Category: Oil & Gas Page 46 of 57

By: Jocelyn Stacey

PDF Version: Failing to Assess the Key Issue: The Unsatisfactory Approval Process for Keystone XL

Decisions Commented On: United States Department of State Bureau of Oceans and International Environmental and Scientific Affairs, Final Environmental Impact Statement for the Proposed Keystone XL Project (August 26, 2011); National Energy Board, TransCanada Keystone Pipeline GP Ltd., OH-1-2009 (March 2010)

For two weeks in August, thousands of protesters staged a sit-in at the White House to protest the imminent approval of TransCanada’s Keystone XL pipeline expansion project. The project would connect the Alberta oilsands to the Gulf Coast market. In one of the biggest acts of environmental civil disobedience in decades, over 1,200 people were arrested and fined, including big names such as Daryl Hanna, Naomi Klein and NASA climatologist, James Hansen. While the Canadian regulatory process caused barely a ripple in the Canadian public conscience, American protesters have launched a full frontal attack drawing support from celebrities, Senators, Congress members, State Governors and Nobel Prize laureates. Keystone XL has become the next chapter in Alberta’s increasingly hostile relationship with American environmentalists. This post explains the American context of the Keystone XL proposal. Why has it is inflamed environmentalists, and is this more than just politics?

Production in meaningful quantities: commercial realities should inform the interpretation of an oil and gas lease

By Nigel Bankes

On September 15, 2011

In Oil & Gas

PDF version: Production in meaningful quantities: commercial realities should inform the interpretation of an oil and gas lease

Case commented on: Omers Energy Inc. v Alberta (Energy Resources Conservation Board), 2011 ABCA 251

In important and rare “reasons for judgement reserved” the Alberta Court of Appeal, in unanimous reasons authored by Justice Carol Conrad, affirmed the decision of the Energy Resources Conservation Board (ERCB) to the effect that a petroleum and natural gas lease had expired in its secondary term in accordance with its own terms when the gas well (the 100/05-4 well) on the lands was unable to produce for more than very short periods of time (minutes or hours) because of large volumes of produced water. The lease in question (the CAPL 91 form) provided for continuation beyond the end of its primary term by “operations”; the term “operations” was defined to include “the production of any leased substances” and was further extended by the language of the shut-in wells clause which defined the existence of a well “capable of producing the leased substances” to serve as “operations” for the purposes of the habendum. Both the Board and the Court concluded that the lease could not be continued. The words “capable of producing” did not mean just any production no matter how miniscule the quantities, and instead must be read to mean “production in meaningful quantities”. Since it followed from this that the lease had expired, Omers was not entitled to maintain well licences for two other wells that it had drilled on the leased properties since it could no longer meet the requirements of s 16 of the Oil and Gas Conservation Act, RSA 2000, c O-6 to the effect that:

16(1) No person shall apply for or hold a licence for a well
(a) for the recovery of oil, gas or crude bitumen, or
(b) for any other authorized purpose
unless that person is a working interest participant and is entitled to the right to produce the oil, gas or crude bitumen from the well or to the right to drill or operate the well for the other authorized purpose, as the case may be.

ERCB Decision 2009-037 is available here.

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

By Nigel Bankes

On August 9, 2011

In Oil & Gas, Uncategorized

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.

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

By Nigel Bankes

On May 16, 2011

In Administrative Law, Energy, Environmental, Natural Resources, Oil & Gas

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?

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

By Nigel Bankes

On May 9, 2011

In Carbon Capture and Storage, Oil & Gas

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.