If more farmers would take as much time signing their surface rights leases as they do shopping for machinery, fewer conflicts would arise, according to a Farmers’ Advocate official.
“I know of farmers who spend days before they buy a $500 welder but sign a surface lease for a well site at the kitchen sink with not a second thought,” said Paul Vasseur, assistant to the Farmers’ Advocate.
His office often gets calls from producers worried about what their signatures committed them to. They may find the contract doesn’t suit their needs when it’s explained to them.
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Often their only recourse is to call the energy company and explain why they want changes. Vasseur credits some companies for considering requests and complying if it’s convenient, but said it’s not the norm.
“Most of the time when you sign a document it’s final. It will probably be there for 20 years or more so it shouldn’t be taken lightly,” he said.
Farmers have the best chance of negotiating oil well sites on their land at the outset of the process, according to an agricultural lawyer.
“Your leverage time is at the very beginning. The further you move into the process the less rights you seem to have,” said Keith Wilson at the Alberta Surface Rights Federation annual meeting held March 2 in Camrose.
Since oil companies have to get the landowner’s consent for a proposed oil site location before they can get an entry order, farmers have bargaining power at that point, explained Wilson.
“What farmers need to understand is the most effective step in the process for them is to have a voice with the utilities board in objecting to the proposed location and the nature of the operation.”
Issues they can raise include the need for the well, location and potential hazard to humans or the environment.
The utilities board can veto the development or impose conditions on it before it goes further.
“That’s where a lot of guys go wrong because they try to do it at the Surface Rights Board and it’s too late. The company can force their way on because they have their ticket.”
The second strategy farmers can use is signing a suitable lease document.
“You want to anticipate all of the future potential problems. And don’t assume that the company you’re dealing with today is the company you’re going to be dealing with tomorrow,” warns Wilson.
He recommends farmers ensure protections are in the document in case the company wants to add wells or has to come back on the land to clean up a problem.
Vasseur, whose office fields about 7,000 phone calls a year from producers, said many are concerned with reclamation issues. Before signing a lease farmers should make sure topsoil is removed and preserved correctly, he said.
The next largest concern is with the company’s operational obligations, said Vasseur, noting he gets plenty of complaints about weed growth.
Before a well is put on their land farmers get an information package from the Farmers’ Advocate explaining the process, but often they don’t crack the cover.
Many producers readily sign agreements because they don’t want to be confrontational or have other concerns like seeding or harvesting on their mind, said Wilson.
“Sometimes it’s difficult but the time to put your effort in this is upfront.”
