Decline in property values

A study by University of Alberta researchers demonstrated that the presence of oil and gas facilities can have significant negative impacts on values of neighbouring properties. Property values within 4 km of the industrial facilities can be reduced by 4 to sixteen percent depending on the level and composition of the activities.

For a home worth $250,000, this could potentially mean a $40,000 loss in value.

Risk of Expansion

The wells that Goldenkey has proposed to drill are exploratory. Should these wells produce at sufficient rates, Goldenkey's next step would be to optimize production. This could lead to the addition of more wells, pipelines to convey fluids, larger processing and storage facilities (batteries) and an overall increase in truck traffic, odors, pollutants, noise, sterilized land etc.

Goldenkey’s mineral rights include 23 square kilometers within the city limits and if production proves viable, their goal will be to produce from all 23 square kilometers to its full extent. Areas of Lethbridge that reside above these mineral rights include RiverStone, Paradise Canyon and the river valley, part of Varsity Village, Mountain Heights, Sunridge, part of Copperwood and farmland designated at future residential areas of Lethbridge.

Golden key mineral rights map

Water usage and contamination

Hydraulic fracturing, or fracking, involves high pressure injection of large volumes of water laced with chemicals and sand into the ground. This process has been implicated in ground water contamination and there have been numerous reports of these chemicals, as well as chemicals released from the deep geological formations, migrating to underground water supplies and even to the soil surface.

Goldenkey states they will use 2,250,000 litres of water for fracking and drilling the exploratory wells and water will be sourced municipally. This drinkable water will be removed from the local water cycle, become waste fluid, and will be trucked and disposed of at a waste disposal facility in Pincher Creek.

Where will the water come from? The City of Lethbridge has stated it has not entered into any agreements for municipal water with Goldenkey. As well, in 2006, a moratorium on new water licences was put in place for the Oldman River basin. Because the Oldman watershed is closed to new surface water allocations, no new licenses will be issued.

Goldenkey reports the following chemicals will be used in the fracking process:


Chemical Risks
Borate salt Causes eye and skin irritation
Cocamido propyl betaine The American Contact Dermatitis Society named Cocamido propyl betaine its allergen of the year in 2004.
Guar gum Petroleum distillates Harmful if swallowed. Can be fatal if ingested.
Causes eye, skin, respiratory irritation.
Can cause skin disorders.
May contain diesel, a known carcinogen.
Methanol Highly flammable. Vapours may form explosive mixtures with air.
The product causes irritation of eyes, skin and mucous membranes.
Toxic by inhalation, in contact with skin and if swallowed.
Methanol can cause blindness.
Causes headache, drowsiness or other effects to the central nervous system.
Do not allow product to contact skin, eyes and clothing.
Do not breathe vapours.
Sodium hydroxide Corrosive.
Contact with skin can cause pain, redness, burns, and blistering. Permanent scarring can result.
A severe exposure can cause death.
Burns may not be immediately painful; onset of pain may be delayed minutes to hours.
Contact with eyes causes severe burns with redness, swelling, pain and blurred vision. Permanent damage including blindness can result.
Ingestion can burn the lips, tongue, throat and stomach. Symptoms may include nausea, vomiting, stomach cramps and diarrhea. Can cause death.
Sodium metaborate Large amounts can be harmful to plants and other species. Releases to the environment should be minimized.
May cause skin irritation.
May cause eye damage.
Animal ingestion studies in several species, at high doses, indicate that borates cause
reproductive and developmental effects.
Sodium persulphate Causes eye irritation.
May cause skin irritation.
Causes respiratory tract irritation.
Causes gastrointestinal irritation with nausea, vomiting and diarrhea if ingested

Dangerous goods transportation and increased traffic

The following diagrams document Goldenkey’s proposed access to the two well sites. Access to the south east well site will utilize the entire length of University Drive, to Popson Park, past Cottonwood Park and on to the well site. Access to the north west well site will utilize the northern section of University Drive, move west along Whoop Up Drive, and then head south through the community of Copperwood. If the wells produce, oil will be trucked out using typical liquid transport trucks. Fracking fluid and waste will also be trucked in and out of well sites.

