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

Candidate forum planned for Sooke

Sooke Region Chamber of Commerce hosts event Oct. 11

Defense says burden of proof not met in double murder case against Oak Bay father

Closing statements begin in trial for man accused of killing daughters Christmas 2017

UPDATED: Hundreds gather to reflect and remember UVic students killed in bus crash

Campus community invited to reflect, support one another

Greater Victoria could see a months worth of rain within a week this fall

Weather Network predicts wet, warm fall season for B.C.

Province overrules View Royal; plans to build handyDART facility

View Royal Mayor calls province’s actions “heavy handed” and “unusual”

VIDEO: Drone footage documents work to free salmon at Big Bar landslide

Video shows crews working to remove rocks and wood, and transporting salmon by helicopter

Man who crushed Nanaimo RCMP cars with stolen truck gets more jail time

Majore Jackson, 34, sentenced to two more years in jail in provincial court in Nanaimo

B.C. dog breeder banned again after 46 dogs seized

The SPCA seized the animals from Terry Baker, 66, in February 2018

Surrey mom allegedly paid $400,000 for son in U.S. college bribery scam

Xiaoning Sui, 48, was arrested in Spain on Monday night

Three dogs found shot dead in Prince George ditch

The three adult dogs appeared to be well cared for before being found with gunshot wounds, BC SPCA says

B.C. party bus company to be monitored after 40 intoxicated teens found onboard

Police received tip teens and young adults were drinking on party buses and limousines in Surrey

Rick Mercer calls out Conservative candidate in B.C. for fake meme

‘Not true. All fake. Please Stop,’ tweeted Rick Mercer in response

Bear killed in Kimberley after chasing girl, wreaking havoc on town

This particular brown-coloured bear has been the subject of many calls this summer; very food habituated, CO says

Vancouver Island man bikes through B.C. Interior for mental health, addiction awareness

Vancouver Island Resident Mat Fee is approaching the final phase of his cross-Canada bike journey to raise awareness about addiction recovery.

Most Read