Canada "is a nation built on energy, and energy is a key part of our economic and political reality," so Canada should act to become a global "energy powerhouse," said the non-profit Energy Policy Institute of Canada (EPIC), which on Thursday released a 151-page report laying out the conclusions of a two-year examination of the country's energy issues and opportunities.

"It is Canada's time to take a global leadership role as an energy powerhouse, combining economic viability and environmental performance," said the report, "A Canadian Energy Strategy Framework." The report outlines key steps EPIC believes the country should take to reach that goal.

"Now is the time for decision-makers to take action and to create a Canadian energy strategy," addressing five key elements, the report said:

The report, which includes 39 recommendations, has been released to all federal and provincial leaders and energy ministries in the country, EPIC said. Among other things, it calls on federal and provincial governments to "cooperate in evaluating whether the processes in place can be modified to remove key barriers to investment in Canadian resource development without relaxing the protections in place for other government policy objectives, including environmental protection." Regulatory reform should include efforts to eliminate uncertainty, shorter review timelines, balance risk, increase transparency, limit joint review panels and clarify Aboriginal consultation, EPIC said.

Last month Canada's National Energy Board (NEB) said environmental assessments and public hearings will no longer be required for long-term natural gas, byproducts and oil export and import licenses, part of an effort to carry out regulatory reform legislation recently enacted by the year-old Conservative majority government following prolonged, heated debate in Parliament this spring (see Daily GPI, July 19). The measure grew out of a Conservative commitment to eliminate duplication of provincial responsibilities and approval procedures for industrial projects (see Daily GPI, May 14).

Canada, which historically has overwhelmingly relied on the United States to be its principal energy export market, needs to explore new markets, according to the report. "The immediate challenge to greater market diversification is developing the needed transportation infrastructure," EPIC said. "Governments can do much here to provide clearer policy and to advance reform of the energy regulatory system."

Such diversification seems most likely to come through the export of liquefied natural gas (LNG) to Asian markets.

Shell Canada Ltd. and its trio of Asian energy partners have asked Canadian regulators for approval to build a facility near Kitimat, BC, that would be capable of exporting up to 24 million tons per year of LNG beginning in 2019 (see Daily GPI, July 31). As envisioned, the facility at full capacity would be able to export up to 3.4 Bcf/d, which is about 25% of Canada's entire natural gas production in 2011, according to NEB. If approved, LNG Canada Development Inc. would be far and away the largest gas export terminal in North America. NEB already has given the green light to two LNG export facilities that would be built in the Kitimat region.

The EPIC report also includes recommendations to encourage innovation in Canada's energy sector, improve energy literacy and conservation and develop a framework for a broad carbon management regime.

EPIC's members include the major natural resource companies operating in Canada, along with power companies, railroads, pipelines, manufacturing and chemical companies.

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