Albertan's son, seeking legal help, records an insider's blunt advice on how petro giants and regulators fend off lawsuits.
Fracking amazed: Ann Craft's son was shocked that a top legal insider 'would be so bold about how the law works in favour of oil companies in Alberta or Canada.' Image: Shutterstock.
In fall 2013 Brent O'Neil*, a veteran global oil and gas driller, went in search of a lawyer to help his mother, realtor Ann Craft.
For the last two years she's been embroiled with a fight with the province's regulators over two separate incidents as exclusively reported by The Tyee yesterday.
In 2012, a seismic-like event lifted up the deck of his mother's mobile home in central Alberta. It damaged her property and even changed the topography of her land.
Both O'Neil and Craft suspect that the shallow gas drilling and fracking program for four nearby coal seam wells by Houston-based Quicksilver Resources at the time probably accounted for the seismic event. Quicksilver denies any role.
Then things got worse. Months later, a trucking company delivered a batch of contaminated water containing sour crude oil to Craft's cistern. Craft showered in the toxic water and has suffered ill health and repeated trips to doctors ever since.
Alberta Environment initially promised a hydrogeological study of Craft's property but then changed its mind.
So, when Alberta Environment and the Alberta Energy Regulator failed to investigate either incident to Craft's satisfaction, O'Neil started to shop for legal assistance.
Craft and O'Neil specifically wanted a lawyer who might have "the experience and confidence to sue an oil company" for the fracking incident. They also wanted somebody who might have the technical resources for tackling the toxic water delivery case too.
"We were forced to sue after it was clear that no regulatory bodies were going to help my mom," recalls 36-year-old O'Neil.
The oil patch veteran eventually made an appointment with Glenn Solomon, a seasoned and respected Calgary lawyer. Solomon, one of Canada's top rated lawyers, is also a senior partner in Jensen Shawa Solomon Duguid Hawkes LLP (JSS Barristers).
The firm has close ties to both federal and provincial Tories. One of the firm's partners is Robert Hawkes, the ex-husband of former Alberta premier Alison Redford.
The bluntness of Solomon's comments stunned O'Neil.
In no uncertain terms, Solomon warned O'Neil that suing oil and gas companies was not only "scary" but expensive.
Solomon added that suing oil and gas regulators in addition to companies was tantamount to declaring World War Three.
Moreover, he advised O'Neil that companies typically settled fracking incidents out of court so they could frack again with limited regulatory consequences.
"And by the way by doing that you (the landowners) shut up, the regulators stay off our back, (fracking companies) get to do it again down the street."
Solomon also told O'Neil that people who sued the government, including the regulator, were "crazy."
Solomon has been recognized as a "Top Rated Lawyer in Canada" by Corporate Counsel Magazine (2013, 2014), The American Lawyer Magazine (2013, 2014), and American Lawyer Media (2013, 2014).
Solomon is also a long-time federal Conservative party activist.
Lawyer's advice recorded
O'Neil recorded the entire two-hour-long meeting with Solomon on his cell phone: "I recorded the conversation as I wanted my mother to be able to decide which lawyer she felt comfortable with." (Craft eventually hired a lawyer in Ponoka for her case.)
O'Neil says that he found it shocking that someone in Solomon's position "would be so bold about how the law works in favour of oil companies in Alberta or Canada."
But he adds that Solomon's responses accurately reflected the way his mother had been treated by both regulators and industry: "His comments were true."
To listen to and read parts of the discussion between Solomon and O'Neil, play the video below.
Click to hear recording of respected Calgary lawyer Glenn Solomon advising Ann Craft's son on the challenges facing anyone wanting to sue for damage related to fracking on their property. Video prepared by Will Koop.
For the first hour of the meeting O'Neil outlined his mother's case, including the fracking-related incident as well as the delivery of toxic water. Craft, the subject of legislative debate in Alberta, now lives in a metal-clad shop and hauls her own water.
Then Solomon explained how the legal system treated such cases. He also outlined his current work as counsel for the former Energy Resources Conservation Board (now Alberta Energy Regulator).
When Alberta landowner Jessica Ernst sued for damage to groundwater on her property by fracking, Glenn Solomon successfully argued before the Alberta Court of Appeal that the regulator had statutory immunity.
Landowner and oil patch consultant Jessica Ernst sued the Energy Resources Conservation Board along with Alberta Environment and Encana for gross negligence seven years ago over an alleged case of groundwater contamination following the shallow fracking of coal seams in central Alberta.
During the celebrated Ernst case, Solomon successfully argued before the Alberta Court of Appeal that the regulator had statutory immunity and that the lawsuit was solely a matter for Ernst and Encana to resolve. The court of appeal agreed.
Ernst has now applied to the Supreme Court of Canada to appeal that decision while her $33-million lawsuit against Encana and Alberta Environment slowly proceeds through the courts. Ernst vows not to settle out of court.
'It's Encana, and they have all the money in the world'
"Take a step back," Solomon told O'Neil. "I told you on the phone, I act for ERCB (now named the Alberta Energy Regulator) when they're sued on these types of things. There's only one such case in Alberta that I'm aware of, where they're using outside counsel, which is me at the moment. And that's an oil spill out in Rosebud area, which has become more of a political grandstanding issue than a legal dispute."
