Compulsory Pooling under the Oil and Gas Conservation Act of Alberta

Abstract

This article provides a comprehensive analysis of compulsory pooling orders issued by the Energy and Utilities Board and its predecessors under the Alberta Oil and Gas Conservation Act The author describes the history and purpose of compulsory pooling provisions, outlines the statutory framework, and analyzes the procedures, jurisdiction and powers of the EUB. The article then describes the salient features of compulsory pooling orders, focusing on contentious issues such as cost equalization, and looks at the effects of such orders. The author argues that EUB decisions are largely consistent, although occasionally provide inadequate reasons. The author submits that the Lieutenant Governor in Council should no longer be involved in EUB pooling orders, rather, the best protection for the industry is to require the EUB to provide clear written decisions which are consistent with its own precedents and subject to judicial review or appeal. Finally, the author points out that in some situations compulsory pooling orders may be more generous to working interest owners than voluntary pooling agreements.