Alberta's main oil and gas regulator will argue in an Alberta court this Friday that it owes "no duty of care" to protect groundwater from hydraulic fracturing and that a regulator can violate the basic rights of citizens if it regards them as an "eco-terrorist."
In a landmark case that has attracted global attention, Jessica Ernst, a 55-year-old scientist and oil patch consultant is suing the Energy Resources Conservation Board (ERCB), the Alberta Environment and Encana for contaminating her water well with methane and other chemicals nearly a decade ago.
The $33-million lawsuit, which has attracted media attention around the world, effectively puts the practice of hydraulic fracturing on public trial.
The high-pressured injection of large amounts of water, sand and chemicals to shatter hydrocarbon-bearing rock formations can cause earthquakes, contaminate groundwater and result in significant releases of methane into the atmosphere.
Originally filed in 2007, the Ernst lawsuit alleges that Encana drilled and fracked gas wells into the local groundwater supply between 2001 and 2004 near Rosebud, Alberta and polluted her water well.
'Implications for many jurisdictions'
Instead of upholding its own policies and investigating the contamination, the ERCB then violated Ernst's rights under the Canadian Charter of Rights and Freedoms by banishing the landowner from the board's investigation and complaint process, adds the claim.
"What the Ernst claim is saying to the Canadian public is that groundwater contamination by shallow hydraulic fracturing happens," says Murray Klippenstein, the Toronto lawyer representing the landowner.
"The claim says that it happened to her and this injustice should be recognized and properly redressed in the public interest. The power and carefulness of the courts shall be the solution here. Her case has implications for many jurisdictions."
Neither Encana nor the ERCB have yet filed statements of defence on incidents that took place nine years ago. At the time industry drilled and fracked thousands of shallow wells in a coal formation in central Alberta resulting in scores of groundwater complaints, protests and public meetings.
Encana, whose CEO Randy Eresman abruptly resigned last week, is no stranger to controversy. The company, which is struggling with debt and an over-reliance on controversial shale gas production, remains the subject of a major U.S. government groundwater study in Pavillion, Wyoming, that has linked hydraulic fracturing to aquifer contamination.
Michigan authorities are also investigating the company for allegedly colluding with Chesapeake Energy to keep land prices low. Encana, the target of a mysterious bombing campaign in northern B.C. in 2008, also received record fines from Colorado's Oil and Gas Commission for contaminating water in 2004.
Energy board's 'duty of care' stops where?
A common complaint among Alberta landowners is that the ERCB reacts slowly to public concerns. It was one of the continent's last oil and gas regulators, for example, to table regulations on hydraulic fracturing.
Several recent court decisions also show that ERCB has a history of not upholding its own laws.
In 2010 the Royal Society of Canada, the nation's top scientific organization, criticized the board for 2007 incident in which the regulator spied on landowners and damaged "its credibility as independent quasi-judicial board."
In a court document filed on Dec. 5, 2012 lawyers representing the ERCB argue that a regulator charged to develop oil and gas resources in the public interest owes no duty of care to protect a citizen's groundwater.
Furthermore the Ernst lawsuit does "not indicate omissions on the part of the ERCB but a failure of the ERCB to act in accordance with the Plaintiff's expectations."
Klippenstein says the ERCB's arguments are both unusual and unorthodox.
"I'm taken aback by the position that the ERCB is openly arguing before the court. I think most Albertans would not be comfortable with a regulator that says it is basically immune from legal accountability in a democracy no matter how incompetent and negligent they are. That's a very unusual position for a regulator."
A mine regulator owes a duty of care to miners to ensure their workplace is safe and municipalities owe a duty of care to their residents to ensure building codes are enforced, adds Klippenstein. Why should an oil and gas regulator not be held accountable for "negligent failure to comply with established government policy?" he asks.
Plaintiff rejects energy board's 'ecoterrorist' accusation
In addition the board argues that its governing statutes provide immunity not only "for negligence but gross negligence, bad faith and even deliberate acts."
"If indeed the legislature wishes to grant such sweeping and total immunity to a government agency that has such an important role in the lives of rural Albertans, it must do so specifically and with clear wording," replies an Ernst legal brief. "It has not. The legislature has failed to include omissions."
The ERCB legal defense brief also portrays Ernst as an "ecoterrorist" and says it ceased all communication with her out of concern of violence in 2004 after Ernst made an offhand comment about "the Wiebo Way."
