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Author: Nigel Bankes Page 27 of 89

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.

Gross Overriding Royalty Payable on 100% of Production

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On June 10, 2019

In Civil Procedure, Energy

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.

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Setting the Record Straight on Federal and Provincial Jurisdiction Over the Environmental Assessment of Resource Projects in the Provinces

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On May 24, 2019

In Constitutional, Energy, Environmental

By: Martin Olszynski and Nigel Bankes

PDF Version: Setting the Record Straight on Federal and Provincial Jurisdiction Over the Environmental Assessment of Resource Projects in the Provinces

Matter Commented On:Bill C-69: An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to ament the Navigation Protection Act and to make consequential amendments to other Acts

Alberta’s new premier has recently threatened to sue the federal government over Bill C-69, the Liberal government’s attempt to restore some credibility to Canada’s environmental assessment regime. More specifically, Premier Kenney has recently been asserting that section 92A of the Constitution Act, 1982, which gives the provinces jurisdiction over the development of non-renewable natural resources, precludes the federal government from assessing what the Premier describes as “provincial projects”: “[BillC-69] gives a new federal agency the power to regulate provincial projects, such as in situ oil sands developments and petrochemical refineries, which are entirely within a province’s borders and already subject to provincial regulation. It disregards a landmark Supreme Court ruling on jurisdiction and the balance between federal and provincial powers spelled out in the Constitution — including section 92A in which provinces have exclusive authority over non-renewable resource projects.” In making these comments, the Premier contradicts almost three decades of settled jurisprudence with respect to the federal and provincial division of powers over the environment generally, and federal jurisdiction to conduct environmental assessments specifically.

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Summary Judgment Not Available in a Farmout Case

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On May 15, 2019

In Oil & Gas

By: Nigel Bankes

PDF Version: Summary Judgment Not Available in a Farmout Case

Cases commented on: (1) Teine Energy Limited v Audax Investments Ltd, unreported oral judgment delivered from the bench October 2, 2018 (Transcript of Proceedings), (2) Teine Energy Limited v Audax Investments Ltd, unreported oral judgment delivered from the bench March 21, 2019 (ABQB), and (3) Teine Energy Limited v Audax Investments Ltd, 2019 ABQB 334 (ABQB Ruling on Costs)

Teine and Audax entered into a farmout agreement on November 24, 2016. The agreement took the form of a proposal from Teine (as the farmor) to Audax as the proposed farmee, which proposal Audax accepted. The agreement contemplated that in return for drilling the commitment well (or wells), Audax would earn a 100% interest in Taine’s Saskatchewan Crown petroleum and natural gas lease, subject to a 17.5% gross overriding royalty in favour of Teine. The agreement incorporated by reference the 1997 Canadian Association of Petroleum Landmen Farmout and Royalty Procedure.

The case turns on clauses 3 and 4 of the farmout agreement:

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Bill 12: a reprise

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On May 2, 2019

In Natural Resources, Oil & Gas

By: Nigel Bankes

PDF Version: Bill 12: a reprise

Legislation Commented On: Preserving Canada’s Economic Prosperity Act, SA 2018, c P-21.5

Case Commented On: British Columbia (Attorney General) v Alberta (Attorney General), 2019 ABQB 121 (CanLII)

I commented on Preserving Canada’s Economic Prosperity Act (PCEPA) when it was first introduced in the spring of 2018: see “A Bill to Restrict the Interprovincial Movement of Hydrocarbons: a.k.a. Preserving Canada’s Economic Prosperity [Act]” (18 April, 2018). At that time, I expressed doubts as to the constitutional validity of elements of Bill 12 as it then was, especially those provisions pertaining to refined products as well as any implementation measures that might involve discrimination by destination with respect to any exports. I remain of that opinion.

What has changed since then is that PCEPA has now been proclaimed (April 30, 2019); that is to say, it now has the force of law in Alberta. Prior to proclamation, PCEPA was of no legal significance. It was that absence of legal significance that led Justice Hall in his judgment in British Columbia (Attorney General) v Alberta (Attorney General) in February of this year to dismiss British Columbia’s challenge to the legislation. Justice Hall concluded that any such attack, at least by way of a declaration as to invalidity, was premature:

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The Senate, the Oceans Act and Marine Protected Areas

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On March 30, 2019

In Environmental, Water Law

By: Nigel Bankes

PDF Version: The Senate, the Oceans Act and Marine Protected Areas

Matter commented on: Bill C-55, An Act to amend the Oceans Act and the Canada Petroleum Resources Act, as passed by the House of Commons, April 20. 2018.

There is a lot of attention focused on the Senate these days, principally in relation to Bill C-69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts, (and the subject of numerous ABlawg posts); but, there are other Bills standing in a long and slowly moving line in that Chamber as well. These Bills include Romeo Saguenash’s private member’s Bill C-262 (also endorsed by the Liberals) to give application to the United Nations Declaration on the Rights of Indigenous Peoples in Canadian law (and the subject of an ABlawg post here), but also proposed amendments to the Oceans Act, SC 1996, c 31 to create an expedited process for establishing marine protected areas (MPAs). This blog post focuses on the latter.

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