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Seven Generations Energy founder says industry should blame itself for Canadian LNG failure

Seven Generations Energy Ltd.’s Kakwa River Projectin northwest Alberta, which company founder Pat Carlson says was completed in part thanks to a realization that businesses can’t rely on the government to push projects past the objections of local communities.

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The Canadian natural gas industry shouldn't blame environmentalists, First Nation communities or the government for its failure to get LNG export infrastructure built. It should blame itself.

That's the view of Seven Generations Energy Ltd. founder Pat Carlson, who stepped down as chief executive officer of the Calgary-based natural gas producer last month. Mr. Carlson, who made community relations a hallmark of Seven Generations's culture, says the industry needs to do a better job of involving those most affected by its operations.

Businesses can't rely on the government to push projects past the objections of local communities, Mr. Carlson, 63, said in a wide-ranging interview. Instead, governments should provide a final examination of operations that have already been mostly agreed on. That philosophy helped Seven Generations build its Kakwa River Project in northwest Alberta, he said. It has also helped the company's shares outperform its peers.

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"A pipeline to the Pacific and an LNG project on the Pacific, where the people along the route are involved – they're owners, they're builders – I don't know that that's been put forward," Mr. Carlson said. "Maybe it has and I just don't know about it, but I suspect it hasn't, and I suspect there's an opportunity there."

A project that needs government assistance to overcome local resistance represents a failure of the free-market system and a step toward a state-controlled economy, he said. And industry should work to convince environmentalists that getting Canadian natural gas to the coast fights climate change by cutting China's dependence on dirtier coal, he said.

Mr. Carlson's views won't surprise those who have followed his career. Like many of its peers, Seven Generations helps fund hospitals and scholarships in the region where it operates, and it works to hire local contractors.

But the company also puts out an annual stakeholder report, which this year started with Mr. Carlson's review of the past thousand years of human history and the evolution of democracy. In fact, Mr. Carlson founded Seven Generations – his fourth energy startup – on a code of conduct that says the company has only the rights given to it by society and that it should exist primarily to serve its communities, its workers and shareholders.

Mr. Carlson says he's confident Seven Generations's culture will remain intact under new CEO Marty Proctor. He's also optimistic for the Canadian gas industry's prospects over the long term, despite the current perception that it's trailing its U.S. counterparts. "Canadians are a little more conservative, a little less aggressive in the applications of new technologies, but they certainly don't lack the understanding," he said.

Video: Can Petronas overcome the opposition to its LNG project? (Globe and Mail Update)
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