Monthly Archives: May 2008

A Lost Opportunity for Clarifying Public Participation Issues in Oil and Gas Decision Making

Cases Considered: Graff v. Alberta (Energy and Utilities Board), 2008 ABCA 119

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Those of us following the year-long journey of the Graff family (the “Graffs”) through the Court of Appeal were stunned when the final decision was handed down on March 26, 2008. While the grounds upon which leave to appeal had been granted held out promises of clarification on certain key public participation issues in oil and gas development, none of these grounds were ultimately dealt with by the Court. Instead, both appeals (heard together) were dismissed on the basic procedural point that parties requesting standing before the Energy and Utilities Board (the “EUB”, now the ERCB) must provide at least some relevant evidence to support their claim of being “directly and adversely” affected.
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The Independent Operation Of The Shut-in Clause Of An Oil And Gas Lease

Cases Considered: Kensington Energy Ltd v. B & G Energy Ltd 2008 ABCA 151

PDF Version:  The Independent Operation Of The Shut-in Clause Of An Oil And Gas Lease

In this important decision (hereafter “Kensington”) the majority of the Alberta Court of Appeal (Hunt and Slatter JJA; Romaine JA dissenting) concluded that the third proviso to the habendum of an oil and gas lease does not establish a set of conditions precedent that the lessee must fulfill before it can rely upon the shut-in wells clause and shut-in well payment to deem production, thereby continuing the lease – at least, and this is an important caveat – where the language of the shut-in wells clause does not track that of the third proviso. In reaching this conclusion the Court effectively distinguished its earlier decision in Freyberg v. Fletcher Challenge Oil and Gas Inc, 2005 ABCA 46 (“Lady Freyberg”).

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The relationship between the well licence jurisdiction of the Energy Resources Conservation Board and the jurisdiction of the Surface Rights Board

Cases Considered: EnCana Corporation v. Campbell, [2008] ABQB 234

PDF Version: The relationship between the well licence jurisdiction of the Energy Resources Conservation Board and the jurisdiction of the Surface Rights Board

Justice Crighton’s decision in EnCana v. Campbell suggests that land owners may be able to use the Surface Rights Board (SRB) to require an oil and gas operator to follow more stringent conditions in relation to surface access and related matters such as weed control and water quality protection and testing than may be prescribed in the terms of a well licence or the Energy Resources Conservation Board (ERCB)’s Oil and Gas Conservation Regulations. Given the potential surface impacts of coal bed methane (CBM) development in the province and the uncertainties associated with the effect of CBM operations on ground water quality this is an important development. But while it offers additional protection for surface owners it also has the potential for a patchwork of environmental requirements etc. which may vary from property to property. This may well be a case where the re-born ERCB needs to be more proactive and precautionary so as to reflect the concerns of and uncertainties faced by landowners especially with respect to such an important matter as water quality.

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