Category Archives: Energy

The AER Must Consider the Honour of the Crown

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Decision Commented On: Fort McKay First Nation v Prosper Petroleum Ltd, 2020 ABCA 163

In this important decision, a unanimous panel of the Court of Appeal concluded that the Alberta Energy Regulator (AER) has an obligation to take into account the honour of the Crown when deciding whether to recommend approval of a new oil sands project under s 10 of the Oil Sands Conservation Act, RSA 2000, c O-7 (OSCA). The AER had not done so in this case. Accordingly, the Court vacated the AER’s approval of Prosper’s Rigel project and referred the matter back to the AER. The decision is an important decision on the implications of the honour of the Crown in the context of a regulatory tribunal, but it is also an important decision on cumulative impacts and the limits that cumulative impacts may impose on the Crown’s power to take up lands under the numbered treaties. Previous posts on ABlawg have emphasized the importance of this point for the prairie provinces and other provinces with numbered treaties within their boundaries: see here, here, here and here. Continue reading →

Two Manitoba Oil and Gas Lease Termination Cases

By: Nigel Bankes

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Cases Commented On: Corex Resources Ltd. et al. v 2928419 Manitoba Ltd., 2020 MBQB 47 (CanLII) and 6660894 Canada Ltd. v 57110 Manitoba Ltd., 2020 MBQB 50 (CanLII)

Two Manitoba oil and gas lease termination cases; two days apart – March 10, 2020 and March 12, 2020; same judicial district (Brandon); same outcome (leases terminated); but different judges and significantly different analytical and doctrinal approaches. The Corex decision is grounded in the specialized body of case law which recognizes that oil and gas leases can terminate automatically in accordance with their terms. The 6660 decision takes a contractual approach and frames the case in terms of fundamental breach and repudiation. While both decisions get to the same point (the lease in each case had terminated), the reasoning in Corex is far more consistent with the relevant authorities. Continue reading →

COVID-19 and the Suspension of Energy Reporting and Well Suspension Requirements in Alberta

By: Shaun Fluker

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Order Commented On: Ministerial Order 219/2020 (Energy)

Section 52.1 of the Public Health Act, RSA 2000, c P-37 provides a minister with power to suspend, modify, or effectively amend the application of legislation which they are responsible for under the Government Organization Act, RSA 2000, c G-10. Ministerial orders exercising this power are being made with increasing frequency during the COVID-19 emergency, and these orders, together with other public health orders issued by Alberta during this crisis, are published here. One should also keep an eye on the Queen’s Printer website for Orders-in-Council which enact new, or amend existing, regulations to address COVID-19. Readers may recall that I previously commented here on Ministerial Order 17/2020 (Environment and Parks) which suspends routine environmental reporting. This post looks at Ministerial Order 219/2020 issued by the Minister of Energy on April 6, 2020 which suspends some reporting and inactive well suspension requirements under energy legislation. Continue reading →

Bill 12: A Small Step Forward in Managing Orphan Liabilities in Alberta

By: Nigel Bankes

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Matter Commented On: Bill 12, Liabilities Management Statutes Amendment Act, 2020

Bill 12 addresses some issues related to the province’s orphan fund and the responsibilities of the Orphan Well Association (OWA). While my overall conclusion is that the Bill is to be welcomed, the procedure under which the Bill was adopted was unfortunate. Furthermore, while the Bill does plug some gaps and extends the authority of the OWA and the orphan fund in helpful ways, the Bill is most notable for what it doesn’t address. In particular, it does not address the systemic drivers of the growing orphan liability problem in the province. Continue reading →

More Competition For Underground Disposal Space

By: Nigel Bankes

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Decisions Commented On: 2020 ABAER 005, Pure Environmental Waste Management Ltd. Applications for the Hangingstone Project February 27, 2020 and 2020 ABAER 004, Pure Environmental Waste Management Ltd. Regulatory Appeal of Approval WM 211 for Pure Environmental Waste Management Ltd.’s Hangingstone Facility February 27, 2020

Conventional and non-conventional oil and gas operations frequently seek to dispose of liquid oilfield waste in underground formations that have suitable injectivity and sealing properties. Not all formations are suitable for injection purposes and even those that are suitable may have limited capacity, especially where the characteristics of the formation limit opportunities for pressure leakoff. Locally limited capacity or scarcity may lead to competition for the available disposal capacity.

These two decisions (and especially 2020 ABAER 005) address the licensing of disposal wells in such a competitive setting. These are not the first such examples we have seen in Alberta. I commented on an earlier AER decision (2014) on a disposal well application here. See also Bankes, “Disputes between the owners of different sub-surface resources” in Don Zillman et al (eds), The Law of Energy Underground (Oxford University Press, 2014) p 433. Continue reading →