British Columbia's oil and gas regulator, the BC Oil &
Gas Commission (Commission), recently enacted the Liquefied
Natural Gas Facility Regulation (Regulation) pursuant to
section 111(2) of the Oil and Gas Activities Act. The
Regulation is the latest in a series of regulatory developments
aimed at formalizing and clarifying the provincial government's
Liquefied Natural Gas (LNG) Strategy that was released in February
From 2010 to 2014, LNG-related matters in British Columbia were
governed by the former Pipeline and Liquefied Natural Gas
Facility Regulation. The LNG-specific provisions of that
regulation were removed by amendment on July 21, 2014 and expanded
upon in the new Regulation. The former regulation is now known
solely as the Pipeline Regulation, and is limited to
pipeline-related matters in British Columbia and is distinct from
the jurisdiction and mandate of the British Columbia Utilities
The Regulation, according to the Commission's Industry
Bulletin 2014-09, was developed to comprehensively address
regulatory aspects of proposed LNG facilities in British Columbia.
Moreover, it was developed in consultation with various LNG
stakeholders including industry, First Nations, and various levels
The Regulation covers a wide scope of technical requirements for
LNG facilities, beginning with the LNG facility permit application
process, through the construction, operation, decommissioning and
reclamation phases. Notably, the Regulation sets forth notice and
reporting requirements for all project applicants and permit
holders during various project phases, and enables the Commission
to make individual facility-specific decisions based on such
reports. Further, the Regulation sets out overarching occupational
health and safety program requirements, including emergency
response planning. Significantly though, the jurisdiction of the
Regulation is limited to LNG facility sites themselves as opposed
to upstream aspects of natural gas extraction, production and
Potentially important to LNG facility permit holders, section 25
of the Regulation grants discretion to the Commission to exempt an
LNG facility permit holder from one or more provisions of the
Regulation on a case-by-case basis. Although an LNG project
proponent may successfully apply for and receive an exemption, the
Commission retains the ability to impose conditions on such
exemption. It remains to be seen how widely the Commission will
grant exemptive relief to LNG facility permit holders using this
LNG FACILITY MANUAL
Concurrently with the release of the Regulation and the
amendments to the Pipeline Regulation, the Commission
published the Liquefied Natural Gas Facility Permit Application and
Operations Manual (LNG Facility Manual). The LNG Facility Manual
provides an overview of the current provincial LNG scheme, as well
as detailed guidelines for the rules and procedures set forth in
the Regulation. More specifically, it covers a range of issues
relating to the life cycle of an LNG facility, from environmental
matters to shipping, water use, engineering and geotechnical
matters, among others. While the LNG Facility Manual provides
helpful clarification, it is by no means an exhaustive summary of
the complex and interrelated provincial and federal legislative
regime for LNG facilities and the related upstream, midstream and
When read together, the Regulation and the LNG Facility Manual
provide a helpful overview of the current LNG regime in British
Columbia. These tools also provide necessary guidance to LNG
facility proponents and permit holders on a variety of regulatory
and technical facility issues.
Despite this additional guidance, however, areas of uncertainty
remain within British Columbia's regulatory system for LNG. As
noted in our March 2014
Blakes Bulletin: B.C.'s Proposed LNG Tax – Some Answers,
Many Questions, the pending LNG income tax regime is expected
to be released by the provincial government in the fall of 2014,
with administrative and enforcement provisions to be introduced in
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