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.
PDF version: What does the term “oil well rights” mean when used in a will?
Case considered: Wernicke v Quirk, 2011 SKCA 95
The moral of this story might well be “don’t mess with terms you don’t understand”; and if you want to make a specific devise of surface rentals from gas wells on your property you might wish to do so explicitly and not use a term like “oil well rights”.
PDF version: Another step in implementing ALSA: the review and variance provisions and compensation for compensable takings
Regulation commented on: Alberta Land Stewardship Regulation, Alta. Reg. 179/2011
The Alberta Land Stewardship Act, SA 2009, c A-26.8 (ALSA) is a work in progress: see my earlier blog: “ALSA and the property rights debate in Alberta: a certificate of title to land is not a ‘statutory consent’” We won’t know how this beast or angel will turn until we see the first approved plans (see my blog on the draft Lower Athabasca Plan (“The proof of the pudding: ALSA and the Draft Lower Athabasca Regional Plan“) and a complete set of implementing regulations. Here we have the next piece of the puzzle in the form of a set of regulations primarily concerned to implement the 2011 amendments to the ALSA (Bill 10, the Alberta Land Stewardship Amendment Act, 2011) which I blogged at “Regulatory chill, weak regional plans, and lots of jobs for lawyers: the proposed amendments to the Alberta Land Stewardship Act” .
I wasn’t exactly a fan of Bill 10. I thought that it created too many opportunities to put roadblocks in the way of implementing plans. I don’t believe that it is necessary to provide for both plan reviews and variance applications, and I am still of the view that the compensable taking provisions of Bill 10 will foster needless and expensive litigation.
PDF version: Production in meaningful quantities: commercial realities should inform the interpretation of an oil and gas lease
Case commented on: Omers Energy Inc. v Alberta (Energy Resources Conservation Board), 2011 ABCA 251
In important and rare “reasons for judgement reserved” the Alberta Court of Appeal, in unanimous reasons authored by Justice Carol Conrad, affirmed the decision of the Energy Resources Conservation Board (ERCB) to the effect that a petroleum and natural gas lease had expired in its secondary term in accordance with its own terms when the gas well (the 100/05-4 well) on the lands was unable to produce for more than very short periods of time (minutes or hours) because of large volumes of produced water. The lease in question (the CAPL 91 form) provided for continuation beyond the end of its primary term by “operations”; the term “operations” was defined to include “the production of any leased substances” and was further extended by the language of the shut-in wells clause which defined the existence of a well “capable of producing the leased substances” to serve as “operations” for the purposes of the habendum. Both the Board and the Court concluded that the lease could not be continued. The words “capable of producing” did not mean just any production no matter how miniscule the quantities, and instead must be read to mean “production in meaningful quantities”. Since it followed from this that the lease had expired, Omers was not entitled to maintain well licences for two other wells that it had drilled on the leased properties since it could no longer meet the requirements of s 16 of the Oil and Gas Conservation Act, RSA 2000, c O-6 to the effect that:
16(1) No person shall apply for or hold a licence for a well
(a) for the recovery of oil, gas or crude bitumen, or
(b) for any other authorized purpose
unless that person is a working interest participant and is entitled to the right to produce the oil, gas or crude bitumen from the well or to the right to drill or operate the well for the other authorized purpose, as the case may be.
ERCB Decision 2009-037 is available here.
Case commented on: Adam v Canada (Environment), 2011 FC 962
Woodland caribou are listed as threatened under the Species at Risk Act, SC 2002, c 29 (SARA). The species (and particular herds of the species) are threatened by the fragmentation of their habitat principally due to resource developments including coal mining (see West Moberly First Nation v British Columbia (Chief Inspector of Mines), 2011 BCCA 247), oil and gas exploration, oil sands projects (mining and in situ) and forestry projects, and by the linear land use disturbances often associated with these projects including seismic lines, roads, transmission lines and pipelines. The species is also negatively impacted by increased predation.
But what should we do about this? The answer of governments in Alberta, British Columbia and the federal government seems to be as little as possible and as slowly as possible – for fear that any real action to recover the various herds will be too disruptive of the governments’ shared resource development agendas.
PDF version: The Court confirms that coalbed methane forms part of the natural gas title and not the coal title
Case considered: Encana Corporation v ARC Resources Ltd., 2011 ABQB 431
In 2010 the provincial legislature amended the Mines and Minerals Act, RSA 2000, c. M-17 (as am by SA 2010, c.20) (MMA) to declare that coalbed methane (CBM) is and always has been natural gas. In this case Justice Kent of the Court of Queen’s Bench applied the new s.10.1 to grant summary judgement in competing actions brought by the coal owners and the natural gas lessees seeking declaratory relief as to the ownership of CBM in certain lands. The actions in question had all been commenced before the amendment was introduced and passed. The Court held that s.10.1 was a complete answer to the competing claims and concluded that the natural gas lessees were entitled to a declaration that the coalbed methane had been granted to them under the terms of their natural gas leases.
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