Running pipelines from Alberta across the border into the U.S. has its challenges — not only from a business perspective, but a legal one as well. The legal environments on both sides of the border are similar, but the devil is always in the details, and the legal teams have to work together to keep business running smoothly, no matter where they’re located.
Enbridge Inc. operates the world’s longest crude oil and liquids pipeline system in Canada and the U.S. It has stretched across North America for 55 years, delivering more than 2 million barrels of crude oil and liquids per day. Enbridge also owns and operates Canada’s largest natural gas distribution company.
“We have a significant number of liquids assets in the U.S.,” says Joel Kanvik, senior counsel and assistant secretary with Enbridge Energy Company, Inc., which supports operations of the liquids pipeline group in the U.S. “The basic pipeline system that comes into the U.S. from Canada has about 1,900 miles of pipe in the U.S., so I’m responsible for supporting [the pipeline group] and everything they need, which basically means one day is different from the next.”
His practice touches on several areas of law, including contract review and negotiation, advising on public affairs, dealing with regulatory matters at both a federal and state level, and managing litigation when Enbridge finds itself involved in suits both as a plaintiff and defendant. He also handles much of Enbridge’s U.S. intellectual property matters and business development initiatives, as well as mergers and acquisitions. He is one of two attorneys in the operations division for liquids pipelines in the U.S. There are about a dozen lawyers in the various divisions across the U.S.
Kanvik co-ordinates frequently with the Canadian legal teams, especially on large projects such as pipelines extending from Edmonton into the Chicago area. “I’m not practising Canadian law and they’re not practising American law. We respect the border as a good dividing line of our responsibilities, but in order to get the project approved, in the ground, and operational on a budget and on a timely basis, I have to have at least a rudimentary understanding of what the laws are in Canada, and the reverse is true,” says Kanvik. “We need to make sure we have our details lined up and in agreement.”
When you delve down into those details, there are some significant differences between the two legal systems. The National Energy Board in Canada has a much larger role in regulating the pipeline system in Canada than the Federal Energy Regulatory Commission does in the U.S. However, if you change the commodity from crude oil to natural gas, that disparity is much smaller. But there are also differences in terms of litigation, such as evidentiary rules.
Recently, Enbridge permitted a number of large pipelines as an expansion of its system. While some states allow imminent domain authority by statute, others, like Minnesota, require you to file an application with a public utilities or public services commission to get permission to build a pipeline and then go through a separate process to get site authority.
“In Minnesota we’re asking for permission every step of the way,” says Kanvik. “On the natural gas side, our FERC regulations are all-encompassing. If we get permission from FERC we can build it and use imminent domain authority at a federal level. With oil it’s a state-by-state process and we have to comply with the laws at each state.”
The company uses outside counsel in each of the state jurisdictions where its assets are located. If there happens to be any litigation, having local counsel is critical. The laws on just about everything vary from state to state, from rules of evidence to statutes of limitations to regulatory matters. Enbridge also uses outside counsel for federal matters such as environmental compliance.
Across the border in Canada, there are some of the same challenges, but a different regulatory environment. As senior legal counsel in the corporate law department, Tyler Robinson’s role is to provide day-to-day legal advice to the company’s range of internal clients, from human resources to international to business development — and everything in between. He also handles domestic and international mergers and acquisitions.
“I say to this day that I was ultimately tricked into it by the writers of L.A. Law — Arnie Becker sure seemed to have an exciting lifestyle,” he says. But, for Robinson, a career in law always interested him. He likes the idea of solving complex problems and being right in the thick of things, whether that meant a big deal or a high-profile trial. And he gets his fill at Enbridge.
The corporate law group includes six lawyers and three administrative assistants, but Enbridge employs lawyers in its various business divisions across Canada. “We do use outside counsel, but we try to keep as much inside as we can — just when we get into larger projects where we need extra manpower or a specialty we don’t have in-house,” says Robinson.
Pipeline lawyers on both sides of the border have a lot of interaction because projects have Canadian and U.S. aspects and different regulatory regimes, so while the purpose is the same, the approach can be quite different. But there are also day-to-day matters to deal with such as customs issues related to shipments, NAFTA issues, and cross-border credit issues.
On the international front, Enbridge has an active consulting group that travels around the world giving advice on safety and how to run pipelines in different jurisdictions. “We end up dealing with a lot of intellectual property issues, things like licensing and copyright and even web sites, where people try to claim our web site name,” says Robinson. “A lot of interesting stuff happens abroad, and it can be tricky in some of those foreign jurisdictions.”
The biggest challenge for Kanvik in the U.S. is the current climate around energy. “We have a fossil fuel-based economy,” he says. “We do, Canada does, the world does, and we don’t have an economically viable alternative to that yet, and we have all these groups trying to prevent us from putting these projects in, or they want a piece of the pie. Balancing all of those interests plus the interests of our customers, which are based on their own financial health, and getting a project in on a timely basis, that’s a significant challenge.” The company’s CEO has stated that Enbridge is aiming to be a carbon neutral company by 2015.
For Robinson, the challenges of the job are somewhat different. While he enjoys the variety of the work, it can also be a double-edged sword. “In private practice you get an opportunity to specialize, but here you need to be a jack of all trades and be relatively comfortable diving into issues and areas of law that you might not be all that familiar with and [you] have to bring yourself up the curve relatively quickly.”
On the international side, you require at least a rudimentary grasp of the laws in foreign countries, but also — and perhaps more importantly — an understanding of the cultural differences that might influence how counterparties approach a negotiation or dispute. Taking a North American view doesn’t always work so well in certain jurisdictions.
But these challenges allow Robinson to play a significant role on complicated files from start to finish — one that is appreciated by the legal group and the business. That’s something he didn’t really experience in private practice. “It’s rewarding to have a job I look forward to coming to.”
For Kanvik, he’s seen the company grow significantly over his nine years, and he’s played a role in acquiring a lot of the assets Enbridge now owns in the U.S. “Being part of that, being on the cutting edge of what the company is doing and where it’s looking to go is very exciting,” he says. “Everyone looks at energy as being a very specific, defined, possibly esoteric area of law. It really is not — our business encapsulates a lot of the different disciplines of law and brings them all into one situation.”
Enbridge is not only expanding its systems to deliver fossil fuel, it’s continually looking at alternative fuels. “We have a couple of wind farms, and we invest in fuel cell technologies and other alternative fuels,” says Kanvik. “So there’s always the possibility in the future that opportunities with Enbridge could present themselves to go into a different part of the energy industry.”