Category: Natural Resources Page 12 of 17

Cases Considered: National Energy Board, Reasons for Decision, TransCanada PipeLines Limited, GH-5-2008, Jurisdiction and Facilities, February 2008 (posted to the NEB website February 26, 2009)

PDF Version: TransCanada’s Alberta Pipeline System now under federal regulatory authority

It’s official. The intra-provincial natural gas transmission system (the Alberta System), originally built by Alberta Gas Trunk Line Limited, latterly known as NOVA, and part of the TransCanada PipeLines (TCPL) empire since 1998, will henceforward be regulated by the National Energy Board rather than the provincial regulators, the Energy Resources Conservation Board (ERCB) (for pipeline construction etc) and the Alberta Utilities Commission (AUC) (for tolls and tariffs etc).

What is sauce for the goose is sauce for the gander (and other, more mixed, metaphors): and a prediction as to the role of power and influence on law-making in the province.

By Nigel Bankes

On February 25, 2009

In Administrative Law, Natural Resources

Cases Considered: ATCO Midstream Ltd. v. Alberta (Energy Resources Conservation Board), 2009 ABCA 41.

PDF Version: What is sauce for the goose is sauce for the gander (and other, more mixed, metaphors): and a prediction as to the role of power and influence on law-making in the province.

The cases are legion in which the Energy Resources Conservation Board, supported by the Court of Appeal, has denied standing to public interest interveners, First Nations (e.g. Dene Tha’ First Nation v. Alberta (Energy and Utilities Board), 2005 ABCA 68) and fellow-travellers on the grounds that they lack an adequate legal interest in the subject matter of the application. What is interesting about this case is that, this time, the ox that is gored is a sacred cow. Two sacred cows in fact; a leading provincial utility and gas processor (ATCO), and a petrochemical interest (NOVA) that the province spawned. At a formal level the result might be celebrated in terms of respect for the neutrality of the law and equality before the law. Respect may be tempered if we think the rule to be a bad rule.

The sky is falling, let’s blame the royalty review

By Nigel Bankes

On February 3, 2009

In Natural Resources, Oil & Gas

PDF Version: The sky is falling, let’s blame the royalty review

I have lived in Alberta and this city for nearly thirty years. During the fall of 2007 I thought that we had the best public policy debate that I have ever seen in this province. The subject of that debate was the province’s royalty review.

I think that it was a good debate because it was a well informed debate on a crucial public policy issue. It was a well informed debate because the province, for the first time in its history, struck a public review which articulated a set of principles that should govern royalty design. Prior to that, royalty reviews were essentially private affairs between government and industry.

Adjudicating on waterflood enhanced recovery schemes: is it time for compulsory unitization in Alberta?

By Nigel Bankes

On February 1, 2009

In Natural Resources, Oil & Gas

Cases Considered: Hunt Oil Company of Canada Inc: Applications to amend enhanced recovery scheme approval No. 10848 and Pool Delineation Kleskun and Puskwaskau Fields, December 23, 2008, ERCB Decision 2008-130, December 23, 2008.

PDF Version: Adjudicating on waterflood enhanced recovery schemes: is it time for compulsory unitization in Alberta?

Hunt and Galleon (and perhaps others) have interests in the same small oil pool and indeed a series of oil pools that are all “in communication” by virtue of a common aquifer. But evidently they cannot agree on how best to develop the pool, or perhaps they cannot agree on how to share the costs and benefits of joint development including the allocation of resulting production. As a result, each of them operates separate waterflood schemes in the same pool. Each such enhanced oil recovery (EOR) scheme needs to be approved by the ERCB under s.39(1)(a) of the Oil and Gas Conservation Act (OGCA), R.S.A. 2000, c. O-6.

Terminating a Long Term Gas Sales Contract on Account of a Material Adverse Change: The Continuing Fallout from the Collapse of the Enron Empire

By Nigel Bankes

On January 31, 2009

In Contracts, Natural Resources, Oil & Gas

Cases Considered: Marathon Canada Ltd v. Enron Canada Ltd, 2008 ABQB 408;
Marathon Canada Ltd v. Enron Canada Ltd, 2009 ABCA 31.

PDF Version: Terminating a long term gas sales contract on account of a material adverse change: the continuing fallout from the collapse of the Enron Empire

The Court of Appeal, in a memorandum of judgement authored by Justices Ellen Picard, Peter Costigan and Jack Watson, has affirmed the decision at trial of Justice Terence McMahon of the Alberta Court of Queen’s Bench. Justice McMahon held that Marathon Canada had lawfully terminated a natural gas purchase contract with Enron Canada. Marathon chose to terminate when Enron Canada’s US parent (Enron Corp) fell into serious financial difficulties. Both courts also held that: (1) Marathon was entitled to recover $560,000 damages for natural gas that it had delivered prior to contract termination, but that, (2) Enron Canada was not entitled to recover liquidated damages of some $126 million based on a counter-claim of wrongful termination and the estimated\guesstimated present value of Marathon’s future deliveries at the contract price.