Case Considered: Kelly v. Alberta (Energy and Utilities Board), 2009 ABCA 161

PDF version: Charter and Oil and Gas Issues to Await Another Day: A Disappointing End to the Kelly Appeal?

In an earlier post, I suggested that a recent development in the Kelly appeal would likely lead the Court of Appeal to declare the appeal moot (see “An Important Development in the Kelly Appeal“). I also suggested that, although this would not be a surprising decision, it would amount to a disappointing end for an appeal which held out promises of elucidating important legal issues. The Court of Appeal has indeed dismissed the Kelly appeal as moot. Although this result is certainly disappointing from a legal point of view, it is perhaps less so from a societal and public participation point of view.

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Cases Considered: National Energy Board, Reasons for Decision, TransCanada PipeLines Limited, GH-5-2008, Jurisdiction and Facilities, February 2008 (posted to the NEB website February 26, 2009)

PDF Version:  TransCanada’s Alberta Pipeline System now under federal regulatory authority

It’s official. The intra-provincial natural gas transmission system (the Alberta System), originally built by Alberta Gas Trunk Line Limited, latterly known as NOVA, and part of the TransCanada PipeLines (TCPL) empire since 1998, will henceforward be regulated by the National Energy Board rather than the provincial regulators, the Energy Resources Conservation Board (ERCB) (for pipeline construction etc) and the Alberta Utilities Commission (AUC) (for tolls and tariffs etc).

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Cases Considered: ATCO Midstream Ltd. v. Alberta (Energy Resources Conservation Board), 2009 ABCA 41.

PDF Version: What is sauce for the goose is sauce for the gander (and other, more mixed, metaphors): and a prediction as to the role of power and influence on law-making in the province.

The cases are legion in which the Energy Resources Conservation Board, supported by the Court of Appeal, has denied standing to public interest interveners, First Nations (e.g. Dene Tha’ First Nation v. Alberta (Energy and Utilities Board), 2005 ABCA 68) and fellow-travellers on the grounds that they lack an adequate legal interest in the subject matter of the application. What is interesting about this case is that, this time, the ox that is gored is a sacred cow. Two sacred cows in fact; a leading provincial utility and gas processor (ATCO), and a petrochemical interest (NOVA) that the province spawned. At a formal level the result might be celebrated in terms of respect for the neutrality of the law and equality before the law. Respect may be tempered if we think the rule to be a bad rule.

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PDF Version:  The sky is falling, let’s blame the royalty review

I have lived in Alberta and this city for nearly thirty years. During the fall of 2007 I thought that we had the best public policy debate that I have ever seen in this province. The subject of that debate was the province’s royalty review.

I think that it was a good debate because it was a well informed debate on a crucial public policy issue. It was a well informed debate because the province, for the first time in its history, struck a public review which articulated a set of principles that should govern royalty design. Prior to that, royalty reviews were essentially private affairs between government and industry.

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Cases Considered: Hunt Oil Company of Canada Inc: Applications to amend enhanced recovery scheme approval No. 10848 and Pool Delineation Kleskun and Puskwaskau Fields, December 23, 2008, ERCB Decision 2008-130, December 23, 2008.

PDF Version:  Adjudicating on waterflood enhanced recovery schemes: is it time for compulsory unitization in Alberta?

Hunt and Galleon (and perhaps others) have interests in the same small oil pool and indeed a series of oil pools that are all “in communication” by virtue of a common aquifer. But evidently they cannot agree on how best to develop the pool, or perhaps they cannot agree on how to share the costs and benefits of joint development including the allocation of resulting production. As a result, each of them operates separate waterflood schemes in the same pool. Each such enhanced oil recovery (EOR) scheme needs to be approved by the ERCB under s.39(1)(a) of the Oil and Gas Conservation Act (OGCA), R.S.A. 2000, c. O-6.

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Cases Condisidered: Marathon Canada Ltd v. Enron Canada Ltd, 2008 ABQB 408;
Marathon Canada Ltd v. Enron Canada Ltd, 2009 ABCA 31.

