Lawsuit of the week: Environmental groups take feds and oil companies to court to stop ‘unlawful’ rubber-stamping of oil and gas permit extensions

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The David Suzuki Foundation and World Wildlife Fund Canada are taking the federal government and two oil companies to court, claiming the minister of Natural Resources Canada has been wrongfully rubber-stamping extensions of offshore oil and gas permits in marine protected areas off the B.C. coast for years.

In a notice of application filed in the Federal Court of Canada on July 26, the environmental groups name the natural resources minister, the attorney general of Canada, Chevron Canada Ltd. and ExxonMobil Canada Properties as respondents. 

According to the application, the minister has been unlawfully extending the terms of the companies’ offshore exploration permits that fall within the Scott Islands Protected Maritime Area and the Hecate/Strait/Queen Charlotte Sound Glass Sponge Reefs Marine Protected Area. The applicants claim the policy of indefinitely extending the terms of the permits contravenes the Canada Petroleum Resources Act. 

“Both protected areas are of outstanding ecological value and vulnerable to damage from human impacts, including oil and gas activities,” the application states. “The applicants have a genuine interest in protecting the marine environment against the threats posed by offshore oil and gas activities and in ensuring that the minister complies with the mandatory duties that parliament has imposed upon him under the act.” 

Between the two oil companies, the pair hold 20 exploration permits after they were transferred to them by their original holders. The permits date back decades, having originally been issued in the late 1960s and early 1970s under the Canada Oil and Gas Land Regulations. The permits are supposed to expire after six years but have been extended by orders-in-council after changes to the statutory framework for issuing the permits took effect in the 1980s. But the changes back then required owners to “negotiate with the minister to convert them into exploration licences.” 

The environmental groups claim those negotiations never occurred and that the permits were never properly converted into exploration licences, meaning they should have been surrendered to the minister long ago. Instead, the applicants claim the minister has just extended the terms of the permits in a way that “circumvents” the statutory scheme governing the permitting and licensing process. 

The extension policy, according to the application, “purports to allow the minister and companies to achieve the very outcomes the act aims to prevent.”

“It circumvents and renders meaningless the act’s deemed surrender provision, the maximum term limits that the act establishes for exploration licences and the substantial constraints the act imposes on the minister’s power to extend exploration licences,” the application states. 

Meanwhile, the groups claim the minister has justified the policy by pointing out that B.C. has a moratorium on offshore oil and gas activities, even though it doesn’t “legally prevent” those activities from occurring.

The David Suzuki Foundation and World Wildlife Fund Canada seek declarations that the extension policy is unlawful and that the minister has no jurisdiction to indefinitely extend the companies’ permits. In addition, they seek a declaration that the permits have expired and that the lands covered by them be surrendered to the Crown. The application’s factual basis has not been tested in court, and the companies and the Canadian government had not filed response materials by press time.