CBM reducing land values

[cowdog]

A recent decision by the Red Deer County Council quashed an attempt by an elderly county resident to create a sub-division for her son to live on right next to her residence. This would allow this lady to remain in her home and the son to have his own property to build on so he can continue to own his own home independent of the family farm. Normally such first out sub-divisions for compasionate reason are granted without question, but, not in this instance. It is being denied because of its proximity to an oil and cbm lease on the adjoining property belonging to another landowner.
There is no required setback limiting landowners to how close they may construct any structure to a sweet oil or gas well lease, there is however a required setback under EUB regulations to how close an oil or gas well maybe drilled to a dwelling. The EUB regulates the oil and gas industry not thr municipalitie or the landowner.
It appear that the County of Red Deer has now transfered this onus onto the backs of the landowners
The well lease is located on the Northwest 1/4 the proposed sub-division is on the northwest corner of the Southwest 1/4; in other words across the fence.
This particular parcel of land the landowner was seeking to sub-divide is prime corridor land, 4 miles off QE2 and 1/2 mile from the paved secondary highway 587. At the Landuse Forum held last mouth in Red Deer the Alberta Government expressed that the priority use for the corridor of land extending 10 miles either side of the highway should be development and the energy industry should confine itself to the area east of this corridor. The preposed parcel as far as I have observed is unsuitable for agriculture. It is part of an eskar, very steep and rocky, has poor soil and is bracketted by wetlands.
This whole issue raises some very serious concerns in regards to the payments for adverse effect beyond the lease onto adjioning lands; it clearly shows the need for the industry to compensate adjoining landowners.
It also raises questions into Administrative Law; there is a gross inequality in the treatment between different land users the landowner inorder to change landuse must consult nieghbours, apply to the county for rezoning, provide a survey and a report on current and proposed land use. The energy company has to do none of this,
they effectively rezone the lease and the surrounding lands industial with
no questions asked. Now put this into context of atleast 4 cbm wells per 1/4, existing conventional oil & gas and then add in the up coming shale gas play with well densities even higher than cbm, and you will have lost all say over your own property.

[cowman]

Well I'm no expert on this type of deal but I wonder about this one you mention?
Usually first parcel out gets a free ride...providing it is the farmstead on the quarter section...I wonder if this is first parcel out?
I also wonder why the widow wouldn't take out her home as first parcel out and let the son have the rest? Or was she intending to sell the rest?...So much for the compassion thing?
There might be a lot more to this than a CBM well? I can't really see the county denying this based on a CBM well? I mean its a pipe coming out of the ground...and very few restrictions on what and how close you can build to it...less restrictions than a conventional well?
If the Alberta government has a policy of reserving land, for 10 miles on either side of HighwayII its sure not doing much of a job? I live slightly over three miles from HighwayII and they are still drilling several CBM wells from here right up to the highway?
Township 35-27 lies completely within the 10 mile limit(starting at 3 miles) and it is a pilot project for CBM with 64 wells per section...so where does this 10 mile policy come into affect?
I think we are a long, long way from any kind of shale play? In fact it probably isn't economically feasable here?...probably never will be?

[coppertop]

If the lady really wants to remain in her home she no doubt can get permission to have a second residence on the quarter, keep the land in her name until her death, will it to whatever family she wishes to in joint title or tenants in common. That way the son could have his residence and she would have someone living on the farm with her.

[cowman]

Now I don't know this situation, but would suspect the son needs to get a mortgage and that is a reasonable problem?
I think the original post said the problem was a CBM well? But the fact is if this lady requested her farmstead be considered as a "first parcel out" she would have no problem...if it was indeed a first parcel out????
If this scenario was to happen(widow takes out first parcel)...there would in all probability...be no problem for the son to build a house...even within the area of conflict?
Now consider this: How should county council view this "compassionate application"? Is it really for compassionate reasons...or is it a way to make an end run around the rules?
If I was a councillor, I would vote to NOT approve this application? Nothing to do with the CBM thing...but an end run around the rules?
As I said I don't know all the details so it is hard to understand if they made the right decision? But I do like to think my councillors aren't complete idiots!

