Another View: B.C. goes long with LNG bid

Tom Fletcher is a legislative reporter and columnist for Black Press

B.C. Views

 

Opposition politicians were outraged over the B.C. government’s latest effort to secure its first major liquefied natural gas deal, announced last week.

Premier Christy Clark, Natural Gas Development Minister Rich Coleman and Finance Minister Mike de Jong signed agreements with Pacific Northwest LNG for a long-term gas royalty structure that could run for 30 years.

The government says the deal guarantees minimum royalty revenue for the province, while the investors increase their revenue if the spread between gas prices in North America and Asia increases during the term.

Pacific Northwest is a partnership of some of the biggest investors and gas customers: Malaysian state giant Petronas, its Canadian subsidiary Progress Energy, Chinese state firm Sinopec, Indian Oil Corp. and Japan Petroleum.

These corporate giants will review a project development agreement, and if they approve, Clark will convene the legislature to approve changes that would compensate them if the new LNG income tax increases.

Environmental changes such as a “discriminatory” carbon tax increase or greenhouse gas regulations on LNG would also trigger compensation. Future changes to general carbon tax or corporate income tax rates would not.

NDP leader John Horgan warned that “too much lolly” is being offered, with no word of job guarantees for B.C. or a deal with First Nations at the proposed site near Prince Rupert.

“My biggest concern is that we’re tying the hands of future governments because a desperate government made commitments that they over-promised on and now they want to get a deal at any cost,” Horgan said.

Green Party MLA Andrew Weaver called it “shocking and irresponsible,” repeating his prediction that the global market is swimming in gas and will never support huge green-field projects across B.C.

For the investors,  it’s like a mortgage. There are “subjects” to be removed before the deal closes, and this is a proposed $36 billion mortgage for pipelines, LNG processing and shipping facilities.

This isn’t just a political dispute. For example, Progress has drilled about 500 gas wells in northeastern B.C., and Petronas took it over with this development in mind. Without exports, B.C.’s whole gas industry is looking at a bleak future of low prices and demand.

Petronas delayed its investment decision to this year and cited exactly these concerns, certainty on taxation and royalties beyond the election cycle. With that in hand, their obstacles remain federal environmental approval and a revenue sharing deal with a First Nation to host a terminal.

Pacific Northwest CEO Michael Culbert notes that answers to questions posed by the Lax Kw’alaams First Nation were submitted to federal regulators only days before they started voting on a $1 billion share of LNG proceeds over 40 years.

The vote was a resounding no, despite a redesign that put pipelines on a suspension bridge over the most sensitive salmon habitat. Culbert suggests that given some time to examine environmental mitigation work, that answer may change.

Does aboriginal title offer a veto over projects like this? According to the recent Supreme Court of Canada decision on the Tsilhqot’in case, the short answer is no. Objections could be overridden if governments determine a project is in the interest of the greater public.

Talks have taken place with 19 First Nations affected by pipelines and facilities, and 14 have agreed. While they continue with Lax Kw’alaams and other Tsimshian Nations on the coast, it’s worth recalling that others are not so reluctant.

The Nisga’a Nation has identified four sites as suitable for LNG terminals with a shorter pipeline route to the coast than Prince Rupert.

 

Tom Fletcher is B.C. legislature reporter and columnist for Black Press newspapers. Email: tfletcher@blackpress.ca

Just Posted

Russell Books marks opening of new location by setting Guinness World Record

Store stacks world record books more than six metres high

Disturbing sexual, criminal trends with Greater Victoria youth on the rise

Family counsellors see unprecedented rise in youth sexual assaults and exploitation of children

PHOTOS: 11th annual Gingerbread Showcase comes to Victoria

Bakers spent more than 100 hours perfecting their creations

Sooke Mounties continue probe into high school hold and secure

No charges yet from last week’s incident

Petition calls on province to cover transfer fees after Island adoption centre closes – again

‘Choices clients weren’t told the ship was sinking,’ says would-be parent

VIDEO: B.C. to restrict nicotine content, bring in 20% tax on vaping products

Province will also restrict candy and fruit flavoured vaping products to adult-only stores

12 Sooke events to get you into the holiday spirit

From a Santa parade to classicial music, Sooke has it all

‘City that protects rapists’: Sexual assault survivor slams Kelowna mayor for defending RCMP

Heather Friesen spent the morning handing out flyers around city hall calling out the mayor

Batten down the hatches: Wet and windy weekend on the way for coastal B.C.

Environment Canada issues special weather warning for Lower Mainland, Vancouver Island

BC Liquor Stores to move fully to paper bags by March

Vancouver Island to be the first to convert to paper bags in November

Tolko shuts B.C. divisions for two weeks over holidays

Head office to close from Dec. 23-27; two weeks’ downtime runs Dec. 21-Jan. 6

B.C. government working with RCMP to address $10 million in budget cuts

Public Safety Minister Mike Farnworth issues statement following report of RCMP cost-cutting

Port Moody mayor says stayed sex assault charge related to ‘awkward date’

Rob Vagramov said charge was related to a string of dates in 2015

UBC conference draws fire over speaker from Chinese tech company blacklisted in U.S.

The company that has been blacklisted by the U.S. over links to the repression of China’s Muslim minority

Most Read