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Month: February 2012

Deep Rights, Shallow Rights, and the Interpretation of a Purchase and Sale Agreement

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On February 13, 2012

In Oil & Gas

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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Supreme Court of Canada Saves Timing for the Alberta Information and Privacy Commissioner

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On February 9, 2012

In Administrative Law, Privacy

PDF version: Supreme Court of Canada Saves Timing for the Alberta Information and Privacy Commissioner 

Decision considered: Alberta (Information and Privacy Commissioner) v Alberta Teachers’ Association, 2011 SCC 61

This case has been followed closely by those interested in information and privacy procedures. The issues raised by the decision were discussed in my previous blog (see here). [Editor’s note, also see Alice Woolley’s ABlawg on this decision True Questions of Jurisdiction: Administrative Law’s Unicorns]

In sum, the Information and Privacy Commissioner (IPC) received complaints that the Alberta Teachers’ Association (ATA) had disclosed personal information in contravention of Alberta’s Personal Information Protection Act, SA 2003 c P-6.5 (PIPA). At the relevant time, subsection 50(5) provided that an inquiry must be completed within 90 days of the complaint being received, unless the IPC notified the parties that he or she was extending the time period. The IPC took 22 months from the initial complaint before extending the date on which the inquiry would be concluded. Then, seven months later, an adjudicator issued an order on behalf of the IPC, finding that ATA had contravened the PIPA. The ATA applied for judicial review, arguing for the first time that the IPC had lost jurisdiction for failing to extend the time period for the inquiry within 90 days of the complaint being received. The chambers judge quashed the adjudicator’s decision on the basis of timing, and the majority of the Court of Appeal upheld the chambers judge’s decision. As noted in the blog above, this decision prompted the rare move on the part of the IPC, who publicly expressed concern about the implications of the Court of Appeal ruling.

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The severance of a water right from a purchase and sale of land

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On February 7, 2012

In Property, Water Law

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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Senate Reform on the Horizon: Does the Parliament of Canada have the power to unilaterally change the terms and selection method of Senators?

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On February 6, 2012

In Constitutional

PDF version: Senate Reform on the Horizon: Does the Parliament of Canada have the power to unilaterally change the terms and selection method of Senators? 

Legislation considered: Bill C-7, An Act respecting the selection of senators and amending the Constitution Act, 1867 in respect of Senate term limits (“Senate Reform Act”), 41st Parliament, 1st Session

After a very long journey, Canadians may be reaching the end of the long road to Senate reform. In the recently introduced Senate Reform Act the federal government is proposing a framework for electing senate nominees, and proposing to significantly reduce Senator term limits. Questions have been raised about Parliament’s unilateral ability to effect these reforms without provincial consent. This comment will explore the constitutional validity of the Senate Reform Act in terms of Parliament’s jurisdiction to unilaterally amend the Canadian Constitution. It will be suggested that while the proposed term limit is likely constitutionally valid, the proposed framework and legal obligation of the Prime Minister to consider elected Senate nominees is beyond Parliament’s sole power.

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The Northern Gateway Joint Review Panel and the Governor in Council

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On February 2, 2012

In Environmental, Oil & Gas

 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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