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.

The Federal Renewable Fuels Regulations Survive an Aggressive and Comprehensive Challenge from Syncrude

By: Nigel Bankes

PDF Version: The Federal Renewable Fuels Regulations Survive an Aggressive and Comprehensive Challenge from Syncrude

Case Commented On: Syncrude Canada Ltd. v Attorney General of Canada, 2014 FC 776

In the dog days of summer (August 6, 2014) Justice Russel Zinn of the Federal Court of Canada handed down his judgement in a case in which Syncrude sought to challenge the validity of the federal Renewable Fuels Regulations, SOR/2010/189 (RFR) on both constitutional and administrative law grounds. The judgment seems to have passed almost without comment in the media. The RFR require that diesel fuel produced, imported or sold in Canada must contain renewable fuel of at least 2% by volume. This requirement can be met by blending diesel with biodiesel (although this can be challenging at cold temperatures). Failure to comply with the RFR is an offence although a regulated entity can achieve compliance by purchasing compliance units from other regulated entities who have exceeded their own compliance targets. See the judgement at para 4.

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What happens when A sells B a Working Interest in the Thermal or Enhanced Production from an Oil and Gas Property and A or its Successors in Interest Continue with Primary Production?

By: Nigel Bankes

PDF version: What happens when A sells B a working interest in the thermal or enhanced production from an oil and gas property and A or its successors in interest continue with primary production?

Case Considered: IFP Technologies (Canada) v Encana Midstream and Marketing, 2014 ABQB 470

What happens when A sells B a working interest in the thermal or enhanced production from an oil and gas property and A or its successors in interest continue with primary production? This was the issue at the heart of this decision. The answer is that B gets shafted; B should have taken better steps to protect itself rather than simply assuming that all future production from the property would take the form of enhanced or thermal production.

In the course of his lengthy 73 page judgement Chief Justice Neil Wittmann (acting in place of Justice Ron Stevens (deceased)) addressed a number of questions of oil and gas law which will be of interest to the energy bar including the following: (1) What property interest did IFP acquire? (2) What is the test for determining whether a working interest owner has reasonable grounds for refusing consent to an assignment of shared interest lands under the 1990 CAPL Operating Procedure? (3) What is the legal position where a working interest purports to withhold consent and the Court subsequently determines that the withholding of consent was unreasonable? (4) Did the development of the property through primary production techniques substantially nullify the benefit for which IFP (B) had bargained so as to amount to a breach of contract? (5) Assuming that there was a breach of contract how should damages be assessed? (6) Assuming liability should any claim for damages be capped by a contractual agreement between the parties? Continue reading →

Grassy Narrows, Division of Powers and International Law

By: Nigel Bankes

PDF Version: Grassy Narrows, Division of Powers and International Law

Case commented on: Grassy Narrows First Nation v Ontario (Natural Resources), 2014 SCC 48

This post discusses two issues arising from the Supreme Court’s decision in Grassy Narrows. The post first considers the implications of the Court’s conclusion that the doctrine of interjurisdictional immunity does not apply in a case where a province infringes the treaty right to hunt leaving the treaty party with no meaningful right to hunt. Second the post argues that the Court’s conclusion that a provincial government may be able to justify an infringement of hunting rights of this nature is inconsistent with Canada’s obligations under international law. Continue reading →

Canada and Nova Scotia Finalize Equivalency Agreement on the Control of Greenhouse Gas Emissions in the Electricity Sector

By: Nigel Bankes

PDF Version: Canada and Nova Scotia Finalize Equivalency Agreement on the Control of Greenhouse Gas Emissions in the Electricity Sector

Documents Commented On: Agreement on the Equivalency of Federal and Nova Scotia Regulations for the Control of Greenhouse Gas Emissions from Electricity Producers in Nova Scotia;Proposed Order in Council Declaring that the Reduction of Carbon Dioxide Emissions from Coal-fired Generation of Electricity Regulations do not apply in Nova Scotia, Canada Gazette vol 148 (2014), June 28, 2014 and the accompanying Regulatory Impact Analysis Statement

This Agreement is the first greenhouse gas (GHG) equivalency agreement to be finalized between Canada and a province. The Agreement and the accompanying draft Order in Council will serve to suspend the application of Canada’s Reduction of Carbon Dioxide Emissions from Coal-Fired Generation of Electricity Regulations, SOR/2012-167 (the federal Coal Regulations or the CFGRs) made under s.93 of the Canadian Environmental Protection Act, 1999, SC 1999, c 33 (CEPA, 1999) in the province of Nova Scotia. For comment on the CFGRs see the post by Astrid Kalkbrenner here. The Agreement will be of considerable interest to other jurisdictions (including Alberta) which are negotiating equivalency agreements with Canada to avoid the application of federal GHG regulations. While a draft of the Agreement has been available for a couple of years (see here, and for a very short summary of the two supportive comments received see here), and there are very few changes between the draft and the final version, what is new is the release of the Regulatory Impact Analysis Statement (RIAS) which casts some light on the methodology that the federal government will apply in assessing equivalency.

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Competition for Underground Disposal Space

By: Nigel Bankes

PDF Version: Competition for Underground Disposal Space

Decision Commented On: Alberta Energy Regulator, Canadian Natural Resources Limited, Application for Disposal, Lloydminster Field, 2014 ABAER 008

Previous posts on ABlawg have commented on sub-surface resource conflicts especially as between gas storage operations and oil and gas production: see Kallisto # 1 here and Kallisto # 2 here. This decision involving Canadian Natural Resources Limited (CNRL) illustrates that there may also be competition for good disposal sites and that the disposal operations of one party may affect the disposal operations of another party. While this decision involves the use of pore space for water disposal operations we can also anticipate competition for the use of pore space for carbon dioxide disposal purposes (i.e. carbon capture and storage, CCS) if that technology rolls out as anticipated to mitigate Alberta’s greenhouse gas emissions.

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