16 LEXPERT
|
2016
|
WWW.LEXPERT.CA
PHOTO:
SHUTTERSTOCK
Green
Mandate,
Red Tape
Energy projects that have
taken years to reach approval
stage now face an additional
obstacle — new regulation
imposed by a federal
government with a powerful
environmental mandate
By Sandra Rubin
RISK IS A FUNNY THING. It can come from the most unex-
pected places. When you think about the risks faced by the large
energy companies, you probably think of political instability, the
risk of not being able to replace dwindling reserves with new ones,
commodity-price volatility, the risk of rising operating costs, the ac-
cessibility of capital. But who thinks of plain-vanilla process risk?
Energy companies doing business in Canada do. In fact, the sin-
gle most important issue for the corporations that sponsor the large
multi-billion-dollar projects that cross municipal, provincial and
First Nations land is regulation. It doesn't matter whether it's oil and
gas, electricity or even wind farms. Companies can spend many mil-
lions of dollars on planning a project; what they can't do is be sure it
will get across the regulatory finish line.
e paralysis stems from the lack of a single cohesive regulatory
regime in a large, fractious federation of provinces, peoples and poli-
tics that oen have competing interests. "Today, it has become easier
to do a project in an emerging market than to do a complex project
in Canada," says Erik Richer La Flèche, a partner at Stikeman Elliott
LLP in Montréal. "e regulatory risk — and I'm talking about the
pipelines, the transmission lines — across borders is quite great."
In other words, Canada, a country built on energy and natural
resources, is one of the slowest in the world in getting energy to
market. Consider this: the original documentation for the $7.9-bil-
REGULATORY BURDEN
