Court orders Alberta government to stop delaying decision on proposed oilsands project

A Calgary energy company has won its case against the Alberta government after a court ruling on Tuesday morning ordered the provincial cabinet to make a decision on whether to approve a new oilsands project.

Prosper Petroleum has waited more than a year and a half for the provincial government to make up its mind on its proposed Rigel project, located about 70 kilometres northwest of Fort McMurray, with few explanations for the delay.

Now, the cabinet is being ordered to make a decision within 10 days, a ruling the government said hours later it would appeal.

"Prosper took the risk of what the decision would be when it commenced the process. It did not, however, commence the process understanding it may never get a decision," said Court of Queen's Bench Justice Barbara Romaine, as she read her decision in a Calgary courtroom.

"There is no question the provincial cabinet must make a decision regarding the Rigel project. There is also no question that cabinet has failed to do so for over 19 months," she said.

The case has gained attention because at the same time the government has been delaying its decision on Rigel, it has been pushing hard to boost oilpatch jobs and investment elsewhere in the province.

Indeed, Premier Jason Kenney has warned if the federal government rejects the proposed Teck oilsands project, it would have "devastating impacts" for Alberta.

The court heard how the government is taking longer than usual to approve or reject this project because of the change in government last year. However, the government has approved other projects since the election.

Romaine discussed how the delay could also be tied to the Fort McKay First Nation's concerns with the project, since the proposed facility would be within 10 kilometres of two of the First Nation's reserves, known as the Moose Lake Reserves.

For several years, the province has worked on a plan for the Moose Lake area, although the process has been slow.

"The Crown has not demonstrated any indication the delays are due to protecting public interest as it has not produced any evidence to demonstrate why the decision has been delayed. On the other hand, there is a strong public interest in encouraging a timely cabinet decision," Romaine said.

The CEO of Prosper Petroleum speaks to reporters following the ruling:

Company says construction would create 10,000 jobs

The Rigel project would produce about 10,000 barrels per day, which is small by oilsands standards. The company said it would create about 10,000 full-time jobs during the construction phase.

In June 2018, the Alberta Energy Regulator approved the proposed project and recommended the provincial government give the project the go-ahead. However, since Prosper Petroleum is still waiting for an answer from the government, the company has said it's suffering financial consequences.

Prosper said it has laid off staff, and that its top three executives are not collecting pay cheques.

"We're pleased the judge decided in our favour. As we've said all along, this has been a very slow and frustrating process, but at least we know 10 days from now we will have a decision, positive or negative, but at least we'll have a decision," said company CEO Brad Gardiner to journalists outside the courtroom.

"I can't predict what the government will do," he said.

"Government is reviewing today's ruling and will be appealing this decision," said Kavi Bal, spokesperson to energy minister Sonya Savage.