Jul 19, 2016
A recent court decision to repeal the Northern Gateway pipeline project has legal professionals concerned about a ripple effect within their industry. As outlined in an article by Sandra Rubin in Lexpert, last month’s Federal Court of Appeal ruling, combined with more stringent environmental policies, has forced strategists in the legal sector to adapt. Shawn Denstedt, partner in Osler’s Energy (Oil & Gas) Practice Group, explains the widespread impact of such rulings.
“I don’t think the importance can be underestimated,” Shawn tells Lexpert. “One, just the nature of the projects themselves generates significant legal work, whether it’s the regulatory process, or the financing, joint-venture agreements, participation agreements, the issuance of bonds to finance the project, ongoing negotiations with Aboriginal groups and the government and others.
“The disappearance of those kinds of projects would be a material hit to law firms that act for those major products – including the loss of the construction and development that flows out of that. It would be a huge hit.”
Shawn also says such rulings could negatively impact Canada’s perception among potential foreign investors, who may worry about Canada’s regulatory process, which he says is a “more insidious hit.”
But despite the uncertainty, Shawn believes Osler has positioned itself well to navigate through the volatile conditions by taking “advantage of the technology sector.”
“What we’re seeing in energy is a mid- to low-price environment in the near to mid-future, so companies are trying to find technologies to extract costs from the equation so their profitability will increase,” Shawn says.
Find out more by reading “Court, regulatory challenges stalling pipelines” published in Lexpert.