Category Archives: Energy

The AER Announces Some Details of the Mandatory Closure Spend Targets

PDF Version: The AER Announces Some Details of the Mandatory Closure Spend Targets

Legislation Commented On: AER Bulletin 2021-22 ‘Invitation for Feedback on Proposed New Licensee Life-Cycle Management Directive’; AER Bulletin 2021-23 ‘Mandatory Closure Spend Targets’

This is another post on the changes the Alberta Energy Regulator (AER) is making to the Liability Management Framework for conventional oil and gas assets. The earlier post I co-authored with Shaun Fluker on the problems with the liability management framework and the changes being made to it (and specifically the changes to the Eligibility Requirements for Acquiring and Holding Energy Licences and Approvals) is here. The AER is now seeking comments on Draft Directive XXX: Licensee Life-Cycle Management (the Draft Directive) until July 25, 2021. The Draft Directive will replace the current Directive 006 once finalized. This post discusses the Draft Directive and the details of the inventory reduction program first announced a year ago. Continue reading →

The Canada Energy Regulator Protects Trans Mountain from Canadians

By: Christine Laing & Drew Yewchuk

PDF Version: The Canada Energy Regulator Protects Trans Mountain from Canadians

Decision Commented On: Decision on Trans Mountain’s Request for Confidential Treatment dated 29 April 2021

The Canada Energy Regulator (CER or Commission) has the statutory duty to assess financial resources plans filed by operating pipeline companies each year and determine whether those resources remain sufficient to cover the company’s expected liabilities if a pipeline spills. The written review process is open to the public through postings on the CER’s website. Trans Mountain requested an exception to the typical public filing process, asking the CER to keep their insurers confidential going forward. On April 29, 2021, the CER granted the request by making an order under section 60 of the Canadian Energy Regulator Act, SC 2019, c 28, s 10 (CER Act) to keep the identity of Trans Mountain’s insurers confidential. The decision pertains to the insurance in place to cover liability for the operating Trans Mountain pipeline, not liability associated with its decommissioning or liability associated with the construction or operation of the Trans Mountain Expansion Project. Continue reading →

Responding to Concerns that Alberta Does Not Collect Enough Security for Environmental Remediation the AER Chooses to Collect Less Security

By: Drew Yewchuk

PDF Version: Responding to Concerns that Alberta Does Not Collect Enough Security for Environmental Remediation the AER Chooses to Collect Less Security

Document Commented On: Mine Financial Security Program Standard, dated May 6, 2021

On May 6, 2021, the Alberta Government announced they would review and modify the Mine Financial Security Program (MFSP). The MFSP is Alberta’s system for ensuring (purportedly at least) that companies pay for the reclamation of their mines, both oilsands and coal. At first glance, a review and modification sounds like a good idea, since the MFSP has been criticized as severely deficient since at least 2015 when an Auditor General report identified numerous significant problems concluding that in the event that “a mine operator cannot fulfill its reclamation obligations… the province may have to pay a potentially substantial cost for this work to be completed” (at 2). Since then, the Alberta Energy Regulator (AER) has improved its administration of the program, but Alberta Environment and Parks (AEP), the primary department responsible for the policy and design of the MFSP, has not addressed the overall structure of the program (see the Auditor General’s 2019 report). Under the MFSP, the province held $1.57 billion in security against estimated reclamation liabilities of $20.8 billion in December 2014 and $1.46 billion in security against $28.35 billion in estimated reclamation liabilities in June 2018. So reform is long overdue, especially if Alberta is considering approving new coal mines. Continue reading →

Renewed Interest in Potential Carbon Capture and Storage Projects in Alberta

By: Nigel Bankes

PDF Version: Renewed Interest in Potential Carbon Capture and Storage Projects in Alberta

Matter Commented On: Alberta Energy, Information Letter 2021-19, Carbon Sequestration Tenure Management, May 12, 2021

In a recent Information Letter, Alberta’s Department of Energy noted that it “has received a very large number of inquiries related to carbon sequestration tenure (i.e. projects that will undertake dedicated geologic storage [of carbon dioxide captured at industrial facilities within the province], without associated oil or gas recovery)” (at 1). This renewed interest is consistent with developments in the rest of the world, spurred on by the growing commitment to reach net zero carbon dioxide (CO₂) emissions by 2050. See, for example, International Energy Agency, Net Zero by 2050: A Roadmap for the Global Energy Sector (2021). Continue reading →

The Curious Demise of Alberta’s Turn Off the Taps Legislation

By: Nigel Bankes, Andrew Leach and Martin Olszynski

PDF Version: The Curious Demise of Alberta’s Turn Off the Taps Legislation

Matters Commented On: Alberta (Attorney General) v British Columbia (Attorney General), 2021 FCA 84 (CanLII) reversing British Columbia (Attorney General) v Alberta (Attorney General), 2019 FC 1195 (CanLII), and Preserving Canada’s Economic Prosperity Act, SA 2018, c P-21.5

The Turn Off the Taps legislation ((or, more properly, Preserving Canada’s Economic Prosperity Act, SA 2018, c P-21.5) (PCEPA)) was passed under the Notley government in 2018. There have always been serious doubts as to the constitutional validity of the legislation (for discussion of the principal objections to the legislation, see ABlawg here) and it is hardly surprising that the Attorney General of British Columbia (AGBC) commenced actions first in the Alberta Court of Queen’s Bench and later in the Federal Court seeking to test the validity of the Act. As described by a majority of the Federal Court of Appeal in Alberta (Attorney General) v British Columbia (Attorney General), 2021 FCA 84 (CanLII) [Turn off the Taps IV], the AGBC had two main arguments. The first was that PCEPA is inconsistent with s 121 of the Constitution Act, 1867 (UK), 30 & 31 Vict, c 3; the second was that the PCEPA is a law in relation to interprovincial trade that falls outside the protection offered by s 92A(2) of the Constitution Act, 1867, the so-called ‘resource amendment’ to the Constitution. In particular, the AGBC noted that s 92A only protects laws pertaining to “primary production” as defined in the Sixth Schedule, and yet the PCEPA purported to apply to refined fuels which fell outside that definition. The Sixth Schedule provides as follows: Continue reading →