Bill 70 (Legislature 11, Session 1)

L11 S1 7192

Alberta — Bills

Bill No. 70 of 1949. A BILL TO DETERMINE ALL CLAIMS ARISING FROM THE ATLANTIC NO.3 OIL WELL DISASTER. NOTE. This Bill enacts a new Act to be known as "The Atlantic Claims Act". The Bill deals with claims arising directly or indirectly from the Atlantic 1\To. 3 oil well disaster whether recoverable as a debt or damages or otherwise howsoever. There are technical and engineering problems involved in the deter minati.on of liability and the assessment of damages which are common to many of these claims, and the claims are so inter-related that it is not feasible .or practicable to deal with them individually.

On the invitation of the Petroleum and Natural Gas Conservation Board representatives of the Atlantic Oil 'Company, Limited and of the majority of the producers in the Leduc field worked out and ap proved a settlement of the claims arising as a result of the Atlantic No. 3 oil well blowing out of control. It is deemed desirable and expedient in the public interest to implement the settlement of claims adopted as, aforesaid and the purpose of this Act is to implement the settlement. The Conservation Board has deposited the proceeds from the sale of petroleum produced from the Atlantic No.3 well in a trust.fund.

Section 3 of the Act enables the Board to retain from the trust fund f.or a period .of not more than two years such moneys as may be required for expenses in connection with bringing the well under control and conserv ing the petroleum and natural gas from the well. The Board is also authorized to pay money out of the trust fund in connection with the costs and expenses incidental to action taken by the Board for the purpose of bringing the well under control. It may also use the money in the fund for any conservation measures the Board deems necessary in connection with the well. This

section empowers the Board to payout of the fund the sums required to give effect to any settlement approved by the Board arrived at between the Company and the claimants against the Company. If the parties cannot agree upon a settlement the Board in its dis cretion may pay to the claimant such amount, if any, in set tlement of his claim as the Board considers just and equitable. The Board can advance to the Company from the fund such sums as the Board deems advisable from time to time. All money remaining in the fund after the payment of claims, costs and expenses authorized to be paid pursuant to the Act belongs to the Company.

Section 4 provides that the Atlantic No.3 well shall be deemed to have over-produced to the extent of five hundred and sixty .. five thousand, one hundred and ninety-five barrels of oil. The

section enables the Board to restrict the pro duction of the Company's other wells ,and to prevent the drilling of further wells until such time as the Board considers it necessary in order to compensate, in the opinion of the Board, for the over-production of the Atlantic No.3 well.

Section 5 prohibits actions against the Company by any person unless such person has obtained the consent in writ ing of the Attorney General.

Section 6 enables the Lieutenant Governor in Council to vest in the Board any additional powers and duties which are deemed nec'essary for the purpose of enabling the Board to perform its duties under this Act.

Section 7 validates Order in Council No.1495/'l8 dated the twenty-first day of December, 1948. This 'Order in Council authorized the payment out of the trust fund of certain expenses incurred in bringing the well under control. It also authorized the payment of sums in settlement of claims which were agreed upon by the Company and the claimants and approved by the Board. It also authorized the payment of royalties to royalty holders on the basis of the normal allowable production of the Atlantic Nos. 1, 2 and 3 wells. KENNETH A. McKENZIE, Acting Legislative Counsel. (This note does not form any part of the Bill but is offered £11 explanation of its provisions.) .

BILL No. 70 of 1949.

An Act to determine all Claims Arising from the Atlantic No. 3 Oil Well Disaster. (Assented to , 191,9.)

WHEREAS the Atlantic No.3 Oil Well 'Of the Atlantic Oil Company, Limited blew out of control and subsequently caught fire causing extensive loss and damage; and

Whereas pursuant to the provisions of The Oil and Gas ResOrUrces Conservation Act, being

chapter 66 'Of the Revised Statutes of Alberta, 1942, the PetrQleum and Natural Gas CQnservation B'Oard entered UPQn, seized and toQk possession 'Of the said well fDr the purpose 'Of bringing it under control and cQnserving the flo.W 'Of petrQleum and natural gas; and

Whereas further loss and damage was caused and expense incurred as a result 'Of measures taken fQr the purpose of bringing the said well under cQntrQI; and

Whereas there are numerQUS claims arising directly 'Or indirectly from the Atlantic No.3 Oil Well disaster and frQm the measures taken tQ bring the same under contrQI, whether recoverable as debts, damages or 'Otherwise howsoever; and

Whereas the proceeds 'Of the sale 'Of the petrQleum reCQver ed frQm the said well have been depQsited in a trust fund in the name 'Of the Petroleum and Natural Gas C'Onservati'On Board and it appears desirable and expedient that the said trust fund be used to pay the said claims; and

