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Leveraging the low-carbon advantage the balance between regulation and new investment
The Ridley Island Propane Export Terminal silently moves ahead B.C. imposes timelines for the restoration of oil and gas wells
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In this issue Message from the editor........................................................................ 8 Message from the Honourable John Horgan, Premier of British Columbia................................................................. 10 Message from the Minister of Mines, Energy, and Petroleum Resources...................................................... 11 Shared future: Energy for Canada and the world............................. 12 British Columbia addressing global issues........................................14 Making a case for Canadian-branded energy.................................... 15 B.C. imposes timelines for the restoration of oil and gas wells; the first province in Western Canada............................... 16 Cathodic protection shielding............................................................. 18 The Ridley Island Propane Export Terminal: Connecting Canadian energy with global markets.......................... 20
B.C. Oil & Gas Report is published by DEL Communications Inc. Suite 300, 6 Roslyn Road Winnipeg, Manitoba Canada R3L 0G5 President David Langstaff Associate Publisher Shayna Wiwierski firstname.lastname@example.org Managing Editor Tammy Schuster email@example.com Sales Manager Dayna Oulion firstname.lastname@example.org Account Representatives Brian Gerow | Jennifer Hebert Mic Paterson | Anthony Romeo
Collaboration and community move Coastal Gaslink forward........ 22
Contributing writers Chris Bloomer | Gary G. Mar, Q.C. Geoff Morrison | Stewart Muir
Why ministerial discretion does not belong in Bill C-69, by Gary G. Mar, Q.C............................................................ 24
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Cover Photo: Ridley Island Propane Export Terminal 6
B.C. Oil & Gas Report • 2019-2020
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Message from the
B.C.’s oil and gas resources put the province in a unique position
e know B.C. and Canada can make a significant contribution to global GHG reductions if we expand the export of our resources to global markets.” An excerpt from an editorial piece written by Geoff Morrison of the Canadian Association
of Petroleum Producers for this issue of the B.C. Oil and Gas Report is echoed throughout the industry. In the 2019/2020 BC Oil and Gas Report magazine, we explore how B.C.’s oil and gas resources put the province in the unique position of helping lower global GHG emissions by providing our products to countries that are still heavily dependent on high-emission energy sources. We discuss the fine balance between the need for rigorous regulatory systems and the need to speed up processes that will allow Canada to capitalize on the demand for cleaner energy products around the world. This issue also provides updates on the Ridley Island Propane Export Terminal and the Coastal Gaslink Pipeline Project about the safest and most responsible approach to transporting our natural resources. I hope you enjoy this issue of the B.C. Oil and Gas Report magazine, and please get in touch if you have any questions, comments, or ideas.
B.C. Oil & Gas Report • 2019-2020
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Message from the Premier of British Columbia
the honourable john horgan
Natural gas development and the path forward
he natural gas sector is the livelihood of thousands of British Columbians. It helps us build a strong economy and provides jobs to hard-working people. Natural gas can keep your home warm in the winter and help grow the produce you buy to feed your family. It is a versatile product with an
important role to play in our province’s future. LNG Canada’s $40-billion commitment to build an export facility in Kitimat is the largest private-sector investment in Canadian history. It is proof that B.C. is attracting investment, providing security to industry and British Columbians as we continue to move our province toward a cleaner and brighter future. Direct benefits of the LNG Canada project include up to 10,000 jobs for people during construction and 950 permanent jobs once operations are underway, as well as approximately $23 billion in new provincial government revenues – new resources for services such as health care, schools, and child care. Our government set four conditions for natural gas development: guarantee a fair return for our natural resources, create jobs and provide training, respect and partner with First Nations communities, and protect our air, land, and water. The LNG Canada project fits into our CleanBC plan and allows us to build a strong economy for future generations, while protecting our environment. We continue on the path toward meaningful reconciliation with Indigenous peoples. We are working government to government with First Nations, forming partnerships that benefit communities and create jobs and shared prosperity for people and communities. We look forward to seeing more good jobs for British Columbians in the natural gas sector. We want families and communities to see the benefits from our province’s resource-based investments and share in its success. Not only will this help make life more affordable, but it will also support services such as improved healthcare and other community-support initiatives. We continue to see growth in our valuable natural gas sector and I am excited for the opportunities ahead. n
10 B.C. Oil & Gas Report • 2019-2020
Message from the Minister of Energy, Mines, and Petroleum Resources
Environmentally sustainable – possible and plausible
n an era of climate change, we are all faced with the necessity to develop our economies in an environmentally sustainable way. In British Columbia, we believe it is possible and plausible to meet this challenge, and we are showing how it can be done.
