For all the fanfare of yesterday’s press conference, you’d think Premier Christy Clark would have some big, new development to announce for her much-vaunted but yet-to-be-built LNG industry. Sorry folks, nothing to see here.
All Clark had to offer was warmed up leftovers from the umpteen previous press conferences, media advisories and political speeches she’s been making for the past several years. Still no final investment decision from Malaysian energy giant Petronas – only “the beginning of the company’s final decision path toward an investment decision”, whatever the heck that means. The “path” to any real bucks being forked out by a single one of the 18 companies and global consortia proposing LNG plants is proving to be a long and winding road.
Are we there yet?
For years now, we’ve watched the likes of Chevron and Petronas punt their promised final investment decisions to next quarter, next year, some vaguely defined point in the future – while many others have outright fallen by the wayside (BG Group, Apache, Encana, EOG to name a few). But we never seem to get there.
And what if we did ever get there? At this point, after all the slashing of royalties and taxes, all the gutting of environmental protections, all the deals with China, India and Malaysia to supply the labour via foreign temporary workers, what’s actually left for the people of BC?
Take your ball and go home
In her press conference yesterday, Clark boasted that the “memorandum of understanding” with Petronas locks in low royalty and tax rates for years to come. This is supposed to be good news for the people of BC?
As I noted back when Petronas CEO Shamsul Abbas took the stage at a glitzy, taxpayer-funded BC LNG conference last year – to lecture us about not “killing the goose that lays the golden egg” – if these are the only terms under which the likes of Petronas will come set up shop here, then we don’t need them. It’s as if they’re saying, “Cut your public benefits and environmental standards to zero, or we’ll take our ball and go home.” Well, take your bloody ball and go home then.
It’s not all about money
And this is all assuming that with enough money on the table (which of course there isn’t), we’d go for this deal. Well, increasingly, the public and First Nations beg to differ. Just look at the Lax Kw’alaams Band and their recent rejection of an unprecedented bag of loot – $1.15 BILLION and $100 million worth of crown land. Apparently, there’s more to money for some of us – like protecting wild salmon that would be severly threatened by Petronas’ proposed plant on top of the Skeena River eestuary.
That’s what yesterday’s announcement was really about: quelling investor fears over the very public face plant that was the failed Lax Kw’alaams deal. Except that Clark has nothing meaningful or new to offer. And she’s panicking now. After all the big promises of a $100 Billion “Prosperity Fund” in the last election – the thing that vaulted her past the NDP, long favoured in the polls – even she now must realize that it’s time to put up or shut up (well, we can dream on the latter)
Yet that’s looking less and less likely. Her other favourite horse – tax fraudster Indonesian billionaire Sukanto Tanoto – is facing an uphill battle in Howe Sound. First Nations and citizens along the various pipeline routes are digging in their heels. Asian LNG prices have plummeted to well below the break-even point for BC LNG exports, obliterating the entire business case for the industry.
In fact, about only way the Petronases of the world can hope to see a profit from BC LNG is by picking your and my pockets. The only way this industry makes sense is with huge, unbilled environmental externalities and massive taxpayer subsidies.
Take it or leave it, says Mr. Abbas.
Leave it, then.
The more I look at this photo, the more I think it’s some kind of spoof. Chrispy’s not smiling – she’s smirking. And the other 3 gentlemen are looking purposefully ‘disgruntled’. Why? Are they really pissed about the flim flam, or is this just an act? Call me ‘Bewildered’.
3 scowl left, as 1 smirks right, shows they are hustling both spectrums
Chevron(Gorgon) being sued by Australian tax department for engaging in elaborate scheme designed to steal monies from Australian taxpayers..
http://powellriverpersuader.blogspot.ca/2015/05/lng-financial-scams-exposed-chevron-in.html
More bad news for the BC Government and Petronas…
http://powellriverpersuader.blogspot.ca/2015/05/the-beginning-of-end-of-behemoth-land.html
This is the first paragraph of the Executive Summary of Oxford Energy’s recent report on Canada’s LNG export prospects (http://www.oxfordenergy.org/wpcms/wp-content/uploads/2015/05/NG-98.pdf ) :
“Despite Canada’s abundance of gas resources and the plethora of proposed LNG export schemes, the current business environment, characterised by low oil prices and industry consolidation, makes it unlikely that any Canadian LNG scheme will be commissioned before the middle of the next decade”.
Unless, of course, the government giveaways to the proponents get even more ridiculous than they already are.
