74 LEXPERT MAGAZINE
|
NOVEMBER/DECEMBER 2017
| LNG DEVELOPMENT |
tor," says Rick Williams, a regulatory and
project approval litigator at Borden Ladner
Gervais LLP in Vancouver.
If you want to talk about impediments
to Canada's prospects as an LNG player, he
says, social licence has to be on the table.
Because the US is converting existing LNG
facilities from import to export, the pro-
posed land is already zoned for industrial
use. As a result, social opposition — from
demonstrations and civil disobedience all
the way up to court challenges — "tends to
be somewhat less."
In Canada, however, opposition to proj-
ect development comes right at the start,
"particularly on the West Coast, and par-
ticularly with greenfield projects, it has re-
ally become the dominant discourse. We
see it on a number of current projects, but
any large-scale industrial development is
faced with at least the threat of civil unrest
or legal challenges."
at can slow things down dramatically.
Take environmental approvals. In theory,
federal environmental approval must be
decided within 36 months, says Burnet
Duckworth's Quesnel. But in practice,
the clock can be stopped several times in
those 36 months, and for several months at
a time, to allow a project developer to ad-
dress comments on environmental impact.
And the comment letters come not only
from stakeholders directly impacted by
the project but from "people from around
the world whose comments also need to
be addressed," she says. "On Petronas, for
example, I heard there were something like
34,000 comments on the government's
dra environmental-assessment report."
lion LNG export facility proposed near
Prince Rupert. It has been going through
multiple environmental studies.
Don Greenfield, an energy partner at
Bennett Jones LLP in Calgary, says Canada
has some real advantages over gas stored and
shipped from the Gulf of Mexico. For one,
the operational costs of producing LNG in
a cold climate should be lower than they are
in a hot climate, because LNG is produced
by refrigerating it. Another advantage for
the energy-hungry Asian market is that
British Columbia is closer, providing a
shipping cost advantage. "e Gulf Coast
exporters have to go through the Panama
Canal, so they have to go south a ways and
then back north, whereas from BC you're
basically going straight across the Pacific
Ocean." at said, Australia and other
Asia-Pacific LNG supply regions, such as
Malaysia and Indonesia, are closer to the
prime Asian markets, and have significant
shipping time and cost advantages over Ca-
nadian projects.
e market "can pass you by," warns
Greenfield, adding that's what seems to
be have happened in Canada over the past
couple of years. He says he's acted for proj-
ect developers who have looked at Canada,
then decided to build elsewhere, although
he can't say for sure whether it's because of
regulatory factors, or for economic reasons
such as the high cost of building brand
new infrastructure.
Although the biggest factors
discouraging investment relate to econom-
ics and regulation, "social opposition com-
pared to other jurisdictions is also a fac-
Social opposition can be heavily
funded by international environmental
groups, says Rachel Hutton, a partner at
Stikeman Elliott LLP in Vancouver, who
acted for the Lax Kw'alaams
First Nation in support of the
Petronas project.
International environmental
activists can play a large role in
the regulatory process "in terms
of launching opposition. ey
come equipped, lawyered-up and
ready to go, and really take up a
very large bandwidth of time, expense and
legal focus at the regulatory level," says
Hutton, who says she's seen it from the
smallest town to those the size of Petronas.
"But what gives rise to opposition, where
the money and resources behind it come
from, may not be visible."
New pipelines are key to get-
ting Canada's shale gas from Alberta and
northeastern BC to Pacific coast terminals.
British Columbia's First Nations commu-
nities are definitely in a position to stall,
if not stop, them from being built across
their lands if they choose, especially since
the Supreme Court of Canada's decision
in Tsilhqot' in Nation v. British Columbia,
2014 SCC 44, which determined that a
small nomadic band held title over its tra-
ditional lands.
But Albert Hudec, a senior partner at
Farris, Vaughan, Wills & Murphy LLP in
Vancouver, says few of them want to. He
says most BC bands are keen to partici-
pate in LNG development, pointing to the
First Nations LNG Alliance, a coalition
whose mandate is to increase positive LNG
dialogue in First Nations communities.
"It shows there's a significant level of sup-
port for LNG and the associated pipelines.
ey understand there is a big difference
between gas and oil." If a pipeline carrying
gas leaks, he says, it explodes and causes a
fire. If an oil pipeline leaks, it leaches bitu-
men into the ground, contaminating the
soil. "First Nations know the difference."
Hudec has acted for First Nations bands
on several LNG deals and says most appre-
ciate the financial benefits, jobs and con-
tracts that can come from these projects.
"A majority of First Nations are disposed
to talk about LNG and natural gas devel-
opment as long as it can be done in an en-
RACHEL HUTTON
> STIKEMAN ELLIOTT LLP
"[Project opponents] come equipped,
lawyered-up and ready to go, and really take up
a very large bandwidth of time, expense and
legal focus at the regulatory level. But what
gives rise to opposition, where the money
and resources behind it come from,
may not be visible."
