Decision Date:  January 10, 2013

Panel:  Alan Andison

Keywords: Oil and Gas Activities Act – s. 72(7); Administrative Tribunals Act – s. 24(2); preliminary application; extension of time; special circumstances

Mike and Aspen Fraser applied to for an extension of time to file an appeal against a permit amendment issued by the Oil and Gas Commission (the “Commission”). The amendment was issued to Encana Corporation (“Encana”), and authorizes certain changes to a well permit that was issued on May 3, 2011.

The well permit originally authorized the drilling, operation and flaring of a vertical well, and the construction and operation of an access road, on land that is owned by the Frasers. That well permit was appealed by the Frasers to the Tribunal. Following an oral hearing, the Tribunal allowed the appeal and sent the matter back to the Commission with directions to amend the permit (Decision No. 2011-OGA-008(a), issued January 19, 2012).

The amended permit authorizes the well to be drilled horizontally, and also authorizes a new emergency management plan and changes in H2S (sour gas) data. The Frasers appealed the amendment on the basis that it results in a substantial increase in activity at the well site, including hydraulic fracturing or “fracking”, and increased road traffic. They also submitted that the amendment was made without due regard to recently completed professional reports addressing flora, fauna, and habitat impacts that were not before the Tribunal during the Frasers’ previous appeal.

The amendment was issued on October 3, 2012, and the appeal was filed on December 6, 2012. Consequently, the appeal was filed 49 days after the expiry of the 15-day appeal period that applies to landowners under section 72(7) of the Oil and Gas Activities Act. However, under section 24(2) of the Administrative Tribunals Act, the Tribunal has the authority to extend the time to file an appeal, even if the time limit has expired, if satisfied that special circumstances exist.

The Frasers submitted that an extension of time should be granted because special circumstances existed in this case. Specifically, they argued that they did not receive a copy of the amendment until November 29, 2012, after their second request to the Commission for a copy of it.

The Commission took no position on whether the application should be granted. It acknowledged that it did not provide a copy of the amendment to the Frasers until November 29, 2012. However, the Commission submitted that the Tribunal should take submissions from the parties on the issue of whether the amendment, and an associated amendment to a cutting permit, which was also appealed by the Frasers, are amendments that change “the effect of the permit on the land of the land owner” for the purposes of sections 31(9), 69, and 72 of the Oil and Gas Activities Act.

Encana opposed the application. Among other things, it submitted that there was no statutory requirement to notify the Frasers of the amendment, because it relates to changes in underground activities and does not affect the Frasers’ land. Encana also argued that the amendment was not an appealable determination under section 72 of the Oil and Gas Activities Act.

The Tribunal found that the issues raised by Encana and the Commission regarding whether the amendments are appealable determinations could not be decided based on the limited information before the Tribunal, and should be decided by the Tribunal after receiving evidence and submissions on those issues. Consequently, the Tribunal decided the preliminary matter of whether to grant the extension of time based on the assumption that the well permit amendment was an appealable determination.

The Tribunal noted that it has previously held that, given the short time frame for land owners to file appeals, and the potential prejudice to a land owner’s right to appeal, it is important that the Commission’s notices to land owners are provided expeditiously and include all relevant information, which should generally include a copy of the determination that may be appealed. Without a copy of the amendment, which was only one page long but contained relevant information about what Encana is authorized to do, it is difficult for land owners such as the Frasers to evaluate whether or not to file an appeal. In this case, the appeal was filed five days after the Frasers received a copy of the amendment. The Tribunal found that the Frasers acted promptly once they received a copy of the amendment.

The Tribunal also considered the need for finality, so that oil and gas operators may proceed with authorized activities without being concerned that an appeal may be filed after the expiry of the appeal period. The Tribunal found that a delay of 49 days after the expiry of the appeal period was somewhat longer than in past cases where the Tribunal has granted an extension of time. However, there was no evidence that granting the extension would result in any prejudice to Encana. In contrast, denying the extension would result in the Frasers losing their right, as owners of land on which oil and gas activities are permitted, to appeal to the Tribunal, despite the fact that the Frasers were successful in having conditions added to the original permit as a result of their previous appeal.

For all of those reasons, the Tribunal concluded that there were special circumstances in this case that justified granting an extension of time.

Accordingly, the application for an extension of time to file the appeal was granted.