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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PDF version: SARA has a spine as well as teeth 

Case commented on: David Suzuki Foundation v. Minister of Fisheries and Oceans and the Minister of the Environment, 2010 FC 1233

Eighteen months ago I blogged on Justice Zinn’s decision in Alberta Wilderness Association v. Canada (Minister of the Environment), 2009 FC 710. The decision dealt with the government’s failure to designate critical habitat for the greater sage grouse under the federal Species at Risk Act, S.C. 2002, c. 29 (SARA) as part of the development of a recovery plan. I thought that Justice Zinn’s decision confirmed that the Courts were prepared to give SARA a fairly robust interpretation and hence I suggested that the legislation was starting to “grow teeth”.

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 PDF version: Using water reservations to protect the aesthetic values associated with water courses: a note on the Spray River (Banff)

Documents commented on: Order in Council 546\49; South Saskatchewan Basin Water Allocation Regulation, Alta. Reg. 307/1991 (rescinded by Bow, Oldman and South Saskatchewan River Basin Water Allocation Order, Alta. Reg. 171/2007); Alberta Environment, TransAlta Utilities (TAU) licence for the Spray River development.

I have been doing some work on Crown water reservations over the last few months and in the course of that came across an example of what at first glance seemed to be the use of a water reservation to preserve the aesthetic qualities of a watercourse. The example also has an interesting constitutional twist that is worth reflecting on.

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PDF version: CCS and CDM: the eligibility of carbon capture and storage projects under the clean development mechanism of the Kyoto Protocol - the Cancun Meeting of the Conference of the Parties

Decision commented on: UNFCCC, Kyoto Protocol, CoP\MoP Decision on “Carbon dioxide capture and storage in geological formations as clean development mechanism project activities”

The 16th Meeting of the Conference of the Parties to the United Nations Convention on Climate Change (UNFCCC), and the 7th Meeting of the Parties to the Kyoto Protocol (KP) (CoP\MoP) concluded last week in Cancun. In the assessment of most observers this was a successful meeting but perhaps only because expectations were modest and anything seemed liked progress after the Copenhagen debacle of last year. But there is still much that remains to be done before countries can agree on a successor to the first commitment period of the KP which expires in 2012. Without such agreement the KP will simply die. Some, especially Europe, but also developing countries, want to see a second commitment period. But others, like Canada, point to the lack of inclusiveness of the KP (to say nothing of our own non-compliance which would result in a penalty on Canada during any second commitment period) and want to see an alternative to the KP that imposes emissions reduction obligations not only on the United States (not a party to the KP) but also on the so-called BRIC countries (Brazil, India, China) as well as other developing countries.

The Meeting did make progress on number of larger matters including REDD+ (reduced emissions from deforestation and forest degradation) and on the narrower issue of the eligibility of carbon capture and storage (CCS) projects under the clean development mechanism (CDM) of the KP. The purpose of this note is to provide an update on that debate.

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PDF version: Little Salmon and the juridical nature of the duty to consult and accommodate 

Case commented on: Beckman v Little/Salmon Carmacks First Nation, 2010 SCC 53

This is the first decision of the Supreme Court of Canada to deal head on with the relationship between the terms of a constitutionally protected land claims agreement (LCA) and the duty to consult and accommodate. The Court holds that the terms of an LCA do not exhaust the Crown’s duty to consult, or, to put it another way, an LCA is not a complete code but is embedded in the general legal system embracing both constitutional law norms and administrative law norms. This means that the Crown may have consultation obligations that are additive to those found in the text of an LCA. However, the majority articulates a narrow view of the content of the duty to consult and thus it was easy for the Court to find that the Crown — here the Government of Yukon (YTG) — had satisfied its obligations. In my view the content of the duty to consult articulated by the Court in this case is no greater than that which would be provided by the application of standard principles of administrative law. This impoverished view of the duty to consult is hardly likely to contribute to the constitutional goal of inter-societal reconciliation.

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Proposal commented on: ERCB Bulletin 2010 - 42, Invitation for Feedback on Draft Legislative Amendments for Removing Industrial Development Permits for Energy Resource Use

Yes. That’s right. In Bulletin 2010-42 issued on December 2, 2010 the ERCB announced that it is “proposing to remove industrial development permits (IDP) legislation from its mandate”. If that wasn’t clear enough the Bulletin goes on to state that “The ERCB is proposing to repeal Sections 28 to 31 of the CCA, [Coal Conservation Act, RSA 2000, c. C-17], Section 43 of the OGCA, [Oil and Gas Conservation Act, RSA 2000, c. O- 6] and Section 12 of the OSCA [Oil Sands Conservation Act, RSA 2000, c. O- 7]. The ERCB is also proposing to modify the definitions of a “processing plant” and “oil sands products” under the OSCA to provide greater clarity as to what types of facilities would fall under the ERCB’s jurisdiction.”

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