"Over an oil spill?" asked O'Neil for clarification.
"This was a fracking case."
"Oh," said O'Neil.
"It was alleged contamination of a water well. Doesn't appear to be any personal injuries. And...
"Just groundwater contamination?" interjected O'Neil.
"Groundwater contamination," confirmed Solomon, who continued: "Encana is the oil company. They've said we deny that we've done anything but we'll give you a lifetime supply of potable water anyway, because we just don't care and we don't want to fight with you. You know, it's Encana, and they have all the money in the world. And Alberta Environment and ERCB have been sued in that one as well. I can tell you it's a case that is seven years old. I haven't yet filed a statement of defense because it's been tied up in preliminary applications …because that's what happens when you start suing Alberta Environment and ERCB."
Ann Craft says fracking buckled her land, cracked her structures, and poisoned her groundwater. Her son sought advice from top Calgary lawyer Glenn Solomon, who advised suing regulators would mean 'World War Three.'
Solomon went on: "We keep on telling the plaintiff's lawyers, look, if you get rid of us (the dispute with the regulators), Encana is going to resolve this with you, cause they always do. That's what they do. Encana has said, look, you know, we're happy to pay for this, without admitting or denying liability... We just don't care. You know, it's, this is a rounding error on our balance sheet for God's sakes. Would you stop being a nuisance?"
"But the PR and the bad publicity that comes from it for everybody, is that even worth it?" asked O'Neil.
"Encana, ERCB, and Alberta Environment just don't care about that either," responded Solomon. "They just don't care about bad publicity because …What tends to happen is that the people who go yapping to the media are typically seen as nutcases," answered Solomon.
'If you drag in the regulators, it's World War Three'
O'Neil then asked a direct question. "On your experience with fracking and stuff, where, what's the success rate?" O'Neil noted that Quicksilver's already had a similar claim against them filed by a Wetaskiwin farmer for a similar incident involving the fracking of coal seams. "What's the Canadian climate for that kind of stuff? Is it worth a fight?"
"I'm not aware of any cases that have gone to trial where fracking damage has been successfully proved. But, again, most of these cases resolve. Okay, we damaged your water well. We'll just set you up with potable water through a tank system forever, because, you know, we just spent a million dollars drilling this well that we made a hundred million on. And it's costing us an extra three hundred thousand. We're okay."
Solomon explained more about the industry's attitude: "You know, we don't need to litigate with you, we don't even need to know that it was our fault. We're just happy to pay you. And by the way by doing that you shut up, the regulators stay off our back, we get to do it again down the street. And so that's the oil company approach on these (things). The people who typically are suing are getting a lot of resistance, and it's a knock 'em down drag 'em out brawl, where the oil companies are not resolving it, if you drag in the regulators, I can tell you from experience…it's World War Three," added Solomon.
'It's scary and it's expensive'
"And Encana, Alberta Environment and the ERCB as it turns out, all have effectively unlimited resources. You know they have office towers full of experts. They have bank accounts full of cash. The cost of having even an army of lawyers, is something that they wouldn't even notice, and they don't have to answer for it. So anyone who wants to pick that fight literally is crazy."
O'Neil then interjected. "Yeah, it's almost, it is, it's terrifying as a land owner in Alberta, like, to see what my mom's gone through, and as you say, what she has to fight, or potentially look forward to fighting, it's, it's so scary, like."
"It is scary, and it's expensive," confirmed Solomon.
O'Neil left the meeting bewildered. "I was shocked that someone in his position would be so bold about how the law works in favour of oil companies in Alberta or Canada. I was worried that my mom wouldn't have a chance to win against the oil company and I was in disbelief when he said it's World War Three when you involve the regulator."
A pattern of confidential settlements
As early as 1987 the U.S. Environment Protection Agency noted that hydraulic fracking had caused cases of water contamination, but it was impossible to quantify the scale of the problem due to confidential out of court settlements.
The EPA report added that not only were damage claims from fracking settled out of court but "information on known damage cases has often been sealed through agreements between landowners and oil companies."
As a consequence of Solomon's blunt assessment of the legal system, Ann Craft decided only to sue the company that delivered the toxic water to her home.
O'Neil says that his mom did not want to sue the Alberta Energy Regulator or Alberta Environment for negligence because it would be "World War Three and very expensive."
O'Neil also realized "that there is zero chance of winning a lawsuit in Canada for fracking damage as Solomon said because there hasn't been a case in Canada where a land owner sued an oil company for frack damages and won."
The oil and gas driller adds that government must do a better job of regulating the controversial fracking industry, which blasts both shallow and deep formations with highly pressurized volumes of water, sand and chemicals.
"Fracking incidents will not stop as long as we continue to frack shallow wells. There is no way around it. Tighter regulations and better qualified people working for government are the first step."
At a 2013 conference researchers documented incidents where fracking caused seismic events on the surface by activating unknown faults in the area.
"If these events are generating ground motions large enough to be felt on surface," said the researchers, "there needs to be an assessment of seismic hazard on site to answer questions about where shaking may be most intense and to what standards equipment needs to be built to withstand such motion."
*Ann Craft's son requested use of an alias last name, O'Neil, in order to protect family relatives working in Alberta.
To read the story of Ann Craft's ordeal by fracking and toxic delivered water that sent her son in search of legal counsel, click here.