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Unlocking Alberta’s Hydro Potential to Generate Clean Dependable Electricity for AlbertaUnlocking Alberta’s Hydro Potential to Generate Clean Dependable Electricity for Alberta315BLG Blog PostMichael A. Marionmmarion@blg.com | Michael A. Marion | 693A30232E777C626C6763616E6164615C6D616D i:0#.w|blgcanada\mam​​​​​Earlier this month the National Energy Board (NEB) released a report on Canada’s renewable power called Canada’s Adoption of Renewable Power Sources – Energy Market Analysis. The NEB report revealed that Canada is a world leader in renewable electricity that generates 66 per cent of its electricity from renewable sources. More particularly, the NEB pointed out that hydro is the dominant source of Canada’s renewable electricity, accounting for 55 per cent of the country’s total installed capacity and almost 60 per cent of its generation. Canada was second only to China in total hydroelectricity production in 2015. The NEB pointed out that the big provincial players in hydroelectricity are Quebec, British Columbia, Ontario, Newfoundland and Labrador, and Manitoba, in that order. Alberta was not even mentioned in the hydro section of the NEB report, and that got AlbertaPowerMarket.com​ thinking about the lack of hydroelectricity development in Alberta. Well, it was the NEB report, plus more talk this month out of Manitoba and British Columbia, and their provincial utilities, about the need for a reinforced “East-West Grid” so that their new multi-billion dollar hydro projects under construction (Keeyask in Manitoba and Site C in British Columbia) could displace some of Alberta’s thermal generation and also firm Alberta’s variable wind and solar power projects.[Read more​...]<p style="text-align:justify;">​​​​​Earlier this month the National Energy Board (NEB) released a report on Canada’s renewable power called <a href="https://www.neb-one.gc.ca/nrg/sttstc/lctrct/rprt/2017cnddptnrnwblpwr/index-eng.html" target="_blank"><em>Canada’s Adoption of Renewable Power Sources – Energy Market Analysis</em></a>. The NEB report revealed that Canada is a world leader in renewable electricity that generates 66 per cent of its electricity from renewable sources. More particularly, the NEB pointed out that hydro is the dominant source of Canada’s renewable electricity, accounting for 55 per cent of the country’s total installed capacity and almost 60 per cent of its generation. Canada was second only to China in total hydroelectricity production in 2015. The NEB pointed out that the big provincial players in hydroelectricity are Quebec, British Columbia, Ontario, Newfoundland and Labrador, and Manitoba, in that order. Alberta was not even mentioned in the hydro section of the NEB report, and that got <a href="https://albertapowermarket.com/">AlbertaPowerMarket.com​</a> thinking about the lack of hydroelectricity development in Alberta. Well, it was the NEB report, plus more talk this month out of Manitoba and British Columbia, and their provincial utilities, about the need for a reinforced “East-West Grid” so that their new multi-billion dollar hydro projects under construction (Keeyask in Manitoba and Site C in British Columbia) could displace some of Alberta’s thermal generation and also firm Alberta’s variable wind and solar power projects.</p><p style="text-align:justify;">[<a href="/energy/Pages/Post.aspx?PID=315" target="_blank">Read more​</a>...]</p>​Earlier this month the National Energy Board (NEB) released a report on Canada’s renewable power called Canada’s Adoption of Renewable Power Sources – Energy Market Analysis. The NEB report revealed that Canada is a world leader in renewable electricity that generates 66 per cent of its electricity from renewable sources. More particularly, the NEB pointed out that hydro is the dominant source of Canada’s renewable electricity, accounting for 55 per cent of the country’s total installed capacity and almost 60 per cent of its generation. Canada was second only to China in total hydroelectricity production in 2015. The NEB pointed out that the big provincial players in hydroelectricity are Quebec, British Columbia, Ontario, Newfoundland and Labrador, and Manitoba, in that order. Alberta was not even mentioned in the hydro section of the NEB report, and that got AlbertaPowerMarket.com thinking about the lack of hydroelectricity development in Alberta. Well, it was the NEB report, plus more talk this month out of Manitoba and British Columbia, and their provincial utilities, about the need for a reinforced “East-West Grid” so that their new multi-billion dollar hydro projects under construction (Keeyask in Manitoba and Site C in British Columbia) could displace some of Alberta’s thermal generation and also firm Alberta’s variable wind and solar power projects.>> Continue reading BLG Partner Chidinma Thompson's post on Alberta Power Market​<p style="text-align:justify;">​Earlier this month the National Energy Board (NEB) released a report on Canada’s renewable power called Canada’s Adoption of Renewable Power Sources – Energy Market Analysis.  The NEB report revealed that Canada is a world leader in renewable electricity that generates 66 per cent of its electricity from renewable sources. More particularly, the NEB pointed out that hydro is the dominant source of Canada’s renewable electricity, accounting for 55 per cent of the country’s total installed capacity and almost 60 per cent of its generation. Canada was second only to China in total hydroelectricity production in 2015. The NEB pointed out that the big provincial players in hydroelectricity are Quebec, British Columbia, Ontario, Newfoundland and Labrador, and Manitoba, in that order.  Alberta was not even mentioned in the hydro section of the NEB report, and that got <a href="https://albertapowermarket.com/">AlbertaPowerMarket.com</a> thinking about the lack of hydroelectricity development in Alberta. Well, it was the NEB report, plus more talk this month out of Manitoba and British Columbia, and their provincial utilities, about the need for a reinforced “East-West Grid” so that their new multi-billion dollar hydro projects under construction (Keeyask in Manitoba and Site C in British Columbia) could displace some of Alberta’s thermal generation and also firm Alberta’s variable wind and solar power projects.</p><p style="text-align:justify;"><strong>>> Continue reading <a href="http://blg.com/en/Our-People/Thompson-Chidinma" target="_blank">BLG Partner Chidinma Thompson</a>'s post on <a href="https://albertapowermarket.com/2017/05/23/unlocking-albertas-hydro-potential-to-generate-clean-dependable-electricity-for-alberta/" target="_blank">Alberta Power Market​</a></strong></p>5/24/2017 4:00:00 AM2017-05-24T04:00:00ZTrue1float;#5.00000000000000float;#2017.00000000000string;#Mayfloat;#201705.000000000GP0|#23e50663-be85-467e-acf9-7150e42ed669;L0|#023e50663-be85-467e-acf9-7150e42ed669|Energy;GTSet|#939fe804-8a2a-4cfa-af8f-5756b32ac3ca;GP0|#03fc5c71-a1cf-4529-a790-3febb462b5dc;L0|#003fc5c71-a1cf-4529-a790-3febb462b5dc|ElectricityEnergy;Electricity
Transparency and Reporting Requirements for Canadian Extractive CompaniesTransparency and Reporting Requirements for Canadian Extractive Companies314BLG Blog PostMichael A. Marionmmarion@blg.com | Michael A. Marion | 693A30232E777C626C6763616E6164615C6D616D i:0#.w|blgcanada\mam​Borden Ladner Gervais LLP is pleased to provide you with a guide on Transparency and Reporting Requirements for Canadian Extractive Companies.A regime for mandatory reporting of payments to governments by participants in the extractive industries came into force in 2015 with the implementation of the Extractive Sector Transparency Measures Act (ESTMA). The implementation of ESTMA fulfilled Canada’s G8 commitment to “contribute to global efforts to increase transparency and deter corruption in the extractive sector” through the adoption of reporting requirements broadly aligned with those in the European Union and the United Kingdom, and designed to ensure a level playing field for Canada’s extractive companies operating domestically and abroad. [Read more​...]<p style="text-align:justify;">​Borden Ladner Gervais LLP is pleased to provide you with a guide on Transparency and Reporting Requirements for Canadian Extractive Companies.</p><p style="text-align:justify;">A regime for mandatory reporting of payments to governments by participants in the extractive industries came into force in 2015 with the implementation of the <a href="http://laws-lois.justice.gc.ca/eng/acts/E-22.7/page-1.html" target="_blank"><em>Extractive Sector Transparency Measures Act</em></a> (ESTMA). The implementation of ESTMA fulfilled Canada’s G8 commitment to “contribute to global efforts to increase transparency and deter corruption in the extractive sector” through the adoption of reporting requirements broadly aligned with those in the European Union and the United Kingdom, and designed to ensure a level playing field for Canada’s extractive companies operating domestically and abroad. </p><p style="text-align:justify;">[<a href="/energy/Pages/Post.aspx?PID=314" target="_blank">Read more​</a>...]</p>Borden Ladner Gervais LLP is pleased to provide you with a guide on Transparency and Reporting Requirements for Canadian Extractive Companies.A regime for mandatory reporting of payments to governments by participants in the extractive industries came into force in 2015 with the implementation of the Extractive Sector Transparency Measures Act (ESTMA). The implementation of ESTMA fulfilled Canada’s G8 commitment to “contribute to global efforts to increase transparency and deter corruption in the extractive sector” through the adoption of reporting requirements broadly aligned with those in the European Union and the United Kingdom, and designed to ensure a level playing field for Canada’s extractive companies operating domestically and abroad. The deadline for filing ESTMA report for issuers with a calendar year end is fast approaching. Reporting entities that are subject to ESTMA must report annually on payments made to any level of government in Canada or abroad relating to the commercial development of oil, gas or minerals for each of their financial years beginning after June 1, 2015. All ESTMA reports must be filed within 150 days following the end of the reporting entity’s financial year. For example, a reporting entity whose financial year begins on January 1 must file by May 30, 2017 a report on payments made during the year ended December 31, 2016. This brochure is designed to provide Canadian entities subject to ESTMA with helpful information about their reporting obligations, implementation tools provided by Natural Resources Canada, and some important legal issues to consider. >> Download the Guide<p style="text-align:justify;">Borden Ladner Gervais LLP is pleased to provide you with a guide on Transparency and Reporting Requirements for Canadian Extractive Companies.</p><p style="text-align:justify;">A regime for mandatory reporting of payments to governments by participants in the extractive industries came into force in 2015 with the implementation of the <a href="http://laws-lois.justice.gc.ca/eng/acts/E-22.7/page-1.html" target="_blank"><em>Extractive Sector Transparency Measures Act</em></a> (ESTMA). The implementation of ESTMA fulfilled Canada’s G8 commitment to “contribute to global efforts to increase transparency and deter corruption in the extractive sector” through the adoption of reporting requirements broadly aligned with those in the European Union and the United Kingdom, and designed to ensure a level playing field for Canada’s extractive companies operating domestically and abroad. </p><p style="text-align:justify;">The deadline for filing ESTMA report for issuers with a calendar year end is fast approaching. Reporting entities that are subject to ESTMA must report annually on payments made to any level of government in Canada or abroad relating to the commercial development of oil, gas or minerals for each of their financial years beginning after June 1, 2015. All ESTMA reports must be filed within 150 days following the end of the reporting entity’s financial year. For example, a reporting entity whose financial year begins on January 1 must file by May 30, 2017 a report  on payments made during the year ended December 31, 2016. </p><p style="text-align:justify;">This brochure is designed to provide Canadian entities subject to ESTMA with helpful information about their reporting obligations, implementation tools provided by Natural Resources Canada, and some important legal issues to consider. </p><p style="text-align:justify;"><strong>>> </strong><a href="http://blg.com/en/News-And-Publications/Documents/BLG-Handbook-Transparency-and-Reporting-Requirements-for-Canadian-Extractive-Companies.pdf" target="_blank"><strong>Download the Guide</strong></a></p>5/17/2017 4:00:00 AM2017-05-17T04:00:00ZTrue1float;#5.00000000000000float;#2017.00000000000string;#Mayfloat;#201705.000000000GP0|#98850b8e-4cdc-41cf-9cf7-f309880c7c29;L0|#098850b8e-4cdc-41cf-9cf7-f309880c7c29|BLG Energy News and Events;GTSet|#939fe804-8a2a-4cfa-af8f-5756b32ac3ca;GP0|#f61f75ba-8b4a-47e4-ac93-81a58bdb7860;L0|#0f61f75ba-8b4a-47e4-ac93-81a58bdb7860|Public PolicyBLG Energy News and Events;Public Policy
