In a Letter Decision issued on June 2, 2016, the
National Energy Board (NEB) approved a six-year extension of the
"sunset clause" for the conditional approval of the
Mackenzie Gas Project. This would give the project proponents until
the end of 2022 to begin construction on the project. As noted in
the NEB's Press Release, the extension will not come
into effect until it is approved by the Federal Government.
The Mackenzie Gas Project is a proposal to develop three natural
gas fields in and near the Mackenzie Delta, and to transport the
natural gas and natural gas liquids to southern markets through
around 1800 km of pipelines that would connect to the existing NOVA
Gas Transmission system. There is a very long history (starting in
the 1970s) of proposals to build a pipeline to transport natural
gas south through the Mackenzie River valley. The application to
the NEB seeking approval of the Mackenzie Gas Project was filed in
October 2004. In December 2010, the NEB issued a Decision (see here and here), approving the Project as being in the
public interest. The NEB's approval included 270 conditions,
including the original sunset clause which states: "Unless the
NEB otherwise directs, this Certificate shall expire on 31 December
2015 unless construction in respect of the Mackenzie Gas Project
has commenced by that date."
In August 2015, Imperial Oil Resources Ventures Limited (on
behalf of all the project proponents) applied to the NEB for a seven-year extension
of the "sunset clause." The stated reason for the request
was "to provide time to determine if the currently
oversupplied North American natural gas market will recover
sufficiently to warrant a resumption in the project work." The
NEB granted an interim extension to September 15,
2016, and convened a process to consider the full extension
In its process to consider the extension request, the NEB
received comments from stakeholders, both in support and in
opposition to the extension request. There was no evidence
received, and no oral hearing was held. As set out in the Letter Decision, the NEB accepted that the
Mackenzie Gas Project is not economically feasible under current
North American natural gas market conditions and stated its view
that it will take many years for the market to recover. The NEB
found, however, that "the project is still in the public
interest and that the original conditions attached to the approvals
will require the project to be designed, constructed and operated
in a manner which would be safe and protect people and the
environment." In the result, the NEB granted the requested
The NEB is currently considering a request to extend the
"sunset clause" for another major project – the
Enbridge Northern Gateway Project. In that case, the proponents
have requested a three-year extension, citing a
number of factors including delays in approvals from other
regulators, market uncertainty and ongoing discussions with First
Nations and Metis communities. As set out in a May 25, 2016 letter, the NEB has convened a
process to consider the extension request, and has invited parties
to submit comments by June 27, 2016. Presumably, the NEB plans to
issue a decision on the extension request by the end of 2016, given
that no interim extension has been given.
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In Bank of Montreal v Bumper Development Corporation Ltd, 2016 ABQB 363, the Alberta Court of Queen's Bench enforced the "immediate replacement" provision in the Canadian Association of Petroleum Landmen 2007 Operating Procedure...
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