Decision Date: May 16, 2018

Panel: Alan Andison

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

Brian and Carolyn Derfler appealed the amendment of a pipeline permit held by Encana Corporation (“Encana”). The amendment was issued by the Oil and Gas Commission (“Commission”), and authorized Encana to make certain changes to a pipeline that crossed the Derflers’ land.

The original permit was issued in 2015, and authorized Encana to construct and operate a five segment pipeline. After the permit was issued, it was amended twice in 2017 to allow an increase in the concentration of sour gas (hydrogen sulphide) allowed in two pipeline segments, but the Derflers did not appeal those amendments.

In October 2017, Encana notified the Derflers of its intention to apply for the permit amendment that was the subject of this appeal. Encana sought the amendment to allow two segments of the pipeline to be split, and to allow the installation of two risers on leased sites.

Also in October 2017, Encana notified the Derflers of a new proposal involving nine pipeline segments (the “New Pipeline Project”), some of which would traverse the Derflers’ land. In response, Mr. Derfler filed a written submission that raised concerns about Encana’s survey access to their land, soil handling and reclamation, pipeline failure, contamination, and pipeline abandonment.

In December 2017, Encana applied to the Commission for the permit amendment. The Commission issued the amendment in March 2018.

The Derflers appealed the permit amendment to the Tribunal. Their Notice of Appeal stated that the Commission did not properly address the concerns expressed in their written submission. They requested the pipeline right-of-way be relocated, because the pipelines on their property affected their farming operation, quality of life, and ability to sell their land. They also sought a stay of the permit amendment, pending the Tribunal’s final decision on the merits of the appeal.

Encana objected to the stay application. It submitted that the Derflers’ grounds of appeal did not relate to the permit amendment; rather, they related to Encana’s application for the New Pipeline Project and to pipeline development generally.

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 Derflers needed to show that the appeal raised serious issues which were not frivolous, vexatious or pure questions of law. The Tribunal found that the Derflers’ grounds of appeal related to the 2015 permit and/or the 2017 amendments to that permit, the New Pipeline Project, and pipelines generally. None of their grounds of appeal related specifically to the permit amendment. The Tribunal also found that issues related to the 2015 permit or 2017 permit amendments could not be dealt with in the present appeal. In addition, since no permit for the New Pipeline Proposal had been granted, issues related to that proposal were not properly before the Tribunal. Therefore, the Tribunal concluded that the Derflers failed to demonstrate that there was a serious issue to be decided in their appeal of the permit amendment.

Given the Tribunal’s finding that the Derflers had not established a serious issue to be decided in relation to the appeal of the permit amendment, the Tribunal did not need to consider the second and third parts of the test.

Accordingly, the application for a stay was denied.