Decision Date: September 20, 2017

Panel: Alan Andison

Keywords: Oil and Gas Activities Act – s. 72(3); preliminary decision; stay; pipeline; permit; RJR-MacDonald Inc. v. Canada (Attorney General) (1994), 111 D.L.R. (4th) 385 (S.C.C.)

Olaf and Frances Jorgensen appealed a pipeline permit that the Oil and Gas Commission (“Commission”) issued to Encana Corporation (“Encana”). The permit authorized Encana to construct and operate a pipeline, subject to certain conditions, on land owned by the Appellants.

In December of 2016, Encana sent an invitation to consult to the Appellants regarding its plans to construct and operate a pipeline on their land. In response, the Appellants’ representative requested additional information on the proposed pipeline. Encana responded to those questions.

In March 2017, the Commission issued the pipeline permit. After it was issued, Mr. Jorgensen attended the Commission’s office to ask whether the permit authorized a sump and/or temporary workspaces on the Appellants’ land. A Commission employee advised him, in writing, that the Commission does not issue authorizations for associated oil and gas activities on private land, and that Encana would need to arrange for access to the Appellants’ land before constructing a sump or workspaces.

On May 31, 2017, the Surface Rights Board issued an order granting Encana a right of entry to, and access across, the portions of the Appellants’ land covered by the pipeline, as well as six temporary workspaces. On June 2, 2017, the Surface Rights Board amended that order by granting Encana a right of entry to, and access over, part of the Appellants’ land for use as a sump.

On June 30, 2017, the Appellants filed their appeal with the Tribunal.

In a preliminary decision dated August 8, 2017 (Decision No. 2017-OGA-023(a)), the Tribunal held that the workspaces and sump were part of the Commission’s determination to issue the permit authorizing the construction and operation of the pipeline, and therefore, the appeal was within the Tribunal’s jurisdiction. The Tribunal also granted an extension of time to file the appeal.

One of the remedies that the Appellants sought was a stay of the permit pending the Tribunal’s final decision on the merits of the appeal. They argued that they never had an opportunity to raise their concerns about the sump and the workspaces because they were misled from the outset.

Encana submitted that the application for a stay was moot, because it had already constructed the pipeline and had remediated the areas disturbed by construction, including the temporary workspaces. Moreover, it never constructed the sump.

In determining whether a stay ought to be granted, the Tribunal applied the three-part test set out in the Tribunal’s Rules of Practice and Procedure, which is based on the Supreme Court of Canada’s decision in RJR-MacDonald Inc. v. Canada (Attorney General).

With respect to the first part of the test, the Tribunal found that the appeal raised serious issues which were not frivolous, vexatious or pure questions of law. The Tribunal also found that not all of the issues raised by the appeal were moot, despite the fact that the sump not built and the workspaces had been restored. Therefore, the Tribunal proceeded to the next part of the test.

In the second part of the test, the Appellants had to establish that their interests would likely suffer irreparable harm if a stay was denied. The Tribunal found that the Appellants failed to do so. Given that a sump was not built on their land, they suffered no irreparable harm from a sump. Although Encana used their land for temporary workspaces, those workspaces had been restored and were available for agricultural use by the Appellants. Furthermore, any harm to the Appellants’ land, or to their quiet enjoyment of their land, was compensable either by agreement with Encana or through the Surface Rights Board’s process.

Turning to the third part of the test, the Tribunal concluded that the balance of convenience favoured denying a stay. The Tribunal found that the harm that Encana would suffer, if a stay was granted, exceeded the harm that the Appellants would suffer if a stay was denied. The Appellants’ main concerns about the permit were in relation to the temporary workspaces and the sump, but the sump was never built and the temporary workspaces were already remediated. Conversely, Encana would suffer some operational delays and financial harm if a stay was granted.

Accordingly, the application for a stay was denied.