Canadian Energy Perspectives

Developments in Energy and Power Law

Canadian Energy Perspectives

National Energy Board Releases Decision on Export of Liquefied Natural Gas

Posted in Liquefied Natural Gas, National Energy Board
Kimberly HowardBraden Sheps

On April 16, 2014, the National Energy Board (NEB or the Board) issued a license to Triton LNG Inc. on behalf of Triton LNG Limited Partnership (Triton LNG LP), to export liquefied natural gas (LNG) (Letter Decision).[1] The licence will permit Triton to export up to 3,749,000 103m3 annually.

Before considering the merits of Triton’s application, the Letter Decision begins with the following noteworthy statement by the NEB regarding government policy and an acknowledgement of the importance of access to new markets:

Recent developments in gas production technology have resulted in a significant increase in the Canada gas resource base and North American gas supply. One of the major impacts of this increase is lower demand for Canadian gas in traditional gas markets in the United States and eastern Canada. As a result, the Canadian gas industry is seeking to develop access to overseas gas markets.[2]

The Letter Decision is also noteworthy for the following reasons:

  • The NEB issued the export license to Triton LNG Inc., noting that while Triton provided one example where a license was issued to partnership under Canadian law, it preferred to follows its established practice for Canadian partnerships, and issue the license to the general partner on behalf of the limited partnership. This is a change from the Board’s previous decisions to issue export licenses to partnerships, including the KM LNG Operating General Partnership (a British Columbia partnership), as well as several United States partnerships.
  • The Board signaled that it is moving away from granting reporting exemptions. In its application, Triton requested an exemption from the reporting requirements set out in section 4 of the National Energy Board Export and Import Reporting Regulations (Reporting Regulations). Specifically, Triton requested that its reporting requirements be limited to quarterly reporting, as opposed to monthly reporting, stating that monthly reporting would place it at a competitive disadvantage. The Board denied this request and relied upon reasoning that its enhanced market monitoring relies on the information that is required to be submitted by export authorization holders in compliance with the Reporting Regulations. The Board reiterated that it continues to support market transparency, but will exercise its discretion with respect to the information it chooses to release to the public.
  • In articulating the policy of the federal government, the Board acknowledged industry’s efforts to develop access to overseas markets and emphasized that the gas resource base in Canada is large and can accommodate reasonably foreseeable Canadian demand, the proposed LNG exports and a plausible potential increase in demand.[3]

This Letter Decision is another example of the trend we continue to see from the NEB. This trend involves timely decisions and demonstrates that the NEB views its role as implementing the government policy that Canada is amenable and desirous of expanding energy trade with new markets and jurisdictions. This trend is positive news for foreign entities seeking to do business and invest in Canada.


[1] National Energy Board Letter Decision to Triton LNG Limited Partnership (16 April 2014) (the “Letter Decision”).

[2] Ibid, at 1.

[3] Ibid, at 1 & 4.

Patent Law Historical Observations: Oil and Gas

Posted in Patent

Timothy EllamSteven TannerThe following snIP/ITs blog post by Steven Tanner and Timothy Ellam may be of interest to readers of this blog:

Patent Law Historical Observations: Oil and Gas

We recently posted an article reviewing the year past in oil and gas patent litigation. We analyzed new Federal Court cases and issued decisions and provided commentary on future implications. You can read that article here.This article continues that analysis by looking backwards in time; specifically to oil and gas patent litigation for the years 2009-2012. What conclusions can be drawn if we look at a 5-year window of time? The short answer is that 2013 was as busy a year for oil and gas patent litigation as the previous four years combined. For the 2009-2012 time frame, there were 12 patent cases filed in the Federal Court and Federal Court of Appeal relating to oil and gas patent litigation. Six oil and gas patent infringement decisions were rendered by the Federal Court and Federal Court of Appeal in that same timeframe. What kinds of cases are being filed? Read more.

