LNG in B.C. firmly on track says Minister

No one in British Columbia wants to see the successful development of an LNG industry in the province more than Rich Coleman, B.C.’s Minister of Natural Gas Development. Mr. Coleman knows what’s at stake – up to $175-billion in industry investment creating as many as 58,700 direct and indirect construction jobs, and 23,800 permanent direct and indirect jobs for operations, according to the government’s website.

As I watch it unfold, I can see the momentum.
I accept that market forces can impact decisions, but these companies work in long cycles and they are looking ahead 30 to 50 years.
— Rich Coleman is B.C.’s Minister of Natural Gas Development

But he also knows the challenges and was reminded of some once again in the most recent Fraser Institute report on LNG in B.C. The report acknowledged that strong environmental and other protections are necessary before LNG projects can proceed, but warned that regulatory and other delays are hindering the ability of B.C. to compete for potentially lucrative LNG sales in the Asia-Pacific region.

It pointed out that while “under conservative assumptions,” B.C.’s LNG export capacity could be 42 per cent to 74 per cent of Asia-Pacific imports in 2020, the International Energy Agency has noted that “no Canadian LNG project will start production by 2020” because of regulatory and other delays.

But Mr. Coleman believes that some of the report’s assumptions paint a picture that is far gloomier than the reality on the ground.

“We have a very good regulatory process and have done a lot of work to streamline it and make sure that it works properly,” he says. “There are a number of projects that have already received their environmental assessment certificates through a joint initiative of the regulators to speed up the process.”

The streamlined process does not mean that corners are being cut, adds Mr. Coleman.
“We have very strict regulatory requirements in place for the construction and operation of LNG plants,” he says. “Agencies across the country – the National Energy Board, B.C.’s Ministry of Environment, B.C.’s Safety Authority   – are working together on the regulatory process to ensure that we do it correctly and that it’s streamlined.”

Mr. Coleman is confident that in spite of the current economic environment and the downturn in the oil and gas sector in particular, LNG still holds the promise of jobs and economic development for B.C.

“We have 20 LNG export proposals in progress and 13 export permits have been approved at the federal level for 10 of those projects. One of them, Pacific Northwest LNG, has made its final investment decision based on getting an environmental certificate federally, which can’t come until after the federal election, and two others have said they will probably make a final investment decision between now and the end of the year or the first quarter of next year,” he says.

He points out that billions of dollars have already been spent by LNG proponents to design plants and pipeline routes, negotiate benefits for First Nations and complete preparatory work on sites.
“I believe that upwards of $12.5-billion has already been invested, which supports jobs linked to exploration, production, processing and transportation,” says Mr. Coleman. “As I watch it unfold, I can see the momentum. I accept that market forces can impact decisions, but these companies work in long cycles and they are looking ahead 30 to 50 years.”

He adds that the B.C. government has worked hard to ensure that the province’s LNG industry will be globally competitive.

“We wouldn’t have Pacific Northwest LNG’s final investment decision or any of the project development agreements done and signed and passed into legislation if the LNG companies didn’t believe we would be globally competitive. I think our progress has been pretty good. I remain optimistic and I’m confident that we are going to get there,” he says.

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