LNG ‘Prosperity’ Will Always be Just Around the Corner for BC
In assessing Premier Christy Clark’s political sins, add one other: irresponsibility…big time.
In the Sun of February 26, on the business page, is an excellent article by Scott Simpson on natural gas prices and their uncertainty. In it you will see that exports of natural gas, in liquefied form (LNG), to Asian markets are scarcely a slam dunk proposition. Gas prices in most Asian markets are controlled by governments and the private sector in a number of cartels, with the idea of maintaining high prices. But, to say the least, the matter is in a state of flux.
Getting ordinary facts on this situation is a crap shoot. Christy Clark tells us that China will be our next big customer. On the other hand, we hear that China has discovered its own massive shale gas reserves – while yet other sources warn this gas will be a challenge to access. Russia sits on the world’s most plentiful conventional gas reserves and is developing a plan to venture into shale gas. The US is awash in the stuff.
Ms. Clark has based her economic position on gas revenues increasing 20 fold in the next 20 years, predicated on the assumption that LNG prices will be 2½ times higher than our domestic price in 20 years.
She has also promised a “Prosperity” fund, starting in two years, which will have us rolling in dough. To tie that all up, she has signed a long-term deal with a consortium of First Nations for gobs of cash to come when a gas pipeline is built through their territory.
This raises, of course, a critical question – if the market we want to serve is awash in natural gas, why in the years to come would it need the stuff from BC?
It rather reminds one of President Hoover, as the Great Depression started rolling, in the election year of 1932, promising a “chicken in every pot” and that “prosperity is just around the corner.”
In The Globe and Mail of February 26, an interview by Justine Hunter of Premier Clark has a little gem in it. The Premier, with her Prosperity Fund “just around the corner”, admits those LNG exports are “four or five years away”.
To top it all off, the International Energy Agency has recently stated, “it is questionable whether freely available LNG will be available from Canada as the main partners in developing other terminals — PetroChina, KOGAS (from Korea), and (Japan’s) Mitsubishi — have dedicated markets for sales in Asia.”
There is also the obvious point that in BC pipelines must cross two huge mountain ranges.
I am no expert in these matters, God knows. However, I have attained a pretty good tummy and an ability to spot horse buns when I see them.
The plain fact is that with the rapid discoveries of shale gas taking place around the world, but especially in the US, Australia, Poland, Russia and China, it doesn’t make sense to promise that any LNG will available from BC to Asia…ever.
Moreover – and please, dear readers pay attention to this – if Australia is any example, LNG plants will only be built with huge incentives (read money) from the public. That’s us folks.
If I am accused of not knowing what the hell I’m talking about, well, neither do Premier Clark and her government.
And I’m not running for a fourth term to lead this province.