Looming Solar Dispute

United States to File a Dispute with the World Trade Organization Regarding Indian Solar Subsidies

Posted in Energy – Renewable, Alternative and Clean, Power, Purchase Agreements, Solar
Brenda Swick

Later this week, on April 25, 2014, the United States is expected to file a dispute with the World Trade Organization (the WTO) regarding India’s domestic content requirements for solar cells and solar modules under its Jawaharlal Nehru National Solar Mission programme, introduced to promote the development of solar power generation facilities in the country. The United States alleges that India requires solar power developers to purchase and use solar cells and solar modules of Indian origin and that India’s solar power developers receive certain benefits and advantages, such as long-term tariffs for electricity, provided that they purchase and use solar cells and solar modules of domestic origin. Indeed, purchasing domestic solar cells and modules is a condition for companies to enter into power purchase agreements with Indian power companies and enjoy benefits such as favorable rates for electricity purchases.

According to the Office of the United States Trade Representative (the USTR),

USTR is standing up for American workers and businesses who manufacture and export solar energy products as well as taking decisive action to make solar energy more affordable and accessible in India, in line with President Obama’s commitment to address climate change.

Specifically, the United States claims that India provides less favourable treatment to solar cells and solar modules imported from the United States than that accorded to like products originated in India and that these are trade-related investment measures inconsistent with India’s obligations under the General Agreement on Trade and Tariffs. It seeks the immediate withdrawal of the domestic content requirement.

Stay tuned for further updates.

Alberta Renewables Update

Alberta Government Signals Greater Customer Choice for Renewable Energy

Posted in Electricity, Energy – Renewable, Alternative and Clean, Hydroelectric
Alberta
Ryan MacIsaac

The Alberta government in its recent Speech from the Throne promised to introduce an alternative renewable energy framework that will allow consumers to exercise choice within the existing system.

In 2007, a report prepared for the Clean Air Strategic Alliance by stakeholders from government, industry and non-government organizations recommended a renewable energy framework that would, among other things:

  • foster market demand;
  • incorporate environmental costs and benefits into the marketplace;
  • establish an emissions trading system; and
  • foster an investment environment for the generation and sale of renewable and alternative power.

Currently, coal-fired plants make up about 41 per cent of Alberta’s installed generating capacity, and natural gas accounts for another 40 per cent. The remainder is hydro, wind and biomass. The Montana-Alberta Tie Line, a 300-megawatt electricity transmission line, recently went into operation and will support the development of wind energy in southern Alberta and northern Montana.

In Alberta, electricity generation is deregulated. Transmission is regulated under a cost-of-service model. Electricity is sold wholesale to market participants through the market-based Power Pool run by the Alberta Electric System Operator. Retail customers can choose between a regulated rate provider or a competitive retail service.

The Speech from the Throne was scarce on details of the government’s proposals. Please visit this space for further updates.

Historic Procurement Opportunities

Comprehensive Economic Trade Agreement with Europe Dramatically Changes Public Utility Procurement

Posted in BC Hydro, Hydro-One Networks, NB Power, Ontario Power Authority, Power, Procurement, Québec Hydro-Québec
Robert GlasgowBrenda Swick

For the first time Canadian “Public Utility Companies” will have their procurement processes, evaluation methodologies and contract awards subject to international disciplines under the Comprehensive Economic Trade Agreement (“CETA”) between Canada and the European Union.  This is a historic change because public utilities, such as Hydro Québec, BC Hydro, the Ontario Power Authority, Toronto Hydro, have previously been exempt from international standards and disciplines.  The North American Free Trade Agreement, World Trade Organization Agreement on Government Procurement and in some cases even the Agreement on Internal Trade exempt utilities from their procurement disciplines.  Continue Reading

Federal Government Announces Approval of Four Long-term LNG Export Licences

Posted in Energy – Renewable, Alternative and Clean, Liquefied Natural Gas
Gordon NettletonKimberly Howard

On March 26, 2014, the Government of Canada approved four long-term liquefied natural gas (LNG) export licences for Pacific NorthWest LNG, Prince Rupert LNG, WCC LNG and Woodfibre LNG.  The four export licences authorize the export of a total of up to 73.38 million tonnes per annum (mtpa) of LNG.

