Canadian Energy Law : Lawyers & Attorneys for Environmental Energy Law

The latest round of United Nations climate negotiations gets underway today in Cancun, Mexico, where representatives of approximately 200 countries will discuss the future of the United Nations Framework Convention on Climate Change and the Kyoto Protocol. The negotiations in Cancun come almost a year since the summit in Copenhagen where high level negotiations fell short of producing a binding post-2012 pact on reducing greenhouse gas emissions and providing aid to developing countries.  As a result of its commitments under the Copenhagen Accord, the non-binding agreement that came out of the negotiations last December, the Government of Canada has pledged to reduce greenhouse gas emissions by 17 percent from 2005 levels by 2020, but only if the United States takes comparable action.

• Comments
• Trackbacks
• Email This
• Print
• Share Link

Following the recent abandonment of a national cap-and-trade system in the United States and the winding-down of the Chicago Climate Exchange voluntary carbon-trading program, traders and exchanges are now focusing their efforts on California. A recent Wall Street Journal article describes estimates of the potential size of California's carbon market ranging from $3 billion to $58 billion, which has exchange operators competing with each other to become the dominant trading hub. Many in the exchange industry view carbon allowances and related derivative products as a key long-term asset with global potential. California currently has several operators interested in launching exchanges, the first of which could begin trading operations as early as next year.

• Comments
• Trackbacks
• Email This
• Print
• Share Link

The Ontario Ministry of Energy has released a Long-Term Energy Plan (LTEP), which is a 20-year plan to guide the province's electricity system. The LTEP forecasts demand growth of 15 percent between 2010 and 2030. Key features of the LTEP include a recommitment to eliminate coal-fired generation by 2014, refurbishment and expansion of nuclear capacity, continuation of FIT and microFIT programs, and the development of a Combined Heat and Power standard offer program for projects under 20 MW. The government will also be proceeding with five priority transmission projects immediately.

As part of the LTEP, the government will be posting a proposed supply mix directive on the Environmental Registry for a 45 day public comment period. Once this process is complete, the directive will be finalized and sent to the OPA and will form the basis for the OPA's new Integrated Power System Plan (IPSP).

• Comments
• Trackbacks
• Email This
• Print
• Share Link

On November 16, 2010, Bill C-311, the Climate Change Accountability Act, was defeated in the Senate by a vote of 43-32 with no debate held. The bill was passed by the House of Commons on May 5, 2010 and would have required the federal government to establish regulations to meet a greenhouse gas (GHG) reduction target of 25% below 1990 levels by 2020 and to set a long-term GHG reduction target of 80% below 1990 levels by 2050.

• Comments
• Trackbacks
• Email This
• Print
• Share Link

The Chicago Climate Exchange ("CCX") recently announced that they will discontinue the CCX emission reduction program at the conclusion of its Phase I and Phase II program at the end of this year.  Launched in 2003, the CCX emission reduction program was North America’s first voluntary greenhouse gas (“GHG”) cap-and-trade scheme. CCX Members made voluntary but legally binding commitments to reduce their annual GHG emissions by 6 per cent below their emissions baselines by the end of 2010.  Members who reduced emissions beyond their targets earned surplus allowances to sell, bank or trade with Members who did not meet their targets.

Carbon Financial Instrument (“CFI”) contracts were used to perform these trades.  The closing prices for a CFI contract fell to $0.05 in January 2010, from its all-time high of $7.40 in May 2008. Since February 2010, the CCX has had zero monthly trading volume.

In place of the emission reduction program, the CCX will create the CCX Offsets Registry Program, which will eliminate emission reduction targets in favour of a general marketplace for emission offsets.

"Fundamentally, with any program that relies on voluntary compliance for something not yet mandated into law, it makes it more difficult ultimately to have as vibrant a market as you'd want," said Bruce Braine, Vice-President of Strategic Policy at American Electric Power, one of the CCX’s founding Members.

Other CCX affiliate programs such as the European Climate Exchange and the Chicago Climate Futures Exchange will continue unchanged.

• Comments
• Trackbacks
• Email This
• Print
• Share Link

Cora Zeeman

As recently discussed on our securities blog, on October 27, the Canadian Securities Administrators (CSA) issued Staff Notice 51-333 – Environmental Reporting Guidance to provide guidance to reporting issuers on satisfying existing continuous disclosure requirements with respect to environmental concerns. Specifically, Staff Notice 51-333 is intended to assist issuers in determining what information about environmental matters needs to be disclosed by reporting issuers based on the requirements found in National Instrument 51-102 Continuous Disclosure Obligations (NI 51-102), National Instrument 58-101 Disclosure of Corporate Governance Practices (NI 58-101) and National Instrument 52-110 Audit Committees (NI 52-110).

The Ontario Securities Commission’s (OSC) nascent focus on investors’ concerns regarding climate change considerations has been apparent for some time. In February 2008, the OSC released Staff Notice 51-716 – Environmental Reporting, which outlined the results of a targeted review to determine the degree to which reporting issuers were adequately disclosing “environmental matters”. Meanwhile, in December 2009, the OSC published Staff Notice 51-717 – Corporate Governance and Environmental Disclosure, which detailed the OSC’s plans to enhance environmental and corporate disclosure requirements of reporting issuers.

