Can Liquefied Natural Gas be a viable industry in BC?
Andrew Weaver has labeled it a “pipe dream”, the NDP have said they support the LNG but would consider banning the process to extract natural gas and stop the construction of the Site C Dam, which would be used to power the LNG terminals.
The BC Liberals support LNG and have made it a major plank in their BC Jobs Plan. Premier Clark has said that revenue from LNG could help pay down BC’s debt. To answer the question about BC’s LNG opportunities or lack of opportunities, lets look at the facts.
Shell, Chevron and Petronas have all announced multi-billion dollar projects aimed at constructing LNG terminals in northern BC. Japan has offered 10 billion in loan guarantees to Japanese companies that will invest in the LNG industry in BC.
The investments made by these companies have been made with the intent to export liquefied natural gas to Asia where the price per unit of natural gas is four to five times higher than in North America, 16-18 dollars in Japan compared to 4 dollars in the US. Andrew Weaver however has said that the governments hopes to export LNG to Asia at a higher price is a “pipe dream” because there are too many exporters of natural gas already and an increase in the supply would cause the prices to go down. Weaver though has forgotten to take into consideration consumption, the use and consumption of LNG has increased around the world.
Weaver’s arguments against LNG are in a way an argument for LNG, because the core of Weaver’s concerns are that BC will not be able to beat China and Russia in the race to develop a LNG export industry. BC however seems to be winning the race so far though as the proposed Kitimat LNG terminal is the only official proposal in Canada, China and Russia therefore we are already ahead of other LNG exporters looking to enter the Asian LNG market.
If actions speak louder than words, then the actions by Shell, Chevron, Petronas, Petro China, Korea Gas Corp and Trans Canada all signal that there is a potential for a viable LNG industry in BC. Because after all you don’t invest billions without having confidence in the industry.
Written by guest contributor to Vancity Buzz.
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