Hon. Jim Prentice, Vice Chairman of CIBC, discusses key issues to be addressed for the success of Canada and British Columbia in the Liquefied Natural Gas market
VANCOUVER, Feb. 25, 2013 /CNW/ - CIBC (CM: TSX) (CM: NYSE) - Canada is well positioned to develop a strong Liquefied Natural Gas (LNG) market that will create jobs; an export-focused competitive energy industry; and long-term economic advantage for British Columbia and Canada. But there are challenges to overcome to be successful, said the Hon. Jim Prentice, Senior Executive Vice-President and Vice Chairman of CIBC.
Speaking at the "Fuelling the Future: Global Opportunities for LNG in BC" conference in Vancouver, Mr. Prentice told the audience that there is momentum in the right direction for success in the LNG sector.
"Everything is happening. Progress is being made on essential regulatory issues. Pipeline routes in from the gas fields are taking shape. Competition is mounting. Opportunity is emerging," said Mr. Prentice.
The good news is that 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, Mr. Prentice told the audience.
But 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.
"We've entered a critical period. 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," he added.
To guarantee success for Canada in the LNG market Mr. Prentice outlined number of issues that must be addressed.
- A royalty regime must be defined - and 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 United States.
"Let's be clear, getting into liquefied natural gas represents a big financial bet," said Mr. 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."
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A PDF of Mr. Prentice's speech is available at: http://files.newswire.ca/256/Jim_Prentice_Speech.pdf