[wilagro]

coppertop: You seem to have the best solution considering the circumstances.

Good sensible plan, I would say.

[coppertop]

Most municipalities will allow a granny suite on site for an aged parent or someone that needs care. This would be the reverse of what your neighbour is proposing. In our municipality we have had several applications approved for caregiver suites, but once the individual no longer lives there or needs care then the suite must be removed, so they must be a portable unit.

[farmers_son]

I think you all are missing the point of cowdog's post.

The people in question were denied the normal right to subdivide their property because of its proximity to an oil and cbm lease on the adjoining property belonging to another landowner.

Now the lady in question probably does have options but the simple fact remains that she and her son have been adversely impacted by the energy development. If they had been allowed to subdivide the subdivision would have been worth, I am quessing, $60,000 or more. Due to the oil and CBM lease on the neighbouring property their potential land values have been reduced.

I think landowners need to be aware of the future impact that energy development will have on their future use of their property.

[coppertop]

In some municipalities subdivision within the Minimum Distance Separation of a confined feeding operation is not allowed, because of the potential for conflicting land uses.

Municipalities are bound by provincial regulations which superceed municipal ones, so if the subdivision was denied due to provincial setbacks from resource facilities then there isn't much the county can do.

[cowdog]

Amazingly enough the only one who actually got the point so far is farmer_son. The backgound story is merely that.
As for cowman please take care in what you write;
1] the 27-35 pilot is about the Eub and the Industry getting together to try and break the resistance of landowner to the industialization of the landscape
, it is not about 64 wells per section.
Making such outlandish statements falls directly into the hands of the EUB spin-doctors such as Leo Touchette, Darren Barter or Bob Curran; some unsuspecting landowner will read this and repeat it at a meeting where they will then deny it and it will then appear in the paper as emotional farmer falsely believes there will 64 wells per section. I have repeatedly asked industry for the answer to how many wells per 1/4. So far I have never got a straight answer. But ask this same question as " If as you say Phase 1 is 1 well per 1/4, Phase 2 is 2 and phase 3 is up to 4 at the current price of gas, then how many will there be if gas prices rise to $18 to $20 per GigaJoule?"; you will get no answer at all. Best estamates are for up to 9 wells per 1/4 for the Horseshoe Canyon play. If you want proof of this you should look at the site diagrams for the average cbm well and that of a one per section multi-well battery; you will see that the flange pressure on the average well is 120 psi or less on the multi it is 700 or more this is for the installation of a boostercompressor
not needed until there are atleast 12 wells per 1/4. By the way these less than 100 hp compressors do not require landowner notification or EUB approval for their installation.
2] Unlike most landowners I attended the CSUG convention where one of the main sessions was about the huge potential of shale gas throughout the Alberta Basin it exceed that of CBM by many fold but requires high well densities. To date I know for a fact ther are atleast 50 shale gas wells drilled in the Consort area and the company drilling them is planning many
more.
3] According to the AB government own prediction, in the next 25 years Alberta's population is expected to exceed 12.5 million, almost all this growth is expected to be along the hwy.
between Calgary and Edmonton. As a farmer I may not like this but, I also
realize that getting agricultural returns of $10,000/ 1/4 on land worth millions a 1/4 makes little sense niehter does devalueing my property by having energy industry encumbences on it
or next to it. As to why the industry continues to drill in this corridor, no one has said they can't and having wells in the way of annexation will maximize returns to the company. I'll
let you think about this I'm sure you can figure it out.
PLEASE, EVERYONE TRY TO STICK TO FACT SPIN AND LIES AND DEFLECTION ARE THE TOOLS OF THE GOVERNMENT AND INDUSTRY.

