Author: Nigel Bankes Page 88 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.

In this important decision (hereafter “Kensington”) the majority of the Alberta Court of Appeal (Hunt and Slatter JJA; Romaine JA dissenting) concluded that the third proviso to the habendum of an oil and gas lease does not establish a set of conditions precedent that the lessee must fulfill before it can rely upon the shut-in wells clause and shut-in well payment to deem production, thereby continuing the lease – at least, and this is an important caveat – where the language of the shut-in wells clause does not track that of the third proviso. In reaching this conclusion the Court effectively distinguished its earlier decision in Freyberg v. Fletcher Challenge Oil and Gas Inc, 2005 ABCA 46 (“Lady Freyberg”).

The relationship between the well licence jurisdiction of the Energy Resources Conservation Board and the jurisdiction of the Surface Rights Board

By Nigel Bankes

On May 9, 2008

In Natural Resources, Oil & Gas

Cases Considered: EnCana Corporation v. Campbell, [2008] ABQB 234

PDF Version: The relationship between the well licence jurisdiction of the Energy Resources Conservation Board and the jurisdiction of the Surface Rights Board

Justice Crighton’s decision in EnCana v. Campbell suggests that land owners may be able to use the Surface Rights Board (SRB) to require an oil and gas operator to follow more stringent conditions in relation to surface access and related matters such as weed control and water quality protection and testing than may be prescribed in the terms of a well licence or the Energy Resources Conservation Board (ERCB)’s Oil and Gas Conservation Regulations. Given the potential surface impacts of coal bed methane (CBM) development in the province and the uncertainties associated with the effect of CBM operations on ground water quality this is an important development. But while it offers additional protection for surface owners it also has the potential for a patchwork of environmental requirements etc. which may vary from property to property. This may well be a case where the re-born ERCB needs to be more proactive and precautionary so as to reflect the concerns of and uncertainties faced by landowners especially with respect to such an important matter as water quality.

The Federal Government’s Climate Change Policy and the Role of Carbon Capture and Storage

By Nigel Bankes

On March 24, 2008

In Carbon Capture and Storage, Climate Change, Natural Resources

PDF Version: The Federal Government’s Climate Change Policy and the Role of Carbon Capture and Storage

In April 2007 the federal government introduced a new greenhouse gas policy, Regulatory Framework for Air Emissions. On March 10, 2008, it tabled a series of additional documents: (1) Taking Action to Fight Climate Change, (2) Regulatory Framework for Industrial Greenhouse Gas Emissions, (3) Canada’s Offset System for Greenhouse Gases, (4) Canada’s Credit for Early Action Program, and (5) Detailed Emissions and Economic Modelling (all available here). These documents provide further guidance and detail on the implementation of the April 2007 proposals. Further details will be provided when the promised regulations appear in draft form but that will not happen before the fall of 2008.

Calculating the Price of Gas: Wet or Dry?

By Nigel Bankes

On February 20, 2008

In Natural Resources, Oil & Gas

Cases Considered: Cargill Gas Marketing Ltd. v. Alberta Northeast Gas Limited, 2008 ABQB 59

PDF Version: Calculating the Price of Gas: Wet or Dry?

When gas is sold on the basis of its thermal or heating value it is necessary to provide a formula for converting delivered volumes (Mcf) into British thermal units or equivalent. And it makes a difference whether the formula uses an assumption of wet gas or dry gas. Wet gas will have a lower heating content than dry. But what happens if the formula prescribes the use of wet gas but in fact actual deliveries under the contract have always been dry gas? This was the issue before Justice T.F. McMahon in the present case.

Environmental Permitting and the Scope of the Duty to Consult

By Nigel Bankes

On December 12, 2007

In Aboriginal, Environmental, Natural Resources

Cases Considered: Siksika First Nation v. Alberta (Director Southern Region Environment) 2007 ABCA 402

PDF Version: Environmental Permitting and the Scope of the Duty to Consult

The Town of Strathmore faced a sewage problem. It proposed to deal with that problem by constructing a pipeline and disposing of some of its waste water into the Bow above the Siksika Reserve. Not surprisingly the Siksika took a dim view of this and when the Director approved the town’s application under the Environmental Protection and Enhancement Act, R.S.A. 2000, c. E-12, the Siksika appealed that decision to Alberta’s Environmental Appeal Board (the EAB). The Siksika also sought judicial review arguing amongst other things that the government of Alberta was in breach of its constitutional duty to consult the Nation. Justice Peter McInytre (oral reasons for judgement, available on the EAB’s website ) rejected the Siksika’s JR application on the grounds that the Siksika’s application was premature and therefore moot (because they might succeed before the EAB). In addition Justice McIntyre reasoned that the EAB procedure (and subsequent consideration of the EAB decision by the Minister) might cure any defect (want of consultation) there might have been in the Director’s procedure. There is no suggestion that Justice McIntyre rejected the application on the basis that the Siksika had not exhausted their local remedies.

Author: Nigel Bankes Page 88 of 89

The Independent Operation Of The Shut-in Clause Of An Oil And Gas Lease

The relationship between the well licence jurisdiction of the Energy Resources Conservation Board and the jurisdiction of the Surface Rights Board

The Federal Government’s Climate Change Policy and the Role of Carbon Capture and Storage

Calculating the Price of Gas: Wet or Dry?

Environmental Permitting and the Scope of the Duty to Consult