Canada: Federal Government Introduces Prince Rupert Port Authority Liquefied Natural Gas Facilities Regulations

On June 20, 2015, the federal Department of Transportation published the proposed Port of Prince Rupert Liquefied Natural Gas Facilities Regulations (Regulations) with respect to proposed liquefied natural gas (LNG) facilities to be built at Prince Rupert, British Columbia. The Regulations are issued under federal authority by virtue of the Canada Marine Act, which regulates Canadian ports. At present, there are four proposals for LNG facilities to be located at Prince Rupert, two are to be located wholly on federal port lands and two are to be located largely on provincial lands, with small portions on federal port lands.

The Regulations implement a regulatory regime for the design, construction, operation, and maintenance of LNG projects proposed on federal lands, and in particular at the Port of Prince Rupert (Port). The Regulations have the following stated objectives:

  • to establish a federal regulatory regime for LNG projects at the Port that applies, with some modifications, the existing British Columbia provincial regulatory regime;
  • to create legal certainty authorizing the British Columbia Oil and Gas Commission (OGC) to administer regulatory oversight at the Port with respect to construction and operation of LNG facilities on behalf of the federal government while preserving the regulatory role of the Port with respect to navigation, shipping, and management of Port lands;
  • to provide certainty and confidence for investors, developers, and the public that there is a clear regulatory regime in place to adequately regulate proposed LNG projects at the Port; and
  • to promote consistency in the regulation of LNG projects in British Columbia, whether on federal or provincial lands.

The Regulations are designed to parallel provincial laws and regulations and to rely on the expertise of the OGC in administration and enforcement. The OGC, which would be the principal regulatory agency charged with implementing the Regulations, would oversee the construction, operation, maintenance, and enforcement of LNG facilities at the Port.

The Regulations would only apply to LNG facilities located on federal lands at the Port and would incorporate by reference, with some adaptations and exclusions, the existing British Columbia regulatory regime. The Regulations would incorporate the following British Columbia acts and regulations:

  • The Oil and Gas Activities Act (OGAA), which governs oil and gas activities in British Columbia, with the exception of several excluded provisions. All regulations made under the OGAA would be incorporated, with the exception of sections dealing with oil and gas wells, pipelines, road construction and maintenance, site restoration, and provincial public inquiries.
  • The Environmental Management Act (EMA), which provides for a provincial authority to manage environmental impacts, with the exception of sections dealing with municipal waste management, contaminated site remediation, area-based management, and provincial inquiries. Certain regulations under authority of the EMA would also be incorporated.
  • The Drinking Water Protection Act and its regulation, which regulate drinking water systems and prohibit their contamination. These provisions would apply to the construction and operation of work camps in relation to LNG activities at the Port.

The Regulations are a significant step towards consistency in the regulation of construction and operation of all LNG projects in British Columbia, regardless of location.

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