Canadians Subsidize Environmental Costs of Encana's Activities at Suffield

Alberta Wilderness Association

News Release: March 30, 2007

EnCana is destroying an environmentally significant area at fire sale prices and with lack of environmental oversight, charges a coalition of environmental groups. The groups are concerned that EnCana's proposal to drill more wells in the Suffield National Wildlife Area may leave Canadian taxpayers with the bill for the huge ecological cost to this priceless area. They are asking the federal government to prohibit all new industrial activities in the Suffield National Wildlife Area.

"EnCana has been given an unfair advantage which no other oil and gas companies have and at taxpayer's expense for its activities in Suffield, including the National Wildlife Area," says Sandra Foss, President, Federation of Alberta Naturalists. "Taxpayers are being taken for a ride."

The Department of National Defence (DND) does not receive royalties from shallow gas activities such as EnCana's proposal to drill an additional 1275 shallow gas wells in the Suffield National Wildlife Area. Yet internal government documents obtained through the Access to Information Act show Canadian Forces Base Suffield, as the landowner, and the Base Commander are accountable and liable for the environment on the Base. While Alberta reaps the royalties, money that the Base spends on environmental management comes out of the pocket of Canadian taxpayers.

While EnCana has just reported a record full-year profit of more than $7 billion, the largest annual corporate profit in Canadian history, the cost for EnCana to do business in CFB Suffield is lower than on any other lands in Alberta. EnCana obtained the oil and gas rights through public largesse, inheriting the leases held by crown corporation Alberta Energy Company, which was given the major share of the mineral leases by the province in 1975. EnCana continues to hold about 95% of the mineral leases in CFB Suffield.

EnCana has not paid surface compensation for any wells drilled from 1975 to 1999 nor on any shallow wells drilled since 1999 on leases existing prior to that date. It is estimated that the EnCana pays about 10% of what companies must pay elsewhere for surface access.

"Canadians should be irate at subsidizing a powerful corporation making huge profits at the expense of taxpayers and a priceless protected area," says Reg Ernst, Southern Alberta Group for the Environment. "For their operations on CFB Suffield to be credible, EnCana must internalize all development costs, pay fair market value for land use, and permanently withdraw their application to drill in the NWA. Anything less than that is unacceptable."

"Market forces are not working since the true environmental costs are not accounted for," says Daniel Casselman, Nature Canada. "EnCana profits from resources given to it for free, the Canadian government receives no royalty revenue, and the environment and wildlife suffer with minimal regulation. This represents a massive subsidy to a private corporation at a great financial and environmental penalty to Canadians. This is unfair, irrational and must come to an immediate stop."

Will EnCana be held accountable for costs such as negative wildlife impacts, improper reclamation of disturbed areas, proliferation of invasive plants, air and noise pollution, abandoned wells, and a general degradation of ecosystem integrity? The internal government documents show there is a lack of Base capacity to review development applications and monitor industry activity, and, therefore, a high level of uncertainty and disagreement about environmental impacts and industry adherence to rules on CFB Suffield. There is no agency responsible for monitoring environmental infractions on the Base.

EnCana stated they do not recognize the right of the DND to manage or deny access to Suffield based on environmental damage. "EnCana has been out of control and does not recognize any restrictive policies from DND that could help prevent environmental damage," says Cliff Wallis, Past-President, Alberta Wilderness Association.

The Suffield NWA is a 458 km2 protected area located inside the 2,690 km2 CFB Suffield near Medicine Hat, Alberta. The NWA is an internationally significant grassland encompassing fragile sand dunes and sand plains. It provides secure habitat for more than 1,100 native prairie species, including 13 federal Species at Risk and 78 provincially listed "at risk" species.

"The National Wildlife Area must be off limits to industrial development-fighting to conserve the ecological integrity of this protected area should never have become an issue," says Dawn Dickinson, Grasslands Naturalists. "If the federal government is to have any credibility regarding environmental stewardship on CFB Suffield, they must face the inconvenient truth about EnCana's Suffield operations and just say no to any further damage."

A coalition of environmental groups, which obtained the documents, are asking the federal government to Coalition members include: Alberta Wilderness Association, Federation of Alberta Naturalists, Grassland Naturalists, Nature Canada, Southern Alberta Group for the Environment, and World Wildlife Fund.

For more information, contact:

Cliff Wallis, Alberta Wilderness Association

Reg Ernst, Southern Alberta Group for the Environment

Dawn Dickinson, Grasslands Naturalists

Daniel Casselman, Nature Canada
613-562-3447, Ext 225,

Sandra Foss, Federation of Alberta Naturalists