B.C. is the leader in Canada for climate action. This year, we launched our CleanBC plan which puts us on a path to a cleaner, better future, where we can continue to balance environmental protection with economic competitiveness and job creation. We have made major investments to help electrify upstream oil and gas production, allowing extraction and processing to be powered by clean energy. Thanks to our abundant supply of hydro-electricity, we have a clear advantage in terms of carbon intensity and can support growth within our climate action plan and targets. Industry development and investor confidence is supported by our government’s natural gas development framework that recognizes current market, resource and climate realities and what is needed for success. This framework, built upon our four conditions for LNG, resulted in the largest private sector investment in Canadian history, LNG Canada’s $40B investment in B.C., and put LNG on a level playing field with other industries. This investment demonstrates that we can build economic opportunities for British Columbians, while also taking action to address climate change and advance reconciliation with Indigenous peoples. We are committed to ensuring our resource sectors provide good, familysupporting jobs for people throughout B.C., meaningful partnerships with First Nations, while also delivering the revenues to fund the services we rely on. I look forward to our continued work to build a clean and vibrant natural gas sector in British Columbia that benefits everyone. n
B.C. Oil & Gas Report • 2019-2020
Shared future: Energy for Canada and the world by Chris Bloomer, President and CEO, Canadian Energy Pipeline Association
s Canada’s energy future
still reliant on higher-emission energy
evolves, pipelines are playing an
sources. But we need to move faster to
increasingly important role here
capitalize on the growing demand for
and around the world. Members
cleaner energy products such as LNG.
of the Canadian Energy Pipeline Association (CEPA), the 11 companies that operate nearly 120,000 kilometres of pipelines in Canada, are embracing this new role by continuously improving how Canada’s oil and gas is transported to markets in the safest, most
Right now, Canada is missing out on many of these opportunities due to a lack of pipeline capacity and limited access to tidewater. While the approval and construction kick off of the Trans Mountain Expansion Project, and the development of LNG Canada and the
and certainty around our regulatory
Coastal GasLink pipeline are steps in
processes. It’s essential we do so for the
While Canada’s energy future will
the right direction, these projects are
long-term livelihood and prosperity of
increasingly include more low-carbon
only part of the solution. We need to be
energy sources such as wind, solar and
more competitive to attract investment
hydro, oil and natural gas will continue
and we need new pipelines. However,
to be fundamental in the energy mix
new rules around the way major
for decades to come. Not only do
infrastructure projects are reviewed and
transmission pipelines make up 10 per
approved are sending mixed messages
cent of Canada’s GDP, providing billions
that threaten to send critical energy
of dollars to fund vital social services
investment elsewhere. Regulatory
such as health and education, they will
processes are becoming increasingly
also help provide the necessary capital
complex and challenging, and this is
to continue investing in alternative
having a serious effect on Canada’s
Canada’s oil and gas resources are
CEPA and its members continue to
11 transmission pipeline companies
developed, produced and transported
advocate for a balanced approach to
that transport virtually all of Canada’s
under the highest environmental,
environmental, social, and economic
natural gas and crude oil to markets
operational, regulatory, and social
considerations to ensure Canada can
across North America. CEPA members
standards globally. With a resource
attract the capital needed to develop,
are global leaders in the safe and
base that is the envy of the globe,
produce, and transport our abundant
responsible delivery of energy products
Canada is in a unique position to help
natural resources in the safest, most
that fuel life in Canada and around the
lower global greenhouse gas (GHG)
responsible way. We can revitalize
world. For more information, visit
emissions by providing our responsibly
our reputation as a great place to do
produced products to countries that are
business by providing predictability
12 B.C. Oil & Gas Report • 2019-2020
Oil and natural gas will continue to be part of a shared energy future for Canada. Now is the time for this country to take ownership of its vast natural resources and the opportunities they provide for the people who live here and around the world.
