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Clarification of CBM Ownership on Freehold Lands in Alberta

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Legislation commented on: Bill 26, Mines and Minerals (Coalbed Methane) Amendment Act, 2010, Legislative Assembly of Alberta, Third Session, 27th Legislature, 59 Elizabeth II

One of the obstacles to coalbed methane (CBM) development on freehold lands in Alberta has been uncertainty regarding ownership of CBM on split title freehold lands. CBM ownership disputes have arisen when one person holds the title to natural gas and a different person holds the coal rights for the same parcel of land. Ron Liepert, the Minister of Energy, introduced Bill 26 in the Alberta legislature on October 27, 2010. After the first and second readings of the Bill, the Committee of the Whole passed an amended version on November 23, which includes one additional section.

Are the Creditors Paying Attention?

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Case considered: Seguin v Graham and 1356248 Alberta Ltd., 2010 ABQB 582

I find it odd that someone who has failed to file tax returns for the last 14 or so years and who has been pursued by Ontario’s maintenance enforcement program for failing to pay child support for at least 7 years would commence a court action that brings these facts plus details of his annual income and net worth to light in the public forum that is a courtroom. And yet that is exactly what Donald Seguin did when he sued Sandra Graham for unjust enrichment and claimed a constructive trust over her house or, alternatively, a judgment for half of the increase in value of the house over the course of their cohabitation. The subsequent publication of the decision of Mr. Justice R.A. Graesser on the Alberta Courts website and on the Canadian Legal Information Institute‘s (CanLII) website in late September puts the facts out there for anyone to read. Justice Graesser’s consideration of Mr. Seguin’s efforts to avoid the acquisition of assets and his attempts to shelter his assets from his creditors make this rather ordinary case concerning the division of assets on the breakdown of a common law relationship of interest to more than the parties themselves. One has to wonder, however, if the creditors are paying attention?

The Supreme Court of the United Kingdom (fka the House of Lords) Decides an Oil and Gas Case

By: Nigel Bankes

PDF Version: The Supreme Court of the United Kingdom (fka the House of Lords) Decides an Oil and Gas Case 

Case Commented On: Star Energy Weald Basin Limited v Bocardo SA, [2010] UKSC 35

It is not every day, or even every year, that the highest court in the United Kingdom passes judgement in an oil and gas case. But the Supreme Court of the United Kingdom did so at the end of July and while much of the Court’s reasoning turns on the details of the UK’s petroleum legislation, and in particular on the terms of the Crown vesting legislation in that jurisdiction, the Court also had something to say about the common law ownership rights of the surface owner. These comments merit carefully scrutiny in the context of the ongoing debate in Alberta and elsewhere about ownership rights in relation to pore space, an important issue in the context of carbon capture and storage (CCS).

Mutatis Mutandis: The ERCB Speaks (in Latin) on the Subject of Carbon Capture and Storage

By: Nigel Bankes

PDF Version: Mutatis Mutandis: The ERCB Speaks (in Latin) on the Subject of Carbon Capture and Storage

Matter Commented On: ERCB Bulletin 2010 – 22, ERCB Processes Related to Carbon Capture and Storage (CCS) Projects, June 29, 2010

After a long period of cogitation the chief energy regulator in the province has finally provided a statement of how it proposes to approach the regulation of carbon capture and storage (CCS) projects. The message is simple: apply the current rules, so far as they are applicable to CCS (the basic idea of mutatis mutandis). The issue is important: several task forces and many commentators have emphasised that the proponents of CCS projects need regulatory certainty if they are to plan and implement commercial scale CCS operations. Whether this ERCB Bulletin provides sufficient guidance to industry and sufficient comfort to the citizens of the province that CCS projects will be handled safely remains to be seen.

Estoppel arguments fail once again in an oil and gas lease case

PDF version: Estoppel arguments fail once again in an oil and gas lease case 

Case considered: Desoto Resources Limited v. Encana Corporation, 2010 ABQB 448

In this case Justice William Tilleman dismissed an appeal from Master Jodi Mason’s decision in chambers in which she had granted summary judgement in favour of the defendant in the action, Encana. Desoto had been seeking a declaration that it had a number of valid leases notwithstanding that the primary term of the leases had expired in the 1970s and that there had been no production on the leases for a period beginning in the late 1990s. This was apparently, at least at the outset, as a result of the properties being shut-in by order of the Energy Resources Conservation Board because of the failure of the then lessee to pay well abandonment deposits.

I blogged on Master Mason’s decision – see Successful application for summary dismissal in an oil and gas lease validity case.

On appeal, Desoto focused on estoppel arguments urging that the leases should survive on the basis of promissory estoppel, estoppel by acquiescence, or estoppel by deed.

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