Although the modern Alberta petroleum industry has been in existence for 65 years, the past decade has seen the courts and the legislature wrestle with some fundamental issues relating to the ownership of resources. Indeed, some of the most contentious issues have arisen within the last year.

The first part of this paper is based on the approach taken by the Canadian courts as they were required to resolve subsurface ownership issues. In the earliest days of the industry, this process began with the initial determination that it was possible to distinguish between the ownership of petroleum and natural gas within the same reservoir. The paper will examine the extension of this approach as novel issues arose in more recent times, including the ownership of evolved (or secondary associated) gas, coalbed methane and gas found in association with bitumen.

The bulk of the paper will discuss controversial recent changes instituted by the government of Alberta between 2007 and 2011. They deal with the clarification of resource rights, the direct removal of resource rights and the rate of return from the exploitation of resource rights. The recent actions of the Alberta government have been seen as a departure from the traditionally favourable legal and policy environment enjoyed by the energy industry. The paper will demonstrate that the controversial initiatives of the government do represent a break in the tradition that was followed between 1981 in 2007, but they are consistent with the attitude of the provincial government over the long term.

The paper will provide guidance on the existing state of law in Alberta and some of the legal and policy consequences of the recent government actions. It will examine the reasons for the changed approach adopted by the government over the last four years with parallels to the period of rising energy prices that occurred between 1971 and 2001.

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