The Resource: April 2017 Digest The Resource: April 2017 Digest313BLG Blog PostMichael A. Marionmmarion@blg.com | Michael A. Marion | 693A30232E777C626C6763616E6164615C6D616D i:0#.w|blgcanada\mam​​​The April 2017 summary put together by the editors of The Resource BLG Energy Law Blog is now available on the BLG website. Some of the post topics includeReady, Set, Go Alberta’s Renewable Electricity Procurement BeginsThe Critical Role of the Board in Addressing Climate Change[Read more...]<p style="text-align:justify;">​​​The April 2017 summary put together by the editors of The Resource: BLG Energy Law Blog is now <a href="http://blg.com/en/News-And-Publications/Publication_4927" target="_blank">available on the BLG website</a>. Some of the post topics include:</p><ul style="text-align:justify;"><li><a href="/energy/Pages/Post.aspx?PID=305" target="_blank">Ready, Set, Go: Alberta’s Renewable Electricity Procurement Begins</a><br></li><li><a href="/energy/Pages/Post.aspx?PID=306" target="_blank">The Critical Role of the Board in Addressing Climate Change</a></li></ul><div style="text-align:justify;">[<a href="/energy/Pages/Post.aspx?PID=313" target="_blank"><em>Read more</em></a>...]</div>The April 2017 summary put together by the editors of The Resource BLG Energy Law Blog is now available on the BLG website​. The​post topics includeReady, Set, Go Alberta’s Renewable Electricity Procurement BeginsThe Critical Role of the Board in Addressing Climate ChangeRegulating in the Green Era the AER Rules Land Disturbance Not Justifiable by Short-term Economic Advantage of New Pipeline(Red)water under the bridge? Court of Appeal upholds right of trustee to disclaim uneconomic assets in the Redwater decisionTo review this information offline, download our print-friendly pdf​​.​<p style="text-align:justify;">The April 2017 summary put together by the editors of The Resource: BLG Energy Law Blog is now <a href="http://blg.com/en/News-And-Publications/Publication_4927" target="_blank">available on the BLG website​</a>. The​post topics include:</p><ul style="text-align:justify;"><li><a href="/energy/Pages/Post.aspx?PID=305" target="_blank">Ready, Set, Go: Alberta’s Renewable Electricity Procurement Begins</a><br></li><li><a href="/energy/Pages/Post.aspx?PID=306" target="_blank">The Critical Role of the Board in Addressing Climate Change</a><br></li><li><a href="/energy/Pages/Post.aspx?PID=308" target="_blank">Regulating in the Green Era: the AER Rules Land Disturbance Not Justifiable by Short-term Economic Advantage of New Pipeline</a><br></li><li><a href="/energy/Pages/Post.aspx?PID=310" target="_blank">(Red)water under the bridge? Court of Appeal upholds right of trustee to disclaim uneconomic assets in the Redwater decision</a><br></li></ul><p style="text-align:justify;">To review this information offline, download our <a href="http://blg.com/en/News-And-Publications/Documents/Publication_4927.pdf" target="_blank">print-friendly pdf​​</a>.​</p>5/10/2017 4:00:00 AM2017-05-10T04:00:00ZTrue1float;#5.00000000000000float;#2017.00000000000string;#Mayfloat;#201705.000000000GP0|#98850b8e-4cdc-41cf-9cf7-f309880c7c29;L0|#098850b8e-4cdc-41cf-9cf7-f309880c7c29|BLG Energy News and Events;GTSet|#939fe804-8a2a-4cfa-af8f-5756b32ac3caBLG Energy News and Events
BLG Releases Second Edition of Report on the Alberta Electricity MarketBLG Releases Second Edition of Report on the Alberta Electricity Market312BLG Blog PostMichael A. Marionmmarion@blg.com | Michael A. Marion | 693A30232E777C626C6763616E6164615C6D616D i:0#.w|blgcanada\mam​Borden Ladner Gervais LLP has released the second edition of its report New Opportunities in the Alberta Electricity Market, A BLG Overview.The Province of Alberta has begun the process to solicit investment in the development of 5,000MW of new renewable power projects in Alberta. This is required to facilitate Alberta's commitment to phase out its coal plants by 2030, and to ensure that 30% of Alberta's generation will come from renewable sources by 2030. These factors together with several other significant policy and market changes have created business opportunities. [Read more...]<p style="text-align:justify;">​Borden Ladner Gervais LLP has released the second edition of its report <a href="http://blg.com/en/News-And-Publications/New-Opportunities-in-the-Alberta-Electricity-Market" target="_blank"><em>New Opportunities in the Alberta Electricity Market, A BLG Overview</em></a>.</p><p style="text-align:justify;">The Province of Alberta has begun the process to solicit investment in the development of 5,000MW of new renewable power projects in Alberta. This is required to facilitate Alberta's commitment to phase out its coal plants by 2030, and to ensure that 30% of Alberta's generation will come from renewable sources by 2030. These factors together with several other significant policy and market changes have created business opportunities. </p><p style="text-align:justify;">[<a href="/energy/Pages/Post.aspx?PID=312"><em>Read more</em></a><em>...</em>]</p>​Borden Ladner Gervais LLP has released the second edition of its report New Opportunities in the Alberta Electricity Market, A BLG Overview.The Province of Alberta has begun the process to solicit investment in the development of 5,000MW of new renewable power projects in Alberta. This is required to facilitate Alberta's commitment to phase out its coal plants by 2030, and to ensure that 30% of Alberta's generation will come from renewable sources by 2030. These factors together with several other significant policy and market changes have created business opportunities. BLG's Electricity Markets Group is regularly asked to assist industry participants and potential entrants into the Alberta Electricity Market better understandthe structure of the marketthe applicable legislation, regulations and governing agenciesthe existing characteristics of Alberta's load and its generation mixthe way in which electricity prices are determined in Alberta, and, most importantlythe recent developments that have occurred to create business opportunities for them in the Alberta Electricity MarketThe Report is designed to provide helpful general information about some legal issues to consider, whether a prospective power project developer, investor, lender, constructor, operator or other participant in the market.>> Read the full report<p style="text-align:justify;">​Borden Ladner Gervais LLP has released the second edition of its report <a href="http://blg.com/en/News-And-Publications/New-Opportunities-in-the-Alberta-Electricity-Market" target="_blank"><em>New Opportunities in the Alberta Electricity Market, A BLG Overview</em></a>.</p><p style="text-align:justify;">The Province of Alberta has begun the process to solicit investment in the development of 5,000MW of new renewable power projects in Alberta. This is required to facilitate Alberta's commitment to phase out its coal plants by 2030, and to ensure that 30% of Alberta's generation will come from renewable sources by 2030. These factors together with several other significant policy and market changes have created business opportunities. </p><p style="text-align:justify;"><a href="http://blg.com/en/Expertise/Pages/ElectricityMarkets.aspx" target="_blank">BLG's Electricity Markets Group</a> is regularly asked to assist industry participants and potential entrants into the Alberta Electricity Market better understand:</p><ul><li><div style="text-align:justify;">the structure of the market</div></li><li><div style="text-align:justify;">the applicable legislation, regulations and governing agencies</div></li><li><div style="text-align:justify;">the existing characteristics of Alberta's load and its generation mix</div></li><li><div style="text-align:justify;">the way in which electricity prices are determined in Alberta, and, most importantly</div></li><li><div style="text-align:justify;">the recent developments that have occurred to create business opportunities for them in the Alberta Electricity Market</div></li></ul><p style="text-align:justify;">The Report is designed to provide helpful general information about some legal issues to consider, whether a prospective power project developer, investor, lender, constructor, operator or other participant in the market.</p><p style="text-align:justify;"><strong>>></strong><strong> </strong><a href="http://blg.com/en/News-And-Publications/New-Opportunities-in-the-Alberta-Electricity-Market" target="_blank"><strong>Read the full report</strong></a></p>5/8/2017 4:00:00 AM2017-05-08T04:00:00ZTrue1float;#5.00000000000000float;#2017.00000000000string;#Mayfloat;#201705.000000000GP0|#98850b8e-4cdc-41cf-9cf7-f309880c7c29;L0|#098850b8e-4cdc-41cf-9cf7-f309880c7c29|BLG Energy News and Events;GTSet|#939fe804-8a2a-4cfa-af8f-5756b32ac3ca;GP0|#03fc5c71-a1cf-4529-a790-3febb462b5dc;L0|#003fc5c71-a1cf-4529-a790-3febb462b5dc|Electricity;GP0|#23e50663-be85-467e-acf9-7150e42ed669;L0|#023e50663-be85-467e-acf9-7150e42ed669|EnergyBLG Energy News and Events;Electricity;Energy
Alberta Court of Queen’s Bench Quashes Alberta’s Refusal to Transfer or Sell Subsurface Land Rights to a First Nation BandAlberta Court of Queen’s Bench Quashes Alberta’s Refusal to Transfer or Sell Subsurface Land Rights to a First Nation Band311BLG Blog PostChidinma Thompson;Sandi Shannon;Tory Hibbittcthompson@blg.com | Chidinma Thompson | 693A30232E777C626C6763616E6164615C6374686F6D70736F6E i:0#.w|blgcanada\cthompson;sshannon@blg.com | Sandi Shannon | 693A30232E777C626C6763616E6164615C737368616E6E6F6E i:0#.w|blgcanada\sshannon;thibbitt@blg.com | Tory Hibbitt | 693A30232E777C626C6763616E6164615C7468696262697474 i:0#.w|blgcanada\thibbitt​​​Added to the growing list of recent court decisions on land claim issues between First Nations and provincial Crowns is the recent Alberta Court of Queen’s Bench decision in Kainaiwa/Blood Tribe v. Alberta (Energy) 2017 ABQB 107 (Blood Tribe). In Blood Tribe, Jeffrey J. denied the Blood Indian Band’s (the Band) request for mandamus on the grounds that Treaty 7, the Natural Resource Transfer Agreement, Schedule to the Constitution Act, 1930 (UK), 20 & 21 Geo V, c 26 (NRTA) and the honour of the Crown did not entitle the Band to subsurface rights on certain lands sought by the Band to be added to its reserve land. However, the Court did quash and send back for reconsideration the decision of the Alberta Minister of Energy to refuse to transfer or sell the subsurface rights to the Band. The Court held that the Minister’s discretionary decision was unreasonable for a number of reasons, including deficiencies in the intelligibility and rationality of the decision and reasons. ​​[Read more…] <p style="text-align:justify;">​​​Added to the growing list of recent court decisions on land claim issues between First Nations and provincial Crowns is the recent Alberta Court of Queen’s Bench decision in <em>Kainaiwa/Blood Tribe v. Alberta (Energy)</em> 2017 ABQB 107 (<em>Blood Tribe</em>). In <em>Blood Tribe</em>, Jeffrey J. denied the Blood Indian Band’s (the Band) request for mandamus on the grounds that Treaty 7, the <em>Natural Resource Transfer Agreement</em>, Schedule to the <em>Constitution Act</em>, 1930 (UK), 20 & 21 Geo V, c 26 (NRTA) and the honour of the Crown did not entitle the Band to subsurface rights on certain lands sought by the Band to be added to its reserve land. However, the Court did quash and send back for reconsideration the decision of the Alberta Minister of Energy to refuse to transfer or sell the subsurface rights to the Band. The Court held that the Minister’s discretionary decision was unreasonable for a number of reasons, including deficiencies in the intelligibility and rationality of the decision and reasons.  </p><p style="text-align:justify;">​​[<a href="/energy/Pages/Post.aspx?PID=311" target="_blank"><em>Read more</em></a>…] </p>​Added to the growing list of recent court decisions on land claim issues between First Nations and provincial Crowns is the recent Alberta Court of Queen’s Bench decision in Kainaiwa/Blood Tribe v. Alberta (Energy) 2017 ABQB 107 (Blood Tribe). In Blood Tribe, Jeffrey J. denied the Blood Indian Band’s (the Band) request for mandamus on the grounds that Treaty 7, the Natural Resource Transfer Agreement, Schedule to the Constitution Act, 1930 (UK), 20 & 21 Geo V, c 26 (NRTA) and the honour of the Crown did not entitle the Band to subsurface rights on certain lands sought by the Band to be added to its reserve land. However, the Court did quash and send back for reconsideration the decision of the Alberta Minister of Energy to refuse to transfer or sell the subsurface rights to the Band. The Court held that the Minister’s discretionary decision was unreasonable for a number of reasons, including deficiencies in the intelligibility and rationality of the decision and reasons.​Background FactsUnder the terms of Treaty 7 signed in 1887, the Band gained rights in certain lands known as the Blackfoot Crossing Reserve. Between 1880 and 1881, the Band was dissatisfied with the Blackfoot Crossing Reserve and agreed to surrender its rights in the Blackfoot Crossing Reserve in exchange for a new reserve that is currently occupies (the Reserve). While surveying the Reserve in 1882, the federal Crown became aware that a non-Indian man, David Akers (Akers), was living at its eastern extremity and in 1883, an Amended Treaty 7 was finalized. The federal Crown later discovered that several pieces of land within the Reserve was inadvertently sold to Akers. Akers refused to relocate and the federal Crown obtained a surrender of approximately 444 acres (the Claim Land) from the Band without compensation (the Surrender). In 1970 the federal crown reacquired and reincorporated 219 acres of the Claim Land into the Reserve. Approximately 225 acres of the Claim Land remained outstanding from the original Agreement. In 1995, the Band submitted a claim alleging that it did not receive compensation for the Surrender, and that the Surrender was invalid. Negotiations resulted in two settlement Agreements, the first in 1997 (the 1st Akers Settlement) and the second in 2003 and 2004 (the 2nd Akers Settlement). Under the 1st Akers Settlement, the Band received $2,346,000 and the option of purchasing 444 acres to be added to its reserve land, provided that the Band consulted with the provincial government and the relevant interest holders and resolved any concerns that may arise. Under the 2nd Akers Settlement, in exchange for an absolute surrender of all of its interest in the Claim Land within the meaning of ss. 38 and 39 of the Indian Act, RSC 1985, c I-5 (the Indian Act), the Band received an additional $3,555,000 and the option of purchasing 225 acres of land adjacent to the Reserve, including subsurface rights, on a willing buyer/seller basis to be added to the Reserve subject to meeting the concerns of the provincial government. Under the 1st and 2nd Akers Settlements combined, the Band received $5,800,000 and the option of purchasing up to 669 acres that could be added to the Reserve.In 2009, the Band purchased surface rights to 664.8 acres (the Purchased Lands). The subsurface rights remained vested in the Alberta Crown, portions of which were subject to coal, ammonite, oil and gas leases. From October 2008 to January 2015, the Band sought a transfer or sale from the Alberta Crown of the subsurface rights in the Purchased Lands. Initially, the Band was advised that Alberta was not willing to transfer Crown mineral rights except where required by law. Over the next several years, the Band was advised that the subsurface rights would not be transferred until the natural gas well ceased production. Alberta wanted compensation for the sub-surface rights and lost royalties. The Band accepted that it would be willing to purchase the subsurface rights, as opposed to receiving it from Alberta for free. Alberta’s Minister of Aboriginal Relations advocated for the transfer of the subsurface rights to the Band while the Minister of Energy advocated against the transfer on the grounds that it would create a precedent for other First Nations purchasing land to seek similar concessions. In 2014, the Minister of Aboriginal Relations became the Minister of Energy, while the Premier took over the office serving as both Premier and the Minister of Aboriginal Relations. The new Minister of Energy changed his former position (when he was Minister of Aboriginal Relations) and advised the Premier that Alberta would not be transferring the subsurface rights to the Band on the grounds that (1) there were existing subsurface rights in the Purchased Lands that were presently being leased, (2) Alberta does not sell subsurface rights except in exceptional cases, (3) Alberta did not have a legal obligation to transfer the subsurface rights in this case and (4) selling subsurface rights where no legal obligation exists may lead other First Nations to purchase land and seek similar treatment. In January 2015, the Band received a letter from Alberta’s Minister of Energy pursuant to the powers under the Mines and Minerals Act R.S.A. 2000, c. M-17 (MMA) communicating his decision refusing the transfer or sale of the subsurface rights. Reasons for the decision were not provided in the letter. The Band commenced the application for mandamus and judicial review.IssuesThe Court considered three issues (a) whether mandamus lay against the Minister of Energy; (b) if not, the applicable standard of review of the Minister’s decision; and (c) whether the Minister’s decision fell short of that standard of review.DecisionOn the first issue, the Court held that neither Treaty 7, the NRTA, nor the honour of the Crown entitled the Band to the subsurface rights underlying the Purchased Lands. Therefore the Minister was not under any legal obligation and could not be compelled by Mandamus to transfer or sell the subsurface rights to the Band. The Court reasoned that while Treaty 7 is constitutionally protected by section 35 of the Constitution Act, 1982, and the NRTA transferred land from the federal Crown to Alberta subject to any existing trusts, the Purchased Lands was never part of reserve land subject to these protections. Alberta received those subsurface rights from the federal Crown unencumbered by any obligation to the Band. The Court confirmed that the honour of the Crown is not a cause of action in itself, but speaks to how obligations that attract it must be fulfilled. Therefore in the absence of a legal obligation, the honour of the Crown could not compel Alberta to transfer the subsurface rights to the Band. The Court also found that the Band’s absolute surrender of all of its interest in the Claim Lands under the 2nd Akers Settlement fulfilled Canada’s treaty obligations, extinguished the Band’s claim and completely bars mandamus.On the second issue, the Court held that insofar as the Minister’s decision entails extricable questions of constitutional interpretation, of an enactment (the NRTA) or an agreement (Treaty 7), or determining the scope of what is entailed by the honour of the Crown, the standard of review is correctness. However, the Minister’s discretionary decision, pursuant to the MMA, to transfer or sell the subsurface rights owned by the Alberta Crown is subject to review on a reasonableness standard.On the third issue, the Court held that the Minister of Energy was correct that there was no legal obligation on Alberta, pursuant to Treaty 7, the NRTA or the honour of the Crown, to sell or transfer the subsurface rights to the Band. However, the Court held the Minister’s refusal to transfer or sell unreasonable from the combination of the diminished intelligibility and rationality of the decision and reasons and his failure to consider how his decision might affect the process of reconciliation between the Crown and Aboriginal peoples. Given the absence of reasons in the decision letter, which made the task of determining the justification and intelligibility of the decision more challenging, the Court assessed reasonableness of the Minister’s decision from the record. The Court found the reasons in the 2014 advice to the Premier from the Department of Energy. The Court held that the deficiencies in those reasons materially undermined a finding of the requisite intelligibility of the decision and its reasons, and sufficient rational connection between the reasons given and the outcome. The Court also confirmed that consideration of opportunities by decision makers to advance and promote the process of reconciliation between Aboriginal peoples and the Crown is constitutionally mandated by Section 35 of the Constitution Act, 1982. In this case, the Constitution required the Minister to consider whether, and if so how, his decision may advance or impair the ongoing process of reconciliation with the Band. The Court found that the Minister failed to undertake this mandatory consideration. As it was not argued, the Court did not decide whether the honour of the Crown required reasons. However, the Court held in obiter that the honour of the Crown “prima facie” requires reasons in such circumstances where the Band perceived an injustice was done to them over a century ago, followed by its decades-long struggle for a remedy. Further, the fact that the Band’s historic claim had some legitimacy given the magnitude of the federal Crown’s payment in settlement, and the Minister’s previous position in favour of the Band’s request while he was the Minister of Aboriginal Relations “all militate strongly in favour of the honour of the Crown obliging the Minister himself to explain his one sentence denial to the Band.” [at para. 118] ImplicationsBlood Tribe is significant to administrative decision making involving First Nations’ rights and entitlements. First, the Court highlighted the constitutional mandate on decision makers to consider the role of the decision in facilitating the ultimate reconciliation of prior Aboriginal occupation with de facto Crown sovereignty (the process of reconciliation). The Court emphasized that, while it may not change the outcome of the decision, the decision maker’s failure to turn their mind to such a mandatory consideration may alone render their decisions unreasonable. It would be prudent for decision makers to include in their decision documents that they have considered this point. Second, the Court held in obiter that the honour of the Crown extends to the nature and manner of communications with the Band. Communicating reasons to the Band is a sign of respect and the requisite comity and courtesy of the Crown as Sovereign toward a prior occupying nation. The Court also held that the honour of the Crown “prima facie” requires reasons in circumstances as those under consideration. Circumstances that trigger the honour of the Crown “prima facie” obligation to provide reasons by the decision maker include decisions of significance to the Band, historical claims followed by decades-long struggle for a remedy, claims with some evidence of legitimacy in the nature of settlement payments and agreements by the Crown. It would be prudent for decision makers to provide reasons for their decisions when these circumstances are present. We will continue to monitor developments on these issues.<p style="text-align:justify;"><span style="text-align:justify;">​Added to the growing list of recent court decisions on land claim issues between First Nations and provincial Crowns is the recent Alberta Court of Queen’s Bench decision in </span><em style="text-align:justify;">Kainaiwa/Blood Tribe v. Alberta (Energy)</em><span style="text-align:justify;"> 2017 ABQB 107 (</span><em style="text-align:justify;">Blood Tribe</em><span style="text-align:justify;">). In </span><em style="text-align:justify;">Blood Tribe</em><span style="text-align:justify;">, Jeffrey J. denied the Blood Indian Band’s (the Band) request for mandamus on the grounds that Treaty 7, the </span><em style="text-align:justify;">Natural Resource Transfer Agreement</em><span style="text-align:justify;">, Schedule to the </span><em style="text-align:justify;">Constitution Act</em><span style="text-align:justify;">, 1930 (UK), 20 & 21 Geo V, c 26 (NRTA) and the honour of the Crown did not entitle the Band to subsurface rights on certain lands sought by the Band to be added to its reserve la</span><span style="text-align:justify;">nd. However, the Court did quash and send back for reconsideration the decision of the Alberta Minister of Energy to refuse to transfer or sell the subsurface rights to the Band. The Court held that the Minister’s discretionary decision was unreasonable for a number of reasons, including deficiencies in the intelligibility and rationality of the decision and reasons.