Category Archives: Oil & Gas

The Court confirms that coalbed methane forms part of the natural gas title and not the coal title

PDF version: The Court confirms that coalbed methane forms part of the natural gas title and not the coal title

Case considered: Encana Corporation v ARC Resources Ltd., 2011 ABQB 431

In 2010 the provincial legislature amended the Mines and Minerals Act, RSA 2000, c. M-17 (as am by SA 2010, c.20) (MMA) to declare that coalbed methane (CBM) is and always has been natural gas. In this case Justice Kent of the Court of Queen’s Bench applied the new s.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 s.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.

Continue reading →

A single window for the permitting of energy projects in Alberta: who will look out for the chickens?

PDF version: A single window for the permitting of energy projects in Alberta: who will look out for the chickens? 

Report commented on: Enhancing Assurance: Developing an integrated energy resources regulator, a discussion document, May 2011

In a discussion paper released on May 9, 2011 under a covering message from Premier Stelmach, the provincial government has announced its intention to create a single window for the permitting of energy projects in the province. The proposal envisages a single new board that will have all of the current responsibilities of the Energy Resources Conservation Board (ERCB) plus the following additional responsibilities (as they pertain to energy projects including conventional oil and gas, oilsands, and coal – and in the future perhaps mining):

1. The responsibilities currently vested in Alberta Environment under the terms of the Environmental Protection and Enhancement Act, (EPEA) RSA 2000c. E-12, and the Water Act, RSA 2000, c.W-3 to conduct EIAs, issue licences and authorizations under the Water Act and EPEA and to deal with reclamation and remediation on private land.

2. The responsibilities currently vested in Sustainable Resource Development (SRD) to issue public land dispositions including mineral surface leases, and to deal with reclamation and remediation on public land.

Does this make sense?

Continue reading →

Alberta’s CCS Disposition Scheme: the Carbon Sequestration Tenure Regulation

By: Nigel Bankes

PDF Version: Alberta’s CCS Disposition Scheme: the Carbon Sequestration Tenure Regulation 

Regulation Commented On: Carbon Sequestration Tenure Regulation, A.R. 68/2011

The provincial government is making steady progress in implementing its plan to put in place a legal and regulatory framework for carbon capture and storage projects. The province passed legislation in the fall of 2010 (Bill 24, Carbon Capture and Storage Statutes Amendment Act, which I blogged here) to deal with pore space ownership issues and to provide a framework for granting agreements to sequester captured carbon dioxide (CO2) in that pore space; and in March 2011 it launched a Regulatory Framework Assessment (RFA) to review the current regulatory rules.

The most recent step is the promulgation (at the end of April) of the Carbon Sequestration Tenure Regulation, Alta. Reg. 68/2011. This regulation puts some meat on the framework established by the new Part 9 of the Mines and Minerals Act (RSA 2000, c. M-17 (MMA)). In particular, it describes in greater detail the elements of the two new forms of agreement (evaluation permits and carbon sequestration leases) and some of the content of monitoring, measuring and verification plans (MMV) and closure plans. The regulations also go some way towards clarifying the relationship between the Department of Energy and the Energy Resources Conservation Board in relation to some of the more technical aspects of MMV programs and closure plans.

Continue reading →

Back to square one: summary judgement on an oil and gas lease validity issue set aside

PDF version: Back to square one: summary judgement on an oil and gas lease validity issue set aside 

Case considered: Desoto Resources Limited v. Encana Corporation, 2011 ABCA 100

In this decision the Court of Appeal set aside lower court decisions (Master and the Court of Queen’s Bench) granting the lessor summary judgement in an oil and gas lease validity case.

At issue in this case is the validity of certain petroleum and natural gas leases granted by PanCanadian (Encana’s predecessor in title) in 1974 to Desoto’s predecessor in title. The fact pattern was complicated by Jofco’s (Desoto’s previous corporate name) bankruptcy in 1999. As part of the judicially approved bankruptcy settlement it appears that PanCanadian was prepared at that time to forego its position that the leases had terminated.

Continue reading →

Court of Appeal grants relief from forfeiture in an oil and gas lease case

PDF version: Court of Appeal grants relief from forfeiture in an oil and gas lease case 

Case commented on: Canpar Holdings Ltd. v. Petrobank Energy and Resources Ltd., 2011 ABCA 62

The principal significance of this case is that it confirms that the Court may relieve against the forfeiture of an oil and gas lease that is terminated for cause (in this case failing to calculate and tender royalties as prescribed by the lease) – as opposed to termination in accordance with its own terms (e.g. for failure to drill or produce), in which case there can be no relief. In granting relief the Court signals that it will draw guidance from non-oil and gas cases dealing with relief from forfeiture. I think that this is the first reported decision in which the Court of Appeal has exercised its discretion to relieve against forfeiture in an oil and gas lease case.

Continue reading →