About CEPA The Canadian Energy Pipeline Association (CEPA) consists of the
Tank Terminal Ad 7 x 9.5.pdf 1 9/24/2018 2:41:11 PM
British Columbia addressing global issues by Geoff Morrison, Manager, British Columbia Canadian Association of Petroleum Producers
atural gas is a major driver of British Columbia’s economy, including offering economic potential for Indigenous communities.
B.C. is uniquely positioned to address a number of global issues. This province’s abundant natural gas resources can help meet growing energy demand — specifically in the Asia-Pacific region, help address energy poverty to elevate health and quality of life, and contribute to the net reduction of greenhouse gas (GHG) emissions worldwide. This may sound like magical thinking, but it’s real and it’s based on innovation, technology, and Canada’s commitment to responsible development. The confluence of a number of factors have created a tremendous opportunity for Canadian energy exports, specifically liquefied natural gas (LNG) from the West Coast. First, let’s look at global energy demand. In November 2018, the International Energy Agency projected demand would continue to rise as China, India, Southeast Asia, and other regions seeking to grow their economies. Canada has more than a 300-year-supply of natural gas, much of it found in northeastern B.C. – a resource poised to meet this demand. Secondly, LNG can help people around the world who are living in energy poverty. Growing energy demand is partly about providing people with access to reliable, affordable energy. Addressing energy poverty can increase life expectancy, access to education, and improve living and working conditions. Thirdly, natural gas from Canadian LNG has lower life-cycle emissions than coal. With upstream electrification, Canadian LNG facilities will have the world’s lowest emissions intensity. The Canadian Association of Petroleum Producers (CAPP) estimates emissions from Canadian LNG facilities can range from 0.035 to 0.13 tonnes of carbon dioxide equivalent per tonne of LNG produced (tCO2e / tLNG) for electrified LNG facilities (non-electrified facilities typically range from 0.255 to 0.398 tCO2e / tLNG). This means that the LNG facilities built in Canada could each help reduce global GHG emissions by up to 100 million tonnes annually if new power plants in China, India, and Southeast Asia are fuelled by natural gas derived from LNG instead of coal. 14 B.C. Oil & Gas Report • 2019-2020
CAPP’s analysis of how growing future Canadian LNG can address net global GHG emissions is corroborated by the Business Council of B.C., which compared B.C.’s current mining and energy resource production to global competitors’ commodities. Currently, resources produced by B.C.’s energy and mining sectors saves up to 18 million tonnes of GHG emissions annually – nearly one-third of B.C.’s total annual emissions. This means B.C.’s resources have a carbon advantage, and if B.C. can export more energy to help meet world demand, global emissions would be lower than if the same products are sourced from other global suppliers. And of course, growing B.C.’s energy industry has positive benefits here at home. The industry generates billions of dollars in revenues for all levels of government, which help support programs valuable to British Columbians such as health care, education, infrastructure, and social services. The industry currently supports some 10,000 direct and indirect jobs in the province, a number expected to increase as construction of LNG projects expands. Industry also offers tremendous potential for Indigenous participation and prosperity, which in turn contributes to reconciliation. B.C. does face competitiveness challenges. Most competing jurisdictions now have either no carbon tax or energyintensive, trade-exposed (EITE) industry protection, which currently does not exist in B.C. This province must be competitive with regulation and infrastructure, and it must have fiscal tools in place to stimulate new investment and leverage our low-carbon advantage. In B.C. we have a tremendous natural gas resource base, a highly skilled workforce, a stringent regulatory system, and a commitment to environmental performance. We know B.C. and Canada can make a significant contribution to global GHG reductions if we expand the export of our resources to global markets. CAPP is pleased to see the $41-billion LNG Canada project underway, a bold step toward realizing this vision for Canadian energy exports. We also note the ongoing work at Woodfibre LNG and Kitimat LNG receiving regulatory approvals. More Canadian energy will mean a better global environment and ultimately, a better Canada. n
