Rainbow

Rainbow

Friday, March 26, 2010

NEB takes away Alberta landowner's contractual right to removal of pipeline

The National Energy Board ("NEB") has granted Nova Gas Transmission Ltd. ("NOVA") a Right of Entry order allowing it to continue the operation of its pipeline on lands owned by Albertan Randolph Hill.  Hill purchased the property from a railway company which had negotiated with NOVA and its predecessors a favourable agreement that allowed the company to require removal of the pipeline on notice.  NOVA went to court to argue that Hill was not assigned rights such as the right to require removal when he purchased the land, but the Court disagreed.  Hill issued the notice to NOVA, and NOVA went to the NEB to ask it to intervene and prevent Hill from exercising the contractual right to require removal.  Previously, the pipeline was regulated by the province of Alberta, but was recently transferred to NEB regulation by a decision of the NEB.

The terms of the Right of Entry order significantly expand NOVA's rights over the land beyond what had been agreed upon previously in contract.  This decision of the NEB confirms its willingness to override the terms of validly executed contracts between pipeline companies and landowners.  The interesting question arising out of the decision will be: what was the contract worth?  Mr. Hill is entitled to be compensated for the rights taken in the Right of Entry order.  What was his right to require removal of the pipeline worth?  What was his right to compensation under the contract worth?

Read the Board's decision and the RoE order at: NOVA Ferrier South Lateral.