Canadian Energy Law : Lawyers & Attorneys for Environmental Energy Law

Brad Grant and Kerri Howard

Background

On February 16, 2007, Lyle Oberg, Alberta's Finance Minister, announced the appointment of a six-member panel of experts to complete a review of Alberta's royalty and tax regimes with the goal of ensuring Albertans are receiving a fair share from energy development through royalties, taxes and fees. The Royalty Review Panel (the Panel), which was put in place to fulfill a promise made by Premier Ed Stelmach during the 2006 Progressive Conservative leadership campaign, included independent experts in resource taxation and the royalty system.

The Panel's review focused on all aspects of the oil and gas royalty system, including royalties with respect to oil sands, conventional oil and natural gas. Among the issues the Panel was asked to address were whether the Alberta royalty system is sufficiently sensitive to market conditions and whether the existing revenue minus cost system for oil sands royalties is appropriate given current industry activity.

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Jamie Klein

Amid the search for new clean-energy sources, there has been a renewed interest in geothermal energy production in Canada. There are two types of energy systems that can be obtained from the earth's heat: Heat Exchange Systems and Steam Turbine Energy Generation Systems. 

Heat Exchange Systems use temperatures found in the earth or below water to cool or heat air and water for buildings. In the typical system, a heat pump will extract heat from underneath the ground to provide heat in the winter months, and in the summer, the pump is reversed in order to provide air conditioning by moving hot air out of the building and down into the ground. There are currently more than 30,000 geothermal heat exchange installations in Canada that are used for residential, commercial, institutional and industrial applications.

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Rob Assal

Relative to other forms of alternative energy, tidal energy developments in Canada are still in their infancy. However, there has recently been significant interest in this area, and tidal projects are currently under consideration in three provinces: British Columbia, Nova Scotia and New Brunswick.

Although  offshore lands for tidal project development are generally secured through long-term leases of Crown land, each of the above-referenced provinces has implemented project proposal and assessment procedures that must be followed by proponents prior to commencement of land lease discussions. In addition, while Crown land leases are typically governed by provincial legislation, the terms and procedures for leasing off-shore lands are found in provincial energy policies.

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Jim Harbell

In Ontario, enthusiasm for  solar PV projects has recently been growing. While solar panels in individual residences and commercial establishments have been in place for many years, Ontario is now moving in the direction of large-scale commercial applications. This trend is assisted by Ontario's Standard Offer Program, run by the Ontario Power Authority, which encourages solar PV projects of up to 10 MW.  Solar PV is being encouraged because it is abundant and renewable, environmentally friendly; it emits no carbon dioxide and potentially displaces other energy sources that do, thereby reducing global greenhouse gases.

Once a concern, the efficiency of solar PV systems has increased with advances in the field to 20% or more. They are an excellent source for distributed energy as they can be rural, remote and portable.

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Rajah Lehal

A federal mandate was announced in 2006, under which fuel producers and importers would be required to have an average annual renewable fuel content of 5% of the volume of gasoline they produce or import, commencing in 2010. "Renewable fuel" is a broad term that encompasses a range of fuels made from renewable resources such as agricultural crops and other organic matter. For example, a renewable fuel such as ethanol contains 35% oxygen, which, when blended with conventional gasoline, results in a more complete fuel combustion and reduces harmful emissions. A proposed draft Federal regulation regarding this mandate is expected in the fall of 2008.

Various provinces including Ontario, Quebec, Saskatchewan and Manitoba have either enacted or drafted legislation that will require a minimum ethanol content for fuel producers. For example, regulation 535/05, a new regulation enacted in 2007 in Ontario, requires an average of 5% ethanol content in gasoline, a standard which is projected to take 200,000 vehicles off the road. Ontario is planning to administer this with a credit-trading system under which wholesalers using more than 5% would acquire credits that they can sell to companies that choose to blend less than 5%. Responding to the demand for ethanol, the Integrated Grain Processors Co-operative is building a $140 million ethanol facility in Aylmer, Ontario, and Husky Oil is constructing a second ethanol plant in Minnedosa, Manitoba that is scheduled for completion in late 2007.

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Harold Andersen and Kirsten Iler

There is an emerging Canadian consensus that carbon regulation is inevitable, and with it, a growing sense that future policies for addressing climate change will include market-based mechanisms such as emissions trading. In early October, the Canadian Council of Chief Executives released a declaration calling climate change the "most pressing" issue today and calling for "aggressive" action and "absolute" emissions reductions. The CEOs also acknowledged that government regulation - including emissions trading, technology investment and environmental taxation - would be required in order to reduce greenhouse gas (GHG) emissions.

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Glenn Zacher

On August 29, 2007, the Ontario Power Authority (OPA) filed its integrated power system plan (IPSP) with the Ontario Energy Board (OEB). The IPSP is mandated by Ontario's Electricity Act, which requires the OPA to develop a twenty year plan to assist, through the effective management of electricity supply, transmission, capacity and demand, the achievement of the provincial government's goals, as identified in its June 13, 2006 Supply Mix Directive (the Directive). The Directive, itself based on recommendations by the OPA, requires the OPA to develop a plan that reduces peak demand through conservation, increases Ontario's use of renewable energy, develops nuclear capacity to meet baseload requirements, maintains the ability to use natural gas at peak times and for high efficiency/value applications, provides for the replacement of coal fired generation and strengthens the transmission system to enable and facilitate these supply-mix goals.

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