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.

A century of liability for an abandoned well

PDF version: A century of liability for an abandoned well

Case considered: Dalhousie Oil Company Limited, Section 40 Review of Abandonment Cost Order No. ACO 2008-1, Turner Valley Field, ERCB Decision 2010-19

In this decision the Energy Resources Conservation Board (ERCB, the Board) confirms that the current owner of an abandoned well has a continuing responsibility to pay for the re-abandonment costs associated with that well even though the well in question had not produced since the 1920s. The decision is particularly interesting in the context of the current discussion surrounding who should assume responsibility for the long term liabilities associated with carbon capture and storage projects.

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Ontario Court of Appeal holds that oil and gas lease continued by virtue of (late) payments under a unitization agreement

PDF version: Ontario Court of Appeal holds that oil and gas lease continued by virtue of (late) payments under a unitization agreement 

Case considered: Tribute Resources v McKinley Farms, 2010 ONCA 392

The Court of Appeal has varied in part the decision in Tribute Resources v McKinley Farms that I blogged here. The trial judge held that any rights that Tribute held under the terms of an oil and gas lease or under the terms of a gas storage agreement (GSA) had terminated.

The Court of Appeal agreed with the trial judge on the GSA point but held that trial judge had erred in holding that the lease was continued by the terms of the unitization agreement. The Court of Appeal concluded that this was an ordinary commercial contract and that the Court must give effect to its terms. The agreement provided that payments under the unitization agreement were effective to deem production on the leased lands. The fact that some payments were late was not significant since the lease did not provide for automatic termination; the default clause was evidence of that and the default clause seemed to allow the lessee the right to notice and the opportunity to cure a default. There had been no notice of default and ergo the deeming was effective.

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Maintaining space for autonomy? Environmental assessments in the context of aboriginal land claims agreements

PDF version: Maintaining space for autonomy? Environmental assessments in the context of aboriginal land claims agreements

Case considered: Quebec (Attorney General) v. Moses, 2010 SCC 17

This is the first decision of the Supreme Court of Canada to examine a modern land claims agreement; in this case the James Bay and Northern Quebec Land Claim Agreement (JBNQA or the Agreement) between Canada, Quebec and the James Bay Cree and the Northern Quebec Inuit. The argument in the case happens to relate to the nature of the environmental assessment process that should be applied to a particular project but there is a much broader issue at stake which is the capacity of federal and provincial governments to continue to make and apply laws within the territory covered by the Agreement to matters “covered” by the terms of the Agreement. By adopting an artificial distinction between that which is covered by the Agreement and that which falls outside it, the majority recognize that governments have retained significant authority to “supplement” the terms of the Agreement. But the government’s authority to do so is not completely unlimited since the majority also recognizes that such authority must be exercised consistently with the Crown’s duty to consult. By contrast, the dissent takes a more robust view of the coverage of the land claims agreement and as a result limits the capacity of governments to create a parallel normative world that sidelines negotiated arrangements for autonomy.

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Water management planning and the Crown’s duty to consult and accommodate: the Court of Appeal rejects First Nations’ application for judicial review of the South Saskatchewan Water Management Plan

Case considered: Tsuu T’ina Nation v Alberta (Environment), 2010 ABCA 137

PDF version: Water management planning and the Crown’s duty to consult and accommodate

The Court of Appeal, in a reasons for judgement reserved decision written by Justice Clifton O’Brien on behalf of a unanimous three person panel (Justices Ellen Picard and Patricia Rowbotham concurring), has rejected the challenge made by two First Nations, the Tsuu T’ina and the Samson Cree, to the South Saskatchewan Water Management Plan (SS WMP). The First Nations challenged the Plan on the basis that the Crown had not fulfilled its constitutional duty to consult and accommodate when it developed and adopted that Plan. The Court found that: (1) the Crown did have a duty to consult (certainly with respect to the Tsuu T’ina, less clearly so with respect to the Samson Cree, at para.70), (2) the content of the duty to consult was at the very low end of the scale “having regard to the nature of the proposed government action, the seriousness of the appellants’ rights and claims, and the potential adverse impacts upon those rights and claims” (at para. 95), and (3) the duty to consult had been satisfied (at paras 130 and 136).

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Yes folks the language of the habendum does matter

Case considered: Bearspaw Petroleum Ltd v Encana Corporation, 2010 ABQB 225

PDF version: Yes folks the language of the habendum does matter

In this decision Justice Terry McMahon held that a petroleum and natural gas lease that provides for continuation at the end of its primary term where leased substances are “producible” will be continued where the lessee has drilled a well that has discovered natural gas in commercial quantities; the lease will be continued even though that well has not been tied in and is therefore not capable of actual production. The decision also offers a comment on implied and express covenants to market.

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