November 15, 2010

Mr. Anderson: Very good. Well, it’s interesting that this would come up. In my previous life as a lawyer I actually worked on the decision that the EUB made on this case in 2007, and it was very interesting. It is very highly technical, over the heads of probably, maybe, everybody in this Assembly, frankly, which is why this obviously needs more time and thought.

Obviously, we can see that Bill 26 clarifies the ownership of the coal-bed methane. What it’s saying is that it’s the gas owners, the freehold owners, not the coal owners.

You know, I had a gentleman in my office just to talk a little bit about who this is affecting. This is not just an issue of big coal. I had a man in my office last week actually who was just beside himself over this legislation because he was part of the consultation that this government did in 2006, I believe he said.

The outcome of that, the recommendation, was to leave things how they were and then see how it would play out in the courts before coming back to it with more consultation. So he was beside himself because this broadsided him.

He’s just a landowner. He’s got a very accessible coal deposit on his land, and he wants to make the most of it. Of course, coal-bed methane could obviously be a very lucrative product that he could gain a lot of money from. As a landowner he’s furious because he feels like he’s been – without any consultation the government comes in and arbitrarily decides: “You know what? You’re out of luck. The gas belongs to the freehold owners, and that’s just the way it’s gonna be. Sorry. No compensation for you.” I think he has a very legitimate claim.

I do understand completely the precedents in this area. There’s no doubt that there have been court cases from the United States as well as from Canada, including our own EUB, although that was a very, very fact-specific case. I don’t think you can say it’s a precedent for the whole area. But there is case law out there that this bill does conform to. That doesn’t necessarily make it right. It’s certainly not well-spread case law.

I can remember hours and hours researching this area and finding almost nothing on it, with a few minor exceptions. So it’s a very new area of law, and it’s something that is extremely technical. I’m glad I’m not doing that anymore because it makes your head spin. In all honesty, I don’t think I can say that I fully understood it when I was going over it. I mean, we had experts in on both sides of the issue that made very compelling cases for why the coal owners should have the rights to it, why the freehold owners should have the rights to it.

That’s the whole point here, that as a Legislature and as lawmakers we have to understand that our decisions affect people a lot. Sometimes we can devalue their land and do things to them that will cause major heartache and major missed opportunities. We have to understand that when we come in and we decide or a bureaucrat decides or a set of individuals decide that they’re going to make a change this substantive, there are consequences. I’m not convinced that the proper protocol, the proper consultation has been done to make sure that the coal owners, whose rights are going to be essentially extinguished under this legislation, are being adequately heard, and I think that that’s wrong.

I think that there is no doubt that there does eventually need to be clarification around this issue, but we should do a proper consultation process and make sure that – you know, there could be ways that we could make sure that the coal owners are compensated in some way for essentially extinguishing their claimed right to the coal-bed methane and also arrive at more certainty. We can do that, but it takes consultation. It takes some hard work to find a way to make sure that all people’s property rights are respected.

It goes back to what the Member for Calgary-Glenmore was saying. This isn’t about, you know, clarifying who owns what. Yeah, that’s what this legislation does, but that’s not the argument he was making, and it’s certainly not what I was making. We all understand the need for clarity, but we also have to understand that this is a new area of law, and this decision is going to have effects on people’s existing property rights, so let’s take some time. Let’s talk it through, maybe not even in this Legislature. Maybe we go back and do a proper consultation first with all partners involved, all stakeholders involved, to make sure that everybody comes out at least with some compensation – yeah, I guess the best word is compensation – for the property rights that they hold. I think that’s a very fair point that the hon. member made.

Again, we can do both. It’s not mutually exclusive, what I’m talking about here. It’s not like we’re saying that we can either have clarity on this issue or we cannot have clarity on this issue; the coal guys win or the gas guys win. It’s not about picking winners and losers. It’s about trying to make sure we arrive at a fair decision, where everyone is compensated.

Just a few years ago or a decade ago coal-bed methane wasn’t even on the radar screen to these guys, so to just come in and arbitrarily make a decision like this, I think, is certainly beyond the expertise of this House currently. Certainly, that’s not to say that we shouldn’t eventually debate and pass a law on it, but to ram this through in a week or a week and a half or whatever we’re going to do without having the proper technical explanations of what this matter is about is really doing a disservice to this House, hon. members.