</span></p><h3>​Background Facts</h3><p style="text-align:justify;">Under the terms of Treaty 7 signed in 1887, the Band gained rights in certain lands known as the Blackfoot Crossing Reserve. Between 1880 and 1881, the Band was dissatisfied with the Blackfoot Crossing Reserve and agreed to surrender its rights in the Blackfoot Crossing Reserve in exchange for a new reserve that is  currently occupies (the Reserve). While surveying the Reserve in 1882, the federal Crown became aware that a non-Indian man, David Akers (Akers), was living at its eastern extremity and in 1883, an Amended Treaty 7 was finalized. The federal Crown later discovered that several pieces of land within the Reserve was inadvertently sold to Akers. Akers refused to relocate and the federal Crown obtained a surrender of approximately 444 acres (the Claim Land) from the Band without compensation (the Surrender). In 1970 the federal crown reacquired and reincorporated 219 acres of the Claim Land into the Reserve. Approximately 225 acres of the Claim Land remained outstanding from the original Agreement. </p><p style="text-align:justify;">In 1995, the Band submitted a claim alleging that it did not receive compensation for the Surrender, and that the Surrender was invalid. Negotiations resulted in two settlement Agreements, the first in 1997 (the 1st Akers Settlement) and the second in 2003 and 2004 (the 2nd Akers Settlement). Under the 1st Akers Settlement, the Band received $2,346,000 and the option of purchasing 444 acres to be added to its reserve land, provided that the Band consulted with the provincial government and the relevant interest holders and resolved any concerns that may arise.  Under the 2nd Akers Settlement, in exchange for an absolute surrender of all of its interest in the Claim Land within the meaning of ss. 38 and 39 of the <em>Indian Act</em>, RSC 1985, c I-5 (the <em>Indian Act</em>), the Band received an additional $3,555,000 and the option of purchasing 225 acres of land adjacent to the Reserve, including subsurface rights, on a willing buyer/seller basis to be added to the Reserve subject to meeting the concerns of the provincial government. Under the 1st and 2nd Akers Settlements combined, the Band received $5,800,000 and the option of purchasing up to 669 acres that could be added to the Reserve.</p><p style="text-align:justify;">In 2009, the Band purchased surface rights to 664.8 acres (the Purchased Lands). The subsurface rights remained vested in the Alberta Crown, portions of which were subject to coal, ammonite, oil and gas leases. From October 2008 to January 2015, the Band sought a transfer or sale from the Alberta Crown of the subsurface rights in the Purchased Lands. Initially, the Band was advised that Alberta was not willing to transfer Crown mineral rights except where required by law.  Over the next several years, the Band was advised that the subsurface rights would not be transferred until the natural gas well ceased production. Alberta wanted compensation for the sub-surface rights and lost royalties. The Band accepted that it would be willing to purchase the subsurface rights, as opposed to receiving it from Alberta for free. Alberta’s Minister of Aboriginal Relations advocated for the transfer of the subsurface rights to the Band while the Minister of Energy advocated against the transfer on the grounds that it would create a precedent for other First Nations purchasing land to seek similar concessions. In 2014, the Minister of Aboriginal Relations became the Minister of Energy, while the Premier took over the office serving as both Premier and the Minister of Aboriginal Relations. The new Minister of Energy changed his former position (when he was Minister of Aboriginal Relations) and advised the Premier that Alberta would not be transferring the subsurface rights to the Band on the grounds that: (1) there were existing subsurface rights in the Purchased Lands that were presently being leased, (2) Alberta does not sell subsurface rights except in exceptional cases, (3) Alberta did not have a legal obligation to transfer the subsurface rights in this case and (4) selling subsurface rights where no legal obligation exists may lead other First Nations to purchase land and seek similar treatment.   In January 2015, the Band received a letter from Alberta’s Minister of Energy pursuant to the powers under the <em>Mines and Minerals Act </em>R.S.A. 2000, c. M-17 (MMA) communicating his decision refusing the transfer or sale of the subsurface rights. Reasons for the decision were not provided in the letter. The Band commenced the application for <em>mandamus</em> and judicial review.</p><h3>Issues</h3><p style="text-align:justify;">The Court considered three issues: (a) whether <em>mandamus</em> lay against the Minister of Energy; (b) if not, the applicable standard of review of the Minister’s decision; and (c) whether the Minister’s decision fell short of that standard of review.</p><h3>Decision</h3><p style="text-align:justify;">On the first issue, the Court held that neither Treaty 7, the NRTA, nor the honour of the Crown entitled the Band to the subsurface rights underlying the Purchased Lands.  Therefore the Minister was not under any legal obligation and could not be compelled by <em>Mandamus</em> to transfer or sell the subsurface rights to the Band. The Court reasoned that while Treaty 7 is constitutionally protected by section 35 of the <em>Constitution Act</em>, 1982, and the NRTA transferred land from the federal Crown to Alberta subject to any existing trusts, the Purchased Lands was never part of reserve land subject to these protections. Alberta received those subsurface rights from the federal Crown unencumbered by any obligation to the Band. The Court confirmed that the honour of the Crown is not a cause of action in itself, but speaks to how obligations that attract it must be fulfilled. Therefore in the absence of a legal obligation, the honour of the Crown could not compel Alberta to transfer the subsurface rights to the Band. The Court also found that the Band’s absolute surrender of all of its interest in the Claim Lands under the 2nd Akers Settlement fulfilled Canada’s treaty obligations, extinguished the Band’s claim and completely bars <em>mandamus</em>.</p><p style="text-align:justify;">On the second issue, the Court held that insofar as the Minister’s decision entails extricable questions of constitutional interpretation, of an enactment (the NRTA) or an agreement (Treaty 7), or determining the scope of what is entailed by the honour of the Crown, the standard of review is correctness.  However, the Minister’s discretionary decision, pursuant to the MMA, to transfer or sell the subsurface rights owned by the Alberta Crown is subject to review on a reasonableness standard.</p><p style="text-align:justify;">On the third issue, the Court held that the Minister of Energy was correct that there was no legal obligation on Alberta, pursuant to Treaty 7, the NRTA or the honour of the Crown, to sell or transfer the subsurface rights to the Band. However, the Court held the Minister’s refusal to transfer or sell unreasonable from the combination of the diminished intelligibility and rationality of the decision and reasons and his failure to consider how his decision might affect the process of reconciliation between the Crown and Aboriginal peoples. </p><p style="text-align:justify;">Given the absence of reasons in the decision letter, which made the task of determining the justification and intelligibility of the decision more challenging, the Court assessed reasonableness of the Minister’s decision from the record. The Court found the reasons in the 2014 advice to the Premier from the Department of Energy. The Court held that the deficiencies in those reasons materially undermined a finding of the requisite intelligibility of the decision and its reasons, and sufficient rational connection between the reasons given and the outcome. The Court also confirmed that consideration of opportunities by decision makers to advance and promote the process of reconciliation between Aboriginal peoples and the Crown is constitutionally mandated by Section 35 of the <em>Constitution Act</em>, 1982.  In this case, the Constitution required the Minister to consider whether, and if so how, his decision may advance or impair the ongoing process of reconciliation with the Band. The Court found that the Minister failed to undertake this mandatory consideration. </p><p style="text-align:justify;">As it was not argued,  the Court did not decide whether the honour of the Crown required reasons. However, the Court held in <em>obiter</em> that the honour of the Crown “<em>prima facie</em>” requires reasons in such circumstances where the Band perceived an injustice was done to them over a century ago, followed by its decades-long struggle for a remedy. Further, the fact that the Band’s historic claim had some legitimacy given the magnitude of the federal Crown’s payment in settlement, and the Minister’s previous position in favour of the Band’s request while he was the Minister of Aboriginal Relations “all militate strongly in favour of the honour of the Crown obliging the Minister himself to explain his one sentence denial to the Band.” [at para. 118]  </p><h3>Implications</h3><p style="text-align:justify;"><em>Blood Tribe</em> is significant to administrative decision making involving First Nations’ rights and entitlements. First, the Court highlighted the constitutional mandate on decision makers to consider the role of the decision in facilitating the ultimate reconciliation of prior Aboriginal occupation with <em>de facto</em> Crown sovereignty (the process of reconciliation). The Court emphasized that, while it may not change the outcome of the decision, the decision maker’s failure to turn their mind to such a mandatory consideration may alone render their decisions unreasonable. It would be prudent for decision makers to include in their decision documents that they have considered this point.   </p><p style="text-align:justify;">Second, the Court held in <em>obiter </em>that the honour of the Crown extends to the nature and manner of communications with the Band. Communicating reasons to the Band is a sign of respect and the requisite comity and courtesy of the Crown as Sovereign toward a prior occupying nation. The Court also held that the honour of the Crown “<em>prima facie</em>” requires reasons in circumstances as those under consideration. Circumstances that trigger the honour of the Crown “<em>prima facie</em>” obligation to provide reasons by the decision maker include decisions of significance to the Band, historical claims followed by decades-long struggle for a remedy, claims with some evidence of legitimacy in the nature of settlement payments and agreements by the Crown. It would be prudent for decision makers to provide reasons for their decisions when these circumstances are present. We will continue to monitor developments on these issues.</p>5/3/2017 4:00:00 AM2017-05-03T04:00:00ZTrue1float;#5.00000000000000float;#2017.00000000000string;#Mayfloat;#201705.000000000GP0|#2cad29ca-54e6-43bb-a056-02b01b063aaa;L0|#02cad29ca-54e6-43bb-a056-02b01b063aaa|Aboriginal;GTSet|#939fe804-8a2a-4cfa-af8f-5756b32ac3ca;GP0|#8d24db86-3f70-433f-80f1-393927d716cc;L0|#08d24db86-3f70-433f-80f1-393927d716cc|Surface Rights;GP0|#f61f75ba-8b4a-47e4-ac93-81a58bdb7860;L0|#0f61f75ba-8b4a-47e4-ac93-81a58bdb7860|Public PolicyAboriginal;Surface Rights;Public Policy
