Canadian Lawyer

LEGAL REPORT/ENERGY LAW "You have good old-fashioned property, negligence, nuisance, those sorts of common law issues and on the regulatory side of things you are trying to put in place a regulatory regime that is going to police those activities in sort of a fast-changing technological environment." WILLIAM LAURIN, LAWSON LUNDELL LLP and has the power to regulate its development though typically it is an area of provincial and territorial jurisdiction. While Ottawa may have a role to play in the development of regulations around fracking, Grant expects the provinces will continue to take the lead in this area. "Largely it is going to be a provincial solution, that is certainly how it has rolled out to date in Canada, if anything has been done, it has been at the provincial level and that has how it has happened in the U.S. where it has been a state-by-state approach to things." Just as fracking extraction is more developed and wide- spread in the U.S., so is environmental criticism and political opposition to the process where the focus is on the potentially harmful effects of the chemicals on water supplies. The high stakes involved, trillions of cubic feet of natural gas that could be exploited across Canada, prompted the Canadian Association of Petroleum Producers this February to release six "operating principles" or voluntary processes it wants natural gas companies to follow when engaged in hydraulic fracking. The most important of the recommendations is that drillers disclose publicly all chemicals used in the fracking process, something environmentalists have long called for. "CAPP placed the guidelines out there and the industry knows that [regulations] are coming or could be coming and they are trying, I think, to head it off by strongly suggesting that people comply with these suggestions that they have," says Grant. "But at this stage there is nothing mandatory that they do have to comply with." The environmental movement has hydraulic fracturing in its sights, notes Grant, and its power should not be dismissed, PROFESSIONAL DIRECTORY Supreme Court of Canada Counsel and Agency Services Henry S. Brown, QC Brian A. Crane, QC Guy Régimbald Graham Ragan Matthew Estabrooks Eduard J. Van Bemmel, Law Clerk pointing to the recent success in derailing of U.S. government approval for the Keystone XL pipeline, which is intended to carry Alberta's oil to the Gulf of Mexico. "The concern here is with fracking, if they don't get ahead of it and something does happen, the environmentalist movement is quite active and it could be quite a barrier to entry to doing things." Many legal issues have to be addressed and some are unknown and could include water rights and aboriginal rights, says the Stikemans lawyer. "To date, it has been the aboriginal land claims that have been the issue but they have not got into the environmental side." So far, hydraulic fracturing has been more of a PR battle than a legal one, and to date, the energy industry looks to be losing in the court of public opinion. An Environics poll released in February for the Council of Canadians found that 62 per cent of the Canadians polled supported a moratorium on all fracking for natural gas until all federal environmental reviews are complete. For its part, CAPP acknowledges that hydraulic fracturing is controversial and is now a subject of potential legislation in provinces with little to no experience with oil and gas extraction. CAPP wants its oil producer members to be seen as "transparent to the public, especially in jurisdictions that might not be famil- iar with oil and gas development like Quebec, New Brunswick, and Nova Scotia," says CAPP spokesman Travis Davies. "There are places that haven't seen any onshore development ever, so obviously people have concerns and questions and I think it is important that our members get out there and talk about what they are doing and ally some of those concerns." William Laurin, an oil and gas lawyer with Lawson Lundell LLP in Calgary, says legal issues around fracking can be divided into above-ground and below-ground concerns. On the sur- face, the larger footprint of fracking means that producers have to deal with noise, dust, water usage, and disposal issues. "You have good old-fashioned property, negligence, nuisance, those sorts of common law issues and on the regulatory side of things you are trying to put in place a regulatory regime that is going to police those activities in sort of a fast-changing technological environment. So that is the challenge for the regulators to sort of keep up with the rate and magnitude of all the work that is going on." As well, resource companies have to worry about the 160 Elgin StreetSuite 2600OttawaOntarioK1P 1C3T 613-233-1781 montréalottawatorontohamiltonwaterloo regioncalgaryvancouverbeijingmoscowlondon below-ground aspects of law including rules governing adjoin- ing mineral owners and groundwater issues. "There is lots of concern about groundwater sources, those sorts of things, but there are also more realistic concerns about adjoining mineral 52 A PRIL 2012 www. CANADIAN Lawyermag.com ntitled-1 1 12-01-17 10:50 AM

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