FOR IMMEDIATE RELEASE – In a recent decision on February 14, 2020, Court of Queen’s Bench Justice Barbara Romaine granted Prosper Petroleum Ltd.’s (Prosper) application for a mandatory interim injunction and/or an order of mandamus, directing the Provincial Cabinet (Cabinet) to make a decision on Prosper’s Rigel Oil Sands Project (Rigel) within 10 days. Less than two days later, the Alberta Government made an application for an appeal and requested a stay of Justice Romaine’s decision.
Prosper – a small, privately held, 97% Albertan-owned, heavy oil company – applied to the Alberta Energy Regulator (AER) in November, 2013, for approval to construct and operate the 10,000 bbl/day steam assisted gravity drainage (SAGD) Rigel project. Since then, Prosper has diligently, and at times painstakingly, steered its Rigel Project through the six and a half year (to date) regulatory process – a process that typically takes 18-24 months. The process was fraught with unanticipated and unprecedented delays and Prosper often had to make several requests before the process would move on to the next step. In June, 2018, after a two week regulatory hearing Prosper finally made it to what it thought would be the finish line –the AER issued its decision report, finding that the Rigel Project was in the public interest of all Albertans and recommending that the project be approved by Cabinet.
On average, Cabinet takes four months to issue a decision. Almost two years later, however, Prosper is still waiting. In the meantime, our current provincial leadership has been highly critical of the Federal Government’s approval process for the Trans Mountain Pipeline, which Premier Kenney stated “has frankly taken too long”. After several unsuccessful attempts to discuss the Rigel project and its delays with Premier Kenney and the Ministers of Energy and Environment, Prosper felt it had no other recourse than to petition the courts for relief. Prosper’s President and CEO, Brad Gardiner, said he “is amazed it has come to this. During his Throne speech, Premier Kenney said that a priority for this government is to lower the regulatory burden on Alberta’s economy…..to free up job creators to get more Albertans back to work.”
The Crown lawyers argued that “it is difficult to imagine a more open-ended discretion” than that of the Crown when making decisions concerning proposed oil sands projects and that there is nothing in legislation “directing Cabinet when to make a decision, how to make a decision, or even to make a decision at all”. “It is unconscionable to suggest that companies should make investments in oil and gas projects in Alberta when the ultimate decision-maker has open ended discretion to decide when, or even if, it will ever make a decision” replied Prosper’s legal counsel, Sander Duncanson.
Prosper has warned that continued delays could put the company out of business. “This is our main asset and we’ve been carrying it with no offsetting revenue for over seven years”, said Gardiner. “I’ve had to lay off some people, cut hours for others, and a few of us aren’t collecting paycheques. And the government’s response is that we should wait longer, until they’re ready, if ever, to make a decision.”
To date, the Crown has not explained to Prosper or the courts why the Rigel Project has been delayed for almost two years; however, it did argue that 19 months is not a long time to wait. They have also not explained why Cabinet has been able to approve three other oil sands projects since the election, projects that received AER approval after the Rigel Project. In her decision, Justice Romaine characterized the Crown’s delay as “unfair and abusive”.
Undeterred by Justice Romaine’s decision, the Crown has made an application to the Court of Appeal to delay the Rigel Project even longer. On Wednesday, February 24, 2020, a stay hearing will be held in the Court of Appeal. If the Court of Appeal awards the stay, Prosper will have to wait for an appeal hearing, and possibly longer, to get a decision from Cabinet.
“The Crown sold those leases with a condition that they be developed. We didn’t think our expectation of developing them was unreasonable,” said Gardiner. “If the government has since changed their mind, they should come and talk to us”.