(Red)water under the bridge? Court of Appeal upholds right of trustee to disclaim uneconomic assets in the Redwater decision(Red)water under the bridge? Court of Appeal upholds right of trustee to disclaim uneconomic assets in the Redwater decision310BLG Blog PostMatti Lemmens;Chidinma Thompson;Leanne Desbaratsmlemmens@blg.com | Matti Lemmens | 693A30232E777C626C6763616E6164615C6D6C656D6D656E73 i:0#.w|blgcanada\mlemmens;cthompson@blg.com | Chidinma Thompson | 693A30232E777C626C6763616E6164615C6374686F6D70736F6E i:0#.w|blgcanada\cthompson;ldesbarats@blg.com | Leanne Desbarats | 693A30232E777C626C6763616E6164615C6C646573626172617473 i:0#.w|blgcanada\ldesbarats​​​​​​​On April 24, 2017, the Alberta Court of Appeal issued a decision in Orphan Well Association v Grant Thornton Limited, 2017 ABCA 124. The decision is arguably the past year’s most hotly anticipated and discussed decision in Alberta, despite involving bankruptcy proceedings of a relatively small junior oil and gas company. The ​​Court of Appeal, in a 2-1 split, upheld the trial judge’s decision that a receiver can disclaim or renounce uneconomic assets that are subject to costly environmental liabilities. The effect of this decision is that a receiver can elect to only package and sell assets of its choosing, possibly leaving responsibility for the clean-up of uneconomic assets to Alberta’s Orphan Well Fund which results in implications for a wide variety of stakeholders across industry (discussed by BLG previously in Where do we go from here? Alberta Court approves renouncement of AER-licensed assets by Trustees and Receivers to avoid monetary environmental obligations, Shifting Environmental Liabilities after the Redwater Decision​ and Impact of Redwater outside of Alberta a British Columbia perspective).​ The decision maintains the new reality that stakeholders have been grappling with since the trial decision was released, but the fallout is likely not over yet. The Alberta Energy Regulator (the AER) has already taken significant steps to address the implications from the trial decision (discussed by BLG in The Alberta Energy Regulator Reacts to the Redwater Decision – Who Suffers? and Alberta Energy Regulator Reiterates Position on Interim Measures post-Redwater but Indicates Some Flexibility on 2.0 LMR Requirement), and more changes can be expected in the energy sector as stakeholders re-evaluate their respective risk profiles in light of the decision. [Read more​...]<p style="text-align:justify;">​​​​​​​On April 24, 2017, the Alberta Court of Appeal issued a decision in <em>Orphan Well Association v Grant Thornton Limited</em>, 2017 ABCA 124. The decision is arguably the past year’s most hotly anticipated and discussed decision in Alberta, despite involving bankruptcy proceedings of a relatively small junior oil and gas company. The ​​Court of Appeal, in a 2-1 split, upheld the trial judge’s decision that a receiver can disclaim or renounce uneconomic assets that are subject to costly environmental liabilities. The effect of this decision is that a receiver can elect to only package and sell assets of its choosing, possibly leaving responsibility for the clean-up of uneconomic assets to Alberta’s Orphan Well Fund which results in implications for a wide variety of stakeholders across industry <span style="text-align:justify;">(discussed by BLG previously in </span><span style="text-align:justify;"></span><em style="text-align:justify;"><a href="/energy/Pages/Post.aspx?PID=208" target="_blank">Where do we go from here? Alberta Court approves renouncement of AER-licensed assets by Trustees and Receivers to avoid monetary environmental obligations</a>,</em><span style="text-align:justify;"></span><span style="text-align:justify;"> </span><a href="http://blg.com/en/News-And-Publications/publication_4528" target="_blank" style="text-decoration-line:underline;text-align:justify;"><em>Shifting Environmental Liabilities after the Redwater Decision</em></a><span style="text-align:justify;">​ and <a href="/energy/Pages/Post.aspx?PID=217" target="_blank"><em>Impact of Redwater outside of Alberta: a British Columbia perspective</em></a><span></span></span><span style="text-align:justify;"></span><span style="text-align:justify;">).</span>​ The decision maintains the new reality that stakeholders have been grappling with since the trial decision was released, but the fallout is likely not over yet. The Alberta Energy Regulator (the AER) has already taken significant steps to address the implications from the trial decision (discussed by BLG in <em><a href="/energy/Pages/Post.aspx?PID=213" target="_blank">The Alberta Energy Regulator Reacts to the Redwater Decision – Who Suffers?</a></em> and <em><a href="/energy/Pages/Post.aspx?PID=222" target="_blank">Alberta Energy Regulator Reiterates Position on Interim Measures post-Redwater but Indicates Some Flexibility on 2.0 LMR Requirement</a></em>), and more changes can be expected in the energy sector as stakeholders re-evaluate their respective risk profiles in light of the decision. </p><p style="text-align:justify;">[<a href="/energy/Pages/Post.aspx?PID=310" target="_blank">Read more​</a>...]</p>​​On April 24, 2017, the Alberta Court of Appeal issued a decision in Orphan Well Association v Grant Thornton Limited, 2017 ABCA 124. The decision is arguably the past year’s most hotly anticipated and discussed decision in Alberta, despite involving bankruptcy proceedings of a relatively small junior oil and gas company. The Court of Appeal, in a 2-1 split, upheld the trial judge’s decision that a receiver can disclaim or renounce uneconomic assets that are subject to costly environmental liabilities. The effect of this decision is that a receiver can elect to only package and sell assets of its choosing, possibly leaving responsibility for the clean-up of uneconomic assets to Alberta’s Orphan Well Fund which results in implications for a wide variety of stakeholders across industry (discussed by BLG previously in Where do we go from here? Alberta Court approves renouncement of AER-licensed assets by Trustees and Receivers to avoid monetary environmental obligations, Shifting Environmental Liabilities after the Redwater Decision​ and Impact of Redwater outside of Alberta a British Columbia perspective). The decision maintains the new reality that stakeholders have been grappling with since the trial decision was released, but the fallout is likely not over yet. The Alberta Energy Regulator (the AER) has already taken significant steps to address the implications from the trial decision (discussed by BLG in The Alberta Energy Regulator Reacts to the Redwater Decision – Who Suffers? and Alberta Energy Regulator Reiterates Position on Interim Measures post-Redwater but Indicates Some Flexibility on 2.0 LMR Requirement), and more changes can be expected in the energy sector as stakeholders re-evaluate their respective risk profiles in light of the decision. Background​A receiver was appointed for Redwater Energy Corporation (Redwater), a publicly listed oil and gas company, when it defaulted on debts owing to the Alberta Treasury Branch. The receiver took possession of Redwater’s most valuable assets and sought to disclaim or renounce certain assets subject to costly environmental liabilities and obligations. The Court confirmed that receivers and trustees of licensees in bankruptcy are permitted under the Bankruptcy and Insolvency Act (BIA) to renounce such assets and that the AER and the Orphan Well Association do not have priority over the other creditors of a bankrupt licensee. For a detailed summary of the trial judge’s decision, see BLG’s previous post (found in Where do we go from here? Alberta Court approves renouncement of AER-licensed assets by Trustees and Receivers to avoid monetary environmental obligations).​In the trial decision, the Honourable Chief Justice Wittm​ann held that an operational ​conflict existed between the federal BIA and Alberta’s Oil and Gas Conservation Act (OGCA) and the Pipeline Act (PA) with respect to c​ertain rights of trustees and receivers of licensees of the AER. Pursuant to federal paramountcy rules, where a conflict exists, the federal legislation prevails. The trial judge found that such a conflict did arise between Section 14.06 of the BIA, which permits a Trustee to renounce assets and not be responsible for environmental abandonment and remediation work, and provisions of the OGCA and PA which do not allow a trustee (which is considered a “licensee” under the legislation) to do so. The Orphan Well Association and the AER appealed the trial decision. Grant Thornton Limited, the receiver in the bankruptcy, and Alberta Treasury Branches, the lender, were Respondents on appeal. Four intervenors were granted rights to participate in the appeal, the Canadian Association of Petroleum Producers, the Attorney General for Saskatchewan, Her Majesty the Queen in Right of the Province of British Columbia as represented by the Ministry of Natural Gas Development and the British Columbia Oil and Gas Commission and the Canadian Association of Insolvency and Restructuring Professionals (the decision to allow the intervenors was discussed by BLG in Alberta Court of Appeal Grants Intervener Status to Four Participants in Appeal of Re Redwater Energy Corp.). Decision The issues on appeal were the priority of environmental claims and whether a receiver or trustee in bankruptcy must address the liabilities inherent in the remediation of the wells in priority to the claims of secured creditors. The Court of Appeal reviewed these questions of law on the standard of correctness. The majority held that the Regulator cannot mandate that the Trustee satisfy environmental claims in priority to the claims of the secured creditor under the BIA. To the extent that the interpretation of the provincial legislation leads to a different result, the paramountcy doctrine is engaged. The majority rejected the arguments by the Appellants and some intervenors that public policy and fairness considerations should factor into its decision, holding that bankruptcy court has no ability to create exceptions to the statute based on general considerations of fairness or public policy.In Justice Martin’s dissenting opinion, she concluded that there was no conflict between the federal and provincial legislative schemes and, accordingly, found that there was no issue with respect to paramountcy. Her analysis was largely based on statutory interpretation of the words of Section 14.06. She found there was no conflict between the federal and provincial legislation as the majority read the provisions of the federal legislation too broadly. Implications The decision does not alter the current status quo, which was shaped by the outcome of the trial decision. As BLG previously discussed in Where do we go from here? Alberta Court approves renouncement of AER-licensed assets by Trustees and Receivers to avoid monetary environmental obligations​ and Shifting Environmental Liabilities after the Redwater Decision, ​there are widespread implications for the energy industry, the lending industry, principals, bankrupts, the AER and the public as a result of this decision. The AER has already revised some policies with respect to abandonment and liability in an attempt to better secure payment from oil and gas companies for liabilities. In the bankruptcy context, the template receivership orders have already been amended in response to the trial decision in Redwater (see for example receivership orders granted in the cases of Northpoint Resources Ltd., LGX Oil + Gas Inc., and Nordegg Resources Ltd.). While there is a possibility of a further appeal to the Supreme Court of Canada, leave to appeal is required and is difficult to obtain. In the interim, this decision will bring greater clarity to stakeholders. Absent any further appeal, it is likely that there will be a future legislative and regulatory framework review by the Regulator for addressing abandonment and reclamation liability.<p style="text-align:justify;">​<span>​</span><span></span><span>On April 24, 2017, the Alberta Court of Appeal issued a decision in </span><em>Orphan Well Association v Grant Thornton Limited</em><span>, 2017 ABCA 124. The decision is arguably the past year’s most hotly anticipated and discussed decision in Alberta, despite involving bankruptcy proceedings of a relatively small junior oil and gas company. The Court of Appeal, in a 2-1 split, upheld the trial judge’s decision that a receiver can disclaim or renounce uneconomic assets that are subject to costly environmental liabilities. The effect of this decision is that a receiver can elect to only package and sell assets of its choosing, possibly leaving responsibility for the clean-up of uneconomic assets to Alberta’s Orphan Well Fund which results in implications for a wide variety of stakeholders across industry (discussed by BLG previously in </span><span></span><em><a href="/energy/Pages/Post.aspx?PID=208" target="_blank">Where do we go from here? Alberta Court approves renouncement of AER-licensed assets by Trustees and Receivers to avoid monetary environmental obligations</a>,</em><span></span><span> </span><a href="http://blg.com/en/News-And-Publications/publication_4528" target="_blank"><em>Shifting Environmental Liabilities after the Redwater Decision</em></a><span>​ and <a href="/energy/Pages/Post.aspx?PID=217" target="_blank"><em>Impact of Redwater outside of Alberta: a British Columbia perspective</em></a></span><span></span><span>). The de</span><span>cision maintains the new reality that stakeholders have been grappling with since the trial decision was released, but the fallout is likely </span><span>not over yet. The Alberta Energy Regulator (the AER) has already taken significant steps to address the implications from the trial decision (discussed by BLG in </span><em><a href="/energy/Pages/Post.aspx?PID=213" target="_blank">The Alberta Energy Regulator Reacts to the Redwater Decision – Who Suffers?