Navigating the tricky ranch-oil relationship

Producers say communication and collaboration are key to a successful relationship with oil and gas companies

Neil Wilson has learned that nothing talks louder than money.

As co-manager for the Antelope Creek Ranch Habitat Development Area near Brooks, Alta., Wilson described how he eventually found a way to communicate his frustrations directly to oil companies in 2006.

He said many company vehicles were destroying native prairie grasses as they drove outside their one-acre lease site.

“What we were finding was they didn’t care where their lease site was. They were out driving around on the prairie,” he said during the sixth Native Prairie Restoration/Reclamation Workshop in Saskatoon Feb. 7-8.

Wilson spoke about balancing agriculture, wildlife and industry on the 5,500 acre ranch that he and his wife co-manage for its owners: Ducks Unlimited Canada, the Alberta government, Wildlife Habitat Canada and the Alberta Fish and Game Association. About 100 oil and natural gas leases operate on about 100 acres.

“I finally took offence to it and said, ‘no, you guys stay where you’re supposed to,’ and I started charging them for tracks out in the grass,” he said.

Wilson decided on $200 per wheel track. A set of two tracks doubled the amount for the invoice he sent to the company involved.

However, he soon learned that he needed to speak up louder.

“That didn’t seem to get their attention and it kept getting worse,” he said.

“It wasn’t a big enough bill. It was busy, and our bill was nothing to what they were making.”

Wilson decided to wait until he had three wells before sending a bill.

“So it ran into a few thousand dollars and then everybody started taking notice,” he said.

He said he was notified before the next well was dug and shown where corner posts were placed. The construction supervisor roped off the lease’s perimeter so truckers knew where they could and could not drive.

Brian Weedon, who talked about his perspective as a producer and oil lessee during the workshop, said collaboration and communication are the main issues that can make or break the relationship between rancher, oil company and government departments.

The Weedon Ranch has been in operation for 44 years in southwestern Saskatchewan, and he said dealing with oil companies has been an evolutionary process in the regulations.

“In the beginning there was none,” he said.

“They (oil companies) did all kinds of things when I first went down there in 1974. It was not uncommon for equipment to have the oil changed right there and let drain on the ground.”

The Surface Rights Compensation and Acquisition Act was written in 1968 along with the formation of the Surface Rights Arbitration Board, which Weedon said acted as a type of police force.

By 2000, environmental protection plans were made mandatory in all classes of land.

“So that helped foster communication between landowners and oil companies,” he said.

Weedon said one of the larger monetary issues over the years has been repairing broken fences caused by oil activity.

“Some companies would pay you for doing it,” he said.

“Other companies would not, or they would hire another independent contractor to do the work — sometimes satisfactory, sometimes not.”

However, Weedon said communication hinges on an organization’s standards of care from the top down.

“It’s the quality and integrity of the people you’re dealing with through the chain … but the parent company is the ultimate stop gap,” he said.

“Responsibilities filter down. Responsible companies look after their act and clean up things. Irresponsible companies will do things like saying, ‘well, it was the fault of the contractor.’

“I’ve got companies I’ve dealt with that I would give them a solid F, but they’re few and far between, and a lot of companies a B+, A for their communications and their due diligence.”

He said many oil companies continue to improve their environment standards, but a lot more work remains to be done.

“There is very little outside help in assessing some of these situations — like who do you turn to other than say an independent environment company that you have to pay for at your own expense and hope maybe you might get something back,” he said.

“I think the other thing was government departments, both Lands Branch and Mines and Energy, don’t have enough staff to cover the acreage and the territory that they look after. So there’s kind of a lack of human resources really to monitor and police these situations.”

If the oil company doesn’t rectify an issue, Weedon said a producer generally contacts the Lands Branch concerning crown land leases.

“Anytime I thought I had something that was noteworthy, I’d always involve Lands Branch,” he said.

“In a few cases they came out and said, ‘no, this is not going to happen the way it’s planned.’ And yet a few days later I find a company out doing work with a Caterpillar and I approached the consultant and say, ‘a few days ago, Regina said, this isn’t going ahead.’ And I’ve heard this more than once. They said, ‘well, Calgary says it is.’

“From then on, if it’s a concern and usually together you contact Mines and Energy and they could come out and assess the situation. If it’s serious, they can do what’s called work stop legislation. They could shut down that facility 24 hours if they don’t see any signs of compliance. That involves mostly the spills and clean up and things of that nature.”

Fostering more dialogue improves communication and transparency between oil companies, producers and the government departments involved.

Wilson boils the problems down to a lack of communication with the oil company.

“What worked really well for us and got a lot done on the ranch with industry in general was having a contact person with each company,” he said.

“Somebody you know, so if a problem arises you can phone them and they’ll deal with it. That’s the biggest thing. You’ve got to find somebody who will take ownership for the company.”

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