Category: Oil & Gas Page 23 of 54

By: Nigel Bankes

PDF Version: Oil Sands Emission Limit Legislation: A Real Commitment or Kicking It Down the Road?

Legislation Commented On: Bill 25: The Oil Sands Emission Limit Act

Alberta’s Climate Leadership Plan has four key planks:

Phasing out emissions from coal-generated electricity and developing more renewable energy
Implementing a new carbon price on greenhouse gas emissions
A legislated oil sands emission limit
Employing a new methane emission reduction plan

The province introduced legislation to implement an economy-wide carbon price in June (the Climate Leadership Implementation Act) and in the resumed session this fall (2016) it has introduced Bill 25: The Oil Sands Emission Limit Act to implement the third objective, a legislated oil sands emission limit. This was not something that the Leach Report had recommended but here is what the Government said in making this commitment:

Pre-Dynex Royalty Agreements Continue to Spawn Interest in Land Litigation

By Nigel Bankes

On October 13, 2016

In Contracts, Oil & Gas, Property

By: Nigel Bankes

PDF Version: Pre-Dynex Royalty Agreements Continue to Spawn Interest in Land Litigation

Decision Commented On: Re Walter Energy Canada Holdings, Inc., 2016 BCSC 1746 (CanLII)

In 2002 the Supreme Court of Canada handed down its decision in Bank of Montreal v Dynex Petroleum Ltd, 2002 SCC 7 (CanLII) in which it confirmed that a gross overriding royalty (GORR) carved out of a working interest in land was capable of subsisting as an interest in land as a matter of law. Whether any particular GORR created an interest in land, or simply a contractual claim, depends upon the intentions of the parties as revealed in the language adopted by the parties to describe the GORR. There is presumably no objection to expressing this intention with words such as “the parties intend that the right and interest created by clause x of this agreement is to be an interest in land” – so long as this intention is not contradicted by other language in the agreement when construed as a whole in accordance with the usual rules on the interpretation of contracts. See, Nigel Bankes, Private Royalty Agreements: A Canadian Viewpoint, Rocky Mountain Mineral Law Institute (2003). While Dynex definitively settled the issue of principle (can a GORR as a matter of law ever be an interest in land) it still requires an analysis of the intentions of the parties in any particular case, although this should be easier to demonstrate for post-2002 agreements than for pre-2002 agreements. That said, the matter had been widely litigated during the previous 40 years, and counsel should at least have been aware, well before then, of the need to use language appropriate to creating an interest in land rather than a contractual interest – if that was indeed the intention of the parties.

Note to Canada on the Northern Gateway Project: This is NOT What Deep Consultation With Aboriginal People Looks Like

By Sharon Mascher

On August 12, 2016

In Aboriginal, Environmental, Oil & Gas

By: Sharon Mascher

PDF Version: Note to Canada on the Northern Gateway Project: This is NOT What Deep Consultation With Aboriginal People Looks Like

Case Commented On: Gitxaala Nation v. Canada, 2016 FCA 187 (CanLII)

On June 20, 2016, the majority of the Federal Court of Appeal (FCA) quashed Order in Council P.C. 2014-809 requiring the National Energy Board (NEB) to issue Certificates of Public Convenience and Necessity to Northern Gateway on the basis that Canada had not fulfilled the duty to consult it owed to Aboriginal peoples affected by the Project. Concluding that “Canada offered only a brief, hurried, and inadequate opportunity in Phase IV – a critical part of Canada’s consultation framework – to exchange and discuss information and dialogue” (at para 325), the Court identifies several ways in which the consultation process fell “well short of the mark”. Marking a crucial step in the “Northern Gateway legal saga” (for a list of previous ABlawg posts, going as far back as 2012, see here), the FCA has remitted the matter to the Governor in Council for redetermination. While entitled to make a fresh decision, the FCA has made clear that should it decide to do so the Governor in Council may only issue Certificates for the Project after Canada has fulfilled its duty to consult with Aboriginal peoples (at para 335).

Needless to say, the substantive guidance provided by the majority’s decision will be important whenever the duty to consult is engaged going forward. In the immediate future, attention will be focused on what this means for the Northern Gateway Project and the Trans Mountain Expansion Project consultations currently underway in accordance with the Federal Government’s interim measures.

Knock-for-Knock Decision Affirmed by Court of Queen’s Bench

By Nigel Bankes

On July 8, 2016

In Contracts, Oil & Gas

By: Nigel Bankes

PDF Version: Knock-for-Knock Decision Affirmed by Court of Queen’s Bench

Case Commented On: Precision Drilling Canada Limited Partnership v Yangarra Resources Ltd, 2016 ABQB 365 (CanLII)

This matter, involving the interpretation of a standard form drilling contract, originally came on before Master Prowse as an application for summary judgement by Precision, the drilling contractor. My post on the Master Prowse’ decision, 2015 ABQB 433, is here and my post on Master Prowse’s further judgement, 2015 ABQB 649, on the “interest clause as penalty” issue is here. Both decisions favoured Precision, and Yangarra appealed both. In this decision Justice E.C. Wilson dismissed both appeals and affirmed Master Prowse’s decisions largely by quoting extensively from the learned Master’s reasons.

Change of Operator: Norcen v Oakwood of no Application in the Case of a Bankruptcy

By Nigel Bankes

On July 7, 2016

In Bankruptcy and Insolvency, Oil & Gas

By: Nigel Bankes

PDF Version: Change of Operator: Norcen v Oakwood of no Application in the Case of a Bankruptcy

Case Commented On: Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363 (CanLII)

This case involves the 2007 version of the CAPL Operating Agreement as well as a construction, ownership and operation agreement for a battery (COO Agreement). In his judgment Justice Alan Macleod enforced the immediate replacement provisions of the operating agreement in favour of a co-owner (Eagle Energy Inc.) and against the purchaser of the assets (Forent Energy Ltd.) from the receiver\manager appointed under under s 243 of the Bankruptcy and Insolvency Act, RSC 1985, c B-3.