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Notes for a Keynote Address
The Honourable Joe Oliver, P.C.,M.P.
Minister of Natural Resources
Liquefied Natural Gas Producer-Consumer Conference
September 19, 2012
Thank you very much. It is a pleasure and an honour to address this important conference. First, I wish to express my sincere thanks to Minister Edano and to the Institute of Energy Economics for the opportunity to bring Canada's perspective to the discussion. I am pleased to acknowledge the Canadian business delegation and Canada’s Ambassador to Japan, Jonathan Fried. I would also like to extend salutations to the distinguished participants of this conference, including Ministers from Australia, Qatar and South Korea as well as industry members and key business leaders from Japan and around the world.
I am here today with one straightforward message: Canada is a very attractive place for capital investment and trade. We are open for business; we welcome foreign investors; and we can be a reliable global partner of choice for liquefied natural gas supply, trade and investment.
Global Energy Leader
Permit me to start with the big picture. As a rising leader in the world of energy, Canada is a large, safe, reliable and cost-effective supplier of energy now and will be for many years to come. We are the world's sixth-largest producer of oil, and our proven reserves are the third largest in the world at 173 billion barrels, of which 169 billion barrels are in the oil sands. We are the second-largest producer of uranium and the third-largest producer of hydroelectricity.
North America is now the fastest-growing oil-producing region outside of the Organization of the Petroleum Exporting Countries. Output is expected to jump 11 percent over the 2010 to 2016 period due to increased oil sands production and increased product from tight light oil formations. As a result, North America has the potential to significantly increase its energy self-sufficiency in the coming years.
Of particular interest today are Canada's vast reserves of natural gas and our rapidly developing capacity to become a major exporter of liquefied natural gas. Shale gas development has dramatically changed the North American gas supply, with global implications. It is an important strategic resource that could have potentially significant impacts on global energy security.
A key strategic objective for Canada is to diversify its energy markets, particularly to the Asia–Pacific region, where demand is increasing. Although Canada does not currently export LNG to Japan and exports very little crude oil and petroleum products there, we see a huge opportunity to change that picture dramatically, benefitting both nations.
Canada is fortunate to have up to 1,300 trillion cubic feet, or 37 trillion cubic metres, of natural gas resources, which puts us in the top tier globally. Two-thirds of this is unconventional gas, including shale gas, which will undoubtedly increase as we discover more resources. We are already the third-largest producer of natural gas in the world. A fully developed service sector continues to propel Canada's upstream natural gas industry forward. So, we are at the forefront of the shale gas revolution.
Five LNG projects are being developed on our Pacific Coast, including three at Kitimat B.C., which are expected to be in service between 2014 and 2019. Two of these have already received 20-year export licences: the Kitimat LNG project, involving Apache Canada, EOG Resources, and Encana Corporation; and the Douglas Channel LNG project, which includes the Haisla First Nation.
LNG export terminals and related pipeline infrastructure are also being proposed for the Prince Rupert area of British Columbia. For instance, North American–based Spectra Energy Corporation recently announced plans with the British Gas Group to develop 4.2-billion cubic feet of natural gas per day pipeline to supply additional LNG export facilities proposed for the port of Prince Rupert.
Based on projects proposed, Canada could export the equivalent of 9 billion cubic feet per day of natural gas as LNG, or 66 million tonnes of LNG annually. These LNG projects are of major economic importance to Canada and are also of significance for Asia–Pacific region. In fact, LNG development on Canada's West Coast is already attracting the interest of investors from Asia–Pacific nations, including Japan, Korea and China.
One of these projects, known as LNG Canada, would have the capacity to export up to 24 million tonnes of LNG per year to Asian markets. Partners in this project include Shell Canada, Korea Gas Corporation, PetroChina Company Limited and Mitsubishi Corporation. TransCanada Pipelines will build the pipeline to transport gas to this facility.
A fully laden LNG tanker from Canada's Pacific Northwest can reach the Pacific basin LNG markets in as few as 11 days — faster than from the Middle East or Africa. Canada's competitive advantage also extends to our investment climate, with Canada ranked by Forbes magazine as the best place in the world to invest.
So the opportunity is huge, our competitive advantage is clear, and we are poised to become a major new safe, reliable and cost-effective supplier to Japan, Korea and other Asia–Pacific nations for years to come.
An Attractive Investment
Let me tell you why Canada is a great place to invest. We welcome investment in energy, mining and forestry. Our eagerness to accelerate development and diversify our exports of these commodities is reflected in our commitment to offer one of the most attractive climates for investment in the world, by lowering taxes, paying down debt, reducing regulatory burden and promoting free trade and innovation.
In large part due to our Government's focus on these basics, Canada's economy has proven to be more stable and resilient than most in the face of the recent global economic storms. Both the International Monetary Fund and the Organization for Economic Co-operation and Development predict that Canada's economic growth will be among the strongest in the G-7 this year and next.
Continuing to Improve: RRD
Despite these accomplishments, we are doing more to make Canada an attractive investment destination. We know that before investors make important capital commitments, what they want most is certainty and predictability.
This is why we recently launched our plan to modernize our regulatory system, called Responsible Resource Development. It will ensure that Canada's regulatory regime for major projects is among the most efficient, effective and competitive in the world. This new legislation introduces a sweeping new approach to regulation that eliminates duplication and enforces beginning-to-end time limits on environmental assessments. It also strengthens environmental protection by focusing on major projects and enhancing enforcement, and it enhances consultation with Canada’s Aboriginal peoples to ensure that their economic and social interests are taken into account.
We’ve done this to help Canada responsibly develop its immense natural resource wealth, which will benefit both Canadians and our major trading partners. These changes will facilitate capital and planning decisions, while strengthening our world-class environmental standards.
Our government has also introduced measures to strengthen Canada’s pipeline and marine safety regime by increasing the annual number of oil and gas pipeline inspection by 50 percent and doubling the number of annual audits to identify potential issues and prevent incidents from occurring. We have strengthened Canada’s tanker safety regime to include double-hulled tankers, mandated pilotage and improved navigation tools that assist ships moving through our waters. These measures ensure that Canada’s safety regime is strong and world-class.
Growth in our natural resource industry brings labour market challenges, especially to skilled trades. To address this challenge, we are actively engaged with our provincial and territorial counterparts, and industry. At the federal level, we are addressing this through programs geared toward temporary foreign workers, Aboriginal Canadians, skilled trades and youth. We are confident that our approach will deal decisively with this matter.
We have an abundance of energy, and we are eager to supply the growing demand for energy throughout the Asia–Pacific region. There is great complementarity because we want to diversify our markets, and buyers need to diversify their sources of supply.
We know that demand for LNG will increase substantially in the years to come. So we are moving quickly to develop the necessary infrastructure and actively pursuing the opportunities — here in Japan, in Korea, in China and elsewhere.
Canada has the resources, the expertise and the experience to be a secure, reliable and cost-effective contributor to the energy security of Japan for many years to come, forging yet another bond in friendship and commerce between our two countries.
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