Apr 29, 2010
By Jim Middlemiss, Financial Post
announcement last month that Alberta would roll back its oil and gas royalty
rates to 2007 levels is only one of the many developments brewing on the legal
front that will impact the energy industry....
competitiveness review for natural gas and conventional oil unveiled March 11
by the Ed Stelmach government reduced the ceilings on oil- and gas
5% front-end rate on natural gas and conventional oil will become permanent
effective January 1, 2011. As well, the maximum rates drop to 40% on
conventional oil from 50% and 36% for natural gas.
applaud the changes. Robert Lehodey, a corporate lawyer at Osler, Hoskin
& Harcourt, said the move is positive because the “government is finally
communicating with the industry.” He said the previous royalty regime was
“concocted” by a panel that “didn’t have industry expertise on it.”
area of the gas business that is driving legal optimism is shale gas. ... The
oil sands continues to be a big driver of legal work, both from a
corporate-commercial and regulatory standpoint and no one sees that letting up
anytime soon. ... Lawyers are also bracing for more changes in the regulatory
environment. ... [and N]ative issues are playing an increasing important role
in the development of the energy patch.
a dark side to all this development. Rob Desbarats, a business lawyer at
Osler, warns that environmental and investor backlash is on the rise and
companies will face greater scrutiny from activist shareholders. “Things are
getting tougher,” he said.
final bugbear for the energy patch is a proposal by the federal government to
create a national securities regulator. Mr. Lehodey said the concern is that
under a national regulator, Alberta’s oil-and-gas expertise and
“entrepreneurial spirit and knowledge” will be overshadowed by the larger
Ontario jurisdiction and the province’s regulatory expertise will get “morphed
into a mentality and approach that is by comparison overly administrative.”