Case considered: Karafiat v Webb, 2012 ABCA 115 and Webb (Re), 2011 ABQB 89.

PDF: Dower Consent Teasers

This case shows that the Dower Act, RSA 2000, c D-15 can still throw up intellectual teasers 55 years after this version of the statute was first enacted (Dower Act, 1948 (Alta), c 7). The case highlights the distinction between the consent required by section 4 of the Act (the normal case), and the consent required under section 25(2). Section 25(2) deals with the situation where the homestead property is co-owned by the spouses. The issue is whether a request by both spouses to the holder of a charge to postpone that charge is a consent to a disposition (i.e. the charge) for the purposes of section 4 or section 25(2). The majority responds in the negative.

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PDF version: More grist for the mill, another case of gross negligence under CAPL 1990

Case commented on: Trident Exploration Corp. (Re), 2012 ABQB 242

An operator under a pooling agreement who agrees to take charge of responding to a Crown offset notice and who fails to do so and fails to inform tract owners that it is no longer intending to respond, is grossly negligent within the meaning of Article 4 of the 1990 CAPL Operating Procedure.

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PDF version: Competing uses of geological space: resolving conflicts between production and natural gas storage interests 

Decision commented on: Kallisto Energy Corp. Application for a Well Licence Crossfield East Field, 2012 AERCB 005, February 24, 2012

This decision deals with the potential for conflict between conventional oil and gas operations and natural gas storage projects.

The idea of resource use or landscape level conflicts is familiar to us in the context of the use of the surface. Consider, for example, the conflicts between recreation and forestry interests, between forestry and oil sands or conventional oil and gas exploration. The idea of competing uses of the subsurface is less familiar but our search for new resources or the application of new technologies to known resources is increasing the potential for those subsurface conflicts. High pressure fracturing operations to stimulate production either from shallow oil formations or deeper shale gas formations raises concerns about the effect of these operations on potable groundwater resources, and proposals to sequester carbon dioxide in saline formations or depleted oil or gas reservoirs raises concerns of sterilizing hydrocarbon resources. The province’s new CCS regime explicitly addresses this scenario through a provision in the Oil and Gas Conservation Act, (OGCA) RSA 2000, c O-6, s 39(1.1) which provides that the ERCB “may not approve a scheme for the disposal of captured carbon dioxide to an underground formation …. unless the [applicant] satisfies the Board that the injection of the captured carbon dioxide will not interfere with (a) the recovery or conservation of oil or gas, or (b) an existing use of the underground formation for the storage of oil or gas.”

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Case commented on: Minister of Fisheries and Oceans v. David Suzuki Foundation (the Killer Whale case) 2012 FCA 40

PDF Version: Federal Court of Appeal confirms that a SARA protection statement must offer the critical habitat of a listed species real legal and non-discretionary protection

A unanimous Federal Court of Appeal in a decision authored by Justice Mainville has largely affirmed Justice Russell’s decision at trial in a case dealing with the legal protection of the critical habitat of two populations of killer whale listed as threatened or endangered under the terms of the Species at Risk Act (SARA), SC 2002, c 29. ABlawg’s post on the trial decision is available here: “SARA has a spine as well as teeth.”

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PDF version: Deep rights, shallow rights and the interpretation of a purchase and sale agreement 

Case commented on: Nexxtep Resources Ltd v Talisman Energy Inc, 2012 ABQB 62

The oil and gas industry splits petroleum and natural gas rights by substances to create severed estates in gas and petroleum but it also splits rights along the vertical axis into different formations. Split rights may be created along the vertical axis for several reasons. In some cases the Crown or other lessor initiates the severance in order to encourage exploration (e.g. deep and shallow rights reversions - explore non-producing horizons in your lease or lose them). In other cases rights will be severed as part of farmout agreements since farmors will be reluctant to allow the farmee to earn interests in formations that are deeper (and in some cases shallower) than those formations to which the test well is to be drilled. But these vertical splits cannot always be determined with accuracy and in some cases the Energy Resources Conservation (ERCB) may be asked to classify or reclassify whether a pool is part of deeper rights or shallower rights for the purposes of different conservation rules including, spacing rules, first well in the pool rules etc.: see Oil and Gas Conservation Act, RSA 2000, c O-6, s 33.

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PDF version: The severance of a water right from a purchase and sale of land 

Case commented on: Royal Bank of Canada v Hirsche Herefords, 2012 ABQB 32 

This decision concludes that a provincial water licence can be contingently severed from the land or undertaking to which it is appurtenant by way of an agreement of sale and the subsequent registered transfer. The contingency is the Director’s approval of the transfer of the water licence to another party under the terms of sections 81 - 82 of the Water Act, RSA 2000, c W-5. The decision also confirms the emergence of a water rights market in southern Alberta.

