Clearing up some common misconceptions

Dear Editor,

In recent weeks, a number of constituents have raised concerns with me that oil and gas companies may be threatening to unilaterally cut payments to landowners for surface leases.

There is no question that low commodity prices have left many of these companies between a rock and hard place, financially speaking. However, in this difficult economy many landowners also find themselves facing difficult decisions. As a result, tensions have risen. In order to avoid any unnecessary conflicts, it is important for landowners to know their rights, and for government to do its best to dispel some of the common misconceptions regarding these issues.

Here are some facts I want to share, courtesy of the Alberta Farmers’ Advocate Office:

• First: A landowner has recourse to obtain compensation for unpaid or reduced rentals through the Surface Rights Board (SRB) under section 36 of the Surface Rights Act at any time during the five-year term.

• Second: A landowner has the right to a five-year review of the rate of compensation. A company cannot unilaterally decide to reduce the amount of compensation provided to a landowner. Section 27 (6) of the Surface Rights Act (SRA) entitles landowners the opportunity to negotiate with industry in good faith; negotiations must be honest, fair and engage both parties. Furthermore: The Surface Rights Act supersedes any clause in a negotiated agreement.

• Third: A landowner is under no obligation to accommodate the changing financial circumstances of a company. The amount provided for annual rental is based on a landowner’s Adverse Effect and Loss of Use, not the state of the industry. Adverse Effect reflects the alterations made to a landowner’s business practices as well as the time, stress, and inconvenience experienced by a landowner as a result of the presence of a surface disturbance. Loss of Use is provided to compensate a landowner for the inability to use and benefit from a portion of their land on an ongoing basis.

I understand that tensions may currently be high, but it is incumbent on both the oil and gas companies and landowners to act in a responsible manner and work together to reach negotiated settlements. This is something we have been able to accomplish in our region for many years, and I know we will continue to do so.

Sincerely,

Hon. Nathan Cooper, MLA Olds-Didsbury-Three Hills