Canadian projects to export liquefied natural gas (LNG) are leading charmed lives by being left out of escalating conflicts over pipelines and tanker terminals planned for the Pacific Coast.
A black and white contrast showed in China and before the National Energy Board (NEB) between receptions in British Columbia (BC) for LNG and oil export schemes. LNG is welcomed as an economic savior. Oil is cast as an environmental devil.
In China a BC delegation led by provincial Premier Christy Clark showered praise on LNG export projects at the World Economic Forum in Tianjin. The message, which the mission has also scheduled to repeat later in Beijing, is, "We are moving at lightning speed to enable this. We need to be in the export market sooner rather than later to lock up contracts."
At the same time, BC's New Democratic Party (NDP) members of the official opposition in the Canadian House of Commons and the Ecojustice environmental coalition served notice on the NEB that they will not be diverted from fighting oil pipeline, terminal and tanker plans by pro-development national regulatory reforms enacted in June by the federal Conservative majority government in Ottawa.
In China, the BC provincial Liberal administration predicted that three West Coast LNG terminals will be up and running by 2020. The government optimists predicted the first one -- the KM LNG partnership of Apache Canada, Encana Corp. and EOG Canada (see Daily GPI, Sept. 14) -- will complete port and pipeline construction on schedule in 2016.
In the lineup, KM LNG and BC LNG Cooperative have obtained provincial permits and NEB gas export licenses for tanker terminals on the northern Pacific Coast at Kitimat, BC, and supporting pipeline facilities. The third and biggest plan -- the LNG Canada partnership of Shell Canada and subsidiaries of Mitsubishi Corp. Korea Gas Corp. and PetroChina, supported by a pipeline proposal from TransCanada Corp. -- has applied for its NEB license.
The trio at the front of the West Coast LNG project lineup calls for a combined gas-export total of 45 Tcf over the 20-year life spans of their NEB licenses. The volume earmarked for future exports equals 65% of the combined current reserves of BC and Alberta. The intended prime supply source for overseas markets is northern BC shale formations, to be tapped at an accelerating rate with hydraulic fracturing.
As BC's delegation to China declared the province wide open to LNG development, another Pacific Coast project began to take shape. Spectra Energy Corp. and BG Group plc announced an agreement to work on building a terminal at Prince Rupert, a seaport north of Kitimat and near the southern tip of the Alaska Panhandle, served by an 850-kilometer northern BC gas pipeline capable of carrying up to 4.2 Bcf/d (see Daily GPI, Sept. 11).
BC's premier encouraged the growth scheme for Spectra's Westcoast gas transmission and processing network well before the corporate announcement, which was made as a confirmation of intentions rather than a disclosure of complete plans including costs. At an official opening this summer of a Spectra-Westcoast gas plant expansion near the first milepost on the Alaska Highway at Dawson Creek, Clark declared, "Natural gas is the opportunity of our lifetime. This plant is an example of long-term activity that natural gas can create." At that time, Spectra described itself as "poised to invest an additional C$4-6 billion (U.S. dollar at par) in British Columbia beyond 2015."
Before the NEB, the Canadian Environmental Assessment Agency and BC regulatory authorities, the industry's critics and their NDP allies have been virtually silent on the LNG schemes and fracking vast northern shale deposits to obtain the gas. Clark's Liberal provincial government, while egging on gas projects, has aligned itself before the board with opponents of oil projects proposed to load production from Alberta's bitumen belt aboard Asia-bound tankers at new or expanded BC terminals.
While the province laid out a red carpet for LNG developers, the protest factions stepped up resistance against Pacific coast oil exports. The critics escalated a budding campaign against Kinder Morgan Canada's plans to expand its Trans Mountain Pipeline between its tanker berths in Vancouver harbor and the Alberta capital of Edmonton.
Ecojustice and BC's dozen NDP opposition MPs, who are also fighting Enbridge Inc.'s Northern Gateway proposal for a new oil pipeline between Kitimat and Edmonton, refused to accept a rebuff by the NEB under Canada's new regulatory regime.
The board this summer ruled that environmental issues have no role in the first regulatory step for the Trans Mountain expansion, a request for approval of a new tolling regime, and should await hearings on a forthcoming construction application. The Canadian regulatory reform package requires tightly focused cases, participation limited to interveners with directly affected interests or recognized expertise on the issues, elimination of duplication and decisions within defined periods of time – and the shorter the better. But the NDP filed a series of demands with the NEB, echoing an Ecojustice wish list for an expensive tariff that would anticipate and cover all costs of any conceivable oil spill cleanups and damages to landowners or communities.
The NDP declared "firm belief that the costs of these measures to protect against these very real risks should be explored at this early stage and incorporated into the toll." Ecojustice told the NEB that "ensuring the toll methodology reflects a full-cost accounting of operation of the pipeline is necessary to ensure that the toll set is just, reasonable and protects the public interest."
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