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 PDF version: The Northern Gateway Joint Review Panel and the Governor in Council

Documents commented on: (1) An open letter from the Honourable Joe Oliver, Minister of Natural Resources, on Canada’s commitment to diversify our energy markets and the need to further streamline the regulatory process in order to advance Canada’s national economic interest, January 9, 2012;

(2) National Energy Board Act, RSC 1985, c N-7, s 52;

(3) Canadian Environmental Assessment Act, SC 1992, c 37, s 37.

On January 9, 2012, the day before the hearings by a Joint Review Panel (JRP) were due to open for the proposed Northern Gateway pipeline (NGP), the federal Minister of Natural Resources, Joe Oliver took the extraordinary step of issuing an Open Letter to Canadians. He followed this up with a series of media appearances. In his letter Minister Oliver made four main points. First, Canada needs to diversify its export markets for many products including oil. Second, “environmental and other radical groups” seek to block this opportunity and any underlying projects. Third, these “radicals” will “hijack our regulatory system,” stack public hearings, “kill good projects,” exploit any opportunity they can to delay project reviews. These radicals have access to foreign money to implement their goals. The delays that ensue are unacceptable. Fourth, Canada needs a fair and independent process to assess projects based on science and the facts - but the current system is out of balance and “is broken.”

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PDF version: Carbon capture and storage in Alberta: draft offset Protocol

Document and regulations commented on: Government of Alberta, Draft Quantification Protocol for the Capture of CO2 and Storage in Deep Saline Aquifers, December 2011 and Specified Gas Emitters Amendment Regulation, Alta Reg 139/2007, Alta Reg 127/2011 at pp. 448 - 451.

While there has been some suggestion that the post-Stelmach provincial government is less enthusiastic than its predecessor about carbon capture and storage (CCS) as a silver bullet to deliver on provincial plans to reduce greenhouse gas emissions, the province will go ahead with at least three of the four short-listed CCS projects that are to receive provincial government financial support: the Alberta Carbon Trunkline Project, Shell’s Quest Project and the Swan Hills Synfuels project. The one outstanding project is TransAlta’s (TAU) Project Pioneer. The province has yet to finalize a deal with TAU (and may never do so) but I gather that this has more to do with problems with the technology that TAU\Alstom has been proposing to use than any provincial cold feet.

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PDF version: The theory and the practice of well abandonment and surface reclamation in Alberta: the latest episode in the dismal saga of Sarg Oils Limited

Decision commented on: Sarg Oils Limited, Review of Abandonment Orders AD 2006-17, AD 2006-17A, AD 2006-18, AD 2006-19 and AD 2006-20, November 15, 2011, 2011 AERCB 032.

Well over ten years ago Sarg Oils sold oil and gas assets to another party. The Energy Resources Conservation Board (ERCB) refused to consent to the transfer of the well licences associated with those assets and as a result Sarg was left with the responsibility of abandoning those facilities. And when Sarg refused, the ERCB did the job itself and sent the bill to Sarg; and when Sarg didn’t pay (and the Court of Appeal ruled that this was a lawful debt owing to the Board: ERCB v Sarg Oils Ltd, 2002 ABCA 174) the ERCB garnisheed other assets of Sarg (the Southern Alberta assets). Sarg didn’t like that and shut the facilities in - owing by this time in excess of $1 million. The Board informed the province of this dastardly deed and the province triggered the procedures under the Petroleum and Natural Gas Tenure Regulation (Alta Reg 267/1997, s18) to terminate the leases on those Southern Alberta assets. Since Sarg no longer had the right to exploit the resources on those terminated leases, the ERCB ordered Sarg (2006) to abandon the related wells and facilities. Sarg did nothing about this except to seek a section 40 review (this application) under the Energy Resources Conservation Act, RSA 2000, c E-10) of the Board orders. And now, five years later, the Board has concluded that the orders “are valid and will be upheld” (at para 148). And now, Sarg must really get on with it! Whew! Unless of course Sarg seeks leave to appeal.

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PDF version: Why Canada should not withdraw from the Kyoto Protocol 

Rumour\decision commented on: Canada will withdraw from the Kyoto Protocol

Rumours abound that Canada will withdraw from the Kyoto Protocol later this month. While Canada’s Minister of the Environment, Peter Kent, will not confirm these rumours (Montreal Gazette, November 29, 2011) there is reason for thinking that withdrawal is being actively considered if not already decided on (see “Canada to pull out of Kyoto Protocol next month“?

This post discusses four questions. First, what is the law pertaining to withdrawal from an international environmental agreement (MEA)? Second, why is withdrawal being considered and what other options are available? Third, what might be some of the ramifications of a Canadian withdrawal? And fourth, what is the legal nature of the current commitment: whom does it bind?

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