PDF version: Alberta’s CCS Disposition Scheme: the Carbon Sequestration Tenure Regulation 

Regulation commented on: Carbon Sequestration Tenure Regulation, A.R. 68/2011

The provincial government is making steady progress in implementing its plan to put in place a legal and regulatory framework for carbon capture and storage projects. The province passed legislation in the fall of 2010 (Bill 24, Carbon Capture and Storage Statutes Amendment Act, which I blogged here) to deal with pore space ownership issues and to provide a framework for granting agreements to sequester captured carbon dioxide (CO2) in that pore space; and in March 2011 it launched a Regulatory Framework Assessment (RFA) to review the current regulatory rules.

The most recent step is the promulgation (at the end of April) of the Carbon Sequestration Tenure Regulation, Alta. Reg. 68/2011. This regulation puts some meat on the framework established by the new Part 9 of the Mines and Minerals Act (RSA 2000, c. M-17 (MMA)). In particular, it describes in greater detail the elements of the two new forms of agreement (evaluation permits and carbon sequestration leases) and some of the content of monitoring, measuring and verification plans (MMV) and closure plans. The regulations also go some way towards clarifying the relationship between the Department of Energy and the Energy Resources Conservation Board in relation to some of the more technical aspects of MMV programs and closure plans.

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PDF version: The proof of the pudding: ALSA and the Draft Lower Athabasca Regional Plan

Documents commented on: Draft Lower Athabasca Regional Plan 2011 - 2021, Strategic Plan and Implementation Plan; Proposed Lower Athabasca Integrated Regional Plan Regulations

On April 5, 2011 the Government of Alberta (GOA) moved a step further to implementing the Alberta Land Stewardship Act, SA 2009, c.A-26.8 (ALSA) when it released a draft version of the Lower Athabasca Regional Plan (LARP) for public consultation. ALSA has been much in the news in Alberta over the last few months and the legislation has been embroiled in debates over property rights leading the GOA to introduce a Bill (Bill 10) to amend ALSA to, inter alia, clarify the relationship between regional plans and property rights. I have commented on that debate (see here) and on Bill 10 (see here).

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PDF version: Back to square one: summary judgement on an oil and gas lease validity issue set aside 

Case considered: Desoto Resources Limited v. Encana Corporation, 2011 ABCA 100

In this decision the Court of Appeal set aside lower court decisions (Master and the Court of Queen’s Bench) granting the lessor summary judgement in an oil and gas lease validity case.

At issue in this case is the validity of certain petroleum and natural gas leases granted by PanCanadian (Encana’s predecessor in title) in 1974 to Desoto’s predecessor in title. The fact pattern was complicated by Jofco’s (Desoto’s previous corporate name) bankruptcy in 1999. As part of the judicially approved bankruptcy settlement it appears that PanCanadian was prepared at that time to forego its position that the leases had terminated.

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PDF version: The legal status of the commitment by Alberta’s irrigation districts to share the shortage 

Document commented on: Declaration re: Sharing Water for Human Needs and Livestock Sustenance During Water Shortages, Alberta Irrigation Projects Association

Last week, on World Water Day, March 22, Alberta’s thirteen irrigation districts (acting through the Alberta Irrigation Projects Association) passed a declaration entitled “Sharing Water for Human Needs and Livestock Sustenance During Water Shortages”. The Declaration is an important political statement by Alberta’s Irrigation Districts. The purpose of this blog is to assess the legal significance of the Declaration. Before doing that I will set out the Declaration and explain just what it is that the Declaration is trying to do.

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PDF version: Regulatory chill, weak regional plans, and lots of jobs for lawyers: the proposed amendments to the Alberta Land Stewardship Act 

Legislation commented on: Bill 10, the Alberta Land Stewardship Amendment Act, 2011

In an earlier blog, I commented on one aspect of the on-going debate in Alberta on the Alberta Land Stewardship Act, SA 2009, c.A-26.8 (ALSA). On March 1, 2011 the government introduced Bill 10, the Alberta Land Stewardship Amendment Act, 2011. The Bill contains 12 pages of amendments to the Act. I think that the Bill will encourage the adoption of timid plans that will not achieve the noble purpose of the legislation. I also think that the amendments will create significant uncertainty and encourage litigation. The big winners from this Bill will be lawyers; the environment will be the loser. And if the environment loses then we all lose; whether we happen to be landowners or not.

