Decision Date:  January 13, 2012

Panel:  Alan Andison

Keywords: Oil and Gas Activities Act – ss. 4, 22(5), 24(1)(c), 72(2); pipeline; permit; land owner; notice; consultation

Loiselle Investments Ltd. (the “Appellant”) appealed a permit issued by the Oil and Gas Commission (the “Commission”), that authorized Encana Corporation (“Encana”) to construct and operate a pipeline on an area that includes part of the Appellant’s land. The approved pipeline route ran along the eastern boundary of the Appellant’s land, parallel to a public road allowance under the authority of the Ministry of Transportation and Infrastructure. For the pipeline, Encana sought to acquire an 18-metre wide easement over part of the Appellant’s land that was included in a subdivision plan approved in 1998 but not registered on the title of the land. The pipeline would also cross the public road allowance in two places.

Encana initially contacted the Appellant in November 2010 about its intention to apply for the permit, and that it was considering a pipeline route that included the Appellant’s land. Between then and late March 2011, Encana had meetings and telephone conversations with Mr. Loiselle, the Appellant’s president/manager, about the proposed pipeline route and the compensation that Encana would pay to the Appellant. Encana inquired about routing the pipeline on the public road allowance, but the Ministry of Transportation and Infrastructure rejected that proposal. On March 25, 2011, Encana advised Mr. Loiselle by telephone that Encana had chosen a final route that included the Appellant’s land.

In mid-April, 2011, Mr. Loiselle, who is solely responsible for the Appellant’s business dealings, was advised by his doctor to take medical leave for at least two months. Encana was notified of his medical leave, and that no one else would be responsible for the Appellant’s business affairs during that time.

In late April, 2011, Encana sent a letter to the Ministry of Transportation and Infrastructure, inviting it to provide comments or any concerns that it had with the final pipeline route. The Ministry expressed no concerns about the final route.

On May 12, 2011, Encana sent a letter and associated documents to the Appellant via email, advising the Appellant of its intention to proceed with the permit application, and inviting the Appellant to provide comments to Encana or the Commission if it had any concerns or questions about the proposed pipeline. Encana received a confirmation of email delivery on May 12, but Mr. Loiselle claimed to have received the documents on May 31, 2011.

On May 18, 2011, Mr. Loiselle attended the Commission’s office and inquired about the status of Encana’s application. He was advised that Encana had not yet filed an application, and he was offered assistance in reviewing documents relating to the permit application.

On June 20, 2011, Encana submitted a finalized permit application to the Commission. Encana’s application package included a report summarizing its notification and consultation in relation to certain persons who may be affected by the pipeline, pursuant to section 24(1)(c) of the OGAA.

On August 4, 2011, the Commission issued the permit to Encana, subject to certain conditions including a requirement to complete a Schedule A Site Assessment for lands within the Agricultural Land Reserve that would be affected by the pipeline, which included some of the Appellant’s land that was excluded from the subdivision plan.

On August 18, 2011, Encana applied to the Surface Rights Board for an order allowing it to enter the Appellant’s land to conduct the permitted activity, and for mediation assistance in relation to the amount of compensation that Encana should pay to the Appellant for acquiring the pipeline easement and using the Appellant’s land. The Surface Rights Board granted the right of entry order to Encana on October 4, 2011.

On August 31, 2011, the Tribunal received the Appellant’s initial Notice of Appeal, which was filed outside of the 15-day statutory appeal period, and was deficient because it did not address the grounds for appeal that are allowed for appeals by land owners under section 72(2) of the OGAA.

On October 21, 2011, after receiving submissions from all parties, the Tribunal issued a decision granting the Appellant’s request for an extension of time to file the appeal (Decision No. 2011-OGA-009(a)). The Tribunal also offered the Appellant an opportunity to file an amended Notice of Appeal, to correct the deficient grounds for appeal in initial Notice of Appeal.

The Appellant subsequently filed an amended Notice of Appeal that included several grounds for appeal, most of which related to the pipeline’s effect on the Appellant’s ability to develop the land in or adjacent to the pipeline easement, and the Appellant’s costs to develop a road and build a subdivision on its property.

The Commission and Encana opposed the appeal. They submitted that none of the issues raised by the Appellant in the appeal proceedings were raised with Encana or the Commission before the permit was issued, and therefore, the grounds for appeal did not fall within the ambit of section 72(2) of the OGAA.

The Tribunal found that section 72(2) of the OGAA allows the Appellant to appeal on the basis that the Commission issued the permit without due regard to either: a submission previously made by the Appellant under section 22(5) of the OGAA; or the consultation report filed by Encana under section 24(1)(c) of the OGAA.

Regarding the first allowable basis for the appeal, there was no dispute that the Appellant filed no submissions under section 22(5) before the permit was issued. The Tribunal found that Mr. Loiselle’s attendance at the Commission’s office in May, when his doctor had recommended that he be on medical leave, conflicted with the proposition that he was completely unable to conduct the Appellant’s business affairs during that time. The Tribunal also noted that the recommended medical leave ended on June 14, 2011, and there was two months between May 31, when Mr. Loiselle received Encana’s consultation letter and documents, and August 4, when the permit was issued, for the Appellant to provide submissions to Encana or the Commission. There was no evidence as to why Mr. Loiselle did not avail himself of the Commission’s offer to assist him in reviewing Encana’s documents. Based on the evidence, the Tribunal concluded that the Appellant received the required notice and invitation to consult in regard to the permit application, and the Appellant had the capacity and a reasonable opportunity to make submissions, but did not do so.

Consequently, the remaining basis for the appeal was whether the Commission issued the permit without due regard to Encana’s consultation report. The Tribunal found that the Commission properly considered the consultation report, as well as other relevant information that was available, including Encana’s rationale for choosing the route that included the Appellant’s land, the Appellant’s objection to the pipeline route, Encana’s consultations with the Ministry of Transportation and Infrastructure and other affected land owners, and Mr. Loiselle’s attendance at the Commission’s office. The Tribunal concluded that, in the circumstances, it was not a breach of procedural fairness for the Commission to proceed to consider the permit application in the absence of submissions from the Appellant, and there was no evidence that the Commission failed to give due regard to the Appellant’s interests that were set out in Encana’s report or the other available information.

The Tribunal concluded that the appeal failed on that basis alone, but for greater certainty, the Tribunal went on to consider the specific issues that were raised by the Appellant during the appeal proceedings. The Tribunal held that some of those issues were addressed by the Commission in the permit conditions. The Tribunal also held that the Appellant’s other issues were outside the scope of an appeal under section 72(2) of the OGAA; namely, they were matters of compensation under the jurisdiction of the Surface Rights Board, or matters relating to the public road allowance administered by the Ministry of Transportation and Infrastructure.

Accordingly, the appeal was denied.