GrainsWest Winter 2021

Winter 2021 Grains West 22 LEASE LESSONS GrainsWest asked farmers about their experience with oil and gas operations on their land and what they’ve learned from their interactions with energy companies. Roy Newman Alberta Barley region 2 delegate, farms grain and cattle near Blackie Roy Newman said hundreds of wells in the area around his farm, north of Blackie, have gone into receivership. Newman has 18 wells on his property. The OWA has stepped in to close some of them. “They’re reclaiming a crazy number of wells in the area.” Compiling all the required documents for the OWA process to begin was a “paper nightmare,” he said. His wife spent months getting the paperwork together. The process also required a lot of phone calls. “It’s government bureaucracy at its best, but I don’t know how else you do it,” said Newman. “We’re lucky to be the first ones who got stung, because we’re first on the list because we’ve been there the longest,” he said. The crews have completed the “down hole” work and are now in the process of reclaiming the sites, he said. “At an exorbitant cost to the government; it makes me sick.” Newman said the hundreds of inactive wells have caused additional problems in the area, with thieves stripping pipes, solar panels and other equipment out of the sites. The inactive wells have also made it harder for newwould-be oil and gas site operators to do business. “There’s a new little company that’s trying again, because there is still oil and gas here,” he said. But it’s tough for new operators, because farmers in the area have become wary about newwell sites, he added. Newman said he thinks well site operators need to set aside money for remediation deposits before being allowed to drill. “You do have to look to the future. You make a mess, you clean it up.” Clayton Quaschnick Petroleum landman, farms grain near Hanna Having oil and gas wells on his farm has been a mixed experience for Clayton Quaschnick. A petroleum landman by day and a grain farmer by night, he has 13 oil and gas wells on his property. On the one hand, he has 11 natural gas wells that are well maintained and paid up by their operator, CNRL. On the other, he has two inactive oil wells, orphaned after the big operators in the region got out and sold their well sites to smaller companies. “It seems like every time they sell the assets they go to a smaller, lesser- known company,” said Quaschnick. “It was a little bit disappointing. It seemed like every time they sold to a different company the relationship got rockier.” At the end, it wasn’t a business relationship, but an “us versus them” situation, he said. At one point, the lease payments for the oil wells just stopped coming. “We actually ended up receiving no communication,” said Quaschnick. The phones had been disconnected at the company’s office. He drove into town and found its office deserted. “It was just crickets.” The OWA reached out two years after the payments stopped, and began closure work on the two orphaned oil wells. Normally, it is nice to have the extra income from well site leases, which evens out annual farming income fluctuations, he said. “During the high activity times when it’s favourable to work in this space, the relationships with farmers are good,” he said. “It’s unfortunate that it’s being eroded by the operators that are left.” It’s not fair for farmers and Albertans to be left on the hook for cleanup costs, he said. “I think there are quite a few companies that shouldn’t be buying wells in the first place that are getting approval to buy them.” FEATURE Photo:CourtesyofClaytonQuaschnick Photo:CourtesyofRoyNewman