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Friday, 24 February 2017 08:00

Action Surface Rights Association promises interesting AGM with timely speakers March 8

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Officials with the Action Surface Rights Association have planned what should be an interesting annual general meeting March 8. Organizers have worked hard to secure guest speakers who will hit the highlights of some timely topics including collecting unpaid rent, how oil companies are still profiting with low oil prices, and  the especially hot topic of orphan wells.

Merv Cradduck, spokesperson for Action Surface Rights, is hoping to see landowners attending the AGM in Taber from across southern Alberta.
“We want to see as many people out as possible,” he adds. “There’s only three or four surface rights groups in all of Alberta with a similar strength as us. A lot of groups are very small and don’t have as much financial resources.”
Guest speakers for the AGM will include Michele Del Colle, energy, utilities and policy specialist with the Farmers Advocate Office.
She will address the topic of collecting unpaid rentals and other problems that have arisen especially in the last six months for landowners, such as how to deal with being stuck with unpaid power bills when oil and gas companies leave the area or go bankrupt.
A second speaker for the afternoon will be Regan Boychuk, an independent researcher who sat on one  of the royalty review’s advisory expert panels.
Cradduck says Boychuk will explain how oil companies are still making a profit even when oil is at $50 a barrel.
The third speaker will be Daryl Bennett, who is on the board of the Action Surface Rights. He will speak about the issues around the Licensed Liability Rating (LLR) system and how that affects landowners as well as the decommissioning of wind towers and the problem of unpaid taxes by oil companies which have gone bankrupt.
Cradduck explains the LLR system can be somewhat complex to understand, but it does overlap with the issue of orphan wells which has become more prominent the past six months.
According to information found by Cradduck, provided by the Alberta Energy Regulator, Alberta has about $30 billion in liabilities because of orphan wells. Based on an oil and gas company’s LLR rating, money is paid into an orphan well association in the form of a levy. That money is then to be used to help clean up orphan wells. Through that association, there is $30 million a year provided for an orphan well cleanup program.
“Officials want to see it increased to $60 million,” explains Cradduck. “We really don’t know how many orphan wells there are in this province.”
The problem with the LLR rating, which Bennett will speak to, is that a company’s assets may have been overvalued and liabilities undervalued.
“With the increasing bankruptcies and companies abandoning wells, it increases the pressure on the orphan well association. That means landowners may have to be the ones to finance the cleanup of orphan wells.”
Cradduck says there are also concerns about a shrinking tax base for municipalities and counties, as the oil and gas sector continues to struggle, and the pressure these government bodies face to clean up orphan wells.
He said in the last newsletter he received from the M.D. of Taber, officials stated the municipality would be collecting about $1 million less in tax revenues due to the fact there are fewer oil and gas companies operating and ones that can’t pay their taxes. The other factor is the provincial government has lowered the linear tax rate, which is what municipalities charge oil companies.
All of this contributes to fewer dollars being collected from that sector, increasing the pressure for municipalities to replace that revenue with other means — namely collecting more money from landowners or cutting services.
“It’s very important for landowners to be aware of this,” says Cradduck. “There will be better detail from Daryl (at the meeting) and people will be able to ask questions.”
Each speaker will have about 20 minutes to share his or her message, and then there will be time for questions from the audience.
Action Surface Rights is always looking for additional board members if anyone is interested. Those on the board are working to hold more information sessions throughout the year when possible.
Cradduck says they would like to organize something specifically in the Foremost/Medicine Hat area about wind turbines, as there are many wind projects in the works in the southeast corner.
Around since the mid-1990s, Cradduck is proud of the work of the Action Surface Rights group, which has undergone a few name changes. Membership sits at about 120 people and can include anyone who resides in southern Alberta.
“We’re proud that we helped raise the rates oil and gas companies pay landowners,” he points out about past successes.
The AGM takes place March 8 at the Taber Heritage Inn. Registration starts at noon with the meeting getting underway at 1 p.m. The cost to attend is $100, which includes a membership in the Action Surface Rights Association.

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Rose Sanchez

Assistant Managing Editor