BUSINESS

Lethbridge city council concerned about oil company's drilling plans

09/17/2013 01:55 EDT | Updated 11/17/2013 05:12 EST
CALGARY - A junior energy company's plans to drill for oil on an undeveloped parcel of grassland in Lethbridge, Alta., is running into opposition from city hall.

City council voted unanimously last fall to oppose any new oil and gas development within municipal boundaries. It reiterated that view this week when it got wind a small Calgary-based concern named Goldenkey Oil Inc. was about to begin public consultations.

Council is concerned drilling could affect growth plans for the city of 90,000. There needs to be a certain amount of space between homes and oil wells — usually about 100 metres. That would pose a challenge when it comes to building new neighbourhoods in the city's southwestern corner, where Goldenkey has obtained mineral rights.

"In effect you end up sterilizing the land, making planning extraordinarily difficult and making development even more so," councillor Jeffrey Coffman said Tuesday.

The land in question is about a kilometre away from an existing subdivision. Coffman said there are concerns among residents about increased truck traffic, especially those carrying chemicals.

The potential drilling location is also a challenge because it's upwind of several west-side neighbourhoods and upstream of the city's water treatment plant, said Coffman.

David Hill, an independent consultant who is doing regulatory and public engagement work on behalf of Goldenkey, said an open house is scheduled for Oct. 1 to help Lethbridge residents understand the company's plans.

"Obviously there's a level of concern, and I get that," he said.

"A lot of these folks aren't oil people, per se. So it's taking them from step one and sort of walking through what's going to happen, what does it look like, what is the impact."

There are already older oil wells within city limits, much closer to residential neighbourhoods. So when Goldenkey bought mineral rights to the land, it didn't expect there to be much pushback, said Hill.

He said the company plans to drill relatively simple, conventional oil wells — nothing like the kilometres-long horizontal wells drilled elsewhere in the province that require a great deal more water and chemicals to crack the rock.

Goldenkey is willing to work with the city to address what qualms it has, Hill said.

"If we hear concerns, we want to go beyond what the regulator says we have to do," he added. "We want to make sure that we're good neighbours, impacting as little as possible."

Once Goldenkey files an application to the Alberta Energy Regulator, the City of Lethbridge can register an objection, said Bob Curran, a spokesman for the energy watchdog. A hearing is one way a dispute could be resolved.

Urban or rural, the process is the same.

"All Albertans are treated the same under our regulations," Curran said.

Ultimately, the City of Lethbridge doesn't have the final say over whether or not oil and gas development happens within its boundaries. That's up to AER.

"We don't have the ability to say no. We don't have the ability to say yes. We don't have the ability to put certain conditions or restrictions," said Coffman.

"I certainly believe that municipalities should be given greater say into issues such as oil and gas exploration within their boundaries."