BC LNG: Environmental Assessment Process

February 17, 2015

In a previous post, we discussed the federal and provincial environmental assessment (EA) process and the status of the various proposed BC LNG Export Terminals in obtaining the necessary EA approvals. The following provides an update as to the status of obtaining EA approvals for those BC LNG Export Terminals that have initiated the EA process.

PROJECT

PARTNERS ON PROJECT

STATUS OF ENVIRONMENTAL ASSESSMENT

Kitimat LNG

Chevron Canada (50%)

Woodside Petroleum* (50%)

(*Woodside Petroleum announced their purchase of  Apache’s 50% stake in the Project on December 15, 2014.)

Received British Columbia Environmental Assessment Certificate on 2006/06/06.

Received CEAA approval on 2006/08/1.

Status: Approved.

Pacific Northwest LNG

Petronas/Progress (62%)

China Petroleum & Chemical Corp
(15%)

Japex (10%)

Indian Oil (10%)

Petro-Brunei (3%)

Received British Columbia Environmental Assessment Certificate on 2014/11/25.

CEAA Application submitted: 2013/04/08.

Status: Approved at BC EAO; CEAA –EA in progress.

LNG Canada

Shell Canada (40%)

KOGAS Canada (Korea Gas Corporation) (20%)

Mitsubishi (20%)

Petro China (20%)

Substitution Order issued 2013/05/31.

BC EAO Pre-Application Stage start date: 2013/04/03.

Status: Application Review Stage.

Woodfibre LNG Export Pte. Ltd.

Pacific Oil & Gas

Substitution Order issued: 2014/02/19.

BC EAO Pre-Application Stage start date: 2013/11/27

Status: Application Review Stage.

WCC LNG LTD.

Exxon Mobil (50%)

Imperial Oil (50%)

BC EAO Pre-Application Stage start date: 2015/01/07.

CEAA Application submitted: 2014/1/31.

Status: Pre-Application Stage at BC EAO; CEAA - EA in progress.

Aurora Liquefied Natural Gas Ltd.

Nexen (60%)

Inpex and JGC (40%)

Substitution Order applied for by BC EAO: 2014/06/24.

BC EAO Pre-Application Stage start date: 2014/06/23.

Status: Pre-Application Stage.

Prince Rupert LNG

BG Group

BC EAO Pre-Application Stage start date: 2013/05/02.

CEAA Application submitted: 2013/06/21.

Status: Pre-Application Stage at BC EAO; CEAA – EA in progress.

Notes:

The various LNG Export Terminals proposed to be built in British Columbia may be subject to EAs under both the Canadian Environmental Assessment Act, 2012 and the British Columbia Environmental Assessment Act. The EA process, whether under federal or provincial legislation, examines projects to identify adverse environmental, economic, social, heritage and health effects that may occur during development and operation of proposed facilities. The EA process includes involvement/consultation with interested parties such as First Nations and working groups, technical studies and the development of comprehensive reports.

In order to minimize duplication and streamline these generally similar federal and provincial processes, the Canadian Environmental Assessment Agency (CEAA) and British Columbia Environmental Assessment Office (BC EAO) have entered into a Memorandum of Understanding on the Substitution of Environmental Assessments with the Canadian Environmental Assessment Agency.

The MOU provides a mechanism for the CEAA to issue a substitution order and effectively substitute the BC EAO’s process for its own, and to rely on the record established by the BC EAO in conducting its EA of projects located in BC, such as the LNG Export Terminals. Any such substitution order is subject to certain terms and conditions, including with respect to the general nature of the process to be run by the BC EAO, and also clearly preserves the right of the federal government to exercise any judgment or discretion that it may possess under applicable federal legislation as it sees fit. However, the MOU does at least hold out the prospect of reducing unnecessarily duplicative proceedings.

Already, the BC EAO has been substituted for the CEAA in connection with several of the most advanced EA applications, and many industry participants and commentators believe this trend is likely to continue as further EA applications are submitted and processed.

The BC EAO EA process consists of three stages:

1. Pre-Application Stage:

The pre-application stage is used to ensure that EA applications contain the information necessary for the BC EAO to actually undertake a project EA and make recommendations. The BC EAO issues Application Information Requirements (AIR),which identify the matters that will be considered in the EA and what information must be included in an EA application. A working group is established and is involved in the development of the AIR. As well, First Nations are consulted. The AIR include baseline studies, project benefits (including socio-economic impacts such as estimated government revenues and contributions to community development), cumulative impacts and proposed mitigation measures and First Nations impacts.

Neither the legislation nor the BC EAO impose time restrictions on the pre-application stage, however there is a maximum 30-day limit for the BC EAO to evaluate and determine completeness of an EA application.

2. Application Review Stage:

Following acceptance of an EA application, the application review stage begins. This involves public comment periods and the drafting by the BC EAO of an assessment report to document: (i) the findings of the assessment; (ii) outstanding issues; and (iii) methods to address documented issues. The BC EAO will share its draft assessment report with the proponent, the working group and First Nations. The BC EAO typically provides three weeks for comment. As the last step of the application review stage, the BC EAO submits its final assessment report, which includes recommendations, to the British Columbia Minister of Environment and the Minister of LNG Development, who have authority to decide whether or not to issue an environmental assessment certificate.

The BC EAO has a maximum of 180 days following the acceptance of an EA application to deliver its assessment report.

3. Decision Stage:

Upon receiving the BC EAO’s assessment report, the Ministers have 45 days to make a decision. In doing so, the Ministers must consider the assessment report, any documents accompanying it and any other matters they believe are relevant to public interest. If the Ministers issue an environmental assessment certificate, the proposed project may proceed and provincial authorities may issue other necessary project approvals, subject to the satisfaction of approval requirements. If a federal EA is triggered, the federal Minister of Environment’s approval is also required, even if a substitution order has been issued under the MOU. Similar to the provincial process, if the federal Minister issues a positive EA decision, federal authorities may issue other necessary approvals under their jurisdiction.

DISCLAIMER: This publication is intended to convey general information about legal issues and developments as of the indicated date. It does not constitute legal advice and must not be treated or relied on as such. Please read our full disclaimer at www.stikeman.com/legal-notice.

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