Category Archives: Energy

Setting the Record Straight on Federal and Provincial Jurisdiction Over the Environmental Assessment of Resource Projects in the Provinces

By: Martin Olszynski and Nigel Bankes

PDF Version: Setting the Record Straight on Federal and Provincial Jurisdiction Over the Environmental Assessment of Resource Projects in the Provinces

Matter Commented On:Bill C-69: An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to ament the Navigation Protection Act and to make consequential amendments to other Acts

Alberta’s new premier has recently threatened to sue the federal government over Bill C-69, the Liberal government’s attempt to restore some credibility to Canada’s environmental assessment regime. More specifically, Premier Kenney has recently been asserting that section 92A of the Constitution Act, 1982, which gives the provinces jurisdiction over the development of non-renewable natural resources, precludes the federal government from assessing what the Premier describes as “provincial projects”: “[BillC-69] gives a new federal agency the power to regulate provincial projects, such as in situ oil sands developments and petrochemical refineries, which are entirely within a province’s borders and already subject to provincial regulation. It disregards a landmark Supreme Court ruling on jurisdiction and the balance between federal and provincial powers spelled out in the Constitution — including section 92A in which provinces have exclusive authority over non-renewable resource projects.” In making these comments, the Premier contradicts almost three decades of settled jurisprudence with respect to the federal and provincial division of powers over the environment generally, and federal jurisdiction to conduct environmental assessments specifically. Continue reading →

(Final?) Brief re: Bill C-69 to the Senate Committee on Energy, Environment and Natural Resources

By: Martin Olszynski

Legislation Commented On:Bill C-69, An Act to enact the Impact Assessment Act and the Canadian Energy Regulator Act, to amend the Navigation Protection Act and to make consequential amendments to other Acts

PDF Version: (Final?) Brief re: Bill C-69 to the Senate Committee on Energy, Environment and Natural Resources

The Senate Committee on Energy, Environment, and Natural Resources (the Committee) is in the final stages of its hearings into Bill C-69, which if passed will replace the current federal environmental assessment regime pursuant to the Canadian Environmental Assessment Act 2012, SC 2012 c 19 s 52 (CEAA, 2012). What follows is a slightly edited version of the brief that I submitted to the Committee last week, following my appearance before it on April 9, 2019, here in Calgary.

I am pleased to submit this brief to the Committee as part of your review of Bill C-69 – and the proposed Impact Assessment Act (IAA) in particular. Much has been said and written about Bill C-69. In addition to this brief, I myself have written or co-written the following articles/blogs since Bill C-69 was passed in the House of Commons:

My own contributions have been spurred less by a desire to defend the Bill and more to simply set the record straight. That is the spirit that animated my remarks to the Committee on April 9, 2019 and that is at the core of this brief, which is organized as follows: Continue reading →

English Court of Appeal Confirms that an Operator Entitled to be “held neutral”

By: Nigel Bankes

PDF Version: English Court of Appeal Confirms that an Operator Entitled to be “held neutral”

Case Commented On: Spirit Energy Resources et al Marathon Oil UK LLC, [2019] EWCA Civ 11.

In a decision that will be of interest to the energy bar in all oil and gas jurisdictions in the common law world, the English Court of Appeal, in a unanimous decision, has confirmed the principle that operations conducted by an operator under the terms of a joint operating agreement are conducted for the joint account and for the shared risk of all working interest owners and that an operator is not an insurer for those other working interest owners. The Court did so in the somewhat unusual context of a liability for unfunded defined pension benefits.

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Negotiated Settlements and Just and Reasonable Rates

By: Nigel Bankes

PDF Version: Negotiated Settlements and Just and Reasonable Rates

Decision Commented On: National Energy Board, TransCanada Pipelines Limited (TransCanada) Application for Approval of 2018 to 2020 Mainline Tolls RH-001-2018, Reasons for Decision, December 13, 2018

This is the most recent decision in a string of decisions from the National Energy Board (NEB) over the last five years dealing with TransCanada PipeLines (TCPL) as TCPL and the NEB seek to grapple with the dramatic changes that have occurred in North American natural gas markets over this period, and more specifically how these changes pose the risk of stranded assets and as such threaten to affect the viability of one of the NEB’s most important regulated  pipelines: TCPL and TCPL’s mainline (or at least elements of that mainline). Perhaps the most dramatic of these changes is the increased availability of shale gas supplies, and specifically shale gas supplies from basins much closer to TCPL’s traditional markets than the Western Canadian Sedimentary Basin (WCSB), TCPL’s main source of gas.

What is interesting about these decisions, including this most recent decision, is the interplay or tension between the NEB’s statutory authority to establish just and reasonable rates and the market-based approaches as reflected in negotiated settlements. While the NEB and other regulators seek to encourage negotiated settlements between the regulated entity and its customers, it is plain from this decision that the regulator retains a power of review. While a regulator may be reluctant to exercise that power given that settlements typically involve some give and take, this decision demonstrates that the regulator will not always defer to the paradigm of settlement and contract if it perceives that the results of the settlement depart significantly from fundamental rate-making principles. While this decision happens to deal with TCPL and the NEB, the same interplay is apparent in any jurisdiction that allows for the possibility that a regulated utility may reach a negotiated settlement with some or all customers rather than going through an adversarial rate hearing.

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Market power in the electricity sector prior to the implementation of a capacity market

By: Nigel Bankes

PDF Version: Market power in the electricity sector prior to the implementation of a capacity market

Report commented on: Charles River Associates, Offer Behaviour Guidelines prior to the implementation of a capacity market, Report Prepared for the Market Surveillance Administrator, December 18, 2018

On September 27, 2018, Alberta’s Market Surveillance Administrator (MSA) provided notice that it was starting a process to determine if it needed to adopt guidelines for market participants in the electricity sector in Alberta during the period prior to the implementation of a capacity market. It will be recalled that the MSA had a set of Offer Behaviour Enforcement Guidelines (OBEG) that were in force until withdrawn by the MSA with the announced advent of a capacity market. For an earlier post referring to the development see here and for discussion of the transition to an energy plus capacity market see here.

To initiate this process the MSA retained Charles River Associates (CRA) to address three questions:

  • Could there be a problem with offer behaviour that would need to be addressed during the transition period?
  • If so, could the problem identified be addressed in whole, or in part, through MSA guidelines and what form could those guidelines take?
  • If guidelines were made and market participants did not follow those guidelines what remedies should the MSA seek from the Alberta Utilities Commission (“Commission”) in an enforcement proceeding?

The MSA has now received that report and this post summarizes some of its key findings.

Continue reading →