Author: Nigel Bankes Page 70 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.

By: Nigel Bankes

PDF Version: Competing Uses of Geological Space: Resolving Conflicts Between Production and Natural Gas Storage

Decision Commented On: Kallisto Energy Corp. Application for a Well Licence Crossfield East Field, 2012 ABERCB 005, February 24, 2012

This decision deals with the potential for conflict between conventional oil and gas operations and natural gas storage projects.

The idea of resource use or landscape level conflicts is familiar to us in the context of the use of the surface. Consider, for example, the conflicts between recreation and forestry interests, between forestry and oil sands or conventional oil and gas exploration. The idea of competing uses of the subsurface is less familiar but our search for new resources or the application of new technologies to known resources is increasing the potential for those subsurface conflicts. High pressure fracturing operations to stimulate production either from shallow oil formations or deeper shale gas formations raises concerns about the effect of these operations on potable groundwater resources, and proposals to sequester carbon dioxide in saline formations or depleted oil or gas reservoirs raises concerns of sterilizing hydrocarbon resources. The province’s new CCS regime explicitly addresses this scenario through a provision in the Oil and Gas Conservation Act, (OGCA) RSA 2000, c O-6, s. 39(1.1) which provides that the ERCB “may not approve a scheme for the disposal of captured carbon dioxide to an underground formation…unless the [applicant] satisfies the Board that the injection of the captured carbon dioxide will not interfere with (a) the recovery or conservation of oil or gas, or (b) an existing use of the underground formation for the storage of oil or gas.”

Federal Court of Appeal confirms that a SARA protection statement must offer the critical habitat of a listed species real legal and non-discretionary protection

By Nigel Bankes

On February 23, 2012

In Administrative Law, Protection of Species

Case commented on: Minister of Fisheries and Oceans v. David Suzuki Foundation (the Killer Whale case) 2012 FCA 40

PDF Version: Federal Court of Appeal confirms that a SARA protection statement must offer the critical habitat of a listed species real legal and non-discretionary protection

A unanimous Federal Court of Appeal in a decision authored by Justice Mainville has largely affirmed Justice Russell’s decision at trial in a case dealing with the legal protection of the critical habitat of two populations of killer whale listed as threatened or endangered under the terms of the Species at Risk Act (SARA), SC 2002, c 29. ABlawg’s post on the trial decision is available here: “SARA has a spine as well as teeth.”

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

By Nigel Bankes

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.

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

By Nigel Bankes

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.

The Northern Gateway Joint Review Panel and the Governor in Council

By Nigel Bankes

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.”