Making a case for Canadian-branded energy by Gary G. Mar, Q.C., President and CEO, Petroleum Services Association of Canada (PSAC) In Canada’s history, it has taken the efforts of many to build an economic legacy that benefits all Canadians. But, under our current rules, only the efforts of a few are required to stop it. One consequence of this condition is the paucity of investors in the Canadian energy sector. All that remains of investors are governments and all of their investment is with borrowed money. CEOs, such as Encana’s, have left the country. An accretion of regulations and legislation by federal and provincial governments and tax policy are further driving a flight of capital, both financial and human, away from Canada. Calgary was once a head-office centre that is now relegated to a branch-office town. Canada may return to the status of being a colony, albeit one where corporations, not a sovereign government, call the shots and extract our resources at colonial prices. While Sir Wilfred Laurier may have predicted the greatness of Canada at the dawn of the 20th century, he was unable to see far enough to accurately assess the current century. Canada, as a nation, has a poverty of ambition. We no longer aspire that achievement must be done, only that it might be done. Even the humble mom-and-pop grocery store aspires to have more than one customer. Canada should, too. How? Build a pipeline to West Coast tidewater and supply China and India. Concerned about Russia? Displace the buyers of Russian oil with Canadian oil. Vladimir Putin needs money to run his kleptocracy. Should Canada want to help mitigate GHG emissions into the global atmosphere? Yes! Then build a natural gas pipeline that contributes to the efforts to convert China from coal to gas-fired power plants. Should Canada be consistent in its human rights stand with the Kingdom of Saudi Arabia? Yes!
Then build a pipeline to tidewater in Canada and end our $2-billion-a-year reliance on oil from a repressive regime and provide the world with a Canadian option. Concerned about Americans treating the Northwest Passage as international waters? You should be. Then buy a fleet of icebreakers and move energy supply out of Churchill and take it to Rotterdam or to Shandong. If you think the Arctic is environmentally sensitive, you are right. So, establish the right rules to govern our territory and don’t let others use it with impunity. Should Canada help developing nations rise out of energy poverty? Yes! Then build a pipeline to tidewater so we can provide them with reliable, affordable, and safe energy to replace coal, wood, and dung. These ideas may be considered right or wrong, but there is an absence of voices of value talking about how Canada can become a great middle power. Canadians need voices that speak up as Canadians first and British Columbians second. Canadians should ask, “What’s in it for us?” and not, “What’s in it for me?” We should want a Canada that lives up to our potential as a great nation that competes with the world, and not one of squabbling duchies.
Association Profile The Petroleum Services Association of Canada (PSAC) is the national trade association representing the service, supply and manufacturing sectors within the upstream petroleum industry. PSAC is Working Energy and as the voice of this sector, advocates for its members to enable the continued innovation, technological advancement and in-the-field experience they supply to energy explorers and producers in Canada and internationally, helping to increase efficiency, ensure safety and protect the environment. n B.C. Oil & Gas Report • 2019-2020
B.C. imposes timelines for the restoration of oil and gas wells
ising rates of insolvency and an increase in the number of inactive and orphan sites is a concern shared among regulators of the oil and gas industry. British Columbia worked collaboratively with Indigenous and
non-Indigenous communities and industry to create a new regulatory framework, which was introduced by the BC Oil and Gas Commission (Commission) on May 31, 2019. The Dormancy Regulation makes B.C. the first province in western Canada to impose, in law, timelines for the restoration of oil and gas wells. It establishes prescribed timelines for decommissioning and reclamation of inactive wells to speed up site restoration and to reduce the potential for orphaned wells.
“After significant work by our dedicated staff, I’m pleased to be delivering on the commitment made last year to have hard timelines in place to ensure the timely cleanup of dormant oil and gas sites in B.C.,” says Paul Jeakins, the Commission’s CEO and Commissioner. “We are working together with both industry and Indigenous people to ensure the required clean up of dormant and orphan sites is completed in the most efficient manner.” The Dormancy Regulation will improve the rate of inactive site restoration and return land to its pre-activity state. The regulation gives each dormant well site a prescribed cleanup
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timeline and imposes requirements for decommissioning, site assessment, remediation, reclamation/restoration, notification, and reporting. The Dormancy Regulation is a fundamental part of the Commission’s Comprehensive Liability Management Plan (CLMP), which will ensure 100 per cent of the cost of
• Growth objectives • Restricted bank credit • Inconsistent cash flow • Credit worthy customers
reclaiming oil and gas sites in B.C. continues to be paid for by
Factors Western can help:
associated with the cleanup of oil and gas sites, protect public
• Factoring frees cash tied up in accounts receivable.