Whereas due tQ the nature 'Of the disaster and the result ing claims there are technical and engineering prQblems inv'Olved in the determination 'Of liability and the assessment of damages which are CQmmon to. Inany 'Of the claims; and

Whereas the claims are S'O inter-related that it is nQt feasible or practicable t'O deal with them individually; and

Whereas it appears desirable and expedient in the public interest tQ determine all such claims; and

Whereas on the invitatiQn 'Of the Board several meetings were held in the City 'Of Calgary, in the PrQvince of Alberta, attended by representatives 'Of the Atlantic Oil Company, Limited and 'Other prQducers in the Leduc field affecte~ by the disaster for the purpQse of determining all such claims; and

Whereas at such a meeting held in the 'Offices 'Of the B'Oard in the City 'Of Calgary, 'On Wednesday, the twenty-sixth day

2 of January, 1949, representatives of the Atlantic Oil Com pany, Limited and of the majority of the producers expressed their approval of the settlement of claIms adopted by the meeting and no Dbj ection to the 'proposed settlement was registered by the representatives of any of the said produc ers; and

Whereas it is deemed desirable and expedient to imple ment the settlement of claims adopted by the said meeting; Now therefDre His Majesty, by and with the advice and consent of the Legislative Assembly of the Province of Alberta, enacts as follows:

SHORT TITLE. 1. This Act may he cited as "The Atlantic Claims Act".

INTERPRETATION. '2.

In this Act unless the context otherwise requires, (a) "Board" means the Petroleum and Natural Gas Conservation Board; (b) "claim" means a claim arising directly or indirectly from the Atlantic No.3 Oil Well disaster, whether recoverable as a debt or damages or otherwise h'Ow soever, and includes a claim of a holder of a gross royalty payable by the Company out of the produc tion 'Of the petroleum and natural gas from the At~ lantic No.3 Oil Well; (c) "C'Ompany" means the Atlantic Oil Company, Limit-, ed; (d) ",person" includes a corporation; ( e)" 'trust fund" means the trust fund in the name of , ' the Petroleum and Natural Gas Conservation Board, being the proceeds received by the said Board from the sale of petroleum produced from the Atlantic No.3 Oil Well. 3~-

(1) The Board is hereby authorized to retain from the trust fund for a period not exceeding two years from the date 'Of the passing of this Act any moneys which in its discretion may be, required for further expenses in connec tion with bringing the Atlantic No.3 Oil Well under control and conserving the flow 'Of petroleum and natural gas there~ from or for any other purposes connected with the Atlantic No.3 Oil Well disaster that the Board deems necessary.

(2) The Board is hereby authorized to pay money out of the trust fund for any of the following purposes: (

a) The costs and eXDenses 'Of and incidental to any action which has been taken or may hereafter be taken by the Board for the purpose of bringing the Atlantic No. 3 Oil Well under control;

3 (

b) The costs and expenses of carrying out all investi gations and conservation measures that the Board has taken or deems necessary to be taken in eon- nection with the said well; , (

c) The payment of such sums of money as may be required to give effect to any settlement approved by the Board and arrived at between the Company and any claimant who may have a claim against the Company, provided that if the parties cannot agr~e upon a settlement the Board may, in its dis cretIon, pay to the ch;imant such amount, if any, in settlement of the claIm as the Board may consider to be just and equitable; (

d) The payment to the Company from time to time of such sums of money as the Board in its discretion deems it advisable to advance, having regard to the protection of the interests of claimants under this

section of whose claims it has notice in writing prior to such advance.

(3) The money remaining in the trust fund, if any, after payment 'Of all claims, costs and expenses authorized to be paid pursuant to this Act shall belong and be paid to the Company. 4. The Atlantic No.3 Oil Well shall be deemed to have over-produced to the extent of five hundred and sixty-five thousand 'One hundred and ninety-five barrels of oil during the period it was flo.wing out of control and the Board may,- (

a) restrict the production of the Company's No.1 and No.2 wells to an amount which shaH not exceed two-thirds of the normal allowable production as set frQm time to time by the Board; and (

b) prevent the drilling of further wells on legal sub divisions 11 and 12 of sectio.n 23, township 50, range 26, west of the 4th meridian; until such time as the Board may consider it necessary in order to compensate, in the opinion of the Board, for the over-production .of Atlantic No.3 Oil Well. 5. No person shall commence any action against the Company or the Board, or any other person in respect of any claim unless such person has first obtained the consent in writing of the Attorney General. 6.

The Lieutenant Governor in Council may vest in the Board such additional powers and duties as are .deemed necessary or advisable for the purpose of enablIng the Board to perform its duties under this Act, and ~ay make such regulations as are deemed n~cessary or a?vIsable f~r carrying out the provisions of thIS Act acCordIng to. theIr true intent.

