mccarthy tétrault llp / mccarthy.ca gordon nettleton regulatory issues facing canada’s oil and...
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McCarthy Tétrault LLP / mccarthy.ca
Gordon Nettleton
Regulatory Issues Facing Canada’s Oil and Gas Industry
McCarthy Tétrault LLP / mccarthy.ca
The Background
Changing Market Dynamics¬Gas
¬ Cdn gas supply abundant from technology (shale gas exploitation)
¬ Prolific trend in US ¬ Geographic proximity to US markets causes
Cdn exports to decline and US supply to serve Cdn markets
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The Background
Changing Market Dynamics¬Crude
¬ Cdn crude supply increasing¬ US crude markets remain most attractive ¬ Constrained access adversely affects net
backs to industry and Cdn governments ¬ US domestic supply on the rise but unlikely to
back out Cdn crude types
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The Background
¬ Response to Market Changes:¬ New infrastructure required to access
alternative tidewater markets¬ Need for Canada to position itself as being able
to serve new markets.
¬ Market Access & Diversification ¬ Largest issue facing Canada’s O&G Industry
¬ Is Canada up this challenge?
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Solving The Market Diversity Challenge
The Requirements
¬Asian marketplace demands¬ Export supply certainty & security¬ Commercial development & operational certainty¬ Fiscal regime certainty¬ Regulatory certainty
¬Opportunity to serve Asian markets is limited¬ Canada is competing with worldwide market
participants.
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Solving The Market Diversity Challenge
Policy/Regulatory Initiatives
¬Legislation¬ Process Changes:
¬ export authorizations ¬ Redefinition of public involvement role ¬ Changes in role/scope of regulator decisions¬ Imposing time limitations on processes
¬ Effectiveness of changes still unclear
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Solving The Market Diversity Challenge
Policy/Regulatory Initiatives
¬Policy¬ Government buy-in essential & unprecedented¬ Discussions are beginning (finally!) around
national energy strategy¬ Will not work without involvement and role for
First Nations affected by new development¬ Learn from Canada’s success stories (e.g. Kitimat
LNG, BxM 500 kV)¬ Commercial structures exist that promote win-win-win
opportunities
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Regulatory Proceedings
¬ Involves impartial public interest decisions
¬ Decisions are based on presented evidence
¬ Concurrent Processes (with settlement)¬ Litigated outcome provides some certainty¬ Common Objective: avoid negative outcomes:
¬ Project denial, delay/appeal, cost increase
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Strategies to Manage Risks During Regulatory Proceedings
Regulatory Objectives:
¬Proponents: ¬ demonstrate evidence supports the relief sought
¬Opponents:¬ Test/present evidence to
¬ Raise doubt regarding the merits of the project¬ Raise doubt about the credibility of the Proponent and the Crown¬ Improve settlement bargaining position¬ Establish an evidentiary for appeal purposes
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Top 10 Strategies For Proponents
1. Build a Strong Evidentiary Record ¬ Focus on Consultation Record
2. Credibility of Witnesses¬ Familiarity with case, issues and comfort with
litigation process
3. Regulators and “Tough” Decisions¬ Avoidance strategy¬ Has the proponent taken all reasonable steps to
avoid opposition?
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Top 10 Strategies For Proponents
4. Know the Case(s) Against You¬ How do you intend to position your case vis a
vis theirs? ¬ What additional evidence do you need?
5. Develop a Litigation Resource Plan ¬ Who is doing what & when? ¬ Advanced Planning is a key for success
6. Witness Training¬ Comfort in the hearing room is key for success
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Top 10 Strategies For Proponents
7. Co-ordination with the Crown¬ Aboriginal risks lie with the proponent AND the
Crown. ¬ Ensure open lines of communication exist with
Crown¬ Roles and expectations must be known in
advance. ¬ Who is doing what, when? ¬ What role will the Crown take in the hearing
process?
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Top 10 Strategies For Proponents
8. Have a Public Relations Plan ¬ Do not leave this to the lawyers!
9. Assess Need/Impact of Cross Examination ¬ On what basis will you credibly attack:
¬ Elder stated oral evidence¬ Positions taken regarding strength of claim
¬ Cross examination has risks!
10. “Backwards First” Strategy¬ Know your final argument and work from there!
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