Author Archives: Nigel Bankes

About Nigel Bankes

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.

Carbon Security or Carbon Whimsy?

By: Nigel Bankes

PDF Version: Carbon Security or Carbon Whimsy?

Document commented on: Alberta’s Proposed Technology Innovation and Emissions Reduction System: Discussion Document, July 2019

This Discussion Document contains the Government of Alberta’s proposal to replace the current Carbon Competitiveness Incentive Regulation, Alta Reg 255/2017, (CCIR) with a Technology Innovation and Emissions Reduction (TIER) system for Alberta’s large final emitters (LFEs). If promulgated, the TIER system will effectively return us to the model of the Specified Gas Emitters Regulation, Alta Reg 139/2007 (SGER) first introduced by the Stelmach government in 2007, and then repealed and replaced by the Notley government’s CCIR effective January 1, 2018. Both the SGER and the CCIR are greenhouse gas (GHG) mitigation measures; both are emissions intensity schemes rather than cap and trade schemes; both require increased carbon efficiency over time (i.e. reduced carbon emissions per unit of output); both schemes offer covered entities access to flexibility mechanisms (including payments into a fund) to allow them to meet their targets in the most efficient manner; both impose a liability only on excess emissions over the target rather than on all emissions but still provide a pricing signal; both are designed to protect trade exposed sectors; and both focus on LFEs. Continue reading →

Another Interconnection Application Crashes Out

By: Nigel Bankes

PDF Version: Another Interconnection Application Crashes Out

Decision Commented On: AUC Decision 24126-D01-2019, Keyera Energy Ltd, Cynthia Gas Plant Power Plant Application, June 25, 2019

In its Smith decision earlier this year, the Alberta Utilities Commission (AUC) concluded that a self-generator could only avoid the general “must offer, must exchange” obligations imposed by the Electric Utilities Act, SA 2003, c E-5.1, (EUA; and regulations) and the Hydro and Electric Energy Act, RSA 2000, c H-16, (HEEA) if it fell within one of the prescribed exceptions in the legislative scheme. ABlawg commented on the Smith decision here: Opening a Can of Worms. The AUC followed its Smith decision with two further interconnection applications in April and early June: AUC Decision 23756-DOI-2019, Advantage Oil and Gas Ltd. Glacier Power Plant Alteration, April 26, 2019; and AUC Decision 24393-D01-2019, International Paper Canada Pulp Holdings ULC Request for Permanent Connection for 48-Megawatt Power Plant, June 6, 2019. I commented on these latter two decisions here. Continue reading →

Royalty Certainty for the Oil and Gas Industry?

By: Nigel Bankes

PDF Version: Royalty Certainty for the Oil and Gas Industry?

Legislation Commented On: Alberta Bill 12: Royalty Guarantee Act

On June 20, 2019 Alberta’s Legislature gave first reading to Bill 12, The Royalty Guarantee Act. The Bill aims to fulfil a commitment made as part of the United Conservative Party’s (UCP) election platform:

Royalty Guarantee

Recent Alberta governments shook investor confidence with royalty reviews. A United Conservative government will guarantee in law that the royalty regime in place when a well is permitted will remain in place for that project in perpetuity. (at 30)

In the press release accompanying introduction of the Bill, Minister Sonya Savage reiterated the concerns that led to its introduction:

Frequent royalty reviews have had a significant negative impact on the energy industry and our province’s ability to compete with other energy jurisdictions. Alberta has competitive royalty rates and investors need certainty when making long-term decisions that the rates will not change on a whim. This legislation would provide the guarantee that stability isn’t just something we talk about in Alberta, it is the law.

This post examines the current rules in relation to changes in Crown royalties and then considers the scope and effect of Bill 12. Continue reading →

The Implications of the AUC’s Smith Decision

By: Nigel Bankes

PDF Version: The Implications of the AUC’s Smith Decision

Decisions commented on: AUC Decision 23756-DOI-2019, Advantage Oil and Gas Ltd. Glacier Power Plant Alteration, April 26, 2019; and AUC Decision 24393-D01-2019, International Paper Canada Pulp Holdings ULC Request for Permanent Connection for 48-Megawatt Power Plant, June 6, 2019.

In its Smith decision earlier this year, the AUC concluded that a self-generator could only avoid the general must offer, must exchange obligations imposed by the Electric Utilities Act, SA 2003, c E-5.1, (EUA; and regulations) and the Hydro and Electric Energy Act, RSA 2000, c H-16,(HEEA) if it fell within one of the prescribed exceptions in the legislative scheme. ABlawg commented on the Smith decision here: Opening a Can of Worms.

In these decisions, two AUC panels have confirmed the Smith decision, and in doing so further explore the implications of Smith for both new generation and for existing generation. Continue reading →

Gross Overriding Royalty Payable on 100% of Production

By: Nigel Bankes

PDF Version: Gross Overriding Royalty Payable on 100% of Production

Case Commented On: Obsidian Energy Partnership v Grizzly Resources Ltd, 2019 ABQB 406

In this decision, Master J.T. Prowse granted summary judgment in favour of Obsidian (formerly Penn West Petroleum) against Grizzly Resources, concluding that Obsidian’s gross overriding royalty interest (GORR) of 2.75% was payable on 100% of production from the encumbered properties rather than on Grizzly’s working interest in the properties. Continue reading →