Natural Gas Liquids Extraction Rights in Alberta: An Evolving Landscape

Volume 47, No 2 ISSN: 1925-8356   |   Courtesy of Canadian Energy Law Edition   |    View Original

Authors: Dave Guichon, Bernette Ho, Robert Froehlich

Alberta’s natural gas liquids (NGLs) industry commenced development in the 1960s and, with the support of the Alberta government, expanded rapidly in the subsequent decades. Over time each of the major natural gas transmission systems in Alberta developed its own protocol in respect of NGL extraction entitlement and procedures. In the case of the NOVA Gas Transmission Ltd. (NGTL) pipeline system, such a protocol was developed by way of convention, and has never been formalized in the NGTL tariff. On several occasions the Alberta Energy and Utilities Board (EUB), and its predecessors, examined the issue of NGL ownership and associated extraction, but significant issues remained. In 2007, the EUB undertook an inquiry regarding matters relating to NGL ownership and extraction from the common stream of natural gas that flows through EUB regulated transmission systems and facilities. The EUB’s decision in this respect was released in February 2009. This article provides background information on the NGL extraction industry, outlines the regulatory history relating to NGL ownership and extraction, reviews the decision released by the EUB following the inquiry, considers related jurisdictional questions raised while the inquiry was ongoing, and considers the future of NGL ownership and extraction rights within the province of Alberta.

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