This approval by the Government of Canada is the last step in the approval process for the issuance of a LNG export licence.  While obtaining a long-term National Energy Board (NEB) export licence is one key step in the approval process for these LNG projects, additional permits and approvals are still required.  The outstanding project approvals will focus on facility and construction approvals and environmental assessments from provincial and federal regulators, including upstream approvals for pipelines.

Under the National Energy Board Act, the NEB regulates the import and export of natural gas. When reviewing LNG export licence applications, the NEB assesses whether Canada’s supply of natural gas is large enough to easily accommodate our domestic needs as well as the proposed LNG exports, while having regard to the trends in the discovery of gas in Canada.[1]

Continue Reading

BC Government Releases Draft “Water Sustainability Act”

Posted in BC Hydro, Hydroelectric, Water
British Columbia
Selina Lee-AndersenMichael Weber

On March 11, 2014, the BC government introduced the Water Sustainability Act into the Legislature for first reading as Bill 18 (Bill).  If passed, the Water Sustainability Act will replace and modernize BC’s century-old Water Act.

As noted in our prior blog post, the introduction of formal legislation is the culmination of over four years of consultations and follows on the heels of a detailed legislative proposal (Legislative Proposal) on the statute released by the government on October 18, 2013.   Continue Reading

Québec Government and Alcoa Announce New Power Supply Agreement

Posted in Electricity, Hydroelectric, Québec Hydro-Québec, Transmission
Québec
Louis-Nicolas BoulangerMark McEwan

The Government of Québec and Alcoa announced today that they have entered into a new agreement for the supply of electricity by Hydro-Québec to Alcoa’s Bécancour, Deschambault and Baie-Comeau facilities.

The agreement secures power supply to the Bécancour and Deschambault smelters until 2030 and to the Baie-Comeau plant until 2036. In consideration for an undertaking by Alcoa to maintain a certain employment level and to invest a minimum of $250 million over the next five years (including $150 million dedicated to modernizing the Baie-Comeau facility), the agreement essentially provides for an improved electricity tariff for Alcoa’s plants reflecting the current conditions of the aluminum market.

Both Alcoa and the Government of Québec claim that the agreement secures approximately 3,000 jobs in the province. Alcoa has also agreed to support the Government’s electric transportation strategy by considering the Baie-Comeau facility as a potential source of aluminum for emerging technology applications, including aluminum-air batteries.

Press releases from Alcoa and from the Quebec government are available here and here.

New Procurement Process for Large Renewable Energy Projects

An Update

Posted in Energy – Renewable, Alternative and Clean, Feed-in-Tariff, FIT, Micro-FIT, FIT 2.0, Ontario Ministry of Energy, Ontario Power Authority
Ontario
Suzanne V. MurphyOmar SolimanStephanie Yarmo

We recently highlighted some important changes by the Ontario Power Authority (the “OPA”) to Ontario’s renewable energy procurement program for microFIT, Small FIT, Large FIT and Contract Capacity Set-Asides. Perhaps the most significant of these changes originated in an Ontario Ministry of Energy directive, issued on June 12, 2013, which instructed the OPA to replace Large FIT Projects (over 500 kW) with a new competitive procurement process to be developed based on feedback from municipalities, aboriginal communities, industry associations, the general public and other stakeholders. Continue Reading

Patent Law Year in Review: Oil and Gas (2013)

Posted in Energy – Conventional, Fossil Fuel
Timothy EllamSteven Tanner

The following article may be of interest to readers of this blog: Patent Law Year in Review: Oil and Gas (2013)

In 2013 the Federal Court experienced a surge in patent infringement actions. Whereas 48 patent infringement actions were filed in 2012, that number rose to 101 in 2013.[1] Part of that increase came about because of growth in the oil and gas patent infringement sector. Put simply, oil and gas companies were more aggressive at enforcing their patent rights in 2013. Read More.

