Cleantech Companies Vie for Limited Funding
by Kevin Marron

As new initiatives vault Canada into a leadership role in the burgeoning field of clean technology, lawyers are looking forward to future growth in a sector that abounds in complex legal issues.

But some are concerned that this growth could be stunted if a government focus on cleaner fossil fuel projects funnels funding away from renewable energy projects.

Greg McNab, a Toronto-based partner at Baker & McKenzie LLP and co-head of the firm's climate change group for Canada, says he's excited about the prospects for carbon capture and storage (CCS), a set of technologies for removing greenhouse gas from smokestacks and burying it underground, which have been boosted by two recent developments – a move by the Canadian Standards Association to create the world's first set of CCS standards, and a new federal government policy that will force coal-fired generating stations to adopt the technology over the next ten to fifteen years.

McNab says Canada is now seen as a pioneer and world leader in CCS which is gaining traction as a commercially viable, simple and measurable way of mitigating the environmental impact of energy from traditional fuel sources. He says the new standards will likely lead to more CCS projects because “it will be easier for people to evaluate what they have to do in order to run in compliance with the law.”

But Aaron Atcheson, a London, Ont.-based partner at Miller Thomson LLP observes that some players in Canada's cleantech sector – particularly those involved in wind or solar powered energy solutions – are worried that too much emphasis is being placed on CCS projects, which have attracted federal and provincial funding commitments of more than $3 billion. “They see it mostly as a distraction and really a competitor for the government funding they're trying to get,” he says, noting that CCS is generally viewed as a medium-term solution to climate change, whereas alternative energy sources offer more long-term solutions.

So what does all this mean for lawyers and law firms? Do these new developments herald what one cleantech lawyer has described as “a gold rush for lawyers” or is such enthusiasm a little premature?

It's important to remember that the cleantech industry is still in its infancy, says environmental law specialist Rick Van Beselaere, a partner at Balfour Moss LLP in Regina, Sask., who predicts, however, that it will grow to the point where it will become part of the practice of most commercial lawyers.

CCS is of huge interest to the oil and gas sector in western Canada, but relies heavily on government funding and on investment by big industry players that want to reduce their own carbon footprint, Van Beselaere says. While there are relatively few current projects, mostly in a demonstration stage, they are massive and very expensive. What makes these projects particularly interesting for lawyers is that they involve many different partners and complex legal issues involving risks, liabilities and compliance with evolving regulations and standards. “Lawyers are going to be very busy with these contracts,” he says.

But the growth of CCS and the legal work it will entail will be dependent on government funding and whatever investments fossil fuel-based industries want to make or are forced to make by government regulations, says Atcheson. He says there will also be work generated by companies developing the various technologies involved in carbon capture, transportation and storage, but this too will be dependent on big projects getting underway. “It will depend on how our federal greenhouse gas strategy develops,” he says.

Meanwhile, Atcheson says, his firm and others are doing a lot of work with wind farms and other renewable energy developers, a sector that is gaining confidence in the private sector but is also dependent on government programs. “As long as the programs are there, those will continue to thrive,” he says.

Kevin Marron is a freelance business and legal-affairs writer.