Canada's emergence as a major gas-exporting nation is looking less like a pipe dream, with the announcement Wednesday of a third major pipeline to carry B.C. gas to proposed liquefying plants on its northern Pacific coast for exports to Asian markets. But with supermajors such as Royal Dutch Shell , Chevron and Malaysian-owned giant Petronas investing to develop the gas sector here, Ottawa needs to take more of a leadership role to ensure Canada lives up to the vast potential before it.
Growing Asian markets are the obvious destination for Canadian gas: the available resource overwhelms our modest domestic needs, while the U.S. is developing enough of its own massive gas resources to require very little if any Canadian output in the coming years. Not only that, but gas prices in Asia are significantly higher – generally in the mid-to-upper range of $10 to $20 (U.S.) per cubic foot – compared with prices of less than $3 here. Prices for Canadian gas are lower than those south of the border by 10 to 20 per cent and would cost less to ship the much shorter distance to Asia than from the U.S. Gulf Coast.
But for the gas to be exported it must move through hundreds of kilometres of pipelines yet to be built, and getting pipelines built has proven to be a tricky and politically charged issue in recent years. Numerous pipeline projects have either been delayed or bogged down in regulatory hearings.
Granted, natural gas pipelines should be an easier sell than those transporting Alberta crude oil: the B.C. government is likely to be less hostile to pipes carrying product tapped and taxed in its own backyard, while fears of nasty oil leaks or spills do not apply to the same extent to gas.
But turning proposed gas pipelines into reality is, as veteran industry forecaster Bill Gwozd of Ziff Energy puts it, "a 2,000 day journey" fraught with all kinds of risks. The Conservative government in Ottawa has been reluctant to be too overt a proponent of expanding energy transportation infrastructure, fearful of losing votes in British Columbia or appearing to circumvent due regulatory process. But that doesn't mean Ottawa can't take a more active stance to show it supports development of such a crucial resource.
One way, says Mr. Gwozd, would be to scout proposed pipeline pathways to anticipate what problems – such as environmental issues or concerns by nearby communities and affected First Nations – might occur, an effort that could help address and solve issues before they bog down the process. It would be a small but important signal that Ottawa is keen to further secure Canada's energy future, and willing to take a more hands-on role to do so.
Sean Silcoff