Canada oil industry loses lawsuit in pollution battle

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Canada oil industry loses lawsuit in pollution battle

BY JEFFREY JONES

CALGARY (Reuters) - A Canadian rancher has won a lawsuit against oil giant

Mobil Corp. in a case that further strains already tense relations between

the energy industry and Alberta farmers over environmental and health

concerns.

Tempers among farmers and ranchers in Alberta have erupted recently over

claims of pollution from oil and gas operations on their land, a situation

that has led to two deaths, a rash of sabotage and heated public debate.

A judge Thursday directed U.S.-based Mobil to pay southern Alberta rancher

C$176,800 for his claims that pollution from the company's oil

and gas operations caused deaths and illness among his cattle.

``Mobil is liable in negligence and in nuisance for the damage caused to Mr.

' herd,'' Alberta Judge Barbara Romaine said in her written decision.

Romaine said had suffered loss to his prize cattle herd between 1986

and 1989 ``beyond what could be expected in normal operations.''

launched the lawsuit in 1990.

The judge agreed with 's expert witnesses that the death rate among the

cattle in 1997 and 1989 was about double the average for southern Alberta as

a result of contamination.

, whose ranch is near Olds, Alberta, 70 km ) north of Calgary, claimed

103 of his cattle died after being exposed to, or ingesting, harmful

chemicals from oil production.

Mobil Oil Canada spokeswoman Suzanne McCarron said Friday the company takes

its environmental responsibilities ``very seriously,'' but was considering

appealing the decision.

``We are disappointed that she did not accept the testimony by Mobil's

experts and experts from the government. And both of those experts

established that Mobil was not responsible for the damages to the herd,''

McCarron said.

The company inherited the property in 1986 through its takeover of rival

Canadian Superior Oil, and took immediate action to remedy problems, she

said.

The decision comes amid other high-profile cases in Alberta pitting farmers

and ranchers against oil companies.

The best known is that of anti-oil crusaders Wiebo Ludwig and

Boonstra, who are charged with numerous counts of conspiracy, mischief and

extortion in connection with gunshots and explosions at natural gas

facilities in northern Alberta.

Ludwig, 57, was ordered Friday to remain in custody for breaching conditions

of his bail after four rifles were found on his commune near Beaverlodge,

about 400 km northwest of Edmonton.

Police discovered the guns during a search of Ludwig's Trickle Creek

compound after the shooting death of a teenage girl from a nearby town who

ventured on to his property last month.

Ludwig has fought a public battle against the oil industry and the

provincial regulator because he believes emissions from natural gas

production have caused miscarriages among his family members and still

births among farm animals.

He was to remain behind bars until his trial, which may not take place until

next year. Boonstra was allowed to go free on the condition he does not go

near the 35-member commune.

Moreau, Ludwig's lawyer, said he believed the decision against Mobil

would ``absolutely'' help his client's cause.

``The timing is sure interesting, isn't it?'' Moreau said. ''It's the first

time an oil company has been held liable in that sort of context.''

While Ludwig was in the media spotlight last autumn, another Alberta farmer,

Wayne , was charged with the murder of KB Resources vice-president

Kent, who was shot while working at a well on the farmer's land.

Those incidents, and increasing activism among farmers and other rural

residents, are a fairly recent phenomenon.

Oil and agriculture have existed cheek-by-jowl for decades in Alberta, where

resource development generates C$2.4 billion of the province's nearly C$17

billion in annual revenues and oil firms pay landowners to operate on their

property.

Some critics blame the rising tension on the Alberta Energy and Utilities

Board, the body that regulates many of the economic and environmental

practices of the energy industry.

Commentator Ian Doig, who publishes a monthly oil-industry newsletter, said

the AEUB was once the world's most respected energy regulator, but has

become ``toothless'' following years of budget and staff cuts handed down by

the Alberta government.

``The significance and importance of AEUB has been in freefall for the last

decade,'' Doig said.

REUTERS