safety, safeguard the environment, and enhance opportunities
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16 B.C. Oil & Gas Report • 2019-2020
industry. The CLMP will hold industry accountable for all costs
to collaborate with Indigenous communities. It will achieve this through three primary components: liability management, improving the rate of inactive site restoration, and addressing orphan sites. Looking at liability management, the Commission is enhancing stringent checks of each company’s financial health and history with the continued goal to mitigate liability risk and minimize pressure on the Orphan Site Reclamation Fund.
Basically, the Commission is evaluating each transaction to make sure companies have the means to manage assets through to closure. For addressing orphan sites, a new liability levy was introduced to provide funding for the Orphan Site Reclamation Fund. The levy is being phased in over the next three years, which will replace a previous fixed tax on marketable gas and petroleum and will ensure the Commission has adequate funds to restore all orphan sites in the province in a timely manner and at no cost to the residents of B.C. Work on dormant sites has already begun with approximately 10,000 - 11,000 wells set to be restored by 2036. For more information, please visit: https://bcogc.ca/industry-zone/dormant-sites. n
Restored site in the Milligan Creek area, located 90 kilometres north of Fort St. John.
Cathodic protection shielding
he industry definition of cathordic protection (“CP”) shielding is preventing or diverting the cathodic protection current from its intended path. It is widely known that most external corrosion on pipelines is
caused by disbonded coating that shields CP, not lack of CP. Industry standards state that the pipe should be protected against external corrosion by non-shielding coatings that allow the CP current to effectively protect the pipe’s external surfaces if disbondment occurs and water penetrates between the coating and the pipe. Most coating types have potential to shield the CP current from protecting the pipe’s external surfaces, since coatings are usually designed to be good insulators with high-dielectric strength and low permeability in the absence of defects. Therefore, the CP current shielding of pipeline coatings should be considered in conjunction with their adhesion to the pipe steel substrate. It has been demonstrated that corrosion does not occur on pipelines when the coating maintains proper adhesion to the steel substrate, whether the coating is shielding or non-shielding the CP current. Therefore, CP shielding becomes a matter only when the coating is disbonded. The protectiveness of shielding coating is dependent on whether a strong adhesion to the steel substrate is achieved. The coating property is not the only contributing factor to CP
the rocky soils, seasonal change of soil conductivity in wet and dry seasons, interference of stray current in soil, foreign metallic structures in the path or shorted casings could result in CP shielding. Therefore, pipeline coatings should be carefully selected to ensure they are truly compatible with CP when coating failure or disbondment occurs. However, the most important criteria for the safety of the pipeline is good adhesion of the protective coating to the steel substrate. Proper coating selection, application, insulation, inspection and careful CP monitoring are the best practices to eliminate the CP shielding effect of pipeline coatings. CP shielding is one of the most interesting aspects of the work Charter Coating Service (2000) Ltd. undertakes. Currently, there are no standard test methods so Charter’s laboratory has designed test methods which simulate field conditions as closely as possible to investigate the CP current shielding of different types of coating. n
shielding. If a defect appears in the disbonded coating, the geometry of the defect and disbondment also affects the flow of CP current toward the damaged areas and the local corrosion protection of the exposed steel substrate. Moreover, for underground pipelines, the properties of soil also play important roles in CP shielding. Even if the CP current can permeate through a coating to polarize the pipeline steel cathodicaly,
Impressed Current Cathodic Protection System 18 B.C. Oil & Gas Report • 2019-2020
Loss of adhesion due to soil stress allowing corrosion and pitting to develop under disbonded coatings where water penetrates but CP is shielded
B.C. Oil & Gas Report • 2019-2020
Connecting Canadian energy with global markets
ver the last three years, as
stored and shipped at atmospheric
option, opening up access to premium
many proposed energy projects
pressure. Chilled propane is then loaded
export markets and delivering stronger
in B.C. were challenged to
onto Very Large Gas Carriers (VLGC)
netbacks for every molecule that moves
move forward, AltaGas Ltd.
and delivered to global markets through
through the company’s value chain.
quietly advanced its Ridley Island
approximately 20 to 30 marine transport
Propane Export Terminal (RIPET).
shipments per year.