• Comments
• Trackbacks
• Email This
• Print
• Share Link

On October 27, 2010, the government of Alberta introduced Bill 26, Mines and Minerals (Coalbed Methane) Amendment Act, 2010. Bill 26 declares coalbed methane “to be and at all times to have been natural gas” for both Crown and freehold minerals. Despite this declaration, Bill 26 expressly honours existing agreements that specifically grant coalbed methane to the coal owner and protects coal owners or their lessees, surface owners and the provincial government from being sued for damages or compensation from the extraction, production or removal of coalbed methane prior to the Bill coming into force. Under the proposed legislation read as a whole, coalbed methane is owned by the natural gas rights holder rather than the owner of coal rights.

The Alberta government views the lack of clarity regarding coalbed methane ownership as a potential barrier to resource development in the Province. Under the Mines and Minerals Act as it currently stands, coalbed methane is only declared to be natural gas on Crown land. The Act is silent as to the nature or ownership of coalbed methane on freehold lands.
 

• Comments
• Trackbacks
• Email This
• Print
• Share Link

Further to our blog post on October 25, 2010 (California vote could hinder cap-and-trade efforts), Proposition 23 was defeated by California voters in the November 2 election. The proposition would have suspended California’s emissions-reduction law until certain economic targets, including a decline in the unemployment rate, were met.

As reported in the Globe and Mail (Globe and Mail Link = http://www.theglobeandmail.com/report-on-business/economy/prospects-for-cap-and-trade-system-waning/article1783998/), the defeat of Proposition 23 could help boost the momentum behind the Western Climate Initiative’s proposed cap-and-trade market, which is schedules to launch in 2010. The Western Climate Initiative includes California, six other American states, Ontario, Quebec, British Columbia and Manitoba.
 

• Comments
• Trackbacks
• Email This
• Print
• Share Link

On November 2, 2010, despite prior approval by the British Columbia government, the Government of Canada denied approval of the Prosperity Gold-Copper Mine (the “Project”) proposed by Taseko Mines Ltd. (“Taseko”). 

Taseko proposed a large open pit gold-copper mine 125-km south west of Williams Lake, British Columbia. In addition to the open pit mine, the Project proposal included an onsite mill and support infrastructure, a tailings storage facility, a 125-km long electrical transmission line, explosives factory and magazine and an access road. The mine site would cover a 35 square km area in the Fish Creek watershed, which drains into several other waterbodies in the surrounding area, including Taseko River, Fish Lake and Little Fish Lake. The development of the Project would result in the necessary destruction of Fish Lake, Little Fish Lake and portions of Fish Creek to allow for the tailings storage plan. 

• Comments
• Trackbacks
• Email This
• Print
• Share Link

In yesterday's elections, California voters showed their continued support for the state's climate change policies, voting against a ballot initiative that would have suspended current climate change policies until certain economic targets were met and electing Democrat Jerry Brown as governor . The election results are an important milestone for the Western Climate Initiative ("WCI'), of which California is the largest participant, as the republican candidate had promised to revisit the state's climate change and cap-and-trade commitments.
 
Voters in New Mexico, another WCI participant, elected Republican Susana Martinez as governor. This could effect New Mexico's continued participation in the WCI as Martinez opposes a carbon emissions cap-and-trade program

• Comments
• Trackbacks
• Email This
• Print
• Share Link

The Alberta government has recently drafted legislation, Bill 24, Carbon Capture and Storage Statutes Amendment Act, 2010, 3^rd Sess., 27^th Leg., Alberta, 2010 which clarifies ownership of pore space and that would, if passed, make Alberta the first province in Canada to enact comprehensive legislation to regulate large-scale carbon capture and storage (CCS) projects. Under Bill 24, the Alberta government would own subsurface pore spaces where carbon dioxide is stored and would assume long-term liability for injected carbon dioxide once project operators provide data that the gas is contained. Bill 24 would also create a special fund financed by CCS operators that would pay for future monitoring of underground carbon dioxide storage sites and any necessary remediation.

The Alberta Energy Minister, Ron Liepert, emphasizes that Bill 24 would ensure Alberta is on track to reducing greenhouse gas emissions and would also help to double Alberta’s conventional oil recovery which will generate billions of dollars for the province. In particular, the Alberta Carbon Capture and Storage Development Council estimates that carbon captured and used in enhanced oil recovery could produce an additional 1.4 billion barrels of oil from conventional reservoirs generating up to $25 billion in provincial royalties and taxes.

• Comments
• Trackbacks
• Email This
• Print
• Share Link

On October 28, 2010, the California Air Resource Board ("CARB") announced the release of its proposed greenhouse gas cap and trade regulation  as part of the state's commitment to the Western Climate Initiative ("WCI"). British Columbia, Ontario, Quebec and Manitoba plan to join California and several other states in the launch of the WCI cap and trade market in 2012.
 
A key part of CARB's AB 32 Scoping Plan, the cap-and-trade program provides an overall limit on the emissions from sources responsible for 85% of California's greenhouse gas emissions. The release begins a 45-day public comment period culminating in a December 16, 2010 public hearing at which CARB will consider adopting the proposed program.

• Comments
• Trackbacks
• Email This
• Print
• Share Link