The three yellow stars indicate the drilling locations of VestaEnergy Ltd.’s proposed sweet oil wells north and west of Red Deer city limits.

Six oil wells proposed north of Red Deer city limits; eight more could follow

MPC joins in ongoing discussion about drilling near cities, towns

While members of the Red Deer Municipal Planning Commission joined in the provincial discussion surrounding oil and gas drilling close to, or within, municipalities, they did not object to six proposed sweet oil wells near city limits.

A further eight more wells, a multi-well battery facility and connecting pipelines could follow — depending on the success of the first six wells — in an area governed by an Intermunicipal Development Plan between the City of Red Deer and Red Deer County.

The drilling is proposed by Vesta Energy Ltd., on three different lease sites just north and west of the city’s boundary.

Permission to drill will come from the Alberta Energy Regulator (AER), but Vesta has asked the city for input in the process. Drilling beyond the initial six wells, as well as pipelines and a battery, would require further AER approvals.

The city has a model consultation process with oil and gas companies that involves open communication about issues such as contamination, reclamation, abandonment and pipeline location when looking at future urban development. The planning commission had no objection on Wednesday, provided Vesta enters into a Consultation and Process Agreement with the city.

That process requires the city and energy company involved to work together when planning future urban development.

Tara Lodewyk, director of Planning Services, said the City of Red Deer took the lead about 10 years ago when it developed a partnership process of consultations and agreements with oil and gas companies because there was nothing in place at the provincial level.

Proactive meetings with oil and gas companies lets them know about city future planning so the companies can make decisions about their budget allocations with regards to cleaning up or moving wells, she said.

The land that Vesta intends to drill on is slated for future industrial area, so the impact of future development would be less than if it were slated for residential development. Annexation isn’t expected to take place for years.

In a letter to the city, Vesta surface landman Thomas Everett said that the three well sites are on the southeast edge of where the company has explored “and therefore a large margin of geological risk is associated with these sites.” However if the drilling proves successful and economical, they will want to further develop the resource.

Jim Benum, oil and gas consultant to the city, said there’s an ongoing discussion with the AER and municipalities in places such as Lethbridge and Calgary regarding wells being proposed within or near cities and towns. That discussion includes issues such as setbacks, public safety and air quality.

There’s a feeling provincial regulations don’t recognize development in urban centres as much as they should, he said. For example, there is no requirement to reclaim an abandoned well that in a specific time frame. “You move that into an urban centre the feeling is there should be.” There’s also no requirement provincially to remove abandoned pipelines.

Mayor Tara Veer said there’s challenges throughout Alberta related to property and surface rights, but for the city the challenge is what protects the city’s long-term interests in future growth areas.

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