In an increasingly competitive global market for natural gas,
the race to export liquefied natural gas (LNG) to Asia is on.
With LNG attracting a premium price in Asia, Canada is vying with
the US, Australia, Russia, East Africa and the Middle East to
rapidly build the infrastructure required to move LNG to key
markets in Japan, Korea, Taiwan, China and India. With the
commercial success of shale gas plays in the US, the nascent LNG
industry in British Columbia is attracting significant interest
from investors as an economically feasible venture. BC is
particularly well suited to unconventional gas production, where
shale is the most commonly occurring type of sedimentary rock in
the northeast part of the province. The big shale plays in BC are
Montney, Horn River, Liard and the Cordova Embayment.
On paper it seems straightforward enough – extract natural
gas from BC's abundant shales in the northeast of the province,
transport it to the BC coast, convert it into liquid form, and
place it on a tanker for delivery to key export markets. The
reality is that the permitting process for the construction and
operation of LNG facilities and upstream infrastructure is a
complex affair which entails a multitude of approvals at all stages
of the project, including:
federal and provincial environmental assessment approvals if
the proposed project meets certain thresholds;
export license from the National Energy Board for LNG headed to
upstream petroleum and natural gas tenures to facilitate
exploration and development activities;
permits for activities relating to the development,
transportation and processing natural gas as well as the
construction of related infrastructure; and
other land use, transportation and environmental approvals from
both federal and provincial regulatory authorities.
Another layer of complexity that is added to the regulatory mix
is the requirement for consultation with stakeholders, particularly
with First Nations. Within the context of major resource projects,
the duty to consult with First Nations is usually triggered at the
start of the regulatory review process. While the duty to consult
rests with the Crown, the procedural aspects of this obligation is
often delegated to the project proponent. This means that the
proponent must be pro-active in engaging with local First Nations
and discussing their concerns in a meaningful way.
As LNG projects advance, key issues for BC include: (i) the
scope of the proposed tax regime for LNG exports, which is expected
to be unveiled before the end of 2013; (ii) securing First Nations
support for upstream activities and the construction of LNG
facilities and infrastructure in their traditional territories;
(iii) the management of air quality issues in the Kitimat air shed
area; and (iv) meeting BC's emission reduction targets.
following article examines the current policy and regulatory
framework for the development of LNG projects in BC, as well as
some of the challenges facing project proponents. As you learn more
about LNG, you will discover that there are many layers of policy,
economics and regulation underlying the development of LNG projects
in BC. Given the myriad issues involved in getting an LNG
project off the ground, the race to export LNG will need to be run
as more of a marathon than a sprint to the finish line.
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The Government of Alberta recently announced a number of policy changes that will impact the Alberta Electricity Market, composed of its generators, transmitters, distributors, retailers, electricity consumers and wholesale electricity market.
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