Eastern Promises? LNG expands beyond B.C.

Jonathan Drance and Cameron Anderson -

Much media attention (including this blog) has been devoted to following the developments of British Columbia’s nascent LNG Export industry. At the same time potential LNG Export Projects on Canada’s East Coast are slowly gaining momentum. The following chart sets out LNG Export Projects on Canada’s East Coast that have been announced to date.

PROJECT

PARTNERS ON PROJECTS

EXPORT CAPACITY

Goldboro LNG

Pieridae Energy Ltd.

10 MTPA

Canaport LNG*

(*Repsol has publicly indicated that it is considering converting this import facility into an LNG Export Terminal)

Repsol YPF SA/Irving Oil

Not yet announced

H-Energy LNG Project

H-Energy

4.5 MTPA

Bear Head LNG Project

Liquefied Natural Gas Ltd.

2 MTPA

Husky Energy

Husky Energy

Not yet announced.

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2014 Oil and Gas M&A Review, Q1/Q2 - Themes and Deal Points

Chip Johnston, Brad Ashkin, Andrew D. Wong and Brandon Leitch -

Recently, our firm’s Calgary office completed a review of M&A themes and deal terms in the oil and gas sector for the first half of 2014. This study contains a list of oil and gas M&A transactions over the six month period, a review of key trends in deal terms, a summary of notable features of each transaction, an analysis of the timelines and a numerical analysis of key deal terms.

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BC LNG: Environmental Assessment Process for pipeline projects

Cameron Anderson and Jonathan Drance -

In a previous post, we discussed the Environmental Assessment (EA) Process applicable to the proposed BC LNG Export Terminals. Here, we discuss the EA Process applicable to various Pipelines designed to serve the LNG Export Terminals.

Unlike the LNG Export Terminals, where EA jurisdiction has historically been shared between the Federal and Provincial governments, the Pipelines are generally governed only by the BC EA Process, as administered by the BC Environmental Assessment Office (BC EAO). This is largely a result of Federal Regulations (enacted October 24, 2013) which remove from the Federal EA Process any Pipelines which are effectively intra-provincial in nature – as all of the currently proposed LNG Pipelines are.

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Glenn Murray to lead new Ministry of the Environment and Climate Change

P. Jason Kroft and Tamir Birk -

In announcing her new cabinet on June 24, Ontario Premier Kathleen Wynne appointed Glen Murray as Minister of the renamed Ministry of the Environment and Climate Change (formerly the Ministry of the Environment). According to Wynne, the expanded portfolio “will ensure Ontario can protect the gains it has made in fighting climate change, lead Ontario's mitigation and adaptation efforts to extreme weather and strengthen its position as a leader in clean technology.” Murray will leave his previous post as Transportation Minister and replace Jim Bradley, Ontario’s longest serving member of the legislature.

Ontario’s emphasis on reducing greenhouse gas emissions is nothing new. The province recently shut down the Thunder Bay coal-generating plant, for example, becoming the first jurisdiction in North America to eliminate coal as a source of electricity. However, Murray’s appointment and the revamped Ministry elevates the climate change issue to the cabinet level for the first time, reflecting the province’s increasing recognition of climate change as a central challenge.

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OPA awards 500 new FIT 3 renewable energy contracts

P. Jason Kroft and Tamir Birk -

On July 30, the Ontario Power Authority (OPA) awarded 500 renewable energy contracts, representing 123.5 megawatts of power, under its Feed-in Tariff (FIT) program. According to the OPA, these contracts represent enough energy to power approximately 15,000 homes.

“The FIT contracts we are about to offer represent significant investment in Ontario and in our electricity system. They show that the transformation of our electricity system to be cleaner and more sustainable is well on its way,” said OPA CEO Colin Andersen.

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BC LNG: Environmental Assessment Process

Jonathan Drance and Cameron Anderson -

The various LNG Export Terminals proposed to be built in British Columbia may be subject to environmental assessment (or EA) under both the Canadian Environmental Assessment Act, 2012 and the British Columbia Environmental Assessment Act. The EA process, whether under the Federal or Provincial legislation, examines projects to identify adverse environmental, economic, social, heritage and health effects that may occur during development and operation of proposed facilities. The EA process includes involvement/consultation with interested parties such as First Nations and working groups, technical studies and the development of comprehensive reports.