PDF Version: Terminating a long term gas sales contract on account of a material adverse change: the continuing fallout from the collapse of the Enron Empire

The Court of Appeal, in a memorandum of judgement authored by Justices Ellen Picard, Peter Costigan and Jack Watson, has affirmed the decision at trial of Justice Terence McMahon of the Alberta Court of Queen’s Bench. Justice McMahon held that Marathon Canada had lawfully terminated a natural gas purchase contract with Enron Canada. Marathon chose to terminate when Enron Canada’s US parent (Enron Corp) fell into serious financial difficulties. Both courts also held that: (1) Marathon was entitled to recover $560,000 damages for natural gas that it had delivered prior to contract termination, but that, (2) Enron Canada was not entitled to recover liquidated damages of some $126 million based on a counter-claim of wrongful termination and the estimated\guesstimated present value of Marathon’s future deliveries at the contract price.

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Cases Considered: Bearspaw Petroleum Ltd. v. Alberta Energy and Utilities Board, 2008 ABCA 405;
Bearspaw Petroleum Ltd. v. Alberta Energy and Utilities Board, 2009 ABCA 3.

PDF Version: Obtaining leave to appeal an ERCB decision: Where is the justice?

Section 41 of the Energy Resources Conservation Act, R.S.A. 2000 c. E-10 provides for an appeal from a decision of the Energy Resources Conservation Board (ERCB) on questions of law or jurisdiction with leave of the Court of Appeal. The test for leave includes a consideration of four factors: (1) whether the point on appeal is of significance to the practice; (2) whether the point raised is of significance to the action itself; (3) whether the appeal is prima facie meritorious; and (4) whether the appeal will unduly hinder the progress of the action. Bearspaw Petroleum Ltd. v. Alberta Energy and Utilities Board is one of many recent leave to appeal decisions from the Court (See for example “Landowners, Procedural Fairness and Alberta’s Energy Resources Conservation Board” ). What strikes me about this decision is how it compares to the Court’s decision to deny leave to appeal in Sawyer v. Alberta Energy and Utilities Board, 2007 ABCA 297 (see “Standing against public participation at the Alberta Energy and Utilities Board”).

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Cases Considered: Kelly v. Alberta (Energy and Utilities Board), 2008 ABCA 410

PDF Version:  An Important Development in the Kelly Appeal

Last March I posted a blog about a Court of Appeal decision which granted a group of landowners (Kelly et al.) leave to appeal a decision of Alberta’s Energy and Utilities Board (now the Energy Resources Conservation Board). See “What does the Canadian Charter of Rights and Freedoms have to do with Oil and Gas Development in Alberta?”. The grounds for leave in the Kelly appeal indicated that the Court of Appeal might have to address novel and difficult questions in relation to the possible application of section 7 of the Charter in the context of oil and gas development in Alberta. A recent development in the case, however, leaves me wondering whether the merits of the appeal will ultimately be heard or not.

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Cases Considered: Signalta Resources Limited v. Dominion Exploration Canada Limited, 2007 ABQB 636; Signalta Resources Limited v. Dominion Exploration Canada Limited, 2008 ABCA 437

PDF Version:  What zones were the subject of a unitization agreement?

I blogged the trial decision of Justice AG Park in this case and now the Court of Appeal has affirmed. Readers wanting a full statement of the facts should review that earlier blog.

There were, as the Court put it, “no grounds for appellate intervention” (at para. 2) and in particular the Court of Appeal agreed with Justice Park that the original inclusion of the Glauconite for the section 8 lands in the schedule to the unitization agreement was a mistake. It was a mistake for two reasons: (1) Dyco (Dominion’s predecessor in title) did not have rights to the Glauconite under its farmout with Husky and therefore could not contribute Glauconite rights, and (2) Husky (which did own the Glauconite rights) never contributed them and executed the relevant agreements as a royalty owner and not as a working interest owner.

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The National Post recently ran a feature choosing different election theme songs for the federal political parties (see http://www.nationalpost.com/news/story.html?id=822081). Critics of Alberta’s dismal turnout on voting day (52.9% of eligible voters) might suggest that the election itself deserved its own theme song in this province - Pink Floyd’s “Comfortably Numb” comes to mind, or perhaps “I’m Only Sleeping” by the Beatles (I am dating myself here - other suggestions welcome). This complacence is troubling in light of the fact that many issues of potential concern to Albertans were discussed during the election, some of which we explored in constitutional law this term.

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