</a></em><span></span><span> and </span><span></span><em><a href="/energy/Pages/Post.aspx?PID=222" target="_blank">Alberta Energy Regulator Reiterates Position on Interim Measures post-Redwater but Indicates Some Flexibility on 2.0 LMR Requirement</a></em><span></span><span>), and more changes can be expected in the energy sector as stakeholders re-evaluate their respective risk profiles in light of the decision. </span></p><h3>Background</h3><p style="text-align:justify;">​A receiver was appointed for Redwater Energy Corporation (Redwater), a publicly listed oil and gas company, when it defaulted on debts owing to the Alberta Treasury Branch. The receiver took possession of Redwater’s most valuable assets and sought to disclaim or renounce certain assets subject to costly environmental liabilities and obligations. The Court confirmed that receivers and trustees of licensees in bankruptcy are permitted under the <em>Bankruptcy and Insolvency A</em><em>ct</em> (BIA) to renounce such assets and that the AER and the Orphan Well Association do not have priority over the other creditors of a bankrupt licensee. For a detailed summary of the trial judge’s decision, see BLG’s previous post (found in <em><a href="/energy/Pages/Post.aspx?PID=208">Where do we go from here? Alberta Court approves renouncement of AER-licensed assets by Trustees and Receivers to avoid monetary environmental obligations</a></em>).</p><p style="text-align:justify;">​In the trial decision, the Honourable Chief Justice Wittm​ann held that an operational ​conflict existed between the federal BIA and Alberta’s <em>Oil and Gas Conservation Act</em> (OGCA) and the <em>Pipeline Act</em> (PA) with respect to c​ertain rights of trustees and receivers of licensees of the AER. Pursuant to federal paramountcy rules, where a conflict exists, the federal legislation prevails. The trial judge found that such a conflict did arise between Section 14.06 of the BIA, which permits a Trustee to renounce assets and not be responsible for environmental abandonment and remediation work, and provisions of the OGCA and PA which do not allow a trustee (which is considered a “licensee” under the legislation) to do so. </p><p style="text-align:justify;">The Orphan Well Association and the AER appealed the trial decision. Grant Thornton Limited, the receiver in the bankruptcy, and Alberta Treasury Branches, the lender, were Respondents on appeal. Four intervenors were granted rights to participate in the appeal, the Canadian Association of Petroleum Producers, the Attorney General for Saskatchewan, Her Majesty the Queen in Right of the Province of British Columbia as represented by the Ministry of Natural Gas Development and the British Columbia Oil and Gas Commission and the Canadian Association of Insolvency and Restructuring Professionals (the decision to allow the intervenors was discussed by BLG in <em><a href="/energy/Pages/Post.aspx?PID=230">Alberta Court of Appeal Grants Intervener Status to Four Participants in Appeal of Re Redwater Energy Corp</a>.)</em>. </p><h3>Decision </h3><p style="text-align:justify;">The issues on appeal were the priority of environmental claims and whether a receiver or trustee in bankruptcy must address the liabilities inherent in the remediation of the wells in priority to the claims of secured creditors. The Court of Appeal reviewed these questions of law on the standard of correctness. </p><p style="text-align:justify;">The majority held that the Regulator cannot mandate that the Trustee satisfy environmental claims in priority to the claims of the secured creditor under the BIA. To the extent that the interpretation of the provincial legislation leads to a different result, the paramountcy doctrine is engaged. The majority rejected the arguments by the Appellants and some intervenors that public policy and fairness considerations should factor into its decision, holding that bankruptcy court has no ability to create exceptions to the statute based on general considerations of fairness or public policy.</p><p style="text-align:justify;">In Justice Martin’s dissenting opinion, she concluded that there was no conflict between the federal and provincial legislative schemes and, accordingly, found that there was no issue with respect to paramountcy. Her analysis was largely based on statutory interpretation of the words of Section 14.06. She found there was no conflict between the federal and provincial legislation as the majority read the provisions of the federal legislation too broadly. </p><h3>Implications </h3><p style="text-align:justify;">The decision does not alter the current status quo, which was shaped by the outcome of the trial decision. As BLG previously discussed in <em><a href="/energy/Pages/Post.aspx?PID=208" target="_blank">Where do we go from here? Alberta Court approves renouncement of AER-licensed assets by Trustees and Receivers to avoid monetary environmental obligations​</a></em> and <em><a href="http://blg.com/en/News-And-Publications/publication_4528" target="_blank">Shifting Environmental Liabilities after the Redwater Decision</a></em>, ​there are widespread implications for the energy industry, the lending industry, principals, bankrupts, the AER and the public as a result of this decision. The AER has already revised some policies with respect to abandonment and liability in an attempt to better secure payment from oil and gas companies for liabilities.  In the bankruptcy context, the template receivership orders have already been amended in response to the trial decision in Redwater (see for example receivership orders granted in the cases of <em>Northpoint Resources Ltd</em>., <em>LGX Oil + Gas Inc., and Nordegg Resources Ltd</em>.). </p><p style="text-align:justify;">While there is a possibility of a further appeal to the Supreme Court of Canada, leave to appeal is required and is difficult to obtain. In the interim, this decision will bring greater clarity to stakeholders. Absent any further appeal, it is likely that there will be a future legislative and regulatory framework review by the Regulator for addressing abandonment and reclamation liability.</p>4/25/2017 4:00:00 AM2017-04-25T04:00:00ZTrue1float;#4.00000000000000float;#2017.00000000000string;#Aprilfloat;#201704.000000000GP0|#5f2600c5-ac2f-4731-ab91-eb396c7c4c54;L0|#05f2600c5-ac2f-4731-ab91-eb396c7c4c54|Bankruptcy and Insolvency;GTSet|#939fe804-8a2a-4cfa-af8f-5756b32ac3ca;GP0|#80272199-c96f-4e96-a610-ee5c8caae603;L0|#080272199-c96f-4e96-a610-ee5c8caae603|Environment;GP0|#0cf193a5-1564-449f-827a-d442b5bcbc51;L0|#00cf193a5-1564-449f-827a-d442b5bcbc51|Director/Officer Liability;GP0|#79f5b025-e6dd-4c66-873b-67e8780cf972;L0|#079f5b025-e6dd-4c66-873b-67e8780cf972|Regulatory;GP0|#a8d93e98-a569-4c7f-ac81-5c92b85685cd;L0|#0a8d93e98-a569-4c7f-ac81-5c92b85685cd|AppealsBankruptcy and Insolvency;Environment;Director/Officer Liability;Regulatory;Appeals
BLG Invite | BLG Employment Law Mini Symposium BLG Invite | BLG Employment Law Mini Symposium 309BLG Blog PostMichael A. Marionmmarion@blg.com | Michael A. Marion | 693A30232E777C626C6763616E6164615C6D616D i:0#.w|blgcanada\mam ​​​​​Join BLG on Wednesday, May 10, 2017​​, for the BLG Employment Law Mini Symposium.​ [Read more​...]​<p>​​​​​Join BLG on Wednesday, May 10, 2017​​, for the BLG Employment Law Mini Symposium.​</p><p>[<a href="/energy/Pages/Post.aspx?PID=309" target="_blank">Read more​</a>...]​</p> ​​​Join BLG on Wednesday, May 10, 2017​​, for the BLG Employment Law Mini Symposium.​​ Registration730 am ​Breakfast Keynote745 am – 815 am ​Sessions815 am – 915 am915 am – 1015 am Keynote Speaker | ​745 am – 815 amJoseph (Chip) Galagaza, Jackson Lewis LLP Session A | 815 – 915 amSelect one of1. Human Rights Update with Brian Portas and Andrew Pozzobon, BLG​2. Recent Cases of Interest with Laurie Robson and Kamini Dowe, BLG ​Session B | 915 – 1015 amSelect one of1. Medical Marijuana in the Workplace with Duncan Marsden and Lorelle Binnion, BLG2. Sexual and Gender Diversity Challenges and Impacts in the Workplace with André Royer and Justine Laurier, BLG ​LocationCentennial Place West Tower3rd Flr, 250 5th St SWCalgary, AB CLICK HERE to RSVP by Wednesday, May 3, 2017. If you have any questions regarding this event, please direct them to Ruxandra Andreiasi at rsvpcalgary@blg.com.<p>​​​Join BLG on Wednesday, May 10, 2017​​, for the BLG Employment Law Mini Symposium.​​</p><p><strong>Registration</strong><br>7:30 am</p><p><strong>​B</strong><strong>reakfast Keynote</strong><br>7:45 am – 8:15 am</p><p><strong>​Sessions<br></strong>8:15 am – 9:15 am<br>9:15 am – 10:15 am</p><p><strong>Keynote Speaker | ​7:45 am – 8:15 am</strong><br>Joseph (Chip) Galagaza, Jackson Lewis LLP </p><p><strong>Session A | 8:15 – 9:15 am</strong><br>Select one of:<br>1. Human Rights Update with <a href="http://blg.com/en/Our-People/Portas-Brian" target="_blank">Brian Portas</a> and <a href="http://blg.com/en/Our-People/Pozzobon-Andrew" target="_blank">Andrew Pozzobon</a>, BLG<br>​2. Recent Cases of Interest with <a href="http://blg.com/en/Our-People/Robson-Laurie" target="_blank">Laurie Robson</a> and <a href="http://blg.com/en/Our-People/Dowe-Kamini" target="_blank">Kamini Dowe</a>, BLG </p><p><strong>​Session B | 9:15 – 10:15 am</strong><br>Select one of:<br>1. Medical Marijuana in the Workplace with <a href="http://blg.com/en/Our-People/Marsden_Duncan" target="_blank">Duncan Marsden</a> and <a href="http://blg.com/en/Our-People/Binnion-Lorelle" target="_blank">Lorelle Binnion</a>, BLG<br>2. Sexual and Gender Diversity: Challenges and Impacts in the Workplace with <a href="http://blg.com/en/Our-People/Royer-Andre" target="_blank">André Royer</a> and <a href="http://blg.com/en/Our-People/Laurier-Justine" target="_blank">Justine Laurier</a>, BLG </p><p><strong>​Location</strong><br>Centennial Place West Tower<br>3rd Flr, 250 5th St SW<br>Calgary, AB<br></p><p><a href="http://bordenladnergervaisllp.com/s/528bcf01c818c8d4247d504b63515cb3d1e83802" target="_blank">CLICK HERE</a> to RSVP by Wednesday, May 3, 2017. </p><p>If you have any questions regarding this event, please direct them to Ruxandra Andreiasi at <a href="mailto:rsvpcalgary@blg.com" target="_blank">rsvpcalgary@blg.com</a>.</p>4/24/2017 4:00:00 AM2017-04-24T04:00:00ZTrue1float;#4.00000000000000float;#2017.00000000000string;#Aprilfloat;#201704.000000000GP0|#98850b8e-4cdc-41cf-9cf7-f309880c7c29;L0|#098850b8e-4cdc-41cf-9cf7-f309880c7c29|BLG Energy News and Events;GTSet|#939fe804-8a2a-4cfa-af8f-5756b32ac3caBLG Energy News and Events
Regulating in the Green Era: the AER Rules Land Disturbance Not Justifiable by Short-term Economic Advantage of New Pipeline Regulating in the Green Era: the AER Rules Land Disturbance Not Justifiable by Short-term Economic Advantage of New Pipeline 308BLG Blog PostChidinma Thompson;Michael A. Marioncthompson@blg.com | Chidinma Thompson | 693A30232E777C626C6763616E6164615C6374686F6D70736F6E i:0#.w|blgcanada\cthompson;mmarion@blg.com | Michael A. Marion | 693A30232E777C626C6763616E6164615C6D616D i:0#.w|blgcanada\mam​​In January 2017, in ABAER 001 - Bonavista Energy Corporation A Regulatory Appeal of Two Well Licences and an Application for a Pipeline Gilby Field (Bonavista case), the Alberta Energy Regulator (AER) issued the first of its decisions for 2017 confirming two horizontal gas well licenses it issued to Bonavista Energy Corporation (Bonavista) and denying Bonavista’s application for an additional pipeline for the proposed gas production. While the wells were needed and the surface drilling location was optimal, the AER found that the short-term economic advantage of the extra pipeline capacity to Bonavista did not justify the impacts to landowners created by the additional disturbance to their lands. [Read more...]<p style="text-align:justify;">​​In January 2017, in <a href="https://www.aer.ca/documents/decisions/2016/2017-ABAER-01.pdf" target="_blank"><em>ABAER 001 - Bonavista Energy Corporation A Regulatory Appeal of Two Well Licences and an Application for a Pipeline Gilby Field</em></a> (Bonavista case), the Alberta Energy Regulator (AER) issued the first of its decisions for 2017 confirming two horizontal gas well licenses it issued to Bonavista Energy Corporation (Bonavista) and denying Bonavista’s application for an additional pipeline for the proposed gas production. While the wells were needed and the surface drilling location was optimal, the AER found that the short-term economic advantage of the extra pipeline capacity to Bonavista did not justify the impacts to landowners created by the additional disturbance to their lands. </p><p style="text-align:justify;">[<a href="/energy/Pages/Post.aspx?PID=308" target="_blank"><em>Read more</em></a>...]