Author: Nigel Bankes Page 16 of 88

Nigel Bankes is emeritus professor of law at the University of Calgary. Prior to his retirement in June 2021 Nigel held the chair in natural resources law in the Faculty of Law.

Coal Law and Policy in Alberta, Part Two: The Rules for Acquiring Coal Rights and the Royalty Regime

By Nigel Bankes

On February 11, 2021

In Energy, Environmental

By: Nigel Bankes

PDF Version: Coal Law and Policy in Alberta, Part Two: The Rules for Acquiring Coal Rights and the Royalty Regime

Matters Commented On: Mines and Minerals Act, RSA 2000, c M-17; Coal Royalty Regulation, Alta Reg 295/1992

Minister of Energy Sonya Savage’s announcement on February 8, 2021 that the province would reinstate the 1976 Coal Development Policy (CDP) caused us to change the planned roll-out of this series on coal law and policy, and to add some analysis of that decision in the post “What Are the Implications of Reinstating the 1976 Coal Development Policy?”

With that out of the way, it still seems useful to return to the original plan in the interests of contributing to the ongoing debate on the future of coal on Alberta’s landscape and economy. To that end, this post examines the rules for acquiring coal rights and the royalty regime for coal in Alberta. In other words, it deals with questions of ownership or property. A later post will deal with questions relating to the regulation of coal exploration and development. It bears emphasizing at the outset that while a lease gives the lessee the property right to exploit the coal, the lessee still needs regulatory approvals from the Alberta Energy Regulator before it can engage in any exploration activities on the land. We see the same parallel structure in the oil and gas sector. A petroleum and natural gas lease, whether acquired from the Crown (Department of Energy) or a private owner, grants the property right to exploit the oil or gas but the lessee still requires a licence from the AER in order to be able to drill a well (see Oil and Gas Conservation Act, RSA 2000, c O-6, s 11). Hence it is important to keep separate questions of property and questions of regulation. The focus of this post is on question of property.

What Are the Implications of Reinstating the 1976 Coal Development Policy?

By Nigel Bankes

On February 9, 2021

In Energy

By: Nigel Bankes

PDF Version: What Are the Implications of Reinstating the 1976 Coal Development Policy?

Matters Commented On: Alberta Energy Press Release, “Alberta’s 1976 Coal Policy Reinstated” (February 8, 2021); Information Letter 2021-07 “Coal Policy Reinstatement” (8 February 2021) and attached Ministerial Order 054/2021

On February 8, 2021, Minister of Energy, Sonya Savage announced via press conference that, effective immediately, the 1976 Coal Development Policy (CDP) would be reinstated. The formal press release noted that “[t]his includes reinstating the four coal categories, which dictated where and how coal leasing, exploration and development could occur.” In addition, the release stipulated that “[a]ll future coal exploration approvals on Category 2 lands will be prohibited pending widespread consultations on a new coal policy.”

But these decisions alone will not restore the status quo as it stood prior to June 1, 2020 when the UCP government revoked the CDP without consultation. This makes the claim of reinstatement hollow – for at least two reasons.

Coal Law and Policy in Alberta, Part One: the Coal Policy and Its Legal Status

By Nigel Bankes

On February 8, 2021

In Energy

By: Nigel Bankes

PDF Version: Coal Law and Policy in Alberta, Part One: the Coal Policy and Its Legal Status

Issue Commented On: Revocation of the Coal Development Policy for Alberta (1976); Department of Energy, Information Letter 2020-23 “Rescission of A Coal Development Policy for Alberta and new leasing rules for Crown coal leases” (15 May 2020)

I don’t need to tell anybody living in Alberta that there has been a lot of talk recently about coal. Most of that talk has been directed at the Government of Alberta’s decision, to revoke a policy adopted in 1976 known as the Coal Development Policy for Alberta (CDP or Policy).

Once it became widely known, the decision to revoke the policy attracted the attention of civil society and of the media. Interest in the decision is growing and many local governments including Lethbridge, High River, Nanton, Longview, Canmore, Edson, Okotoks, Airdrie and Turner Valley have weighed in on the issue. So too have the Kainai-Blood Tribe and the Siksika First Nation. A significant number of these governments have adopted resolutions either questioning the decision to revoke the coal policy or simply demanding that the Government of Alberta reinstate the policy. Much of the commentary focuses on the environmental and health costs associated with coal mining as well as the conflict between coal mining and other visions for the future of the eastern slopes of the Rockies (e.g. Sharon J Riley, “An Alberta County drafted big tourism plans. Then came the coal leases”, The Narwhal (6 February 2021))

Saskatchewan Court of Appeal Confirms that a Registrar’s Caveat Is Not a Magic Wand

By Nigel Bankes

On January 27, 2021

In Property

By: Nigel Bankes and Jonnette Watson Hamilton

PDF Version: Saskatchewan Court of Appeal Confirms that a Registrar’s Caveat Is Not a Magic Wand

Decision Commented On: Primrose Drilling Ventures v Registrar of Titles, 2021 SKCA 15

This case involves the rights acquired by a party (Primrose Drilling) who took a title that was encumbered by a registrar’s caveat. The caveat was filed to warn purchasers of a potential registrar’s error made back in the chain of title, but it was filed after a purchaser for value had got on the register relying on the flawed title.

The case came before the courts on the basis of a reference from the registrar relying on section 108 of The Land Titles Act, 2000, SS 2000, c L-5.1. The trial judge (Registrar of Titles and Great West Life Assurance Company and Primrose Drilling Ventures Ltd, 2018 SKQB 290 (CanLII)) concluded that Primrose’s title was subject to whatever interest the Registrar was seeking to protect (in this case the interests of GWL, the successor in interest to a party wrongly deprived of the mineral title to the lands in question). We commented on the trial judgment at some length in “Saskatchewan Land Titles Decision Calls Out for Appellate Review.” We took the position that the registrar had no authority to file a caveat once a purchaser for value had got on title on the faith of the register and that Primrose (the last purchaser for value in the chain of purchasers for value) was entitled to a title free of the blemish represented by the registrar’s claim. We refer the reader to that post for a detailed analysis and discussion of relevant authorities from both Saskatchewan and Alberta.

Court of Appeal (England and Wales) Confirms High Court Decision on the Relationship Between a Farmout Agreement and an Operating Agreement

By Nigel Bankes

On January 4, 2021

In Oil & Gas

By: Nigel Bankes

PDF Version: Court of Appeal (England and Wales) Confirms High Court Decision on the Relationship Between a Farmout Agreement and an Operating Agreement

Decision Commented On: Apache North Sea Limited v Euroil Exploration Limited and Edison SPA, [2020] EWCA Civ 1397

In this decision, the Court of Appeal of England and Wales confirmed Judge Pelling’s decision in the High Court with respect to the drilling costs Apache was entitled to recover from Euroil under the terms of a farmout agreement (FOA) and its related joint operating agreement (JOA). I commented on Judge Pelling’s decision here and I refer readers to that earlier post for a more detailed statement of the facts, as well as references to Canadian decisions dealing with the relationship between an FOA and the JOA.

In that earlier post I suggested that the FOA at issue here would likely be denominated as a “farmout and participation agreement” in a Canadian context insofar as the drilling obligation was not a sole risk obligation of the farmee (Euroil) but rather was a shared risk operation for which Euroil was to cover only a percentage of the costs. The farmor, Apache, was to carry out the drilling operation as operator and was also responsible for a percentage of the costs.