The BC Govt is desperate for anything that looks like economic growth.
Even if it doesn’t make economic sense. For example, exporting LNG.
Our debt-bloated ponzi financial system demands GDP growth every year, or it collapses.
Gotta grow, grow, grow.
Damien Gillis…..forgot to say I enjoyed the article…
On the photo op….
Christy Clark appears to me like she was told to smile despite the optics of the announcement.
Appears forced and fake..
https://pbs.twimg.com/media/CFf3AkuUgAAcstn.jpg
Have a look at this picture.
If I could put words in Christy Clark`s mouth…
That picture says..
“Petronas, See, I signed it, now please release my family members you took hostage”
Much more here..
http://powellriverpersuader.blogspot.ca/2015/05/christy-clark-and-petronas-democracy.html
Hey Muffin head (that’d be you Christie)! Whatever possessed you to broker a deal with PETRONAS when your commodity (LNG or LFG) is practically worthless? Are you afraid it’ll go bad in the ground? Why not wait until it has some real value, then negotiate a better deal for the taxpayers?
By the way, how much of the $36 Billion ‘investment’ actually stays in BC? I mean, after paying for offshore plants, TFWs, foreign fracking agents, what is the value of the ‘investment’ to British Columbians? Just askin’.
DeJong is my MLA, and I’m pretty upset with him (and the rest of those clowns), but the only communications you get from them are the press release talking points, and they don’t give a crap about their constituents… Anyway I can tell him to stuff it, that will actually sink in?
Great article Damien. There will be no LNG this investment cycle as the prospect for future profits from an LNG plant are so greatly reduced that this CC project will never get financing.
That is unless the BC Government buys the project with future taxpayer borrowing which would most certainly trigger a major credit downgrade that the Min. Finance looks like he is currently showing distress over.
INTERESTING http://www.bloomberg.com/news/articles/2015-03-18/fitch-sees-more-than-50-chance-of-malaysia-downgrade-on-1mdb
That plus the 9B cost of Site C will certainly drop the Triple A rating down a few pegs.
Dejong and Coleman look as though they are paying their last respects at a funeral….
maybe they are. A picture paints a thousand words!
I have a brilliant idea! Why doesn’t British Columbia pay Petronas a signing bonus, say $1 billion? Perhaps that won’t be enough, maybe $2 billion would do it. Maybe $3 billion if they prove to be tough negotiators. But I say not a penny more, although since they’re going to destroy them anyway, we could throw in the Skeena salmon runs for good nature.
THE PROVINCE IS, THANK GOD, IN THE VERY BEST OF HANDS
Rafe, that tounge of yours is planted firmly in cheek.
But I have to wonder how many taxpayer dollars have and will go into schmoozing a foreign company worth billions.
“Gotta keep those corperate taxes low…..”
Looks like Curly, Moe and Larry in the background are sensing that someone either just cut the cheese or laid an egg.
I must admit that those three “stooges” look like they’d rather be anywhere else than on that stage with the “Preem”.
Cant says I blame them.
One wonders if they will be sent back to “photo op school” to relearn their “roles” of what a Happy Happy Team they all are.
2 years to the next election and the NDP better have a more inspired campaign than the last one.
I didn’t catch yesterday’s Press Conference, but I understood it had something to do with Petronas’s commitment? to spend $38 Billion on the LNG project. Can anyone explain how/where that money will be spent? So much fore offshore plants? So much for TFW labour? So much for Royalties? So much for FN purchases? Or was it a figure pulled out of the (hot) air?
In order to have a successful LNG project one must have: a) Customers, b) Product, c) Transportation Facilities, d) Processing Facilities and e) An Agreement in Principal.
I don’t see any evidence that PETRONAS has ANY of these components.
Maybe I should pay more attention to Press Conferences?
Hi John, unfortunately no one can provide you with any clarity on this $36 Billion number as it is a made-up figure. Ostensibly it includes capital costs for the pipeline, the plant and their fracking operations in northeast BC…but it’s still a made up number. And it is mischaracterized as “investment” – this is a public subsidy coming from the taxpayers of BC and Canada, by way of huge royalty and tax discounts, free publicly-funded infrastructure to access their plays, and massive capital cost allowances from the federal government. There is no “investing” going on here.
Have you ever seen such a picture of unbridled joy (photo at top)? And who is the cheerful dude between deJong and Coleman (no, not Chrispy – she’s always smiling)?
That’s James Moore – senior BC Conservative MP