Alberta Energy Regulator Given Immunity in Landmark Fracking Suit

Alberta's chief justice has ruled that a landmark lawsuit against the Alberta government and the energy giant Encana Corporation over groundwater contamination from hydraulic fracking can finally proceed to court. 

But in the same lengthy 41-page ruling, Justice Neil Wittman also struck the province's energy regulator from the lawsuit.

His decision found that the Alberta government had granted statutory immunity to the Energy Resources Conservation Board (ERCB) from all legal claims.

In other words, the board cannot be sued when oil and gas activities regulated by the agency poison livestock, devalue property, sicken landowners or contaminate ground or surface waters.

The lawsuit, filed by oil patch environmental consultant Jessica Ernst, alleges that Encana drilled and fracked shallow coal bed methane wells directly in the local groundwater supply between 2001 and 2004 near Rosebud, Alberta, polluting Ernst's water well with enough toxic chemicals and methane to make it flammable.

In addition, Ernst's claim details how Alberta's energy regulators -- the ERCB (now called the Alberta Energy Regulator) and Alberta Environment -- "failed to follow the investigation and enforcement processes that they had established and publicized" despite direct evidence of industry-caused pollution and public admissions that shallow fracturing puts groundwater at risk.

The regulator is 100 per cent funded by industry and directed by a former oil lobbyist and Encana vice president, Gerard Protti. Landowners generally regard the AER as a reactive agency that works for an industry-friendly government and that now garners one-third of its revenue from the extraction of hydrocarbons.

The majority of all unconventional oil and gas wells in Alberta are now being hydraulically fracked. The brute force technology blasts millions of gallons of water, sand and chemicals under high pressure to crack open both deep and shallow shale formations. The technology, a subject of global controversy, has caused earthquakes, damaged well casings and caused methane to seep into groundwater.

Ernst, who launched her lawsuit in 2007, told The Tyee that she would appeal the decision.

"I have no choice but to appeal," said Ernst in an interview. "Chief Justice Wittmann ruled that the ERCB has a duty to protect the public, but not me. I am the public; we all are. Without water to bathe in, the public's well-being declines -- as mine has for years. Without water to drink, the public dies, so do all individuals -- including Justice Wittmann and his loved ones. There is no frack worth that.

"If I let these rulings stand, companies and the Canadian Association of Petroleum Producers will push regulators across Canada to do unto others as the ERCB did unto me, when they breached my Charter rights and tried to intimidate me into silence by judging me a criminal without any evidence or trial."

Regulator has 'total and blanket' immunity': lawyer

Ernst said a Cochrane-area family phoned her two days ago with a case of water contamination and livestock poisoning due to fracking for shale oil in the Cardium formation.

Ernst was told that if they publicly complained, industry threatened to no longer deliver water to their home.

"It's another horrendous case," said Ernst. 

Ernst's lead lawyer Murray Klippenstein said in press release that, "I think Albertans will be disturbed to learn that their energy regulator has total and blanket immunity, even in cases where the regulator has breached the fundamental and constitutional free speech rights of a landowner."

Although Justice Wittman struck the ERCB from the lawsuit, he supported the validity of claims against the regulator that assert it breached Ernst's rights.

"To a certain extent, a claim for a Charter breach is based upon the establishment of a right and an infringement of it by the action of a government or government agency. That is what is alleged here and, however novel the claim might be, I cannot say that it is doomed to fail or that the claim does not disclose a cause of action."

According to Wittman's summary of the lawsuit, the ERCB "seized on an offhand reference to Wiebo Ludwig made by Ms. Ernst and used it as an excuse to restrict her speech by prohibiting her from communicating with the ERCB through the usual channels for public communication with the ERCB."  

(Wiebo Ludwig, a fundamentalist Christian, declared war on the industry in the late 1990s and served time for his participation in a bombing and sabotage campaign that cost industry nearly $20 million.)

In addition, "these serious restrictions greatly limited her ability to lodge complaints, register concerns and to participate in the ERCB compliance and enforcement process. As a result, Ms. Ernst was unable to adequately register her serious and well-founded concerns that CBM Activities were adversely impacting the Rosebud Aquifer, and her groundwater supply."

The judge also ruled that legal arguments by the ERCB that portrayed Ernst as a terrorist to be without merit.

"I agree with Ernst that the ERCB cannot rely on its argument on the Wiebo eco-terrorism claim, in the total absence of evidence. There is none."

Gov't request to change Ernst claim denied

The Ernst lawsuit claims that Alberta Environment knew that Encana was diverting groundwater from aquifers without permits in 2005 during a massive drilling operation for coal bed methane in central Alberta. Furthermore, the lawsuit claims the agency found evidence of gross hydrocarbon contamination including methane and a variety of carcinogens after it tested Ernst's water well and the Rosebud aquifer.  

Despite these findings, Alberta Environment closed the case and stopped delivering drinkable water to Ernst's residence in 2008.

(Ranchers say that Alberta Environment now has so many complaints about hydraulic fracturing from landowners in southern Alberta's foothills that it is completely backlogged.)

Lawyers for Alberta Environment had argued for the removal of various paragraphs from Ernst claim. In particular, the government wanted all mention of "numerous water wells," "hazardous pollutants" and adjectives such as "contaminated" be struck from the claim.

Justice Wittman found the government's argument unsatisfactory and dismissed its application to change the claim. "Tinkering with pleadings by a Court is not, in this case, useful to the advancement of the action."

Last week a Court of Queen's Bench judge found the Alberta government guilty of violating every principle of natural justice by forbidding environmental groups from participating in oil sands hearings.

Encana, which has suffered financial losses due to bad investments in shale gas, never asked for any part of the claim to be struck. The company's statement of defense was filed last month, six years after Ernst launched her lawsuit.

It argues that the company did not frack any coal-bed methane wells but merely "stimulated" them.

A new report by the US Environment American Research and Policy Centre found that the fracking of 82,000 unconventional wells had used at least 250 billion gallons of water since 2005.

That's enough water to sustain three billion people using 65 gallons of water a day.