BC Government Further Delays Introduction of LNG Tax Regime

Posted in Aboriginal, Energy – Renewable, Alternative and Clean, Liquefied Natural Gas
British Columbia

On February 5, 2014, the BC government announced that it is unlikely to release the detailed tax regime for the province’s proposed liquefied natural gas (LNG) sector before the fall legislative session.  In his address to the media, BC Finance Minister Mike de Jong explained that he expects the government to make the framework for the LNG tax public when he presents the provincial budget on February 18, 2014, but tax rates are unlikely to be released until legislation is tabled this fall.

In September 2013, the BC government cancelled the fall sitting of the legislature on the basis that it required time to draft the complicated LNG tax legislation.  As noted in our prior blog post, the government initially intended to finalize the applicable tax rules by the end of November but decided to delay providing details until completing further consultations with industry and LNG project proponents.

The BC government faces the challenge of developing a tax regime that will fund the promised 30-year $100 billion LNG “Prosperity Fund”, while ensuring that BC remains competitive with other jurisdictions seeking to export LNG.  However, BC’s LNG tax represents only one factor under consideration as LNG proponents prepare to make final investment decisions on their BC-based projects.  In addition, project proponents are continuing to navigate applicable environmental and regulatory processes and engage with potentially impacted stakeholders and First Nations.

At least ten LNG projects are currently planned in BC.  No final investment decisions have been made to date, but certain project proponents have indicated that they intend to do so before the end of 2014.  It remains unclear whether delaying the release of a detailed LNG tax regime will impact the ability of proponents to make final investment decisions according to their current project schedules.  We will continue to monitor the development of BC’s LNG tax and will update this blog as further details emerge.

McCarthy Tétrault launches Canadian Class Actions Monitor blog

Posted in Awards and Recognitions

For those who may be interested, McCarthy Tétrault has just launched its eleventh blog, Canadian Class Actions Monitor, at http://www.canadianclassactionsmonitor.com. The blog provides the firm’s views on class actions across Canada in sectors including securities, financial services, product liability, competition, healthcare and other areas of business. It also comments on the impact of class actions on Canadian businesses and the legal landscape, and shares our insights on specific class actions in Canada, related developments and cross-border influences

Please visit the blog!

Update on LNG-Related Activity in British Columbia: Regulatory and Contracting Advances

Posted in Energy – Renewable, Alternative and Clean, Liquefied Natural Gas, Regulation
British Columbia
Sven MilelliMichael Weber

British Columbia’s new liquefied natural gas (LNG) sector was particularly lively in the weeks since our mid-December update.  To keep our readers up-to-date, we have prepared the following brief summary of recent notable LNG sector activity. Continue Reading

Canadian Appeals Monitor wins Clawbie

Posted in Awards and Recognitions

We are delighted to share that McCarthy Tétrault’s Canadian Appeals Monitor blog has received a 2013 Clawbie (Canadian Law Blog Award) in the Practice Group Blog category, for its overall excellence in covering Canada’s appellate courts and cases.

2013 Canadian Law Blog Awards WinnerCanadian Appeals Monitor is one of McCarthy Tétrault’s 10 blogs covering a variety of practice areas. The Clawbies highlight in particular “This Week at the SCC” as “a strong regular contribution” that “really does take a national firm to pull off.”

We are also very proud of our partner Barry Sookman, whose eponymous Barry Sookman blog was a runner-up in the Clawbies’ Legal Technology category. Barry is the former co-chair of McCarthy Tétrault’s Technology Group and former head of its Intellectual Property Group, and is one of Canada’s foremost authorities in information technology and intellectual property law. He uses his blog to share his views on a wide range of copyright, Internet and information technology issues.

We look forward to more great blogging in 2014!

