The Province of British Columbia (B.C.) is well positioned in Canada to provide clean energy to global markets. The province is endowed with abundant supplies of natural gas and we can ship it to Asia in the form of LNG faster than virtually anywhere else in North America.
The BC Oil and Gas Commission (Commission) is a single-window regulatory agency and oversees all aspects of the natural gas value chain, including natural gas production, pipeline transportation and facility construction and operation within British Columbia. As the regulator, the Commission works on behalf of British Columbians to ensure safe and responsible energy resource development for all of B.C.
The Province has been producing oil and gas since the 1950s and, as such, has a long history of regulating the industry. The Commission was created in 1998 to serve as “one window” regulator for the industry, with a clear mandate to balance the sound development of the oil and gas sector, fostering a healthy environment, a sound economy and social well-being.
The Commission works with proponents, communities, landowners, and Indigenous peoples for the full lifecycle of a project. Safety and environment are paramount. The Commission considers a variety of legal requirements when making a decision, and consults with stakeholders and Indigenous peoples to optimize development while minimizing impacts.
The Commission’s role in LNG development
The operation of LNG terminals falls under the Commission’s LNG Facility Regulation. Most LNG terminals require both federal and provincial environmental assessments and permits, and most LNG terminals require pipelines. Intra-provincial pipelines are provincially regulated; pipelines crossing a provincial or international border are a federal responsibility.
The LNG Canada (Shell, Petronas, Mitsubishi, Kogas & Petrochina) project near Kitimat, B.C. made a positive Final Investment Decision in October 2018. The export terminal will have an initial capacity of 2.1 billion cubic feet per day (BCF/day) with two trains, expandable to four trains and 4.2 BCF/day for an ultimate production capacity of 26 million tonnes per annum (MTPA). For perspective, B.C. natural gas production is currently about 5 BCF/day. And most production – about 3.4 BCF/day - is coming from the liquids-rich Montney play in northeast B.C.
Supplying the facility is the Coastal GasLink pipeline, which is an approximately 670-kilometre (415 miles), 48-inch diameter natural gas pipeline delivering gas from northeast B.C. wells to the LNG Canada Export Terminal on our coast. The Commission regulates this pipeline under the Oil and Gas Activities Act and associated regulations.
The construction of both projects is expected to be very intense with significant time sensitive construction phases occurring simultaneously over a large area. In anticipation of both projects, the Commission is increasing our compliance and enforcement staff and we expect to add more staff specifically to oversee the construction and commissioning of the LNG terminal and associated pipeline.
Leading the way on reclamation
Shale and tight natural gas development has radically changed the nature of activity in North America, making what used to be a scarce resource abundant and cheap. This structural change has many positives: pad drilling reduces the footprint and the need for infrastructure and high productivity means very few wells are required to maintain/grow production. This change also has its challenges: low natural gas prices are here to stay, so it’s important to ensure that in a tight economic environment, producers address their increasing liability from inactive sites.
The Commission is working on prescribed timelines for decommissioning and reclamation of inactive wells to speed up site restoration and reduce the potential for orphaned wells. This will make B.C. the first province in western Canada to impose in law, timelines for the cleanup of wells. The Commission is working with industry, landowners, and Indigenous peoples to partner on restoration opportunities. It is important to note that the cost of reclaiming oil and gas sites will continue to be paid by industry, ensuring no direct cost to B.C. residents.
With experience built on more than two decades of service, the Commission provides expertise on all aspects of LNG in British Columbia; and we will continue to work to protect public safety, respect those affected by oil and gas activity, conserve the environment and support responsible resource development.
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