Prosper Court Ruling To Be Appealed By Alberta Government

By Elsie Ross


The Alberta government plans to appeal a court decision that requires it to make a decision by the end of this month on Prosper Petroleum Limited’s proposed oilsands SAGD project northwest of Fort McMurray.

The government is reviewing Tuesday’s decision by Court of Queen’s Bench Justice Barbara Romaine and will be applying for a stay, Kavi Bal, a spokesperson for Energy Minister Sonya Savage said in an email.

In a decision from the bench, Romaine ruled in favour of an application from Prosper for a mandatory interim injunction to force a decision from cabinet either approving or rejecting the recommendation from the Alberta Energy Regulator (AER) in June 2018 that the 10,000 bbls/d Rigel project be approved.

The judge accepted the company’s argument that by granting cabinet the power to approve the project under the Oil Sands Conservation Act, the legislature imposed a duty on cabinet to exercise this power when called upon to do so by a party interested and having the right to make an application.

The Crown had argued that under the legislation, the cabinet has unlimited discretion to decide on the timing on an approval. Romaine, though, said the legislation does not stipulate that cabinet may decline to make a decision in its absolute discretion or that its discretion is not reviewable.

While there appears to be no specific limit on cabinet’s discretion, “there is nothing to indicate cabinet is not to exercise its discretion in good faith and without bias,” she said. “Failing to make a decision that one has a statutory duty to make is not a valid exercise of discretion.”

In arguing that the lengthy delay in a decision is a breach of cabinet duty, Prosper pointed out that the cabinet takes an average of four months to issue a decision under the OSCA and the longest period of time other than for Prosper is seven months, said Romaine.

“The premier has characterized lesser delays on the much more complicated federal Trans Mountain expansion as taking too long even though that project required consultation with more than 100 Indigenous groups as compared to the three that Prosper was required to consult with in this project — two of which do not object to the project.”

Two oilsands projects that received AER approvals after Prosper also have been approved, she noted.

Romaine said the Crown has refused to give specific reasons for the cabinet delay, citing cabinet confidentiality. “It submits that I must assume that cabinet is acting in the public interest but with no information to support that assumption, I have no basis to draw that inference,” she said.

Fort McKay First Nation has suggested that a reason for the delay may be due to the Moose Lake Management Plan which the province is negotiating with the First Nation group. The proposed plan provides for a 10-kilometre buffer around the lake and the Rigel leases fall within that area, although under the Lower Athabasca Regional Plan (LARP) oilsands development is permitted.

However, in the fall of 2019, the deputy minister of energy informed Prosper that the ongoing appeal court proceedings (by Fort McKay First Nation) are not the reason for the delay, said Romaine. In addition, she said, “the government of Alberta has repeatedly communicated that the Lower Athabasca Regional Plan prohibits decision makers, including government decision makers, from delaying their decisions as a result of outstanding sub-regional plans, which the Moose Lake plan is proposed to be.”

In its decision, the AER said it was required to take LARP into account and that decision must be consistent with the plan.  “It noted that the Rigel approval and conditions for approval were consistent with the LARP objective of optimizing Alberta’s oilsands facilities and the strategy of ensuring First Nations’ ability to continue to exercise their constitutionally-protected rights to hunt, fish and trap for food within reasonable proximity to their main population centres.”

In her ruling, she also accepted Prosper’s argument that the delay has already resulted in two lost construction seasons and affected its planning and financing ability and that could result in “irreparable harm” to the company if relief is not granted.

Source:  Daily Oil Bulletin