Category Archives: Energy

Court of Appeal confirms QB decision that coalbed methane forms part of the natural gas title and not the coal title

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Case Considered: Encana Corporation v Devon Canada Corporation, 2012 ABCA 271, aff’g 2011 ABQB 431.

The Court of Appeal in a unanimous memorandum of judgment (Justices McFadyen, O’Brien and O’Ferrall) has affirmed Justice Kent’s decision at trial in a case dealing with section 10.1 of the Mines and Minerals Act, RSA 2000, c M-17 (as am by SA 2010, c 20) (MMA). That section declared that coalbed methane (CBM) is and always has been natural gas. Justice Kent applied the new section 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 section 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. I blogged on the trial judgment here.

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Quest. The Energy Resources Conservation Board Approves the First Commercial Scale Carbon Capture and Storage Project in Alberta

By: Nigel Bankes

PDF Version: Quest. The Energy Resources Conservation Board Approves the First Commercial Scale Carbon Capture and Storage Project in Alberta

Decision Commented On: Shell Canada Limited, Application for the Quest Carbon Capture and Storage Project, Radway Field, July 10, 2012, 2012 AERCB 008

In a long-awaited decision issued on July 10, 2012, Alberta’s Energy Resources Conservation Board (ERCB or Board) approved Shell Canada Limited’s application for a commercial scale CCS project (the Quest Project). The project is associated with the long standing Athabasca Oil Sands Project (AOSP) and the Scotford Upgrader where new facilities are designed to capture up to 1.2 megatonnes of CO₂ per year for ongoing injection. The cumulative stored volume is expected to be greater than 27 Mt of CO₂ over the expected 25 year life of the Scotford Upgrader. The approval is subject to some 23 conditions and, as contemplated by the scheme approval provision of section 39(2) of the Oil and Gas Conservation Act, RSA 2000, c O- 6 (OGCA), the project will only be finally approved by the ERCB following review by the Minister of the Environment who may impose additional conditions on the scheme approval.

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British Columbia and the Northern Gateway Pipeline

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Document commented on: BC Outlines requirements for heavy oil pipeline projects, July 23, 2012.

The proposed Northern Gateway Pipeline is proving to be extremely contentious on a number of fronts. It raises important questions about the duty to consult and accommodate indigenous peoples who may be affected by the project; it raises questions about the joint review panel and the role of the National Energy Board (see post here) and the amendments to the National Energy Board brought about by the Budget Bill, Bill C-38, now SC 2012, c 19); and, most recently, the province of British Columbia’s Environment Minister, Terry Lake and Aboriginal Relations and Reconciliation Minister, Mary Polak, have outlined the government of British Columbia’s five minimum requirements that must be met for that province “to consider the construction and operation of heavy oil pipelines within its borders.”

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The Proposed Single Energy Regulator: Where Are We Now and Where Do We Go from Here?

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Report commented on: Enhancing Assurance: Developing an integrated energy resources regulator, A Discussion Document, May 2011

It has been over a year since the latest proposal to move to a single regulator for energy development in Alberta was released (see Enhancing Assurance: Developing an integrated energy resources regulator, A Discussion Document, May 2011 (Discussion Document)). Many Albertans are likely asking what, if anything, has happened since then. This post outlines the proposal currently before government, updates readers on any progress made, and highlights the critical issues that ought to be addressed on a go-forward basis.

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Low Carbon Energy Policies: Vested Rights, Legitimate Expectations, and Differential Treatment in Domestic and International Law

By: Nigel Bankes

PDF Version: Low Carbon Energy Policies: Vested Rights, Legitimate Expectations, and Differential Treatment in Domestic and International Law

Cases and Matters Commented On: Secretary of State for Climate Change v Friends of the Earth and Others, [2012] EWCA Civ. 28, aff’g lower decision; Mesa Power Group LLC v Government of Canada, Notice of Intent to Submit a Claim to Arbitration under Chapter Eleven of NAFTA, July 6, 2011; Mercer International Inc v Government of Canada, Notice of Intent to Submit a Claim to Arbitration under Chapter Eleven of NAFTA, 26 January 2012, and request for arbitration (ICSID Additional Facility), April 30, 2012

Governments around the world are adopting a variety of low carbon and green energy policies designed to increase the share of renewable energy sources in the energy mix. In addition, some governments, including the government of Alberta, have also adopted policies to provide for the sequestration of carbon dioxide emissions where carbon fuels continue to make up a significant part of the energy mix. These policies often provide financial incentives to investors in order to persuade them to commit to the new technology. For example, many governments provide for feed-in-tariffs (FIT) to encourage the development of wind and solar energy. A FIT represents a commitment by the government directly or through the incumbent utility to purchase the output from the designated facility (e.g. wind generator, solar panels or biomass generation) at a specified price for a prescribed number of years (typically representing the amortization period of the asset). Such commitments are designed to be “bankable” in the sense that the proponent will be able to use the commitment to raise capital to fund the venture. Similarly, many governments have found it necessary to provide financial support (subsidies or “state aid” in the language of the European Union) for the first commercial scale carbon capture and storage projects. For example, the province of Alberta is currently providing support for three different sequestration related projects in the province (see here). Continue reading →