</p>In January 2017, in ABAER 001 - Bonavista Energy Corporation A Regulatory Appeal of Two Well Licences and an Application for a Pipeline Gilby Field (Bonavista case), the Alberta Energy Regulator (AER) issued the first of its decisions for 2017 confirming two horizontal gas well licenses it issued to Bonavista Energy Corporation (Bonavista) and denying Bonavista’s application for an additional pipeline for the proposed gas production. While the wells were needed and the surface drilling location was optimal, the AER found that the short-term economic advantage of the extra pipeline capacity to Bonavista did not justify the impacts to landowners created by the additional disturbance to their lands.BackgroundOn June 8, 2015, Bonavista submitted non-routine applications for two additional horizontal gas wells to be drilled from an existing well site, which already had two wells Bonavista drilled in 2013. On June 29, 2015, Bonavista applied under part 4 of the Pipeline Act for approval to construct and operate an additional pipeline to transport natural gas from the well site to an existing compressor station. The public notice of the well license applications expired on July 8, 2015, and as the applications met the AER requirements and no statements of concern were received, the AER issued the horizontal well licences. On July 23, 2015, the landowners requested a regulatory appeal of the AER’s decision to issue the well licences to Bonavista and registered a statement of concern against Bonavista’s pipeline application. IssuesThe AER granted the Applicants’ request for a regulatory appeal and set the matter down for a hearing to determine (a) whether the AER’s decision to issue the well licences should be confirmed, varied, suspended, or revoked and the lease site extended; and (b) whether the pipeline should be approved. In determining these issues, the panel considered the need for the project, impacts, mitigation strategies and whether Bonavista met the requirements for stakeholder engagement for the project.DecisionThe AER confirmed its decision to issue the well license but denied Bonavista’s application for an additional pipeline. The panel applied the AER’s legislative mandate to provide for the efficient, safe, orderly, and environmentally responsible development of energy resources, and considered the factors set out in Section 3 of the Responsible Energy Development Act General Regulation and Section 15 of Responsible Energy Development Act (REDA) which are the social and economic effects of the project; the effects of the project on the environment; and it impacts on landowners and their interests. The panel found that while the wells were needed and the well site was the optimal surface location to drill them, the economics of the pipeline were not justified. The panel rejected the Applicants’ objection to extend the lease to accommodate the drilling of the new wells on the ground that a small piece of land to the north of the extension would be difficult to farm. The panel found that Bonavista required the lease extension on a permanent basis to accommodate access for future servicing and accepted Bonavista’s mitigation plans not to fence but to partially reclaim the lease. With respect to other potential impacts of the project such as traffic and road use, water wells, noise and lights, visual impacts and property values, the panel found that Bonavista’s proposed mitigation measures sufficiently address the impacts on landowners and met the AER requirements in Directive 008 Surface Casing Requirements to protect domestic water wells during drilling. The panel found that the AER does not regulate county road use, and road concerns can be addressed through Bonavista’s practice of working with the county and its commitment to communicate directly with landowners on road mitigation issues. While the landowners did not present evidence of the potential negative impact of the two wells on their property values, the AER emphasized that matters of compensation, such as property values, are not within the AER’s jurisdiction. The panel also found that the onus is on all involved to use reasonable efforts to participate in a manner that enables an effective and informative process to meet the goal of Directive 056 participant involvement program. With respect to the pipeline application, Bonavista submitted that due to compressor capacity restraints, building a new 4-inch pipeline from the well site to the compressor would allow the two existing wells to flow through the new 4-inch pipeline at similar-to-current operating conditions while the two new wells would flow through an existing pipeline into a different gathering system and to another compressor. Bonavista provided an economic analysis which projected that its project payback would be achieved in approximately five months. For production optimization capital expenditures, Bonavista considered a project viable if payout occurs in less than six months. Bonavista also anticipated additional drilling in the area, which could create greater gas backout in the future. The panel found that within six to seven months, production rates from the proposed two new wells will decline enough to eliminate the need for an additional pipeline to handle production from the four wells at the well site. Therefore, the need for extra pipeline capacity would be relatively short-lived. The panel found that having the additional pipeline available would minimally expedite production of the resources, however, the absence of an additional pipeline would not strand resources or prevent the eventual production of those resources as the production volumes would not be lost, but would be merely deferred and there was no evidence that reserve recovery would be hindered by the short-term deferral. The panel found that the modest increase in revenue in the short term, as provided by the second pipeline, was not a compelling reason to install the second pipeline in the face of the Applicants’ opposition. The panel held that Bonavista’s need for the proposed pipeline for possible future projects was speculative and that Bonavista could apply for a future pipeline project, without prejudice. Therefore, the AER denied Bonavista’s application for a pipeline.ImplicationsThe Boanvista case, as the first in 2017, highlights the changes in AER’s regulatory approach to energy resources in the era of transitioning to low carbon and renewables. Historically, the AER regulated energy development by assessing each application in isolation, one at a time as the applications were submitted, as Bonavista did with its applications. But times have changed and the AER has rolled out its new regulatory approach, the Integrated Decision Approach​ (IDA). The AER is working to expand it to include all energy development applications. The IDA is a single application, single decision approach that will allow operators to submit all applications for an energy project from start to finish as an integrated application using the new technology known as OneStop. An integrated application, which the AER will review as a whole, will include a broad range of activities, from a single well to a pipeline, a facility, public land dispositions and all construction, operational and reclamation plans and details. While the IDA has not been fully implemented, the Bonavista case highlights some of its potential benefits. The Applicants argued that the existing pipeline had been installed only three years ago for production at the well site and that the need for a second pipeline reflected poor planning by Bonavista. It is possible that in a fully implemented IDA setting, the need for two additional wells and a pipeline may have been caught earlier at the initial planning of the existing wells and infrastructure. As operators continue to strive to maintain adequate cash flow to meet financial obligations in the current economy, it is no surprise that Bonavista preferred to invest in production optimization rather than delay production. However, from the regulatory viewpoint, the AER has made it clear that the economics to the operator will not necessarily be its prime concern. The AER seems to have agreed with the Applicants that a delay in revenue to Bonavista would not justify their cost of having a second pipeline across their land. We will continue to monitor developments on these issues. ​<p style="text-align:justify;">In January 2017, in <a href="https://www.aer.ca/documents/decisions/2016/2017-ABAER-01.pdf" target="_blank"><em>ABAER 001 - Bonavista Energy Corporation A Regulatory Appeal of Two Well Licences and an Application for a Pipeline Gilby Field</em></a> (Bonavista case), the Alberta Energy Regulator (AER) issued the first of its decisions for 2017 confirming two horizontal gas well licenses it issued to Bonavista Energy Corporation (Bonavista) and denying Bonavista’s application for an additional pipeline for the proposed gas production. While the wells were needed and the surface drilling location was optimal, the AER found that the short-term economic advantage of the extra pipeline capacity to Bonavista did not justify the impacts to landowners created by the additional disturbance to their lands.</p><h4>Background</h4><p style="text-align:justify;">On June 8, 2015, Bonavista submitted non-routine applications for two additional horizontal gas wells to be drilled from an existing well site, which already had two wells Bonavista drilled in 2013. On June 29, 2015, Bonavista applied under part 4 of the <em>Pipeline Act</em> for approval to construct and operate an additional pipeline to transport natural gas from the well site to an existing compressor station. The public notice of the well license applications expired on July 8, 2015, and as the applications met the AER requirements and no statements of concern were received, the AER issued the horizontal well licences. On July 23, 2015, the landowners requested a regulatory appeal of the AER’s decision to issue the well licences to Bonavista and registered a statement of concern against Bonavista’s pipeline application. </p><h4>Issues</h4><p style="text-align:justify;">The AER granted the Applicants’ request for a regulatory appeal and set the matter down for a hearing to determine: (a) whether the AER’s decision to issue the well licences should be confirmed, varied, suspended, or revoked and the lease site extended; and (b) whether the pipeline should be approved. In determining these issues, the panel considered the need for the project, impacts, mitigation strategies and whether Bonavista met the requirements for stakeholder engagement for the project.