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Author: Nigel Bankes Page 75 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.

Court of Appeal grants relief from forfeiture in an oil and gas lease case

PDF version: Court of Appeal grants relief from forfeiture in an oil and gas lease case 

Case commented on: Canpar Holdings Ltd. v. Petrobank Energy and Resources Ltd., 2011 ABCA 62

The principal significance of this case is that it confirms that the Court may relieve against the forfeiture of an oil and gas lease that is terminated for cause (in this case failing to calculate and tender royalties as prescribed by the lease) – as opposed to termination in accordance with its own terms (e.g. for failure to drill or produce), in which case there can be no relief. In granting relief the Court signals that it will draw guidance from non-oil and gas cases dealing with relief from forfeiture. I think that this is the first reported decision in which the Court of Appeal has exercised its discretion to relieve against forfeiture in an oil and gas lease case.

ALSA and the property rights debate in Alberta: a certificate of title to land is not a “statutory consent”

PDF version: ALSA and the property rights debate in Alberta: a certificate of title to land is not a “statutory consent” 

Statute commented on: Alberta Land Stewardship Act, SA 2009, c.A-26.8

There is significant public debate in Alberta about a series of measures introduced and passed by the provincial government over the last 18 months. These measures include: (1) the Land Assembly Project Area Act (sometimes known as Bill 19, now SA 2009, c. L-2.5, yet to be proclaimed), (2) the Electric Statutes Amendment Act, SA 2009, c.44 (Bill 50), (3) the Alberta Land Stewardship Act, SA 2009, c.A-26.8 (ALSA), and (4) Bill 24, the Carbon Capture and Storage Statutes Amendment Act (Alberta), SA 2010, c.14. I won’t deal with all aspects of the debate but I do want to comment on one aspect of the debate as it relates to ALSA.

The world wide web and the honour of the Crown

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Cases considered: Athabasca Chipewyan First Nation v Alberta (Minister of Energy), 2011 ABCA 29, and Lameman v Alberta, 2011 ABQB 40

The Court of Appeal (Justices Ritter, Bielby and Read) has denied the appeal by the Athabasca Chipewyan First Nation (ACFN) against the judgement at trial (2009 ABQB 576) which I blogged here. In that decision, Justice D.R.G. Thomas held that ACFN had commenced its application more than six months after the relevant decision, and therefore out of time within the meaning of Rule 753.11 of the old Alberta Rules of Court, Alta. Reg. 390/1968. In doing so I think that the Court of Appeal has ignored the constitutional foundation of the duty to consult and as a result has failed to interpret the Rules of Court through that lens.

The Court of Appeal confirms that the word “producible” does not mean actual production

PDF version: The Court of Appeal confirms that the word “producible” does not mean actual production 

Case considered: Bearspaw Petroleum Ltd v Encana Corporation, 2011 ABCA 7

The Court of Appeal in a memorandum of judgement (Rowbotham, McDonald and Bielby JJA) has confirmed Justice McMahon’s decision at trial which I blogged here.  See that post for a summary of the facts.

There were two issues in this case: (1) the proper interpretation of the habendum (duration) of a petroleum and natural gas lease, and (2) the existence of a covenant to market. The Court finds for the lessee (Bearspaw) on both grounds.

Down on the Kerrs’ Farm: A Comment on the Reports of Alleged Carbon Dioxide Leaks from Cenovus’ Weyburn Project

By: Nigel Bankes

Carbon capture and storage (CCS) is not yet a proven technology at commercial scales. It is true that we have had considerable experience with analogies including acid gas disposal projects, natural gas storage projects and enhanced oil recovery (EOR) projects (involving the injection of carbon dioxide as a miscible flood). We also have some international experience especially in the North Sea with CO2 injection projects not linked to EOR, but elsewhere, commercial scale CCS projects are just getting underway. And there is nothing that would stop or seriously slow the adoption of CCS more quickly than a significant failure in one of the early projects.

For some this would be no bad thing – particularly for the climate skeptics, those who believe that human induced global warming is not happening. Others accept the reality of global warming but are philosophically opposed to CCS as a means of mitigating emissions. The challenge for this group is to identify realistic alternatives if we remove CCS as an option. Yes, energy conservation and the widespread and aggressive adoption of renewables will get us a long way, and for some nuclear energy is an important part of the solution, but national mitigation strategies often adopt a “wedge” that represents the contribution that CCS can make to meeting national mitigation targets (see for example, the work of the National Round Table on the Economy and the Environment). If we lose the CCS wedge we need to find other mitigation strategies that can deliver over the next ten to twenty years.

This is what is so troubling about the reports (see below) that are emerging from Saskatchewan in which the Kerr family alleges that they are experiencing harms from carbon dioxide leaking from the enhanced oil recovery operation of Encana (now Cenovus) in the Weyburn Field in Saskatchewan. This project (which is an EOR project and not a CCS project) has been extensively and intensively studied since 2000 by an international group of scientists and has been adopted by the International Energy Agency as a pilot project to encourage learning for future CCS projects (see here).

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