You know what? This is a perfect place if you want to keep this purely in the Legislature, if you don’t want to go back and do a proper consultation with all the stakeholders before bringing it forward, to at least punt this out – punt is the wrong word – send this to a committee of the House, of the Legislature, and allow that policy committee to sit down and invite stakeholders in to hear their different arguments and to get some technical analysis from some experts and scientists on this subject. You’re going to find, as you peel back the layers of the onion, that there is a ton to learn about this subject. That would be a much better process. You know, perhaps we should bring in an amendment in Committee of the Whole to that effect. That would be a much better process than simply just ramming this through: oh, we’ve got to have clarity; we’ve got to have clarity. This isn’t the way to do it.

Although I applaud that we want to try to bring clarity to this issue – that’s the final goal – you want to make sure you do it in the right way. You don’t just want to jump to a conclusion and then look stupid and affect people’s property rights down the road. You know, some of the issues that haven’t been resolved here are things around deep coal deposits and the gasification of coal. As one coal owner said, if you go and frac the whole thing up down there, it brings some unsettled new legal issues into play that maybe you haven’t accounted for. Maybe there will be a lot of legal disputes that come into play because we jump ahead without thinking.

That’s basically all I had to say on that. I just hope that as we go into Committee of the Whole that we’ll think about it. You know, I’m not going to support the bill at this time because I don’t think the proper consultation process has been done, but in Committee of the Whole I sure would like to see a little bit more sober second thought and move this over to an SPC, at the very least, if not just delaying the bill until a proper consultation is done.

The Deputy Speaker: Standing Order 29(2)(a) allows for five minutes. The hon. Member for Edmonton Norwood-Northlands.

Mr. Mason: Well, Mr. Speaker, I’ve listened to two Wildrose speakers on this bill so far, and I still am really struggling to find out why the position is as it is. It surprises me. Maybe we could take the fellow that the hon. Member for Airdrie-Chestermere referred to, that’s very upset. If this person has some land and on the land is some coal and on the land is some natural gas and on the land is some coal-bed methane, how does this change what his rights are with respect to those things? Does he have freehold mineral rights? I assume not. That means that he doesn’t control the mineral rights, so a coal company could come and dig up his coal, and a natural gas company could come and drill for gas. If this bill was passed, then the gas company could come and take the gas because he doesn’t own the mineral rights. Are you proposing something that would actually give mineral rights to the people who own the surface land? Is that what you’re proposing? I don’t understand how this fellow is negatively affected by the bill. I don’t think you made that clear enough.

Mr. Anderson: Fair enough. You can own coal rights without owning the gas rights. That was the case with this fellow. He doesn’t own the gas rights, but he owns the coal rights to this certain parcel of land. If he wants to develop the coal, he’s going to get an awful lot of money for that coal. If some company who already owns the natural gas that he doesn’t own wants to drill for it, he’s not going to get compensated even a fraction of what he would get compensated if he actually owned the gas rights. You know, that’s the difference. You do have separate rights to these commodities. It does make a huge difference with regard to the amount of compensation that the landowner will receive depending on what rights he holds.

Again, this is about property rights. This isn’t about picking winners or losers or favouring the little guy over the big guy or the big guy over the little guy. It’s about doing the right thing, making sure that people’s property rights and their expected property rights are compensated and respected. I don’t think that this House has done the adequate due diligence necessary to say that we actually have made a just and well-thought-out decision.

The Deputy Speaker: The hon. Member for Calgary-Glenmore.

Mr. Hinman: Thank you. Two quick questions. One, how does this affect in situ development of coal in the future? We have in situ development of bitumen. Well, maybe I’ll just let you do that because there are lots of people that want to ask some questions here. Does this affect the in situ development? If, in fact, you own the coal, who has precedence to go in? If someone wants to take out the coal-bed methane yet you want to mine your coal, does that mean you don’t have access to your coal? Is that clarified?

Mr. Anderson: It’s not clear. That’s one of the points where we need to do more consultation because that issue in itself could raise a whole whack-load of legal issues that this legislation clearly does not address. The problem is that when you pass legislation that isn’t well thought out on every issue – for example, this in situ development of coal – you have a situation develop where in order to solve one legal problem or clarify one legal area, you end up opening up Pandora’s box in another area.

Video:

Property Rights and Coalbed Methane
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