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PDF version: Court of Appeal grants relief from forfeiture in an oil and gas lease case 

Case commented on: Canpar Holdings Ltd. v. Petrobank Energy and Resources Ltd., 2011 ABCA 62

The principal significance of this case is that it confirms that the Court may relieve against the forfeiture of an oil and gas lease that is terminated for cause (in this case failing to calculate and tender royalties as prescribed by the lease) - as opposed to termination in accordance with its own terms (e.g. for failure to drill or produce), in which case there can be no relief. In granting relief the Court signals that it will draw guidance from non-oil and gas cases dealing with relief from forfeiture. I think that this is the first reported decision in which the Court of Appeal has exercised its discretion to relieve against forfeiture in an oil and gas lease case.

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PDF version: ALSA and the property rights debate in Alberta: a certificate of title to land is not a “statutory consent” 

Statute commented on: Alberta Land Stewardship Act, SA 2009, c.A-26.8

There is significant public debate in Alberta about a series of measures introduced and passed by the provincial government over the last 18 months. These measures include: (1) the Land Assembly Project Area Act (sometimes known as Bill 19, now SA 2009, c. L-2.5, yet to be proclaimed), (2) the Electric Statutes Amendment Act, SA 2009, c.44 (Bill 50), (3) the Alberta Land Stewardship Act, SA 2009, c.A-26.8 (ALSA), and (4) Bill 24, the Carbon Capture and Storage Statutes Amendment Act (Alberta), SA 2010, c.14. I won’t deal with all aspects of the debate but I do want to comment on one aspect of the debate as it relates to ALSA.

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PDF version: The world wide web and the honour of the Crown 

Cases considered: Athabasca Chipewyan First Nation v Alberta (Minister of Energy), 2011 ABCA 29, and Lameman v Alberta, 2011 ABQB 40

The Court of Appeal (Justices Ritter, Bielby and Read) has denied the appeal by the Athabasca Chipewyan First Nation (ACFN) against the judgement at trial (2009 ABQB 576) which I blogged here. In that decision, Justice D.R.G. Thomas held that ACFN had commenced its application more than six months after the relevant decision, and therefore out of time within the meaning of Rule 753.11 of the old Alberta Rules of Court, Alta. Reg. 390/1968. In doing so I think that the Court of Appeal has ignored the constitutional foundation of the duty to consult and as a result has failed to interpret the Rules of Court through that lens.

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PDF version: The Court of Appeal confirms that the word “producible” does not mean actual production 

Case considered: Bearspaw Petroleum Ltd v Encana Corporation, 2011 ABCA 7

The Court of Appeal in a memorandum of judgement (Rowbotham, McDonald and Bielby JJA) has confirmed Justice McMahon’s decision at trial which I blogged here.  See that post for a summary of the facts.

There were two issues in this case: (1) the proper interpretation of the habendum (duration) of a petroleum and natural gas lease, and (2) the existence of a covenant to market. The Court finds for the lessee (Bearspaw) on both grounds.

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Carbon capture and storage (CCS) is not yet a proven technology at commercial scales. It is true that we have had considerable experience with analogies including acid gas disposal projects, natural gas storage projects and enhanced oil recovery (EOR) projects (involving the injection of carbon dioxide as a miscible flood). We also have some international experience especially in the North Sea with CO2 injection projects not linked to EOR, but elsewhere, commercial scale CCS projects are just getting underway. And there is nothing that would stop or seriously slow the adoption of CCS more quickly than a significant failure in one of the early projects.

For some this would be no bad thing - particularly for the climate skeptics, those who believe that human induced global warming is not happening. Others accept the reality of global warming but are philosophically opposed to CCS as a means of mitigating emissions. The challenge for this group is to identify realistic alternatives if we remove CCS as an option. Yes, energy conservation and the widespread and aggressive adoption of renewables will get us a long way, and for some nuclear energy is an important part of the solution, but national mitigation strategies often adopt a “wedge” that represents the contribution that CCS can make to meeting national mitigation targets (see for example, the work of the National Round Table on the Economy and the Environment). If we lose the CCS wedge we need to find other mitigation strategies that can deliver over the next ten to twenty years.

This is what is so troubling about the reports (see below) that are emerging from Saskatchewan in which the Kerr family alleges that they are experiencing harms from carbon dioxide leaking from the enhanced oil recovery operation of Encana (now Cenovus) in the Weyburn Field in Saskatchewan. This project (which is an EOR project and not a CCS project) has been extensively and intensively studied since 2000 by an international group of scientists and has been adopted by the International Energy Agency as a pilot project to encourage learning for future CCS projects (see here).

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