Attached is the Ministry s reply argument regarding the Marauder applications.

Transcription

1 Via Mr. Robert J. Pellatt Commission Secretary Sixth Floor 900 Howe Street Vancouver BC V6Z 2N3 Dear Mr. Pellatt: Re: Order G Marauder Resources West Coast Inc. ( Marauder ) Applications for Common Carrier/Common Processor Orders to Canadian Natural Resources Ltd. ( CNRL ) and Pioneer Natural Resources Canada Ltd. ( Pioneer ) Velma Field, Bluesky Pool Attached is the Ministry s reply argument regarding the Marauder applications. Respectfully submitted, Stirling Bates Director Regulatory Policy cc: All Registered Intervenors Ministry of Energy, Mines Oil and Gas Policy Branch 5 th Floor, 1810 Blanshard Street and Petroleum Resources Oil and Gas Division PO Box 9318 Stn Prov Govt Victoria, BC V8W 9N3

2 BRITISH COLUMBIA UTILITIES COMMISSION IN THE MATTER OF the Utilities Commission Act, R.S.B.C. 1996, Chapter 473 (the Act ) and Applications by Marauder Resources Westcoast Inc for Common Carrier / Processor Orders to Canadian Natural Resources Limited and Pioneer Natural Resources Canada Velma Field, Bluesky Pool (Project No ) SUBMISSIONS OF MINISTRY OF ENERGY, MINES AND PETROLEUM RESOURCES

3 Page 1 MINISTRY SUBMISSIONS 1. These submissions of the Ministry of Energy, Mines and Petroleum Resources (the Ministry) on behalf of the Province of British Columbia to the British Columbia Utilities Commission (the Commission) relate to the applications by Marauder Resources Westcoast Inc (Marauder) for Common Carrier / Processor Orders (CC/CP) to Canadian Natural Resources Limited (CNRL) and Pioneer Natural Resources Canada (Pioneer) Velma Field, Velma Pool. The applications relate to production from the Marauder Talisman Chinchaga b-37-b/94-h-8 and Marauder Talisman Drake a-38-b/94-h-8 wells ( Marauder wells ) 2. These submissions provide no position to the Commission as to whether or not to issue a CC/CP order(s), but rather clarify the jurisdiction of the Commission. JURISDICTION OF THE COMMISSION: 3. In its argument, at paragraphs 66 and following, Marauder asserts that the Commission has the implied jurisdiction to make an order allocating the Bluesky Pool; or, in other words, to make a "rateable take" order. This assertion is incorrect. The Commission does not have the power to make a rateable take order for the simple reason that jurisdiction to make such an order has been granted by the Legislature to the Minister of Energy, Mines and Petroleum Resources (the "Minister") pursuant to s. 98(e) of the Petroleum and Natural Gas Act. Section 98(e) provides as follows: The minister may, by regulation of general application or by order related to a specific location or well, restrict the amount of petroleum or natural gas, or both, that may be produced in British Columbia by doing the following: (e) distributing the amount of natural gas that may be produced from a pool in a manner among the wells in the pool that each owner may produce or receive his or her fair share of the natural gas in the pool.

4 Page 2 4. It is trite law that a statutory body may only exercise the powers granted to it pursuant to its constituent statute. In this case, sections 65 and 67 of the Act provide, in short, that the Commission may make orders declaring a person to be a common carrier or processor. The Commission may also establish the conditions under which the common carrier must accept and carry energy resources, and under which the processor must process natural gas. There is nothing whatever in these sections which suggests that the Legislature intended, explicitly, or through implication, to grant the Commission the authority to make rateable take orders. This is obvious from the fact that the Legislature specifically granted this power to the Minister. 5. Marauder cites the Supreme Court of Canada's decision in R. v Ontario Inc., [2001] 3 S.C.R. 575 for the proposition that a statutory body impliedly has those powers necessary to "accomplish its mandate". The Ministry submits that this principle has no application here for the simple reason that making rateable take orders is not part of the Commission's mandate. This mandate has been explicitly given to the Minister. For the same reason, the Commission does not have the same "power" to make a rateable take order; thus s. 110(a) of the Act has no application in these circumstances 6. At paragraphs 77 and 78 Marauder asserts that the Legislature could not have intended that two bodies have the power to deal with a situation in which there has been an inequitable drainage of a pool. The Ministry submits that the Legislature could not have intended, having given the Minister the power to make a rateable take order, to give another body created by it the very same jurisdiction. This would obviously create the potential for inconsistent decisions - there is nothing in s. 98(e) that suggests that the Minister would be bound by any Commission rateable take order. Inconsistent decisions on precisely the same matter would result in regulatory chaos. This is not hypothetical - Marauder currently has an application before the Minister for a rateable take order. 7. Marauder cites a number of previous decisions of the Commission in which pool allocation orders were made (Exhibits A2-7 to A2-14). The Ministry submits that these decisions are distinguishable because they are all common purchaser orders. Further, none of the decisions cite s. 98(e) (then s. 114(e) of the Petroleum and Natural Gas Act, RSBC 1979,

5 Page 3 c. 323). The Commission appears from these decisions not to have considered that section, and its relationship to the Commission s jurisdiction to issue common purchaser orders. At any rate, it is clear from the reasons in those decisions that this point was not argued before the Commission. Therefore, these decisions can have no persuasive force. Finally, even if these decisions were persuasive, the Commission is not bound its previous decisions. For the reasons set out herein, the Ministry submits that these decisions should not be followed insofar as they suggest that the Commission, and not the Minister, has the jurisdiction to make rateable take orders. 8. In summary, the Ministry submits that the legislation is clear that the Commission has the jurisdiction to issue common processor and carrier orders, and the Minister has the sole authority to issue rateable take orders.