National Energy Board Cuts Long-term
Outlook for Oil Prices and Production
The National Energy Board has revised down its long-term outlook for oil prices and Canadian production in the face of lower global industry costs and stricter environmental regulations.

In an update released Wednesday [October 26^th], the regulator projects inflation-adjusted oil prices rising to US$68 a barrel by 2020 and US$90 by 2040, $12 and $17 a barrel lower, respectively than in its January report.

"A lot of it is the ability of oil production to be sustained at lower prices," said Shelley Milutinovic, chief economist at the NEB. "There's an expectation that somewhere between 40 and 60 dollars a barrel, you can get a lot of oil production around the world," she said.

The lower prices are expected to translate to lower long-term production for Canada, where costs are comparatively high. Read The Vancouver Sun article.

Feds "Stand Behind" LNG Decision, Brace for
First Nations Legal Challenge
Environment Minister Catherine McKenna expressed confidence [October 26^th] in the federal government's support for BC's liquefied natural gas industry on the eve of a major legal assault on Ottawa's position.

First Nations leaders and an environmental group are assembling at the Federal Court of Canada in Vancouver to file a series of actions to challenge Ottawa's decision last month to approve the $11.4-billion Pacific NorthWest LNG proposal.

The critics will base their challenges on both Aboriginal title and environmental grounds.

"We stand behind the science in this decision," McKenna told Postmedia, noting the extra time her department took to assess the risks before approving the project, subject to 190 conditions. "If legal action is taken we'll certainly consider what next steps need to be taken."

The event Thursday [October 27^th] morning will involve Aboriginal leaders and hereditary chiefs from a number of northern First Nations, as well as Union of BC Indian Chiefs Grand Chief Stewart Phillip and a representative of the SkeenaWild Conservation Trust. Read The Vancouver Sun article.

British Columbia Utilities Commission Denies Approval for
Neighbourhood Energy Agreement
In a September 26, 2016 decision, the British Columbia Utilities Commission (BCUC) confirmed earlier decisions denying approval of a "Neighbourhood Energy Agreement" (NEA) in downtown Vancouver (Northeast False Creek and Chinatown). The NEA is similar to a franchise agreement as it gives the proponent the exclusive right to operate in a defined area, including rights to locate and access facilities on municipal property.

The subject application from Creative Energy Vancouver Platforms Inc. (Creative Energy) sought approval for a NEA with the City of Vancouver (Vancouver), to provide Creative Energy with an exclusive franchise to supply a district energy system (DES) in the subject neighbourhoods. In its Application, Creative Energy also sought approval of a Certificate of Public Convenience and Necessity, a Connection Agreement and various rate parameters which define a methodology upon which a future rate application will be based.

The project at issue is called a Low Carbon Neighbourhood Energy System and is proposed to proceed in two phases. Phase 1 consists of a hot water piping network connected to Creative Energy's existing natural gas fuelled steam system, through steam to hot water conversion stations. Phase 2 envisions a switch to a fuel source that produces less greenhouse gases than natural gas. Read article by David Stevens with Aird Berlis LLP.

The New Federal Carbon Pricing Policy – Roadmap to a
Pan-Canadian Energy Strategy?
Earlier this month the Federal Government took two major steps towards the implementation of its climate change policy – ratification of the Paris Agreement and a proposed pan-Canadian benchmark for carbon pricing to be implemented by 2018. These changes both address prior commitments and raise outstanding legal and policy issues.

Background to the New Federal Carbon Pricing Policy
At the 2015 United Nations Climate Change Conference in Paris, France ("COP21"), that resulted in the Paris Agreement, Canada committed to a 2030 target of a 30% reduction below 2005 levels of emissions [discussed by BLG in 2015 Year in Review: Top 10 Legislative, Regulatory and Policy Changes of Import to the Canadian Oil and Gas Industry]. In the March 3, 2016, First Ministers' Meeting in Vancouver, British Columbia, the First Ministers resolved in a Vancouver Declaration on Clean Growth and Climate Change (the "Vancouver Declaration"), to develop a concrete plan to achieve Canada's international commitments that includes federal action through a Pan-Canadian Framework for Clean Growth and Climate Change, to be implemented by early 2017. Working groups were set up in four areas, including carbon pricing mechanisms, to provide reports by September 2016. The First Ministers also agreed to meet in the fall of 2016 to review progress on their Canadian Energy Strategy. The Working Group on Carbon Pricing Mechanisms produced its report. The Government of Canada adopted the Pan-Canadian Approach to Pricing Carbon Pollution.

Read the full article by Chidinma Thompson, Alan L. Ross and Matti Lemmens of Borden Ladner Gervais LLP.

As Canada Negotiates New Softwood Pact,
Complaints of BC Subsidies Resurface
US group aims to limit competition from our wood in American market
The way long-time conservationist Vicky Husband sees it, American negotiators working on a new softwood lumber agreement with Canada are right to complain that the logging industry is subsidized in British Columbia.

"They're absolutely right," Husband said in a phone interview.

BC is responsible for about half of Canada's production of softwood, which includes spruce, pine, fir, hemlock, cedar and other trees. Lack of government oversight, allowing excessive cutting and charging low stumpage fees for logging trees on public land in the province all amount to subsidies, Husband said. Read the Tyee article.

Substantive Changes Coming to Contaminated
Sites Regulation – November 1st, 2017
The Stage 10 (Omnibus) amendments to the Contaminated Sites Regulation and related consequential amendments to the Hazardous Waste Regulation and Organic Matter Recycling Regulation have been approved. The amendments made to the regulations are summarized in an Update on Contaminated Sites (PDF). Following a 12 month transition period, these changes will come into effect on November 1, 2017. Administrative Bulletin 3 (PDF) prescribes the administrative process for legal instrument applications being submitted during the regulatory transition period. The Omnibus amendment updated over 8,500 environmental quality standards. Although every effort was made to ensure that the amended standards were accurate and correct, invariably some typographical, transcription and other errors are inevitable in such a large revision. An Erratum (PDF) has been released that lists currently known errors in the Stage 10 amendment. The Errata will be updated and reissued throughout the year of transition as new errors are identified. All errors identified during the year of transition will be corrected in a final "house-keeping" amendment to be made to the Regulations immediately prior to the new Omnibus CSR standards coming into force on November 1, 2017. Should you identify additional errors, or suspected errors, in addition to those contained in this erratum please notify the Environmental Emergencies and Land Remediation Branch at site@gov.bc.ca. Read more on the government website.

Environmental Appeal Board Decisions
There were two Environmental Appeal Board decisions released in the month of September:

Wildlife Act

• Derek Pitt vs. Deputy Director of Fish, Wildlife and Habitat Management [Final Decision – Appeal Dismissed; Application for Costs – Denied]
• Kulwinder Singh Gill; Avninderjit Kaur Gill v. Assistant Regional Water Manager [Stay Decision – Denied]

Visit the Environmental Appeal Board website for more information.