[cowdog]

******CORRECTION****** A BOOSTER COMPRESSOR IS NOT REQUIRED UNTIL THERE ARE 12 WELLS PER SECTION**** NOT PER 1/4

[cowman]

Well not sure how I was lying and spinning and deflecting, just thought I was trying to understand why this application was denied?
The main point of the well adversely affecting the proposed subdivision might be valid? If a hog barn was across the fence, denial would be equally valid?
It actually seems to me this subdivision should have been invalid right from the start? First parcel out isn't a problem..."subdivision" for a short term compassionate reason is a problem?
I'm not sure if the number of 9 wells per quarter is correct or not? The landman tells me they don't think they are going to need more than 2 per quarter...is he a liar?
I guess 27-35 is a pilot project to see if multiple wells are economically feasible...isn't that what they are saying? The EUB has appointed a group of landowners to sit on a committee to consult on this project? There are some good solid farmers on that committee, whose families have farmed there for a long time...are they all lackeys of the EUB and industry?
I don't see any CBM company forcing anyone into accepting wells? What I do see is a the majority of farmers willingly signing leases...and darned glad to get the money! Now maybe they are all short sighted or something, but that is their right...they do own the land!

[farmers_son]

Cowman: Well, actually you are technically forced to accept the wells. Everyone knows when the landman comes knocking on your door that if you don’t deal the company will take you land by force anyway so you got to deal.

You said yourself in other posts that the Alberta government is going to see those wells drilled. When farmers sit on EUB committees they realize that all that can be accomplished is to make the best of a bad situation. The outcomes of these committees is a foregone conclusion.

When farmers sign leases, it can mean a lot of things. It can mean they are desperate for the money or it can mean they have no choice but to sign anyway. It is a concern to me to see the oil/gas/CBM companies grow richer while other sectors of the Alberta economy like agriculture are withering on the vine. If farmers are so hard up for money that they have to grab at whatever money the energy companies offer it should never be taken as an indication that the compensation is fair or that the farmer was in any position to consider the long term consequences when they are facing immediate financial distress.

[cowman]

farmers son: Actually the farmer doesn't have to take the well? Offset drilling is not a big problem these days? It really isn't.
Are the farmers "forced" to take the well, because they are broke?
Tell me, how hard is this to figure out? 64 wells per section...16 wells per quarter? Average price per well $2000-$3000...or $32,000 to $48,000 per year in annual rent/quarter! I know barley is a little higher lately...but she sure needs to climb a lot more if this is the case! Never mind the 16 X $13,000 initial payment!
Cowdog mentioned how in 25 years the whole ten miles on either side of Highway II would be worth millions? I would suggest, a bird in the hand is worth more than two in the bush?
This isn't rocket science? When the landman comes knocking with real money, don't be fooled by thinking somehow you are going to get richer by growing grain or cows? No body wants them. Just my opinion.

[cowdog]

A quick straw pole - have you ever been lied to by a landman - yes or no
1 for yes here

As for the forcing of well and pipelines onto the landowner. It happens all the time to the point where currently the Surface Rights Board is plugged. Last I heard it was a month and a half wait for a right to entry order and nearly 2 years for Board Hearing; and that is why companies are giving up or angle drilling. By the way
in many areas the targets are so shallow
that angle or directional drilling is impossible or so expensive and risky to complete that is not a realistic solution. A more sensible solution for now is to go to the suckers who are
willing to take $2000 to $3000 annual rents instead of the $5000 to $6000 that most are now getting.
Now lets look at the long term consequences: say you live on a 1/4 at the start of a dead end road that accesses yours and 7 other 1/4's with 2
wells each [16 wells} and as is the case most times 2 companies and all wells are producing. You will likely experience atleast 24 refracture jobs a year[average of 8 large trucks 3 small], 4 service rigs a year[ about 100 truck trips in or out each], 384 well swabs per year [ 3 large trucks each], 104 operator checks routine, 26 operator checks non-routine, 64 equipment maintenance trips, 64 equipment repair trips, 48 water truck trips to remove water of condensation, and atleast 52 engieer or supervisor trips in and out. Thats an additional 2174 trucks passing your residence twice each a year, day and night on just that one dead end road; and oh yah dead end roads are where companies like to place compressors. Sweet dreams cowman.

[wbrower]

Dead end roads also make excellent cover for cattle thieves. But according to the crown in Alberta cattle are not stolen intentionally, sometimes they just get mixed up.