B.C. to be lead regulator of LNG terminals, even on federal port lands

B.C. to be lead regulator of LNG terminals, even on federal port lands

Critics worry setup will suffer from lack transparency and accountability, and an inability to investigate

A provincial oil and gas agency will be the lead authority over huge new liquefied natural gas plants if they are built in B.C., even on federal port lands, under proposed federal regulations.

Ottawa’s plan to delegate authority to the B.C. Oil and Gas Commission covers four proposed plants in the Prince Rupert area in northwest B.C. on port lands or waters, including the Petronas-led $11.4-billion Pacific NorthWest LNG plant.

In introducing the proposed LNG regulation in June, Stephen Harper’s Conservative government said it has no comparable regulatory system to B.C.’s and it would save tax dollars, resources and time to adopt the provincial regulatory system.

“These regulations will ensure that the LNG projects at the port are built and operated in a safe manner, protecting the environment and Canadians,” Transport Canada said earlier in an introduction statement to the new law.

The federal regulations are not yet in force, and with an election underway, it’s not clear what would happen to the proposals if there was a change in government in Ottawa.

If the federal rules became law, the Commission would oversee construction, operation, maintenance and enforcement of LNG facilities at the Port of Prince Rupert. It already has this responsibility for LNG plants not on federal lands, including at two existing small plants in Delta and Vancouver Island.

In a written statement, the Commission said it has been building the capacity and expertise in the past two years to “effectively” review and regulate major LNG projects. That includes staff training, travelling to see operating LNG facilities, restructuring positions and hiring new staff, although the Commission would not say how many have been hired.

The agency’s commissioner and CEO, Paul Jeakins, said in an email that the commission has opened offices in Prince George, Smithers and Terrace in north-central and northwest B.C. in preparation of a potential shift in the natural gas industry.

“The commission created the major projects branch that works specifically with LNG-related projects. The commission also dedicated three existing engineering experts to LNG, and additional contractors as needed. The existing facilities engineering team also provides support,” he said.

Asked how the commission would deal with companies such as Petronas, given concerns over its safety issues in Malaysia and that the company is new to B.C., Deakins said all companies operating in B.C. must meet all environmental reviews, all applicable legislation and regulations and any specific permit conditions that may be imposed on them.


“The commission has a highly-trained compliance and enforcement team that ensures operators in B.C. are following all laws, regulations and permit conditions,” said Jeakins.

The Commission said it conducted 5,000 inspections in 2014.

The Commission said it will also work co-operatively with the National Energy Board, the B.C. Ministry of Environment and the B.C. Safety Authority. WorkSafeBC has no jurisdiction over port lands, the federal agency Service Canada has authority for workplace safety.

Critics of the plan, including environmental groups such as Voters Taking Action on Climate Change and the SkeenaWild Conservation Trust, fear the federal plan would reduce transparency and accountability and leave the provincial body with an inability to investigate incidents at federal ports. In a letter to Transport Canada, Voters Taking Action and SkeenaWild said under the new rules, commission officials would not have the power to search, conduct inspections or enter the premises of federal port offices of the Prince Rupert Port Authority without the consent of the person in charge.

The two groups also said they believe the Commission is insufficiently resourced, and does not have the capacity to operate meaningfully in northwestern B.C. because its focus, until very recently, has been entirely in B.C.’s northeast.

Kathryn Harrison, Voters Taking Action volunteer director, said her group is concerned the provincial regulator won’t have the authority to ensure the safety of the LNG industry.

“If governments want citizens to trust them, the way to do that is by making their actions transparent and accountable. Trust is built through openness and trust is built through performance,” said Harrison, a University of B.C. political science professor.

Critics also have concerns with the Commission’s powers, saying the B.C. agency has an internal conflict of interest because it is has responsibility to both steward the growth and development of the natural gas sector and to regulate it.

“That kind of conflict of interest — promoting the industry and then regulating the industry — helped contribute to the BP Horizon disaster and it led the U.S. federal government to break up the agency that had that internal conflict of interest,” noted Calvin Sandborn, legal director of the University of Victoria’s Environmental Law Centre.

Sandborn was referring to the Minerals Management Service, which was split up into three federal U.S. agencies, including a separate safety and environmental enforcement branch.


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