4 7. A certain Order in Council dated the twenty-first day of December, 1948, intituled O.C. 1495/48, and set out in the

Schedule hereto is hereby ratified, validated and confirmed and shall have the same force and effect as if the same had been enacted by this Act. 8. This Act shall come into force on the day upon which it is assented to.

SCHEDULE Approved and Ordered, (Sgd.) J. C. BOWEN, Lieutenant Governor. Edmonton, Tuesday, Dec·ember 21st, 1948. The Executive Council has had under consideration the report of the Honourable the Minister of Lands and Mines, dated December 20th, 1948, stating that:

Whereas by the terms of

section 46 of The Oil and Gas Re sources Conservation Act, being

Chapter 66 of the Revised Statutes of Alberta, 1942, it is provided as follows: "46.-

(1) The Board may take such steps and enlploy such persons as it considers necessary for the enforcement of any order made by it and for the purposes thereof may forcibly or otherwise enter upon, seize and take possession of the whole or part of the movable and immovable property in, on or about any well or us'ed in connection there with or appertaining thereto together with the books and offices of the owner thereof, and may, until the order has been complied with, either dis continue all production or may take over the manage ment and control thereof. "

(2) Upon the Board taking possession of any well and so long as such possession continues, every officer and employee of the owner thereof shall obey the orders _ of the Board or of such person or persons as it places in charge and contvol thereof. "

(3) Upon possession being taken of any well the Board may take, deal with and dispose of all petroleum produced at the well as if it were the property of the Board, subject to the obligation to account for the net proceeds thereof to the persons entitled thereto. " ( 4) The costs and expenses of and incidental tQ proceedings taken by the Board under this

section

5 shall be in the discretion of the Board, and the Board may direct by whom and to what extent they shall be paid."; and

Whereas Atlantic NQ. 3 Well of the Atlantic Oil Company Limited, blew out ().f control and the Petroleum and Natural Gas Conservation Board deemed it necessary to enter upon, s,eize and take possession of the movable and immovable property in, o.n or about the said weB for the purpose of bringing it under control and conserving the gas and flow .of oil under the terms of an Order of the Board; and

Whereas during the time that the Board has been in possession o.f the said well it has marketed the oil derived frQm the well, the proceeds from which are held in a special trust account in the name of the Board; and

Whereas it is deemed necessary and expedient to payout of the said trust account to the perso.ns hired by the Board the costs and expenses of and incidental to the work of bringing the said well under control; and

Whereas it is also deemed advis'able and expedient to endeavor to settle any claims against the Atlantic Oil Com pany, Limited, other than claims arising from an interest in mines and minerals and to settle claims of persons entitled to a royalty on production from the Numbers 1, 2 and 3 wells of the Atlantic Oil Company, Limited; and Wher,eas the-re is no statutory provision enabling the said payments to be made or ,settlements effected and it is pro posed to make the said payments and settlements subject to ratification by the Legislature at its next ensuing session.

Therefore, upon the recommendation of the Honourable the Minister of Lands and Mines, the Executive Council advises that the Petroleum and Natural Gas Conservation Board be and is hereby authorized to: (1) payout of the fund now held in the name of the Petroleum and Natural Gas Conservation Board in trust and representing the proceeds of the sale of petroleum from Atlantic' No.3 Well the costs and expenses of and incidental to the proceedings taken by the Board to' control the gas flow in the said well and the flow of petroleum therefrom. (2) payout of the said fund such sums as may be re quired to give effect to any settlement approved by the Board arrived at between the Atlantic Oil Company, Limited and any claimant or claimants who. may have a claim against the Atlantic Oil Company, Limited arising directly or indirectly from the Atlantic No.3 Well blow-out whether recoverable as a debt o.r dam,ages or otherwise howsoever, other than a claim arising from an interest in mines and minerals. (3) payout of the said fund to any person entitled to a royalty on production from the Numbers 1, 2 and 3 wells

6 of the Atlantic Oil Company, Limited, such royalty as, in the opinion of the Board, would have been received by such person if the Atlantic No.3 Oil Well had not blown out of control and if the s'aid wells had produced at a rate equiva lent to the actual rate of production allowed by the Board to similar wells belonging to other companies in the same field at the same time. (Sgd.) ERNEST C. MANNING, Chairman.

FIRST HESSION ELEVENTH LEGISLATURE 13 GEORGE VI 1949 BILL

An Act to Determine all Claims Arising from the Atlantic No. 3 Oil Well Disaster. Recei ved and read the First time ..... . Second time .. Third time HON. MR. TANNER. Title: 1949 (11th, 1st) Bill 70,

An Act to determine all Claims Arising from the Atlantic No. 3 Oil Well Disaster

Document details

Collection	Alberta — Bills
Citation	L11 S1 7192
Type	bill
Volume / chapter	L11 S1 7192
Language	en
Format	json
Source	PROVINCIAL
Identifier	b48b4eac8cdf1d39aa571317954611fa38eb3d44

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