Top officials from Alberta and British Columbia on Thursday touted the strategic positioning and infrastructure of their provinces in facilitating the movement of natural gas through the proposed Alaska pipeline, which, if constructed, will deliver gas to the Lower 48.

“The Alberta Hub is a major piece of infrastructure in North America for the delivery and processing of natural gas,” noted Mel Knight, a member of Alberta’s Legislative Assembly, in a briefing held at the Canadian Embassy in Washington, DC. “What we believe in Alberta is that we can make a very good business case to move any northern gas through the BC-Alberta system and into the Lower 48,” Knight said.

The pipeline “actually traverses BC more than any other territory or province,” noted Richard Neufeld, minister of energy for British Columbia. “We have facilities to actually treat the gas and strip it in BC and want to see a bit more of that happen if the pipeline comes through,” Neufeld said. “But we’re certainly there to facilitate it, whenever Alaska or the Lower 48 thinks they need that in their system.”

Knight pointed out that if “you take the Alliance pipeline and the deliverability capacity of the Alberta Hub, we’ve got — with very little additional effort — about 3 Bcf/d of excess capacity to deliver as we speak.” The Alliance pipeline starts in northeastern BC.

“We can very easily move the 1.2 Bcf/d of northern Canadian gas into the system now,” Knight said, adding that as he understands it, Alliance is “capable of an additional 1 Bcf of capacity.”

Meanwhile, provincial officials were quizzed on how much Canadian gas production will wind up staying in that country going forward, in light of the fact that demand for gas is increasing in both the U.S. and Canada.

“We’ll see, obviously, our consumption increase,” Neufeld said. “We’ve got a population of just over four million people and increasing. People are moving back to British Columbia, and starting businesses, but there are the opportunities to” boost natural gas production significantly, as well as 90 Tcf of coalbed methane.

“Over time it’s a huge amount of natural gas that the province of British Columbia will probably never consume and if we ever did, by that time we probably won’t be using natural gas — we might be using something else, for all I know, and I’ll be long gone,” Neufeld went on to say.

Knight noted that Alberta is expecting an increase in demand primarily from oil sands production. “That’s where we come under the most criticism with respect to capabilities to export. What people hear about these numbers — taking a Bcf a day into the oil sands to develop it to its potential and that type of thing.”

However, he said that new technology should limit the demand increase. “As it’s moving ahead, the technology that’s involved there now will, undoubtedly, decrease the demand for natural gas with respect to that production.” Overall, he said that Alberta believes it has the potential over time “to be able to increase our exports,” but declined to “hazard a guess” as to what the magnitude of the increase in exports would be.

Neufeld noted BC should eventually turn to offshore development which still “is obviously in its infancy — although the first offshore rig built in Canada was built in Victoria, British Columbia.”

A moratorium was put in place by both BC and the Canadian federal government several years ago and it “was held in place, I guess, after the Exxon Valdez grounded in Prince William Sound. There wasn’t much desire to” remove the moratorium, Neufeld noted, “although we are working on that. I have a division within my ministry…that it’s job is to eat, breathe and sleep offshore oil and gas. We’re working with the federal government, with First Nations and with communities along the coast and are actually moving along quite well.”

BC believes that “there are huge opportunities offshore. The companies that interestingly have held their tenure for 35 years are excited about us actually moving forward in trying to lift the moratorium simultaneously with the federal government,” Neufeld said. “That brings into play an awful lot more gas that we could export to the U.S. and consume for ourselves.”

Industry has told Neufeld that three issues need to come together in order to get the moratorium lifted. “First is a regulatory system that actually works. Second is deal with First Nations’ issues and, third, deal with the federal government as to ownership and who’s actually going to regulate it.”

He said that the demand for natural gas “gives everyone a lot more excitement about trying to develop it. Our premier has committed to actually having some serious activity happen by 2010.”

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