Pacific Northwest LNG suspended its federal environmental review to substitute a suspension bridge over Flora Bank at its Lelu Island tanker docking site

Pacific Northwest LNG suspended its federal environmental review to substitute a suspension bridge over Flora Bank at its Lelu Island tanker docking site

Is B.C. LNG industry real? Yes

Petronas project at Prince Rupert is poised to go ahead, as opposition finds it can't call the industry as fantasy any more

VICTORIA – The B.C. legislature is back in session this week, a rare summer sitting to approve a 25-year project agreement for the first large-scale liquefied natural gas project in northern B.C.

Finance Minister Mike de Jong released the lengthy legal agreement prior to the debate, saying this step should remove any doubt that an international investment group led by Petronas of Malaysia intends to go ahead.

With billions invested in upstream resources and buyers waiting at home, the Pacific Northwest LNG group includes Chinese state corporation Sinopec, Indian Oil Corp., Japan Petroleum Exploration Corp. and Petroleum Brunei.

The most contentious issue is the government’s intention to protect the investors from “discriminatory” tax and regulations for the life of the project. The government insists these sorts of long-term cost certainty agreements are commonplace, and don’t affect provincial and federal taxes or environmental regulations unless they single out LNG operations.

Future governments can raise corporate tax rates, carbon tax or enter into a cap and trade system. Ottawa can scrap capital cost allowances that were recently extended to LNG producers, which is significant because Liberal leader Justin Trudeau has indicated he would get rid of what he calls subsidies to fossil fuels.

Both the province and Ottawa allow capital cost write-offs against corporate tax, to attract investment. B.C. attracted a lot of gas drilling rigs from Alberta with tax breaks for deep drilling.

The B.C. government invited comparisons with Western Australia LNG producers, and NDP researchers did just that. They noted that Australia’s Gorgon and North West Shelf LNG projects have written provisions that local employment and local suppliers will get preference.

Those are absent in B.C., along with apprenticeship guarantees for LNG.

“There was hard bargaining by the companies, and certainly the premier went into this negotiation in a very weak position, having to deliver on her extravagant and grandiose promises from the election,” NDP critic Bruce Ralston said. “The companies did well. Whether the citizens of British Columbia did well is certainly an open question.”

Green Party MLA Andrew Weaver painted himself into a corner, having spent the last two years dismissing the B.C. LNG industry as a fantasy that will never come to pass, strictly on economic grounds. He has since branded the Petronas deal, a template for any future projects, a “generational sellout.”

Another big player with gas well investments in northeast B.C. is Shell, with a proposal for Kitimat. Its prospects have improved since it took over British Gas Group, which had its own LNG intentions here. Another group led by Altagas remains on track to ship LNG from its Douglas Channel site before the end of the decade.

It’s important to remember that without LNG exports, B.C.’s natural gas industry will shrink rapidly after 50 years of increasingly significant revenues from sales to the U.S. Leaving aside all the political positioning around the province’s largest private investment to date, if this doesn’t go ahead we will all feel the effects.

De Jong had a blunt response when asked what the province gets in return for all its guarantees of low tax environment: “Their money.”

At peak construction, Pacific Northwest LNG will need as many as 4,500 workers, with 500 or more operations jobs depending on how far it expands.

The finance ministry forecasts that once Pacific Northwest LNG is up and running, it represents $9 billion in revenues to the province over 10 years, including gas royalties and taxes. That’s more than taxpayers can expect from the entire forest industry.

Tom Fletcher is legislature reporter and columnist for Black Press. Twitter: @tomfletcherbc

 

Just Posted

Mount Waddington Regional Fall Fair logo
Mount Waddington Regional Fall Fair cancelled again due to COVID-19 restrictions

The 2022 fall fair is still scheduled to take place in Port Hardy

North Island Gazette
EDITORIAL: What to do about homelessness in Port Hardy

‘people suffering from homelessness deserve to be treated with dignity and compassion’

North Island Eagles logo
North Island Eagles give update on the upcoming 2021-2022 season

The North Island Eagles minor rep hockey teams are getting ready for… Continue reading

Ma Murrays 2021 virtual ceremony screenshot
North Island Gazette wins big at 2021 Ma Murray Newspaper Awards

Zoe Ducklow and Bill McQuarrie both won gold at the online ceremony

Port Hardy council has agreed to cancel Canada Day celebrations in wake of the discovery of the remains of 215 children being found on the grounds of a former residential school. (North Island Gazette file photo)
Council votes to cancel Canada Day celebrations in wake of mass grave sites being found

Coun. Treena Smith made the motion for the chamber to not host Canada Day celebrations this year

People line up to get their COVID-19 vaccine at a vaccination centre, Thursday, June 10, 2021 in Montreal. THE CANADIAN PRESS/Ryan Remiorz
Vaccines, low COVID case counts increase Father’s Day hope, but risk is still there

Expert says people will have to do their own risk calculus before popping in on Papa

The Co-op gas station at Whiskey Creek is burning after a camper van exploded while refueling just before 4 p.m. on Thursday, June 17, 2021. (FACEBOOK PHOTO)
Exploding camper van torches Highway 4 gas station between Qualicum Beach and Port Alberni

Highway traffic blocked after Whiskey Creek gas station erupts into flames

Helen Austin performing with Trent Freeman at the 2018 Vancouver Island MusicFest. Austin is one of the many performers listed for the 2021 event.
Vancouver Island MusicFest goes virtual for 2021

Black Press to stream 25 hours of programming July 9-11

Greater father involvement in the home leads to improved childhood development and increased marital satisfaction, says expert. (Black Press Media file photo)
Vancouver Island researcher finds lack of father involvement a drag on gender equality

Working women still taking on most child and household duties in Canada: UVic professor

FILE – A science class at L.A. Matheson Secondary in Surrey, B.C. on March 12, 2021. (Lauren Collins/Surrey Now Leader)
Teachers’ union wants more COVID transmission data as B.C. prepares for back-to-school

BCTF says that details will be important as province works on plan for September

Provincial health officer Dr. Bonnie Henry outlines B.C.’s COVID-19 restart plan, May 25, 2021, including larger gatherings and a possible easing of mandatory masks on July 1. (B.C. government photo)
B.C. records 120 new COVID-19 cases, second vaccines accelerating

Lower Pfizer deliveries for early July, Moderna shipments up

A Heffley Creek peacock caught not one - but two - lifts on a logging truck this month. (Photo submitted)
Heffley Creek-area peacock hops logging trucks in search of love

Peacock hitched two lifts in the past month

The Calgary skyline is seen on Friday, Sept. 15, 2017. THE CANADIAN PRESS/Jeff McIntosh
2 deaths from COVID-19 Delta variant in Alberta, 1 patient was fully immunized

Kerry Williamson with Alberta Health Services says the patients likely acquired the virus in the hospital

The first suspension bridge is the tallest in Canada, with a second suspension bridge just below it. The two are connected by a trail that’s just over 1 km. (Claire Palmer photo)
PHOTOS: The highest suspension bridges in Canada just opened in B.C.

The Skybridge in Golden allows visitors to take in views standing at 130 and 80 metres

Most Read