Common Sense Canadian

Exploding BC LNG Myths – Part 2

Posted February 20, 2014 by Kevin Logan in Energy and Resources
Exploding BC LNG Myths-Part 2

BC Minister of Natural Gas Development, Rich Coleman (BC Govt photo)

“The opposition wouldn’t know LNG if it came up and bit them, they’re totally uninformed.” – Rich Coleman, BC Minister of Natural Gas Development.

For over three years, Rich Coleman has led the BC LNG charge; however, he has taken a back seat in recent weeks as his self-imposed deadlines for progress on LNG development have repeatedly blown up.

Very little mention has been made of the non-disclosure agreements Coleman has with 12 or so companies lined up to exploit BC’s massive natural gas reserves – but that apparently does not stop him from admonishing his critics for being “totally uninformed.”

After missing his third self-imposed deadline to finally let the rest of us in on his non-disclosed, high-level negotiations, Coleman continues to hold his cards close to his chest.

While this week’s Liberal budget finally included some details on the long-promissed tax regime for LNG, it has yet to become legislated or locked in. This should be viewed as trial balloon – a proposed “framework” enabling the Liberals to say they’ve “delivered” on something. And the terms themselves show what raw deal taxpayers can expect under the Liberals’ LNG scheme (more on that in a bit).

In this, the second part of “Exploding BC LNG Myths” (See part one here), we examine the few details we have to work with to try to understand what Coleman is doing and how BC intends to launch itself to the forefront of a trillion dollar worldwide LNG industry.

While Clark campaigns for a Debt Free BC, she alone will have booked over half of the debt accumulated since we started calling the place British Columbia.

Yet another budget of promised “Prosperity”

Claim: BC Liberals are keeping their election campaign promises of a “Debt Free BC”, balanced budgets, job creation and a prosperous future due to LNG.

False: When Clark became Premier in 2011 and began her “Debt Free BC” Campaign, total Provincial debt was 45.2 Billion dollars. Despite her government’s claims of balanced budgets with surpluses – past, present and future – BC’s total debt will climb over 50%, from 45.2to 68.9 Billion dollars.

In other words, while Clark campaigns for a Debt Free BC, she alone will have booked over half of the debt accumulated since we started calling the place British Columbia! And she will do it all before the next election. And that’s not counting the $100 Billion in additional contractual obligations they’ve racked up for taxpayers, hidden from public view.

That is a staggering, unprecedented growth in debt and there will not be one nickel of promised prosperity funds booked  from LNG revenues before the next election.

Liberals fail in job creation too

The BC Liberal Government has also lost a staggering 21 000 full-time jobs since Clark was elected less than a year ago – despite the multi-million dollar “Job Creation Plan” that was the center of her campaign of a strong economy, secure tomorrow, smaller government and thriving private sector.

Most new job creation during the entirety of the now almost three-year-old “Jobs plan” has been in in the public sector.

BC Liberals Give away the Farm

Claim (Rich Coleman): “I think people will be surprised how smart we have been with the establishment of a taxation regime for the budding LNG industry.”

Partially True: It is true that Coleman and his repeatedly-promised, non-disclosed terms still have yet to be fully divulged and legislated but what little has been disclosed and floated by the finance minister is very clever indeed.

LNG in a NutshellEffectively, BC will not realize any serious revenue from LNG until – wait for it – not this mandate, nor the next administration, but beyond the election after that!

The two tier tax regime floated by the finance minister does not start until ships are leaving our coast full of LNG, and for 3-5 years after that it is “tier one” rates of 1.5%. However, the kicker is that every nickle paid to BC under the pathetic 1.5% tier one rate is given back to the companies once tier two is reached.

And tier two is not much better. Tier two taxation is achieved once the LNG companies we let set up shop have recovered 100% of their costs. (Remember, Petronas alone claims investment of 36 billion dollars!) And once they have recovered costs, the tier two taxation rate of “up to” 7% kicks in – at the same time all the tax paid under tier one is given back to the companies through rebates.

At this rate, economists and experts have claimed that erasing BC’s fast-growing debt, lowering taxes and filling a 100 billion dollar prosperity fund while also underwriting the services we have come to rely on is a total impossibility, based on reasonably expected LNG revenues. And even if it was achievable, it would not begin to happen for three elections after it was promised.

“Very smart” indeed Mr Coleman – to run and get re-elected on prosperity for British Columbians, but instead deliver massive giveaways to the largest most profitable multi-national companies on earth.

Time to act: Demand an inquiry and full disclosure

Our governments have already committed to export more natural gas than we have ever produced throughout all of Canada, through as many as 11 export permits, totalling 105 mtpa for twenty five years – an oil equivalent that doubles current Tarsands production. Seven of the eleven await cabinet approval, so now is the time to be heard.

Now, as of this most recent budget, they are promising to pick up the tab for large portions of total investments, with clever tax incentives and rebates that leave the resource owners holding the bag.

They have done all of this under non-disclosure and handed it all over without even so much as a commitment from a single potential investor – not even a non-binding memorandum of understanding has been produced for the largest deals in our history.

It’s time British Columbians put the breaks on this debacle, demand full disclosure and an inquiry into the secret negotiations that have resulted in taxpayer giveaways of such unprecedented, gargantuan proportions.

Our public purse, energy security, environment and economy depend on it.


About the Author

Kevin Logan

Kevin Logan's career has been diverse, ranging from small business to NGOs through finance and government. Early on, he operated the research department for the Vancouver branch of international brokerage Richardson Greenshields. After leaving the finance industry he owned operated small businesses and eventually established a consulting company which contracts with both the private and public sectors. He served as a ministerial assistant to numerous ministers and a premier in the former BC NDP Administration. Kevin is also an independent researcher and writer who has administered many diverse and successful campaigns.



    what can i do… ? What can we do..?

