Landowners ask why they should pay to remove gas wells

People whose homes and farms were recently annexed into the City of Red Deer plan to fight a project that they say will cost them money with no appreciable benefit.

Janice Besner is not happy about the City of Red Deer's plan to charge her for moving a gas line from her property in the newly annexed land on the east side of the city.

Janice Besner is not happy about the City of Red Deer's plan to charge her for moving a gas line from her property in the newly annexed land on the east side of the city.

People whose homes and farms were recently annexed into the City of Red Deer plan to fight a project that they say will cost them money with no appreciable benefit.

On Thursday, staff from the city’s Development Department were to privately meet with property owners in the Balmoral district, located in the northeast corner of the city, to update them on plans to pay NAL Resources to shut down four sour gas wells and pull up the pipelines serving them.

Shutting in the wells and pulling up the pipes is necessary to enable urban development in the immediate area, said Lee Birn, development engineer for the City of Red Deer.

If approved by council, the deal with NAL will see the wells closed and the pipelines removed by the end of 2012, Birn said before the meeting on Thursday. City council has not yet reviewed the plan, which has been placed on the agenda for its regular meeting on Monday.

While NAL had sought $2.4 million at the outset of negotiations, first introduced to local landowners in 2008, that price tag has since been cut back to $520,000, Birn said before the meeting on Thursday.

That translates to $2,100 per hectare ($850 per acre), to be charged as a local improvement levy and is due by the end of this year, he said.

While that may or may not seem like a significant figure on a smaller parcel, it amounts to $135,000 for a quarter section of farmland and rises to more than $200,000 if the levy is deferred rather than paid up front, said area farmer Bob Northey.

Regardless of the hardship, it doesn’t make sense to pay for an early abandonment when NAL plans to shut those wells down over the next few years anyway, said Northey.

Acreage owner Janice Besner said she has no intention of paying a levy that is of no benefit to her, but that will subsidize the city’s efforts to develop its own land. The city is making plans to develop a quarter section of property within the affected area.

Birn said the benefit to local landowners will be that it opens their land up to urban development, which cannot be allowed within 500 metres of sour gas wells and the pipelines connected to them.

Should council approve the proposal, area landowners have 30 days in which to file a petition opposing the levy, said Elaine Vincent, manager of the city’s Legislative and Governance Services Department.

bkossowan@bprda.wpengine.com