Canadian political leaders are refusing to let project delays and shaky markets lower high expectations for rapid development of liquefied natural gas (LNG) exports from shale drilling in northern British Columbia (BC).

Gestures by provincial and federal cabinet ministers expressed the optimism after BC LNG Export Cooperative last Tuesday disclosed a two-year postponement, until mid-2015, of its plan to be the first to load gas tankers for voyages to Asia from new terminals proposed on BC’s northern Pacific coast at Kitimat and Prince Rupert (see Daily GPI, Jan. 23).

In Dawson Creek, starting point for the Alaska Highway and gateway to the northern shale gas region, grants of US$200,000 were announced for this year to a Farmers Advocacy Office, to cover costs of its assignment to maintain peace between homesteaders and industry as unconventional drilling using hydraulic fracturing (fracking) spreads.

The idea behind the office, which opened as a provincial pilot project in 2010, is to prevent Canadian counterparts to the fear, loathing, environmental science duels and protest lawsuits that drilling and fracking technology ignited across the United States.

“A major commitment of our BC natural gas strategy is to work with communities and stakeholders to develop a made-in-BC approach to local engagement…so job-supporting work can move forward and northeast BC can continue to prosper,” said BC Energy Minister Rich Coleman of the grant.

Northern civic leaders echoed the provincial minister’s hopes. At the Peace River Regional District, a Dawson Creek coalition of northern BC municipal authorities, chair Karen Goodings called the government-supported advocacy office “key to keeping respect between the oil and gas industry and landowners.”

Coleman has also let the industry and financial markets know that the provincial Liberal administration accepts international investment in BC. He emphasized the open-door attitude when the federal government approved takeovers of shale gas developers Progress Energy and Nexen Inc. by Malaysia’s Petronas and Beijing’s China National Offshore Oil Co. (see Daily GPI, Dec. 11, 2012).

BC gave unqualified support for the deals, which were questioned elsewhere in Canada as imperial expansion by state-owned and semi-political enterprises. The approvals were offset by new federal restrictions against foreign takeovers of corporations with Alberta oilsands operations, but no fences were erected around BC shale gas.

“We support the direction the federal government has taken with respect to CNOOC and Petronas’ bids to invest in British Columbia,” said Coleman. “This is another positive step in the development of BC’s LNG industry and will allow for major LNG investments in the province.”

In Vancouver, BC, Canada’s Aboriginal Affairs and Northern Development Minister John Duncan announced that regulatory formalities had been completed to enable the KM LNG partnership of Chevron Canada Ltd. and Apache Canada Ltd. to build their proposed terminal on reserve land leased from the Kitimat native community, Haisla Nation (see Daily GPI, Dec 26, 2012).

Duncan also announced an agreement with provincial and aboriginal leaders to turn administrative, environmental monitoring and regulatory compliance activities for the proposed KM LNG terminal over to provincial government experts.

“The Kitimat LNG facility will create well-paying jobs in British Columbia, while giving Canadian energy producers access to important overseas markets,” Duncan said.

The BC attitude is not expected to change even if current political polls are right and the partisan stripe of the government is poised to change in a provincial election scheduled for this spring.

Although the ruling Liberals and rising New Democratic Party have been competing with each other to show the greenest opposition against new pipelines to proposed tanker terminals for Alberta oilsands exports on the BC coast, neither contender to form the next government has cast environmental doubts on the outlook for LNG or shale gas projects.

The BC attitude will be on display at an international conference on LNG that the BC government will stage Feb. 25-26 at the Vancouver Convention Centre. Coleman said the event for global investors and industry will include explanations of the supportive BC attitude by all concerned, from aboriginal participants in LNG projects to provincial and local authorities.

Energy specialists in the Toronto-based, international law firm of Blake Cassells & Graydon LLP draw a sharp contrast between the Canadian fossil fuel industry’s main development fronts — oilsands and LNG — in a 2013 outlook briefing.

“Amid the debate over oil pipelines throughout North America, there has been little public backlash against and significant support from government and aboriginal groups for the development of LNG facilities at Prince Rupert and Kitimat,” said the firm. For the oilsands, and especially pipeline projects to widen American markets and open up new Asian outlets, “the regulatory review and approval process, which has become increasingly politicized both in Canada and the U.S., will continue to challenge firms.”

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