Restricted Drilling Zones

Res #: 15-07A
Number: 15
Year: 2007
Midterm: No
Expired: Yes
Responses Received: No

Resolution 15-07A
Restricted Drilling Zones

WHEREAS, The Oil and Conservation Act, 1985 outlines the regulations and restrictions regarding which areas may, and may not be drilled for natural resources; and

WHEREAS, in 1996, without prior consultation, warning, or explanation, individuals owning land within the restricted area around potash mines in Saskatchewan were suddenly prevented from leasing the oil and seismic testing rights on their respective properties as a result of a drilling restriction implemented by the province of Saskatchewan; and

WHEREAS, private landowners in the rural municipalities who have, previous to 1996, been able to supplement their incomes by leasing the oil and seismic testing rights on their property have lost this source of income due to the drilling restrictions and have now, for more than a decade, lost substantial revenue due to the drilling restrictions;

THEREFORE BE IT RESOLVED, that the Government of Saskatchewan and the Potash Mines provide adequate compensation for the loss of income resulting from the drilling restriction implemented in 1996, to the landowners whose drilling rights have been denied.

Response from Eric Cline, QC, Minister of Industry and Resources

I trust that SARM understands that, given the very significant investment associated with our potash mines, the safety of workers in those mines, as well as contributions to the local economy that the mine presents, the government must act in a responsible manner to safeguard those interests.  I can also assure you that the government has been working on balancing the interests of both valuable resources of oil and potash within the same area.  The government is also concerned with the impact drilling restrictions is having on privately held minerals and is committed to balancing the protection of the two valuable resources.

To that end Industry and Resources (IR) continues to meet with potash producers to consult on and investigate solutions to issues such as the size of the restricted area, the depth to which oil wells may be drilled and how to address concerns from the holders of private minerals.

I understand that in a recent meeting on March 20, 2007, facilitated by IR, the council of the RM of Rocanville No. 151 met with offcials from the Potach Corporation of Saskatchewan (PCS).  This meeting was a result of a commitment made by Mr. Bruce Wilson, Deputy Minister, IR to establish a multi-stakeholder process for the purpose of addressing all concerns related to potach restricted drilling areas.  The meeting was quite productive insofar as allowing PCS an opportunity to make a presentation to the council which outlined the technical and historical reasons why oil and gas drilling and potash mining should remain geographically separated.  The RM council had an opportunity to express their position and concerns.

The meeting ended with committment from both parties to separately formulate possible solutions to the compensation issue by April 30, 2007.  IR has again committed to facilitating a future meeting between the two parties to see if common ground can be found in relation to a solution.

IR shares SARM's concerns about a equitable solution to the potash restricted drilling area issue and will continue to play an active role in resolving the issue.