New HEC Chair in Energy Sector Management

McCarthy Tétrault partners with HEC Montréal’s new Chair in Energy Sector Management

Posted in Energy – Conventional, Energy – Renewable, Alternative and Clean, Power, Project Finance
Québec
Louis-Nicolas BoulangerWill Fyfe

We are delighted to announce our partnership with HEC Montréal’s new Chair in Energy Sector Management, which is held by renowned expert on energy policy Professor Pierre-Olivier Pineau. The new Chair is dedicated to advancing knowledge of energy issues, with a view to  optimizing energy systems and ensuring that there are adequate energy sources to meet society’s needs. In its role as partner to the Chair, McCarthy Tétrault will contribute a total of $100,000 over a five-year period. Our very own Marc Dorion will serve on the Chair’s advisory committee.

You can find our press release is here and the press release of HEC Montreal is here.

Hydro-Québec Distribution issues a call for tenders for 450 MW of wind power

Posted in Energy – Renewable, Alternative and Clean, Power, Procurement, Québec Hydro-Québec, Régie de l’énergie, Renewable Energy Approval, Wind
Québec
Louis-Nicolas Boulanger

Hydro-Québec Distribution announced today that it has issued a call for tenders for the purchase of a block of wind power produced by facilities with an installed capacity of 450 MW, composed of 300 MW for the Bas St-Laurent and Gaspésie─Îles-de-la-Madeleine regions and 150 MW for projects across Québec.

Continue Reading

On the Road to Emission Reductions: Policy Perspectives on BC’s Low Carbon Fuel Standard

Posted in Climate Change, Emissions Regulation, Energy – Conventional
British Columbia
Selina Lee-Andersen

As a major contributor of greenhouse gas (GHG) emissions, the transportation sector has been identified by policy makers as a sector in which significant emission reductions can be achieved. In British Columbia (BC), the transportation sector accounted for approximately 37.1% of the province’s total GHG emissions in 2011.  One of the policy instruments designed to reduce GHG emissions is the low carbon fuel standard (LCFS), which is intended to reduce the carbon intensity of transportation fuels measured on a life-cycle basis.  The LCFS also requires a reduction in the carbon intensity of life cycle emissions, which is intended to spur improvements in fuel production and refining efficiency, while promoting a broader range of fuel alternatives and innovation in vehicle technology to accommodate the growth in fuel options. Continue Reading

The BC LNG Sector Remained Active Through 2013: End-of-Year Update

Posted in BC Ministry of Energy, Mines and Natural Gas, Liquefied Natural Gas
British Columbia

British Columbia’s emerging liquefied natural gas (LNG) sector remained active throughout the second half of 2013.  Governments and proponents negotiated agreements and projects advanced through various regulatory processes.  Given continued interest in BC’s new industry, we prepared the following end-of-year update that summarizes notable LNG sector activity. Continue Reading

Ontario’s Long Term Energy Plan

George Vegh Discusses Ontario’s Long Term Energy Plan on the Agenda with Steve Paikin

Posted in Energy – Conventional, Ontario Power Authority, Policy, Power
Ontario
Will Fyfe

We are pleased to announce that George Vegh, the head of our energy regulatory practice, was recently invited to discuss Ontario’s new Long Term Energy Plan on the Agenda with Steve Paikin.  You can watch a recording of the program by clicking here.

For other posts on the Long Term Energy Plan please click here and here.

Ontario’s Long Term Energy Plan

The Government of Ontario Releases its Much Anticipated Energy Plan

Posted in Energy – Conventional, Ontario Power Authority, Policy, Power
Ontario
George Vegh

The Government of Ontario today released the province’s most recent Long Term Energy Plan (“LTEP”). A copy of LTEP materials can be accessed by clicking here.  As expected, the LTEP did not provide any drastic supply mix or policy changes from current plans. However, there are a number of changes that are worth noting.

