Providing coverage of Alaska and northern Canada's oil and gas industry
September 2015

Vol. 20, No. 38 Week of September 20, 2015

British Columbia to run LNG ports

Delegation includes 4 facilities proposed for Prince Rupert area; feds say provincial regulation would save money, resources, time


For Petroleum News

Under proposed Canadian government regulations, British Columbia’s energy regulator will be the lead authority over any LNG export facilities and ports on the province’s Pacific coast even if they are built on federally owned port lands, under proposed federal regulations.

The objective is to pass control to the B.C. Oil and Gas Commission which will expedite approvals and consolidate management of the facilities. Initially the change would apply to four planned terminals in the Prince Rupert port area, including the C$11.4 billion facility for the Pacific NorthWest project operated by Malaysia’s Petronas.

The government of Prime Minister Stephen Harper said that because it has no regulatory system comparable to the OGC using the provincial regulatory system would save money, resources and time.

“These regulations will ensure that the LNG projects are built and operated in a safe manner, protecting the environment and Canadians,” Transport Canada said in introducing the regulations.

Port of Prince Rupert

Under the proposed laws, the OGC would oversee construction, operation, maintenance and enforcement of the LNG facility at the Port of Prince Rupert.

The OGC said in a written statement that it has been building the capacity and expertise in the past two years to “effectively” review and regulate major LNG projects, including staff training, traveling to see operating LNG facilities, restructuring positions and hiring new staff.

OGC Commissioner Paul Jeakins said offices have been opened in three northern communities in preparation for a potential expansion of the natural gas industry to provide feedstock for LNG.

He said all companies operating in British Columbia must meet all environmental standards and al applicable legislation and regulations.

The OGC said it will also work in cooperation with Canada’s National Energy Board, the B.C. Ministry of environment and the B.C. Safety Authority.

Concern over transparency

But environmental groups fear the transfer of power will reduce transparency and accountability and deny the OGC the ability to investigate incidents at federal ports.

They also doubted the OGC would have the authority to ensure the safety of the LNG industry.

In addition, the critics said the OGC has an internal conflict of interest because of its responsibility to steward the growth and development of the natural gas sector - a position they said contributed to the BP Horizon disaster in the Gulf of Mexico, forcing the U.S. government to divide the Minerals Management Services into three agencies, including a separate safety and environmental enforcement branch.

On another maritime issue in Canada, the opposition Liberal Party said that if it is elected in the Oct. 19 Canadian election it will impose a moratorium on oil tanker traffic along the northern coast of British Columbia.

The move would effectively scuttle any crude pipelines in the area, including Enbridge’s controversial Northern Gateway project that Liberal leader Justin Trudeau opposes.

The pledge would place Dixon Entrance, Hecate Strait and Queen Charlotte Sound off limits to tankers as part of the Liberal commitment to protect ecologically sensitive areas.

Trudeau has also said he would reinstate C$40 million that the Harper government has cut from the ocean science and monitoring program at the Department of Fisheries and Oceans.

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