Canada is well positioned to develop a strong Liquefied Natural Gas (LNG) market that will create jobs, and an export-focused competitive energy industry.

“Progress is being made on essential regulatory issues,” says Jim Prentice, senior executive vice president and vice chairman of CIBC. “Pipeline routes in from the gas fields are taking shape. Competition is mounting. Opportunity is emerging.”

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Canada has a number of advantages, including geography and one of the shortest supply routes to the Asian market, along with a substantial resource base, supportive governments at the provincial and federal level, and an open-for business environment.

But there are challenges to overcome to be successful, he adds.

Similar to the oil industry, there is a need to tap into new markets because gas production has declined significantly over the last several years, and Canada has been dependent on traditional markets.

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“We’ve entered a critical period,” he says. “We face the imperative to match up Canada’s resources with the needs of the Asian marketplace. We must access new and growing markets if we want to reinvigorate this important industry.”

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The issues that must be addressed include:

  • A royalty regime must be defined in such a way that it promotes the establishment of an LNG industry in Canada and helps ensure its long-term survival and success;
  • Canada faces a skilled labour shortage that could put development at risk, and action is needed to ensure those skills exist;
  • The federal government needs to adopt a proactive role on coastal waters management;
  • Decisions must be made on how LNG facilities in B.C. are to be powered;
  • There is a need to better understand and move to address the competitive challenge that may be posed by the U.S.

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“Let’s be clear, getting into liquefied natural gas represents a big financial bet,” says. Prentice. “The stakes are high and the challenges are formidable. This is no slam-dunk. We need to be confident and aggressive — but we must also ensure that we resolve and bring across the finish line a number of key outstanding issues.”