    Refuse to pay my taxes (withold) until we can put an independent progressive in a leadership role who is representing the public… in otherwords demand input into how our tax money is being spent… i see this as peaceful protest….. withholding our taxes

    refuse to pay my utility bills (withold my payments)..until the bc gov. comes clean about these contracts and financial agreements with the multi-national energy companies… and prepared to include independent public representation in any contractual processes with energy multi-nationals…

    refuse to buy gas at any outlets that are energy companies in contract agreements with bc gov. … unfortunately it is likely all of them.. i will have to look into this…

    turn off any media divices that are nothing of truth but powerful supporters of the corperate agenda… although some folks (likely most of us)due to no choice of our own watch/listen to mainstream which only increases our understanding of what, who and how well the propaganda is being delivering…

    Have these political discussions on all the local public cable tv channels in bc…. in other words take over our only public channel..
    design creative programs that demonstrate how things are and how it could be if we had an elected leader by the people and for the people …

    refuse to vote or support any candidate and campayne that is not an independent progressive by the people
    and for the people…

    keep our children informed and protect them from the mass loss of their future rights as citizens in a democratic society which is regressing faster and faster with eeah year to the point that it is almost out of our control …

    thank you COMMON SENSE and CONTRIBUTORS for all the hard work, remarkable research to raise awareness and inform, , the incredible amount of human energy all of you put forth to public and enviormental issues that are of great concern…!!!


    “The opposition wouldn’t know LNG if it came up and bit them, they’re totally uninformed.”

    This reveals the present divisive mindset of the bc government. Anyone who does not see the issue as they do is dismissed outright.

    Legitimizes the observation repeatedly that this government is not for anyone but themselves and screw everyone else.

    This government simply does not care for British Columbians. They only care about doing everything and anything to remain where they are regardless of the cost.


    And therein lies the problem Sidney. What can a few people do without the resources to make this government come clean? How do a few people force a public inquiry into this government? They don’t. Unless the other political parties (NDP) are willing to do something to put the brakes on this mess, the people of BC will be stuck with the consequences, and that is the sad part of the whole thing.


    I’ve always been of the opinion that what is needed is a series of criminal complaints signed by several thousand people and filed with the RCMP or appropriate agency demanding a forensic accounting of these Liberals and their deals starting with the Run of River scam.

    My understanding is that left or right, these governments are elected protect the Public’s Interest. Not to fire sale our resources at pennies on the dollar in exchange for campaign donations and other more questionable gratuities.
    Clearly someone is not holding up their end of the social contract.


      “….filed with the RCMP …..”

      Ummmmm, perhaps you may have heard of the BC Rail “trial”?

      The Liberal gov’t paid the “defendants” $6 million dollar legal fees and quietly shelved the entire rotten can of worms..
      And then a few months later signed a 20 year, multi billion dollar “renewal” contract with the RCMP…….nothing to see here….move along…..

      Who was it that said “Power corrupts. Absolute power corrupts absolutely….”


        Your point is taken, but I believe the BC Rail scandal was covered up through the manipulation or corruption of the court system.

        The RCMP may have actually done their job in delivering a trial-able case.

        Part of my thought was to be able to get some traction in the media with sheer numbers demanding a forensic investigation, thereby exposing the corruption of our alleged government and their lack accountability to those who are actually dumb enough to vote for this scum.

        It might also shine further light on the RCMP pursuing ICBC issues like bicycle riders who don’t wear helmets, while turning a blind eye on white collar crime and the large scale theft of British Columbia’s resources..

          Kevin Logan


          “Part of my thought was to be able to get some traction in the media with sheer numbers demanding a forensic investigation, thereby exposing the corruption of our alleged government and their lack of accountability”


          I am just wrapping up a piece right now that you will find interesting …….. stay tuned and watch this space in coming days….

    Don F.

    This is worrisome on so many levels.
    We live in a province where Media seem incapable or unwilling to face the realities of this madness and bring it forward to the public and where political opposition is so enemic as to be all but useless!
    Apart from the monetary losses {which in themselves are devastating} there will be environmental devastation as we have never known.This is totally irresponsible and should be challenged immediately.
    This is all being imposed on us by people so incapable and incompetent as to make you weep, people who would do this to our province only to stay in power a few short more years. They are willing to destroy all rather than admit their madness.
    We simply cannot allow this to happen.


      The “media” in this province ( and in most other jurisdictions), have become lapdogs to the almighty dollar.

      What I find particularly galling is the govts use of taxpayers dollars to perpetuate the endless advertisements telling us what a great job the are doing.
      I should be illegal for taxpayers money to be used to promote a particular gov’ts agenda. Let’s face reality folks. Our tax money is being used to promote a political party in power’s agenda through all forms of media(print, radio, tv).
      If the federal conservatives or the provincial liberals want to toot their own horn with their own money….go crazy.

      Just don’t use my tax dollars to tell me how great you are………..

      It should be illegal for public money to be used for what amounts to propaganda.

      But you will never hear a critical peep from the media lapdogs. They know where there next meal comes from…….

      And they wonder why their ratings are dropping like a rock.


    What can I do?

    It’s time British Columbians put the breaks on this debacle, demand full disclosure and an inquiry into the secret negotiations that have resulted in taxpayer giveaways of such unprecedented, gargantuan proportions. put the brakes on this debacle

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