Wiebo Ludwig was a northern Alberta landowner who orchestrated a unprecedented campaign of industrial sabotage against the oil and gas industry in the late 1990s after five years of civil complaints and little regulatory response. Since then hundreds of landowners in Alberta and British Columbia have made comments about "the Wiebo Way."
A legal brief submitted by Ernst's lawyers argue that the ERCB's allegations are not supported by public evidence and amount to character assassination.
A transcript of a taped conversation with an ERCB lawyer read and heard by this reporter seems to contradict the contents of this ERCB brief. In 2006 a board lawyer admitted to Ernst and a witness that the agency had no real safety concerns with Ernst, but disliked her public criticism of the board because it had become "humiliating."
"The ERCB takes the prejudicial, vexatious, unsupported and wholly unsupportable position that the 'expression' the Plaintiff seeks to protect was a 'threat of violence' and that the ERCB ceased communication with Ms. Ernst 'in order to protect its staff, the Alberta public and the Alberta oil and gas industry from further acts of eco-terrorism.' This is a prejudicial and irresponsible accusation that is entirely without foundation."
Adds the brief: "If the ERCB wishes to advance its patently absurd and irresponsible theory that Ms. Ernst's offhand reference to Wiebo Ludwig was somehow a 'threat of violence,' and that an appropriate response to 'protect against further acts of eco-terrorism' was to cease communication with the Plaintiff, it must do so by forwarding cogent evidence. The ERCB has not, and frankly cannot, put forward such evidence."
Government wants words struck from plaintiff's brief
Last year the RCMP charged a mother of three children in central Alberta, Kim Mildenstein, for writing a threat against an oil and gas company after a dangerous volume of fracking traffic threatened the safety of children at a local school.
Louis Frank and two other women from the Blood Nation Reserve were also arrested for blockading a fracking vehicle in southern Alberta in 2011.
Mildenstein pleaded guilty and was sentenced to a year of probation while the Crown dropped all charges against Frank last year.
In contrast Ernst has never been arrested or charged with uttering threats of any kind.
Lawyers representing Alberta Environment are asking for the removal of more than a dozen paragraphs from Ernst's amended statement of claim. In particular the government wants any mention of other landowners and other water wells struck from Ernst's claim such as the following sentence:
"By mid 2005 Alberta Environment knew that a number of landowners had made complaints regarding suspected contamination of the Rosebud Aquifer potentially caused by oil and gas development."
Government lawyers say such statements are irrelevant and improper because the government might have to respond to "similar fact evidence." The government also argues that the use of words such as "hazardous" and "pollutants" to describe groundwater contamination are "argumentative and should be struck."
A 2004 study by the U.S. Environmental Protection Agency on the fracking of coal formations warned that the practice could contaminate aquifers and well waters: "If fracturing fluids have been injected to a point outside of the well's capture zone, they will not be recovered through production pumping and, if mobile, may be available to migrate through an aquifer."
Water that combusts
A New York Times investigation found evidence of groundwater contamination by fracking as early as 1987 in coal formations. It also found that industry routinely covered up evidence of groundwater contamination by writing landowners a large cheque and then demand they sign confidentiality agreements.
A peer reviewed 2011 study by Karlis Muelenbachs, a world expert on identifying oil and gas drilling pollution, found extensive contamination of water wells in the Rosebud area due to cumulative oil and gas drilling and fracking combined with leaking wellbores. "Years of intensive resource exploitation in agricultural areas have left an impact on some domestic water wells," concluded the study.
The Ernst lawsuit has dragged on now for years. Both industry and government first argued for a shorter statement claim. Then they petitioned to have the court case moved from rural Alberta (Drumheller) to Calgary, where fewer people are directly impacted by hydraulic fracturing.
"This kind of determined legal battling goes on frequently whenever someone challenges government or corporations who have lots of resources to fight with," explains Klippenstein, one of Canada's top litigation lawyers.
Prior to extensive CBM fracking in central Alberta, only four of 2,300 historic water well records within a 50-kilometre radius of Rosebud showed any presence of methane.
But after Encana fracked the region, Ernst reported so much methane flowing from her kitchen tap that it whistled like a freight train and could be set on fire. Bathing burned her skin.
Her lawsuit, the first of its kind in Canada, has given Ernst, a shy and private researcher, folk hero status throughout rural communities in Ireland, New York, Michigan, New Brunswick, Quebec, Nova Scotia and Western Canada.