globeandmail.com

In an oil-patch town, a long-buried secret surfaces

Thursday, June 10, 2010

Abandoned wells, shut down decades ago and removed from land records, wreak havoc with property values in Calmar, Alta.

JOSH WINGROVE

CALMAR, ALTA. -- Liz Beaudry still remembers the knock on her door just over two years ago.

On the stoop of her new home at 16 Evergreen Cres. in Calmar, a bucolic town of 2,000 southwest of Edmonton, stood workers from Imperial Oil. Their job, they said, was to track down old oil wells, and the search had led to her door.

"According to the records, they believed that somewhere in that vicinity was a well site," recalled Ms. Beaudry, 45, a mother of two. They guessed right. In her backyard, a metre from her house, crews found a broken, leaking, 50-year-old natural gas well.

"I didn't expect that," Ms. Beaudry said.

Like many towns scattered across oil-rich Alberta, the Calmar region is dotted with "abandoned" (an industry term meaning shut down) oil wells.

But Alberta law allows them to be taken off property records. If towns or developers don't explicitly check with the provincial regulator, the Energy Resources Conservation Board, they won't know whether a wellhead lies in the centre of a new subdivision, vulnerable to damage by construction crews.

Only an "insignificant" amount of gas leaked from Ms. Beaudry's well, Imperial spokeswoman Laura Bishop said. The company resealed the well, built a shed over the site and bought the home from Ms. Beaudry, who moved to a nearby town.

Now, Imperial wants to remove the well entirely, which will mean displacing five homes.

The ordeal has sparked a public game of finger-pointing in Calmar. Residents blame the town for not knowing about the well. Town officials blame the province for not telling them. The province blames both the town and the developer for not doing their homework.

"This is very unusual," ERCB spokesman Darin Barter said of the well discovery.

But in Calmar, it's not.

'WE HAVE THEM EVERYWHERE'

Ed Melesko pulls a map from his office wall - Calmar and the surrounding area, divided into tiny squares filled with black and red dots. Each dot is an old oil or gas well. Mr. Melesko, the town's public works director, sought out records to find them after Ms. Beaudry's ordeal.

He's found 19 - all old wells drilled decades ago. It was one found leaking in a schoolyard that prompted Imperial officials to seek out the one on Ms. Beaudry's property.

"We have them in the mobile home park, we have them in the industrial park. We have them everywhere," Mr. Melesko said. "It's an eye-opener."

In 1999, the ERCB notified municipalities that they had to check for abandoned wells. Tiny Calmar, which contracts out its zoning application services, didn't add this to its standard procedures. Officials simply check land titles, which is why they missed the well at Ms. Beaudry's house.

"Should we have caught it? Maybe. Did we catch it? No. I don't know how we'd have caught it," Mr. Melesko said. "Why do these things come off the titles?"

Most residents blame the town and are asking that their property taxes, about $3,000 a year, be waived for a decade to offset the drop in property values.

"They're part of the screw-up no matter how you look at it," said resident Bob Cranston, 65, a retired trucker.

Most agree there will be no health impact from the gas, a small amount of which has leaked into the soil. Ms. Beaudry says weeds still grew throughout her unfinished yard.

To remove the well, Imperial workers will bring in a large piece of equipment. To make room, they'll move five modular homes, three permanently. But the company has reached deals with only two owners.

Homeowners Stacy and Trevor Smith say they're holding out for a better offer that reflects the work they've done on the property.

"We seeded, we sodded, we put flower beds in. We planted trees. We put in a parking pad," Mr. Smith said, calling the province a "pincushion" of oil exploration. "We don't want to hold up this project. We just want replacement value on our house. And what they're offering ain't gonna cut it."

Ms. Beaudry feels she was offered a fair price.

"My only comment is if you don't own a million-dollar home you can't expect a million-dollar [price]," she said, noting that everyone on the street bought homes at the height of Alberta's boom and has seen housing prices drop.

If the Smiths can reach a settlement, work will start next summer and last several weeks.

The long-term impact on Calmar remains to be seen. "For sale" signs dot most streets in the town. Ms. Beaudry says she would not move back.

Such sentiments could leave a hole in what was otherwise a developing neighbourhood. Across the street from Ms. Beaudry's old home, retirees Bert and Gwen Brown live in a spacious, custom-built bungalow with their extended family. They moved in six years ago and watched in excitement as young families followed suit.

"We thought it was going to finish off the area," said Mr. Brown, 86, a Second World War veteran and retired firefighter.

Now, outside their window will lie a gapped-tooth grin of a community.

"I'm unhappy for the people [moving]. I'm sorry for them," said Ms. Brown, 85. "And the thing that gets me? Somebody had to know."