Through ongoing discussions with
The facility not only opens up new
local Indigenous communities, business
Cleaner Energy for Asian Markets
markets for Canadian energy, but
Global environmental concerns
leaders, emergency responders, and
benefits from a significant shipping
around greenhouse gas emissions
municipal, provincial, and federal
advantage, taking only 10 days to
from activities such as burning coal,
governments, the company was able
transport product to Asia compared to
are driving an increased demand for
to work closely with its key partners to
25 days from the U.S. Gulf Coast.
create broad support for the project and across Alberta and British Columbia to
Greater Value for Canadian Natural Gas Producers
Canada’s first propane export terminal.
AltaGas offers producers a uniquely
Located along British Columbia’s
complete solution for their propane. The
northwest coast, approximately 10
company has developed an integrated
kilometres south of Prince Rupert,
footprint in the Western Canadian
RIPET is capable of storing 600,000
Sedimentary Basin in northeast B.C.
bbls and exporting 1.2 million tonnes
and Alberta that offers producers gas
of propane per year. The terminal,
gathering and processing, liquids
now into its fifth month of operations,
handling, fractionation, and export
offloads approximately 50 to 60 railcars
of liquid propane from B.C. and Alberta
Through RIPET and its unique
each day, transfers the propane to
structural advantage, AltaGas provides
storage, and cools it so that it can be
upstream producers with a high-value
readiness for propane to begin travelling
20 B.C. Oil & Gas Report • 2019-2020
propane – a cleaner burning fuel that is easily and safely transported. Currently, Asia is the world’s largest importer of LPG, with as many as 24 million households using propane for heating and cooking in Japan alone. To meet Asia’s growing demand for propane, AltaGas entered a multi-year agreement with Astomos Energy Corporation, a Japanese propane importer and distributor, to purchase at least 50 per cent of the propane shipped from RIPET annually. The ability to import Canadian propane is a significant advantage for Asian markets, as it provides greater energy security and supply diversification, while also enabling Canada to maximize the value of its natural resources.
More Opportunity for Local Residents Throughout the design and construction of RIPET, AltaGas worked closely with local Indigenous peoples, communities, and all levels of government to develop opportunities for economic and social development and skills training. In consultation
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with the Coast Tsimshian Nation communities and Coast Mountain College, AltaGas developed an Operator Training Program to provide First Nations and local residents with the technical skills needed for a rewarding career at RIPET. The program was a tremendous success, with 100 per cent of program graduates offered full-time roles at the Terminal. RIPET is charting a new course for Canadian energy and signaling to the world that, through strong partnerships, Canada can deliver on energy exports. n B.C. Oil & Gas Report • 2019-2020
Collaboration and community move Coastal GasLink forward
oastal GasLink Pipeline Project
activities to their communities. The
completed. That open, relationship-
has launched a Construction
program will continue throughout
based approach is something that
Monitoring and Community
construction of the 670-kilometre
Coastal GasLink believes is integral to
Liaison Program (CMCL) to
pipeline project designed to transport
the success of the project.
protect Indigenous culture and values
natural gas from the Dawson Creek
Harry Bodewitz, who works closely
along with the environment during
region to the LNG Canada liquefaction
with CMCL advisors from several
construction of the project.
facility in Kitimat. The project is planned
Indigenous communities located along
The program provides opportunities
for in-service in 2023.
the project corridor, has witnessed the
for Indigenous community members to
Transparency with Indigenous
value of the program. As construction
participate in construction within their
communities is core to the CMCL
ramps up, additional CMCL advisors
traditional territory for the purposes
program by promoting meaningfully
will be brought on to be involved in the
of observing, recording, and reporting
participation in the project and
on implementation of construction
monitoring the work that is being
“Something might have been planned
22 B.C. Oil & Gas Report • 2019-2020
CMCL coordinators Harry Bodewitz, Rocky Desjarlais, and Mike Gouchie with current and former CMCL advisors from the Witset First Nation and Wetâ&#x20AC;&#x2122;suwetâ&#x20AC;&#x2122; en First Nation.
