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A drilling rig in the Montney Shale, near Fort St. John, B.C. Photographer: Jason Dziver/TalismanJason Dziver

Royal Dutch Shell PLC is raising the stakes in the country's contentious energy debate, warning that Western Canada's shale gas boom will be short-lived without an urgent push to access Asian markets.

In a weekend interview, Shell Canada president Lorraine Mitchelmore said growing U.S. shale gas production is rapidly shrinking the market for Canadian exports.

As a result, Western Canadian producers must find new customers in the fast-growing Asian market but are facing stiff competition there from countries like Australia.

"In Asia, they are looking to diversify their supply, but we have a very short window," Ms. Mitchelmore said in a telephone interview from St. John's, where she addressed the Canadian Chamber of Commerce.

"Otherwise, we risk becoming a very, very small market."

Without an expanded customer base, companies will find it hard to justify the development of British Columbia's Montney and Horn River shale gas plays.

"It would be an absolute pity not to develop that resource," she said.

Shell has a major presence in the Montney shale gas play, and is working with Chinese, Japanese and South Korean companies to determine the feasibility of building a pipeline to B.C.'s Pacific coast and a liquefied natural gas terminal.

A native Newfoundlander, Ms. Mitchelmore is trained as a geophysicist and has spent 25 years in the international oil and gas business.

Along with oil patch executives like Suncor Energy Corp.'s Rick George, she has become a leading advocate for a new energy strategy that places an urgent priority on improving access to global markets.

Federal, provincial and territorial energy ministers endorsed the need for a national strategy at a July meeting in Kananaskis, Alta., but are far from agreeing on what that framework would include.

Environmental groups argue that issues like climate change and protecting local ecosystems should outweigh development interests. First nations are demanding a partnership in any project that makes an impact on their traditional territories, and a veto over developments they oppose.

Ms. Mitchelmore said Canada's prosperity hangs in balance, given that the oil and gas sector is by far the country's leading export industry, dwarfing even the auto industry.

"This should be a time of great opportunity for Canada, but it isn't – or at least not yet," she told the Chamber of Commerce on Sunday. "We need to diversify our customer base for energy products and create access to global growth markets."

Canada is already paying a stiff penalty for its reliance on the U.S. as its sole export customer.

Western Canada crude is selling at a deep discount to the international price because the landlocked, mid-continent market – where Alberta and Saskatchewan oil is mainly sold – faces a glut of growing Canadian and U.S. production.

North American natural gas prices are trading near $4 (U.S.) per thousand cubic feet – depressed by the booming production of shale gas in the U.S. and lower recessionary demand levels. Asian gas prices are linked to crude costs, and are currently about $14 (U.S.) per thousand cubic feet.

Meanwhile, U.S. shale producers are capturing American markets that have been served by Canadian imports, and are even making inroads into Ontario from the prolific Marcellus gas field that spans Pennsylvania, West Virginia, Ohio and New York state.

There is already a move by Western Canadian producers to turn to Asia. Backed by Calgary's Encana Corp., U.S.-based Apache Corp. have submitted a $4.7-billion proposal to the National Energy Board to build a gas pipeline and an LNG facility in Kitimat, B.C.

Shell – the world's leading LNG company – is working with China National Petroleum Co., South Korea's Kogas, and Japan's Mitsubishi in the early stages of a feasibility study for a similar export project.

But Ms. Mitchelmore said Canada is in a race with gas exporters like Australia and Qatar to win supply contracts in Asia, where countries are now signing up long-term suppliers. Australia has some $250-billion (U.S.) of LNG projects either under development or proposed – double Canada's planned oil sands investment – with a goal of becoming the world's largest LNG supplier by 2020.

She said Ottawa needs to move quickly to make its regulatory system more efficient – with clear time lines to conclude reviews – so that companies can commit to multibillion-dollar projects. Provinces also need to streamline their regulatory systems.

The Shell executive applauded the commitment of ministers at Kananaskis but worries they'll take too long to translate intentions into action.

"I'm not sure they understand the sense of urgency in front of us," she said.

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