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Time to proclaim the compulsory unitization provisions of the Oil and Gas Conservation Act

Prof. Nigel Bankes

Prof. Nigel Bankes

Author: Prof. Nigel Bankes, Faculty of Law, University of Calgary

The attached post draws attention to a recent decision of the Energy Resources Conservation Board in Alberta dealing with a CO2-EOR miscible flood project. The decision points to an important gap in the property and regulatory framework for CO2-EOR projects in Alberta because of the absence of compulsory unitization provisions in Alberta’s oil and gas conservation legislation. In this particular case the project operator, Glencoe Resources, was unable to persuade one party to join the unitization. That party is now free-riding on Glencoe’s project. In the context of carbon management it is important to note that the free rider is also venting the CO2 which is produced in association with its oil. Had the pool in question been fully unitized the free rider’s producing well would have been integrated in Glencoe’s operations and any CO2 produced from that well captured and re-injected into the reservoir.

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