initially, but once we actually get to
in 2012, the Coastal GasLink project
B.C. communities to ensure questions
the field, that plan may change or be
team has ensured Indigenous groups
are answered, concerns are addressed,
modified to make sure itâ&#x20AC;&#x2122;s done right,â&#x20AC;?
along the pipeline route have access
and feedback is gathered as the project
says Bodewitz. â&#x20AC;&#x153;In the CMCL program,
to meaningful opportunities to be
continues to move forward.
we have an opportunity to observe
part of project planning, jobs, and
Stay up to date on Coastal GasLink and
local contracting prospects for their
learn more about the project by visiting
businesses and their communities.
CoastalGasLink.com and following
For Mike Gouchie, a CMCL coordinator
The project team will continue to work
along on Facebook and Twitter @
from Lheidli Tâ&#x20AC;&#x2122;enneh First Nation,
with all Indigenous groups and local
whatâ&#x20AC;&#x2122;s going on, discuss it and share that with our communities.â&#x20AC;?
the program provides a chance to be out in the field ensuring that matters important to his community are at the forefront of the construction program.
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â&#x20AC;&#x153;As a CMCL coordinator, Iâ&#x20AC;&#x2122;m able to assist the CMCL advisors understand the scope of the project in our territories and make sure environmental issues are identified,â&#x20AC;? he says. To date, approximately $720-million in contract work has been awarded to Indigenous and local businesses for this project, including right-of-way clearing, medical services, security, and camp management needs. Since the project was announced
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B.C. Oil &â&#x20AC;&#x2C6;Gas Report â&#x20AC;˘ 2019-2020
Why ministerial discretion does not belong in Bill C-69 by Gary G. Mar, Q.C., President and CEO, Petroleum Services Association of Canada (PSAC)
n March 22, 2019, my Board Chairman and I represented the Petroleum Services Association of Canada (PSAC) before the Standing Senate Committee on Energy, the Environment, and Natural Resources. We were
testifying on behalf of PSAC member companies, offering their views and perspectives on Bill C-69, which would enact the Impact Assessment Act and the Canadian Energy Regulator Act, as well as amend the Navigation Protection Act and a number of other acts. In short, Bill C-69 is the federal government’s attempt to impose new “environmental assessment” measures on Canada’s resource sector. It has been widely criticized as likely to further delay and discourage investment in Canadian pipelines, mines, and other resource infrastructure. Its “green agenda” threatens to trump economic considerations while adding new layers of bureaucracy, higher costs, longer delays, and more uncertainty on Canada’s resource sector. In preparing to appear before the Committee, we struggled with what we could present that hadn’t already been said many times before by other parties as deeply distressed as we are with the
In preparing to appear before the Committee, we struggled with what we could present that hadn’t already been said many times before by other parties as deeply distressed as we are with the disastrous consequences this bill portends.
disastrous consequences this bill portends. Nevertheless, we felt it necessary to reiterate the issues of deep concern that had also come to the fore in our own assessment of the bill’s likely impact. We pointed out that what began in 2014 as a downturn due to low commodity prices, a situation outside of the control of a federal or provincial government, has escalated into a dramatic flight of capital from Canada in response to factors that are within the control of governments. These include competitiveness, regulatory uncertainty, the tanker moratorium, the clean fuel standard, methane emissions reduction regulations, carbon taxes and, finally, Bill C-69. At a time when investors are looking for regulatory certainty and firm timelines,
24 B.C. Oil & Gas Report • 2019-2020
override is that you will invariably have other ministers, MPs and others with agendas lobbying the minister in question to exercise his or her discretion in a certain way. The clear danger is that issues of national interest may be forced to take a back seat to those of political interest. Our advice to the Committee? If you don’t want the PMO, ministers or others exercising undue pressure upon an Bill C-69 in its current form threatens the opposite. Canada will continue to sacrifice billions of dollars of economic
individual minister, then take away that possibility. The process must not be politicized.