</p><h4>Decision</h4><p style="text-align:justify;">The AER confirmed its decision to issue the well license but denied Bonavista’s application for an additional pipeline. The panel applied the AER’s legislative mandate to provide for the efficient, safe, orderly, and environmentally responsible development of energy resources, and considered the factors set out in Section 3 of the <em>Responsible Energy Development Act</em><em> General Regulation</em> and Section 15 of <em>Responsible Energy Development Act</em> (REDA) which are the social and economic effects of the project; the effects of the project on the environment; and it impacts on landowners and their interests. </p><p style="text-align:justify;">The panel found that while the wells were needed and the well site was the optimal surface location to drill them, the economics of the pipeline were not justified. The panel rejected the Applicants’ objection to extend the lease to accommodate the drilling of the new wells on the ground that a small piece of land to the north of the extension would be difficult to farm. The panel found that Bonavista required the lease extension on a permanent basis to accommodate access for future servicing and accepted Bonavista’s mitigation plans not to fence but to partially reclaim the lease. </p><p style="text-align:justify;">With respect to other potential impacts of the project such as traffic and road use, water wells, noise and lights, visual impacts and property values, the panel found that Bonavista’s proposed mitigation measures sufficiently address the impacts on landowners and met the AER requirements in <em>Directive 008: Surface Casing Requirements</em> to protect domestic water wells during drilling. The panel found that the AER does not regulate county road use, and road concerns can be addressed through Bonavista’s practice of working with the county and its commitment to communicate directly with landowners on road mitigation issues. While the landowners did not present evidence of the potential negative impact of the two wells on their property values, the AER emphasized that matters of compensation, such as property values, are not within the AER’s jurisdiction. The panel also found that the onus is on all involved to use reasonable efforts to participate in a manner that enables an effective and informative process to meet the goal of Directive 056 participant involvement program. </p><p style="text-align:justify;">With respect to the pipeline application, Bonavista submitted that due to compressor capacity restraints, building a new 4-inch pipeline from the well site to the compressor would allow the two existing wells to flow through the new 4-inch pipeline at similar-to-current operating conditions while the two new wells would flow through an existing pipeline into a different gathering system and to another compressor. Bonavista provided an economic analysis which projected that its project payback would be achieved in approximately five months. For production optimization capital expenditures, Bonavista considered a project viable if payout occurs in less than six months. Bonavista also anticipated additional drilling in the area, which could create greater gas backout in the future. </p><p style="text-align:justify;">The panel found that within six to seven months, production rates from the proposed two new wells will decline enough to eliminate the need for an additional pipeline to handle production from the four wells at the well site. Therefore, the need for extra pipeline capacity would be relatively short-lived. The panel found that having the additional pipeline available would minimally expedite production of the resources, however, the absence of an additional pipeline would not strand resources or prevent the eventual production of those resources as the production volumes would not be lost, but would be merely deferred and there was no evidence that reserve recovery would be hindered by the short-term deferral. The panel found that the modest increase in revenue in the short term, as provided by the second pipeline, was not a compelling reason to install the second pipeline in the face of the Applicants’ opposition. The panel held that Bonavista’s need for the proposed pipeline for possible future projects was speculative and that Bonavista could apply for a future pipeline project, without prejudice. Therefore, the AER denied Bonavista’s application for a pipeline.</p><h4>Implications</h4><p style="text-align:justify;">The Boanvista case, as the first in 2017, highlights the changes in AER’s regulatory approach to energy resources in the era of transitioning to low carbon and renewables. Historically, the AER regulated energy development by assessing each application in isolation, one at a time as the applications were submitted, as Bonavista did with its applications. But times have changed and the AER has rolled out its new regulatory approach, the <a href="http://aer.ca/applications-and-notices/integrated-decision-approach" target="_blank">Integrated Decision Approach​</a> (IDA). The AER is working to expand it to include all energy development applications.  The IDA is a single application, single decision approach that will allow operators to submit all applications for an energy project from start to finish as an integrated application using the new technology known as OneStop. An integrated application, which the AER will review as a whole, will include a broad range of activities, from a single well to a pipeline, a facility, public land dispositions and all construction, operational and reclamation plans and details. </p><p style="text-align:justify;">While the IDA has not been fully implemented, the Bonavista case highlights some of its potential benefits. The Applicants argued that the existing pipeline had been installed only three years ago for production at the well site and that the need for a second pipeline reflected poor planning by Bonavista. It is possible that in a fully implemented IDA setting, the need for two additional wells and a pipeline may have been caught earlier at the initial planning of the existing wells and infrastructure. </p><p style="text-align:justify;">As operators continue to strive to maintain adequate cash flow to meet financial obligations in the current economy, it is no surprise that Bonavista preferred to invest in production optimization rather than delay production. However, from the regulatory viewpoint, the AER has made it clear that the economics to the operator will not necessarily be its prime concern. The AER seems to have agreed with the Applicants that a delay in revenue to Bonavista would not justify their cost of having a second pipeline across their land. We will continue to monitor developments on these issues.  ​</p>4/17/2017 4:00:00 AM2017-04-17T04:00:00ZTrue1float;#4.00000000000000float;#2017.00000000000string;#Aprilfloat;#201704.000000000GP0|#79f5b025-e6dd-4c66-873b-67e8780cf972;L0|#079f5b025-e6dd-4c66-873b-67e8780cf972|Regulatory;GTSet|#939fe804-8a2a-4cfa-af8f-5756b32ac3ca;GP0|#7ea7e480-c8e7-48db-baae-396516e81926;L0|#07ea7e480-c8e7-48db-baae-396516e81926|PipelinesRegulatory;Pipelines
The Resource: March 2017 DigestThe Resource: March 2017 Digest307BLG Blog PostMichael A. Marionmmarion@blg.com | Michael A. Marion | 693A30232E777C626C6763616E6164615C6D616D i:0#.w|blgcanada\mam​​The March 2017 summary put together by the editors of The Resource BLG Energy Law Blog is now available. Some of the post topics include ​Focus on budgetsAlberta Budget 2017Federal Budget 2017 – A Focus on Innovation and Tax Fairness for the Middle Class [Read more​...]<p style="text-align:justify;">​​The March 2017 summary put together by the editors of <a href="/energy" target="_blank"><em>The Resource: BLG Energy Law Blog</em></a> is now available. Some of the post topics include:</p><p><strong>​Focus on budgets</strong></p><ul style="text-align:justify;"><li><a href="/energy/Pages/Post.aspx?PID=298" target="_blank">Alberta Budget 2017</a><br></li><li><a href="/energy/Pages/Post.aspx?PID=301" target="_blank">Federal Budget 2017 – A Focus on Innovation and Tax Fairness for the Middle Class</a><br></li></ul><p>[<em><a href="/energy/Pages/Post.aspx?PID=307" target="_blank">Read more​</a></em>...]</p>The March 2017 summary put together by the editors of The Resource BLG Energy Law Blog is now available. Some of the post topics includeFocus on budgetsAlberta Budget 2017Federal Budget 2017 – A Focus on Innovation and Tax Fairness for the Middle Class>> FIND MORE PUBLIC POLICY POSTSA​​​lberta Electricty ​Market updatesReady, Set, Go Alberta’s Renewable Electricity Procurement Begins>> FIND MORE ELECTRICITY POSTS​Our perspective on recent decisionsAlberta Court of Appeal Protects Confidentiality of Alberta Energy Regulator’s ADR Process and Clarifies What Evidence can be Relied on When Seeking Permission to AppealAlberta Courts Confirm Restructuring Transactions with Select Creditors Not Oppressive and Comment on Availability of the Oppression Remedy in CCAA Proceedings​>> FIND MORE RECENT DECISION POSTS​Read the full digest on BLG.com. To review this information offline, download our print-friendly pdf.​<p style="text-align:justify;">The March 2017 summary put together by the editors of <a href="/energy" target="_blank"><em>The Resource: BLG Energy Law Blog</em></a> is now available. Some of the post topics include:</p><h4>Focus on budgets</h4><ul style="text-align:justify;"><li><a href="/energy/Pages/Post.aspx?PID=298" target="_blank">Alberta Budget 2017</a><br></li><li><a href="/energy/Pages/Post.aspx?PID=301" target="_blank">Federal Budget 2017 – A Focus on Innovation and Tax Fairness for the Middle Class</a><br></li></ul><p style="text-align:justify;">>> <strong><a href="/energy/Pages/Category.aspx?Category=Public%20Policy&" target="_blank">FIND MORE PUBLIC POLICY POSTS</a></strong></p><h4>A​​​lberta Electricty ​Market updates</h4><ul style="text-align:justify;"><li><a href="/energy/Pages/Post.aspx?PID=305" target="_blank">Ready, Set, Go: Alberta’s Renewable Electricity Procurement Begins</a><br></li></ul><p style="text-align:justify;">>> <strong><a href="/energy/Pages/Category.aspx?Category=Electricity&" target="_blank">FIND MORE ELECTRICITY POSTS​</a></strong></p><h4>Our perspective on recent decisions</h4><ul style="text-align:justify;"><li><a href="/energy/Pages/Post.aspx?PID=294" target="_blank">Alberta Court of Appeal Protects Confidentiality of Alberta Energy Regulator’s ADR Process and Clarifies What Evidence can be Relied on When Seeking Permission to Appeal</a><br></li><li><a href="/energy/Pages/Post.aspx?PID=303" target="_blank">Alberta Courts Confirm Restructuring Transactions with Select Creditors Not Oppressive and Comment on Availability of the Oppression Remedy in CCAA Proceedings​</a><br></li></ul><p style="text-align:justify;">>> <strong><a href="/energy" target="_blank">FIND MORE RECENT DECISION POSTS​</a></strong></p><p style="text-align:justify;"><a href="http://blg.com/en/News-And-Publications/Publication_4898" target="_blank">Read the full digest</a> on BLG.com. To review this information offline, <a href="http://bordenladnergervaisllp.com/collect/click.aspx?u=s54SYG4dfwZOGCBVzIw62EFPqhjAdra6OymCtE5L/j++Aat3iUICbnlJe4M/KxuMi6O3mKg3nQFaR3yqQFd7urMN7kMUzfI1&rh=ff002fc4dcf44217b3c8bae50e439f304745380e" target="_blank">download our print-friendly pdf</a>.​</p>4/12/2017 4:00:00 AM2017-04-12T04:00:00ZTrue1float;#4.00000000000000float;#2017.00000000000string;#Aprilfloat;#201704.000000000GP0|#98850b8e-4cdc-41cf-9cf7-f309880c7c29;L0|#098850b8e-4cdc-41cf-9cf7-f309880c7c29|BLG Energy News and Events;GTSet|#939fe804-8a2a-4cfa-af8f-5756b32ac3caBLG Energy News and Events
The Critical Role of the Board in Addressing Climate ChangeThe Critical Role of the Board in Addressing Climate Change306BLG Blog PostMichael A. Marionmmarion@blg.com | Michael A. Marion | 693A30232E777C626C6763616E6164615C6D616D i:0#.w|blgcanada\mam​​​BLG Counsel Beth Reimer-Heck, Q.C., contributed to an article titled The Critical Role of the Board in Addressing Climate Change in the March/April 2017 issue of the Director Journal, a publication of the Institute of Corporate Directors.​[Read more​...]<p style="text-align:justify;">​​​BLG Counsel <a href="http://blg.com/en/Our-People/ReimerHeck-Beth" target="_blank">Beth Reimer-Heck, Q.C.</a>, contributed to an article titled <em>The Critical Role of the Board in Addressing Climate Change</em> in the March/April 2017 issue of the <a href="https://www.icd.ca/Resource-Centre/News-Publications/Director-Journal.aspx" target="_blank">Director Journal</a>, a publication of the <a href="https://www.icd.ca/Home.aspx" target="_blank">Institute of Corporate Directors</a>.​</p><p style="text-align:justify;">[<a href="/energy/Pages/Post.aspx?PID=306" target="_blank">Read more​</a>...]</p>​BLG Counsel Beth Reimer-Heck, Q.C., contributed to an article titled The Critical Role of the Board in Addressing Climate Change in the March/April 2017 issue of the Director Journal, a publication of the Institute of Corporate Directors.​>> The full article is available online​​<p style="text-align:justify;">​BLG Counsel <a href="http://blg.com/en/Our-People/ReimerHeck-Beth" target="_blank">Beth Reimer-Heck, Q.C.</a>, contributed to an article titled <em>The Critical Role of the Board in Addressing Climate Change</em> in the March/April 2017 issue of the <a href="https://www.icd.ca/Resource-Centre/News-Publications/Director-Journal.aspx" target="_blank">Director Journal</a>, a publication of the <a href="https://www.icd.ca/Home.aspx" target="_blank">Institute of Corporate Directors</a>.​</p><p style="text-align:justify;"><strong>>> </strong><a href="https://www.icd.ca/Resource-Centre/News-Publications/Director-Journal/2017/March-April-2017/Articles/The-Critical-Role-of-the-Board-in-Addressing-Clima.aspx"></a><a href="https://www.icd.ca/Resource-Centre/News-Publications/Director-Journal/2017/March-April-2017/Articles/The-Critical-Role-of-the-Board-in-Addressing-Clima.aspx" target="_blank"><strong>The full article is available online​</strong></a><strong>​</strong></p>4/10/2017 4:00:00 AM2017-04-10T04:00:00ZTrue1float;#4.00000000000000float;#2017.00000000000string;#Aprilfloat;#201704.000000000GP0|#98850b8e-4cdc-41cf-9cf7-f309880c7c29;L0|#098850b8e-4cdc-41cf-9cf7-f309880c7c29|BLG Energy News and Events;GTSet|#939fe804-8a2a-4cfa-af8f-5756b32ac3caBLG Energy News and Events