While University Drive is a designated Dangerous Goods Route, the other streets are not. The City of Lethbridge Bylaw No. 5254 states that no carrier shall enter or leave or travel within the City other than on a Dangerous Goods Truck Route; except for the purposes of obtaining or delivering goods from a location off the Dangerous Goods Route. In this circumstance, the most accessible connection must be used.

The Fire Chief may issue an Off-Route Permit authorizing the transportation of dangerous goods on a highway in the City other than the Dangerous Goods Route, provided that such transportation, in the opinion of the Fire Chief, be conducted safely.

Due to the nature of the drilling, frequent industrial truck traffic to and from the well sites is to be expected. Goldenkey has indicated that truckers will be instructed to operate well below posted speed limits. On single lane streets, this has the potential to cause major traffic delays.

In light of recent oil transportation disasters, including loss of life, and the subsequent governmental safety alerts, residents are very concerned about regulations and safety regarding the transportation of dangerous goods and oil through residential areas, past schools, playgrounds, libraries, churches and homes.

Truck Routes

Future development and land sterilization

Mayor Chris Spearman has stated:

“Drilling activity within our city limits would only make it more difficult and expensive to develop those lands in the future, and it would create no real economic benefit for our city.”

Mayor Spearman also explains how Lethbridge’s industrial businesses are located together in industrial parks in the city’s north east sector. This isolation of industrial activity is a result of careful, long-term planning in order to minimize impact on residential living. If local land-use bylaws were applied to oil and gas drilling, this activity would be deemed unsuitable for Goldenkey’s proposed sites.

However, the regulation of oil and gas activity throughout Alberta, including within municipal boundaries, falls to the Alberta Energy Regulator thereby removing the authority to approve this development from the City of Lethbridge. However, the Minister of Energy has the authority to cancel any mineral lease when it is not in the public’s interest.

Goldenkey states that the proposed setbacks for this project are 100 metres. This means that these types of well sites can be placed just over 100 metres from permanent dwellings and public facilities in order to access the extent of their mineral lease.

Goldenkey mineral rights holdings map

At present, gas wells in the area have had a lesser visual surface impact. Gas comes to the surface due to existing pressure and is redirected to a series of buried pipelines. The proposed Goldenkey Penny Project will be drilling for oil. Access roads, fencing, berms to contain spills, multiple storage tanks, separation vessels, sweetening systems, pump jacks, and large power generators are required for this type of activity.

The following photo was an image Goldenkey released with their October 3, 2013 presentation. This is supposed to represent what a well site will look like. However, it is missing fencing, containment berms, onsite storage tanks, a separator, and the sweetening system.

Oil Well Site

The Alberta Energy Regulator allows for the onsite disposal of some oilfield wastes. This includes the burial of cement returns and the land spreading of approved water based mud systems. There is the potential for future residential development to be built on this oilfield waste.

Goldenkey states that they will remove and reclaim the infrastructure if and when other development is formally and practically proposed, approved and ready for construction on the lands they occupy. Will this proposal stand if the Penny Project is sold to another company?

Odors and air pollution

Sour gas and flaring are major concerns for the residents of Lethbridge. However, concerns about odors and other air pollutants are also an issue. Residents across Alberta report negative consequences from being within the vicinity of oil and gas operations. Nose bleeds, rashes, headaches, dizziness, respiratory problems, muscle pain, loss of hair, severe illness and death of livestock have all been widely reported. see for personal stories

At this time, the Alberta Energy Regulator is holding public hearings into residents’ concerns that oil industry operations in the Peace River area are causing dizziness, headaches and cognitive impairment. Experts contend that in the least the symptoms are caused by the strong smell which triggers a reaction.

Residents in this area were refused physician care and laboratory analytical services when they suggested a connection between bitumen exposure and chronic symptoms.