prosperity and growth even as jobs continue their flight to
Let’s take to heart what the PM himself said about the SNC-
Lavalin affair, “We will stand up and defend and create jobs,
One of the biggest problems with Bill C-69 is that it would give the federal environment minister added discretionary power on deciding whether a project goes ahead or not. This politicization of the process has been roundly criticized by numerous thoughtful commentators, including the four Atlantic premiers who told the Prime Minister
and we will always defend our institutions and rule of law.” By all means, create new and better institutions and laws as they deal with resource development, but then stand out of the way and let them work with certainty, objectivity and timeliness to restore investor confidence and bring back those jobs for Canadians. n
that Bill C-69 in its current form “will not meet the dual objectives of environmental protection and economic growth”. They went on to say that a particular concern
Two is stronger than one.
is that the bill “places final decision-making power in the hands of the Minister or Governor in Council and provides the opportunity to veto the results of thorough scientific assessment and review of evidence”. Telling the Committee that PSAC shares this concern added nothing new to the debate. What is new is a key lesson coming out of the ongoing SNC-Lavalin saga. In that regard, we reminded the Committee that one of the purposes of administrative law is to take political decisions out of the hands of politicians and place it in the hands of subject experts. That’s what we seek: subject experts able to move the process forward in an objective manner. Legislators have the key responsibility of establishing the
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parameters within which such quasi-judicial administrative bodies exercise their authority. They then need to stand out of the way and let their handiwork prove itself. The problem with politicizing the process by adding a ministerial
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B.C. Oil & Gas Report • 2019-2020
Oil and gas experts have an important role in setting a realistic energy future By Stewart Muir
ntolerance for the development and use of hydrocarbons is one of the defining factors of the current time. Much of this is channeled through pressures on industry and government to adopt climate-related policies making
it ever more difficult to work with the most reliable and abundant energy solutions available to us – hydrocarbons. For many professionals in energy-supporting fields such as geophysics, engineering, law, and finance, the rapid politicization of these issues is not just about the challenges they face at work. It is a cultural thing that translates to the kitchen table where children return home from school demanding to know why mommy or daddy are drawing their livelihood from a horrible, planet-killing industry that a Swedish teenager says has to go away. Broadly speaking, it’s difficult to disagree that it’s desirable to never stop improving our energy systems and thinking. I’ve yet to meet a professional in the oil and gas fields who says otherwise. Willingness to try new things is the dominant characteristic of the Canadian energy people. If it wasn’t, there wouldn’t be an oil sands and shale revolution. Renewables evangelists talk about a “moonshot” to rapidly disrupt conventional energy systems. As the Manhattan Institute points out in a recent paper, “transforming the energy economy is not like putting a few people on the moon a few times. It is like putting all of humanity on the moon— permanently.” The “new energy economy” is an exercise in magical thinking, argues author Mark Mills. For the cost to drill a single shale well, one can build two 500-foot-high, two-megawatt (MW) wind turbines. Those two wind turbines produce a combined output averaging out over the years to the energy equivalent of 0.7 barrels of oil per hour. The same money spent on a single shale rig produces 10 barrels of oil per hour, or its energy equivalent in natural gas, averaged over the decades. 26 B.C. Oil & Gas Report • 2019-2020
Mills concludes, “Hydrocarbons — oil, natural gas, and coal — are the world’s principal energy resource today and will continue to be so in the foreseeable future.” Stating this simple reality, one determined by the laws of physics, has become taboo. We are all supposed to politely go along with the messianic idea that windmills, solar panels and batteries are about to save humanity. A false sense of confidence is leading politicians at all levels of government to drive policies that ignore the laws of physics. They do this out of fear of angering a renewables lobby that has been extremely successful in constructing an ecosystem of cultural, social, and political support buttressed by strategies such as climate lawsuits and elaborate public affairs campaigns. As the best-endowed energy nation of all the world’s countries, Canada should be on a path to increased economic competitiveness, enhanced environmental performance and long-term social success. Running away from innovation in hydrocarbons will not help us to accomplish any of that. Leave it to others to evangelize for an energy miracle that will provide consequence-free energy for all (if such a thing can exist). Those who understand the fundamentals, and can realistically define what’s required to meet the challenges, should not feel restrained from speaking up about what they know and believe. Stewart Muir is executive director of the Resource Works Society, based in Vancouver. Follow him on Twitter at @sjmuir or contact him directly at firstname.lastname@example.org. n
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