In order to minimize duplication and streamline these generally similar Federal and Provincial processes, the Canadian Environmental Assessment Agency (CEAA) and the British Columbia Environmental Assessment Office (the BC EAO) have entered into a Memorandum of Understanding on the Substitution of Environmental Assessments with the Canadian Environmental Assessment Agency  (the MOU). The MOU provides a mechanism for the CEAA to issue a Substitution Order and to effectively substitute the BC EAO’s process for its own and to rely on the record established by the BC EAO in conducting its EA of projects located in BC, such as the LNG Export Terminals. Any such Substitution Order is subject to certain terms and conditions including as to the general nature of the process to be run by the BC EAO and also clearly preserves the right of the Federal government to exercise any judgement or discretion which it may possess under applicable Federal legislation as it sees fit. However the MOU does at least hold out the prospect of reducing unnecessarily duplicative proceedings.

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The Tsilhqot'in decision: a view from Quebec

Erik Richer La Flèche -

On June 26, 2014 the Supreme Court of Canada recognized for the first time a First Nation’s aboriginal title over an area outside a reserve in Tsilhqot’in Nation vs. British Columbia.

Since then much has been written on whether the decision would have an adverse impact on natural and infrastructure development across Canada, with some columnists and think tanks being alarmed at the consequences the decision may have on projects.

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Grassy Narrows: Supreme Court confirms provincial jurisdiction over logging and mining on Treaty Lands

Patrick G. Duffy and Rachel V. Hutton -

Two weeks after the highly publicized Tsilhqot’in v. British Columbia decision, the Supreme Court of Canada has released another prominent decision in the area of Aboriginal law.  The issue in Grassy Narrows First Nations v. Ontario (also referred to as Keewatin v. Ontario) was a narrow but important one – does a province (rather than the federal government) have the authority to approve logging, mining and other activities on Crown lands that are subject to treaty rights? The Court’s answer can be summarized as “yes, but only if the province has met its duty to consult.” 

What is the significance of the case to industry?

The stakes in the case were high - a ruling against the province would have cast doubt on the validity of provincial approvals for forestry, mining and other activities on Crown lands that were surrendered by treaty. By rejecting that outcome, the Court has provided a pragmatic framework for dealing with surrendered lands, while ensuring that provinces respect treaty rights.  This ruling should allow industry participants to breathe a little easier knowing that existing provincial approvals on surrendered lands are valid, provided the province’s duty to consult has been fulfilled.

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Investment Canada Act approval for oil sands investment by State-Owned Enterprise

Lawson Hunter and Michael Kilby -

In May 2014, the Minister of Industry issued a net benefit approval for PTTEP’s acquisition of control of the Thornbury, Hangingstone and South Leismer oil sands projects from Statoil Canada. PTTEP is a Thai state-owned enterprise for purposes of the Investment Canada Act.

By way of background, in December 2012 the Prime Minister and the Minister of Industry issued new and revised guidance in relation to State-Owned Enterprises. In relation to the oil sands, the relevant policy provides that acquisitions of oil sands businesses by SOEs will only be approved in exceptional circumstances.  The PTTEP acquisition is significant because it represents the first test of this policy.

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Alberta Energy Regulator completes implementation of new mandate

Allison Sears -

In the oil and gas regulatory sphere, Q2 marked the implementation of the third and final phase of the Alberta Energy Regulator’s new mandate under the Responsible Energy Development Act (REDA). In addition to the “energy resources enactments” over which it previously had jurisdiction in its former incarnation as the Energy Resources Conservation Board, the Alberta Energy Regulator (AER) has now assumed jurisdiction over various provisions in certain “specified enactments”, including the Public Lands Act, the Environmental Protection and Enhancement Act and the Water Act insofar as those provisions relate to “energy resources activities” (i.e. oil and gas operations and coal mining, but not power generation or electricity transmission and distribution).

Whereas the proponents of energy resources projects previously obtained Crown surface dispositions and environmental approvals from Alberta Environment and Sustainable Resource Development (AESRD), all requisite approvals can now be obtained under the single umbrella of the AER. Whether this will actually result in the intended efficiency gains of one-stop-shopping remains to be seen as the AER is only just beginning to dig itself out from under the thousands of applications transferred over to it from AESRD.

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