Residents of Lethbridge have also expressed concerns on the greenhouse gas emissions resulting from this project.

Noise and light pollution

The proposed Goldenkey operations will increase the level of noise in the vicinity of the drill sites. Transport trucks, large-scale power generators, and flaring will increase environmental noise. Goldenkey states they will adhere to Alberta Energy Regulator Noise Directives and address concerns “as they arise”.

The Alberta Energy Regulator states that if operators feel operations could affect nearby residents, they must notify them. However, regulations do not guarantee that a resident will not hear noises from a facility. Noise complaints can be filed with the Alberta Energy Regulator.

Goldenkey has not stated how they plan to reduce potential visual impacts associated with the facilities.

Emergency Westside evacuation and emergency response

Goldenkey Oil states that though the Alberta Energy Regulator does not require a site-specific Emergency Response Plan for this project, they have created one. While a list of safety measures has been brought forth, at this point in time Goldenkey has not made the Emergency Response Plan public.

This leaves residents with many questions including:

  • Who will oversee the response?
  • Who will inform those affected?
  • Will this include evacuation plans?
  • What happens at schools, playgrounds and public facilities?
  • Will the burden of response including the financial cost, manpower and service requirements, re-routing of traffic, coordination of evacuation and housing of evacuees fall upon the City of Lethbridge and its taxpayers?

Recent grass fires have brought forward the issue of Westside evacuation and the limited Westside emergency egress.

Sour gas and flaring

Sour gas is natural gas that contains some amount of hydrogen sulphide (H2S). It has a distinct rotten egg odour and is poisonous at high concentrations. Exposure to H2S occurs from non-combusted or unflared sour gas. When natural gas is flared sulphur dioxide (SO2) is released.

The Goldenkey Confirmation of Non-Objection as per Alberta Energy Regulator Directive 56 states that the Goldenkey Penny 5-14-8-22 W4M well expects production of sour gas at 400 ppm (parts per million) or 0.04% H2S (hydrogen sulfide) content. Goldenkey has stated in correspondence that the location of flaring will be either at the wellsite or a satellite location. Flaring event duration will be three days unless further notification is granted. Prior to flaring, the City of Lethbridge will be notified.

Hydrogen sulfide may be fatal if inhaled. Gas may be severely irritating to the eyes and respiratory tract. Alberta Health Services reports that short-term exposure to hydrogen sulfide at 2 ppm may induce bronchial obstruction with individuals with mild to moderate asthma.

Concentration of hydrogen sulfide and effects to human health.



1-5 ppm

Moderately offensive odour, possibly with nausea, or headaches with prolonged exposure

20-50 ppm

Nose, throat and lung irritation, digestive upset and loss of appetite, sense of smell starts to become "fatigued", odour cannot be relied upon as a warning of exposure

100 -200 ppm

Severe nose, throat and lung irritation, ability to smell odour completely disappears

250-500 ppm

Potentially fatal build-up of fluid in the lungs (pulmonary edema) in the absence of central nervous system effects (headache, nausea, dizziness), especially if exposure is prolonged

500 ppm

Severe lung irritation, excitement, headache, dizziness, staggering, sudden collapse ("knockdown"), unconsciousness and death within 4-8 hours, loss of memory for period of exposure

500-1000 ppm

Respiratory paralysis, irregular heart beat, collapse, and death

Short-term exposure to elevated sulphur dioxide (SO2) levels while at moderate exertion may result in reduced lung function. Effects associated with long-term exposure to high concentrations along with particulate matter can result in respiratory illness, alterations in lungs’ defenses, and aggravation of existing cardiac disease. Those at risk include those with cardiovascular disease or chronic lung disease, as well as children and elderly.

Goldenkey has a history of high risk noncompliance issues. In early 2013, wells located North East of Grand Prairie were licensed as sweet when, in fact, an H2S Release Rate Assessment was required and appropriate consultations with affected stakeholders should have been performed. Goldenkey did not diligently evaluate the presence of hydrogen sulfide and operations at the affected wellsites were suspended.