Major Supply Changes:

  • As expected, there will be no new nuclear facilities;
  • A schedule has been set for the refurbishment of the Bruce and Darlington nuclear facilities, starting in 2016;
  • The target for non-hydro renewable capacity remains unchanged, but its implementation is extended from 2018 to 2021 – the goal is for procurements of 300 MW of wind, 140 MW of solar and 50 MW of bioenergy for each of 2014 and 2015; and
  • Demand reduction targets have increased to 10% of forecasted demand by 2025 (however, when combined with other types of conservation, the total conservation targets are not dramatically changed).

Major Policy Changes:

  • Placing greater reliance on regional planning, including municipalities and local communities – which could have a major impact on the development of large wind projects;
  • Avoiding commitments to new supply facilities unless and until necessary to do so; and
  • Providing annual updates on forecasts and achievement of goals.

EDITOR’S NOTE: please tune in to see George Vegh, the head of our energy regulatory practice, discuss the LTEP on the  Agenda with Steve Paikin tomorrow evening at 8:00 pm on TVO.  You can watch online by clicking here.  For other posts on the LTEP, including a post on George’s recently published paper, “Energy Planning: The Case for a Less Prescriptive Approach”, please click here.

Peeling Back the Layers of LNG Development: A Primer on the Regulatory Framework for LNG Projects in BC

Posted in Energy – Renewable, Alternative and Clean, Liquefied Natural Gas
Selina Lee-Andersen

In an increasingly competitive global market for natural gas, the race to export liquefied natural gas (LNG) to Asia is on.  With LNG attracting a premium price in Asia, Canada is vying with the US, Australia, Russia, East Africa and the Middle East to rapidly build the infrastructure required to move LNG to key markets in Japan, Korea, Taiwan, China and India.  With the commercial success of shale gas plays in the US, the nascent LNG industry in British Columbia is attracting significant interest from investors as an economically feasible venture. BC is particularly well suited to unconventional gas production, where shale is the most commonly occurring type of sedimentary rock in the northeast part of the province. The big shale plays in BC are Montney, Horn River, Liard and the Cordova Embayment. Continue Reading

BC Hydro Releases Final Integrated Resource Plan; Includes New Clean Energy Strategy to Support Renewables Sector and Promote Opportunities for First Nations

Posted in Aboriginal, BC Hydro, BC Ministry of Energy, Mines and Natural Gas, Energy – Renewable, Alternative and Clean
Sven Milelli

On November 26, 2013, the BC government confirmed its approval of BC Hydro’s Integrated Resource Plan (IRP). The IRP provides a 20-year outlook of how BC Hydro expects to reliably and cost-effectively meet the anticipated future electricity needs of the province through conservation and acquisition of sufficient generation and transmission resources. Continue Reading

BC Government Releases 10 Year Plan for BC Hydro; New Rates to Fund Reinvestment and Debt Reduction

Posted in BC Hydro, BC Ministry of Energy, Mines and Natural Gas, BC Utilities Commission
British Columbia
Sven Milelli

The BC government has announced a 10 Year Plan for BC Hydro in which the province aims to minimize rate increases while allowing BC Hydro to reinvest in its aging assets and infrastructure.  As we noted in a prior blog post, Bill Bennett, Minister of Energy and Mines and Minister Responsible for Core Review, previously indicated that BC Hydro rate increases were imminent in view of the ongoing refurbishment of BC Hydro’s heritage generation facilities. Continue Reading

BC Carbon Offset Program to be Folded into Climate Action Secretariat as Pacific Carbon Trust Winds Down

Posted in Climate Change, Emissions Regulation
British Columbia
Selina Lee-Andersen

On November 19, 2013, B.C.’s Minister Responsible for Core Review, Bill Bennett, announced that the province’s carbon offset program will be folded into the Ministry of Environment’s Climate Action Secretariat (CAS) while the Pacific Carbon Trust (PCT) is wound down. Minister Bennett indicated that the closure of the PCT will result in savings of approximately $5.6 million annually, part of the core review being undertaken by the provincial government to find $50 million in cost savings to meet the promise of a balanced budget in 2014. The transition of the carbon offset program to CAS will also mean a reduction in staff from 18 to 5. Continue Reading