Author(s):
Sander Duncanson
Oct 15, 2021
Sander Duncanson, a partner in Osler’s Regulatory, Indigenous and Environmental Group, recently spoke with Lexpert TV’s Kavita Musty about Canada’s ongoing energy transition. They discussed challenges with upgrading existing infrastructure, what governments can do to encourage the transition to a low-carbon future, the value of a cross-disciplinary team of experts and more.
“Transitioning towards a net-zero carbon future will require significant changes all along all parts of the energy value chain,” Sander says. “To make the types of transition that are being talked about happen, that's going to require potentially repurposing significant existing infrastructure, and it will require new technologies to allow this all to happen.”
Advice for businesses
Of course, such a massive and complicated undertaking can be daunting for companies looking to get involved in the energy transition. But Sander sees several potential benefits for those willing to take risks, carve out roles for themselves and adapt their current assets and expertise to the evolving energy space.
“What I've seen in the last months and over the last year is that the companies who did begin exploring opportunities early, even when there were many uncertainties around those opportunities, those companies are now at the forefront of the energy transition, because those companies have helped shape the government incentives and initiatives that have been rolled out, and those companies also have the projects that are the farthest advanced, and therefore the most likely to secure government funding and private capital.”
With the pace of change in the industry and the complexity and cost of upgrading infrastructure, Sander suggests those companies should “invest in dedicated internal resources to understand where opportunities might arise within your particular business, and then to work with financial and legal advisors to assess the specific risks associated with those opportunities.”
Government’s role in energy transition
The federal and various provincial governments have provided substantial supports to the effort, and Sander thinks further financial incentives may help to quicken the pace of transition. Still, a larger roadblock may have to do with existing legal frameworks in the industry.
“One of the key issues that we're seeing in my space right now is that the regulatory and tax frameworks that exist today don't adequately address some of these new technologies and new developments, and that, in some cases, is impeding development,” he says.
Particularly in Western Canada, newer projects in blue hydrogen, geothermal energy and others take place under older regulatory structures that did not specifically consider them and may, as a result, require updating.
“To the extent that governments can provide regulatory clarity for those types of new technologies, that would certainly help facilitate new investment.”
Other regulatory risks related to environmental and Indigenous laws can hinder the type of large-scale investments necessary for Canada’s energy transition but, Sander says, “in my experience, those risks can be successfully managed in most cases.”
While a full transition toward clean energy may still be several years in the future, with considerable questions still to be answered and challenges to be tackled in the meantime, the sector’s transformation is well underway and there is plenty of opportunity for businesses to join in the effort.
“What I've seen is that it may pay to be proactive, even in the face of uncertainty.”
Watch the full interview with Sander at Lexpert TV.