wishes to be clear that it considers the participation of all of these 3 organizations was of significant value and assistance to the Board. The Board considers that it was important and essential to its deliberations that the 3 organizations did actively participate.” (EUB Energy Cost Order 2005-014, p. 20)

“The board wishes to make it clear, however, that the participation of the [Regional Municipality of Wood Buffalo] provided significant and valuable assistance to the Board in relation to the regional socio-economic issues that were the focus of its participation.” (EUB Energy Cost Order 2007-001, p. 10)

The Board has clearly stated that active participation by municipalities during Hearings was deemed important and essential to its deliberations. Further, In EUB Energy Cost Order 2005-014, the Board states the following:

“The City of Calgary (City), Calgary Health Region (CHR) and MD of Rockyview (MD) are all statutorily created bodies with specific mandates granted to them by the legislature. It is the Board’s view that the cost recovery sections of the ERCA were not meant to award costs to such bodies when their respective statutory duties require them to participate in a Board process.” (emphasis added)

The decision to not grant standing to Parkland County – or any municipality – is in direct contradiction to the Board’s expressed statements. A municipality has several duties and responsibilities imposed upon it through legislation, as well as having direct and indirect impact on the development, including taxation, land values, and land development impacts. The municipality in which each energy resource project is located is in the best position to present evidence of the social and economic impacts of that project. It is imperative that municipalities be permitted to participate in ERCB hearings and represent the interests of its residents and its own interests as an incorporated entity. Therefore, legislation governing the ERCB should be amended to provide a municipality with automatic local intervener standing at ERCB hearings.

Resolution 12-08S: THEREFORE BE IT RESOLVED that the Alberta Association of Municipal Districts and Counties request the Government of Alberta to provide financial assistance to the MUSH sector (municipalities, universities, schools and hospitals) in Alberta to intervene in proceedings before the EUB in respect of proposed energy resource projects which may impact them, either through special grant funding or through changes to the cost recovery provisions of the relevant legislation.

While this resolution specifically advocates for financial support, the context of the resolution addresses the need and value of municipal participation in these types of proceedings.

Energy: The Energy Resources Conservation Board (ERCB) makes decisions on standing on a case-by case basis, having regard to all of the facts before it.  As with all decisions on standing, the ERCB should retain the discretion to determine, as a matter of fact and law, whether the party has legally recognized rights that may be directly and adversely affected by a proposed energy development.  The ERCB has consistently and correctly applied the current and existing legal test regarding standing as articulated by the Alberta Court of Appeal in the case of Dene Tha’ First Nation v. Alberta (Energy and Utilities Board) and Penn West Petroleum. 
The ERCB has exercised its discretion to grant standing to a municipality in the past and, where appropriate, will continue to do so.   However, it is not appropriate to take that discretion out of the hands of the ERCB (i.e., by amending the legislation to deem municipalities to be directly and adversely affected) unless it can be shown that the ERCB has incorrectly applied the legal test for standing as articulated by the Alberta Court of Appeal. The direct and adverse effect test is as appropriate for a municipality as it is for any other potential hearing participant. If that is not the standard used to determine entitlement to participate in a hearing, the ERCB may be forced to hear concerns that are not related to the proposed development and/or not within its jurisdiction to consider.
With regard to awards for costs, Subsection 28(1) of the Energy Resources Conservation Act (ERCA) requires that, to qualify as a local intervener, a person or entity must either have an interest in land or an entitlement to occupy land.  This requirement is consistent with the principle that underlies the current provisions of Energy Resources Conservation Board (ERCB) legislation and directives that require a party to have legally recognized rights that may be directly and adversely affected by an energy development in a manner that differs from other members of the general public. 
The history of the local intervener provisions of the ERCA also supports the principle that the Legislature intended to give the ERCB discretion to grant standing in relation to, and compensate parties for participation in, hearings regarding applications for approval of oil and gas related development.  Section 28 was added to the ERCA in 1978.  Hansard from that time states that the purpose of the provision was to
“….help ensure that a resource development project before the ERCB does not place an unjust burden on local landowners, who to protect their interests, find it necessary to appear before the Board and place their position before the Board at some expense.”
and
“The principle in this bill is that the ERCB may be able to assist people that have a proprietary interest in lands or minerals and may have to appear before the Board in order to protect their interests and therefore expend certain monies…”
While these provisions relate specifically to the issue of costs awards for participation in ERCB hearings, the principle applies equally to the granting of standing to participate in ERCB proceedings in the first instance.

Finally, the ERCB notes that municipalities are expected to work with parties who reside and businesses that operate in their jurisdiction.  The ERCB hearing process can be contentious and should not be a substitute for productive discussions that should be occurring between companies and municipalities on an ongoing basis.  In reviewing the resolution, the ERCB is very concerned about a possible trend where the important ongoing and co-operative consultation that should occur between companies and municipalities does not occur as it should and the ERCB hearing process and municipalities’ participation in that process becomes a substitute for such consultation.

The position of the ERCB remains that they will make decisions as to intervener status on a case-by case basis including whether the party has legally recognized rights that may be directly and adversely affected by a proposed energy development. The AAMDC finds this an unsatisfactory response to our resolution and will continue to urge the government to automatically include municipalities as participants in such hearings. This position was communicated to the government during recent consultations for the Regulatory Enhancement Project, specifically as it relates to the single energy regulator being proposed.