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Want to subdivide? Oil wells may prevent this

When it comes to subdividing single parcel country residential properties out in rural municipalities there are a number of factors that determine whether a subdivision will be approved by the Province of Saskatchewan: surface water and drainage acce
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When it comes to subdividing single parcel country residential properties out in rural municipalities there are a number of factors that determine whether a subdivision will be approved by the Province of Saskatchewan: surface water and drainage access and the placement of existing oil wells on a quarter section.

I’ve not yet heard of a situation where a landowner has been advised prior to signing for an oil lease that signing on the dotted line could prevent them from subdividing their farmstead. So why is this?

In the Province of Saskatchewan, section 15(6) of the Subdivision Regulations stipulates limitations on the approval of a residential subdivision could be because the proposed land of the subdivision is within 125 metres of an existing oil well. If the oil well becomes an H2S oil well, then the distance may be increased to 500 metres from a new property boundary.

What this means is an oil well can be drilled adjacent to your existing house, but you may not be allowed to subdivide around your house because of that oil well. If we take it one step further, if your neighbour on the adjacent quarter section signs the lease for an oil well to be located just on the other side of that quarter line, you may not be allowed to subdivide your existing house because the new proposed property line of your acreage will be within 125 metres of that new oil well. In this area of the province, where oil and gas extraction is prominent on the majority of agricultural quarter sections, this can cause serious implications for future subdividing. Such as, a farmer may not be able to subdivide out the farmstead for estate planning purposes.

When attending an education session hosted by a director of Community Planning at last year’s Saskatchewan’s Professional Planners Institute annual conference, the question was asked whether land owners are made aware of the implications allowing oil and gas exploration on a quarter section has on residential development at the time of signing the lease agreement. The director said it is the municipality’s responsibility to educate ratepayers of the Ministry of Economy’s policies and make them aware of the subdividing implications of allowing oil and gas wells on their property.

This is a tough role for a municipality to complete, because RMs have no control when oil and gas companies approach a landowner to place a well on their quarter section. Nor is a municipality allowed to require a development permit application for an oil well (except where an Interim Development Control Bylaw has been adopted by council), because this is deemed to be infringing upon provincial interests of economic development.

The only aspect of oil and gas exploration an RM is allowed to control is the placement of a lease road approach onto a municipal road allowance, and may require the signing of capital road upgrades or maintenance agreements to cover infrastructure impacts. However, should the municipality push too firm on an oil company for contributions to municipal infrastructure and a complaint to the Ministry of Economy occurs, this could result in a call from the provincial government and a slap on the hands for the municipality.

Subdivision regulations allow the approving authority (or the director of Community Planning) to accept a subdivision that is less than the prescribed 125 metres if there is appropriate information provided to Community Planning about the well and its current status of operations. There is no guarantee that your proposed subdivision will be denied because of the oil wells, but the placement of these wells is definitely something to consider prior to signing on the dotted line.

— S. Yvonne Prusak, BASc, MA, MCIP, RPP, is a municipal planner with municipalities and communities in Northwest Saskatchewan. She specializes in land use planning and development. She can be reached at 306-845-6702 or at yvonne@northboundplanning.ca.