Christy Clark’s LNG economic miracle turned out to be a mirage

Christy Clark’s come-from-behind election win in 2013 was based on false economic projections. Just three months before that provincial vote, in February 2013, her government made a promise of windfall revenues from the rapid development of liquefied natural gas (LNG) exports.

In a press release at the time, the BC Liberals assured British Columbians, “Our LNG industry is quickly developing,” and predicted this new industry would deliver “approximately $1 trillion in cumulative GDP within British Columbia over the next 30 years and that means more than $100 billion will flow directly to the Prosperity Fund.” That $100 billion, we were told, would fund public services and pay off the province’s debt.

Earlier, on May 30, 2012, Christy Clark stood in the Legislature in Victoria and stated that the first LNG facility would be up and running by 2015.

Here we are, three years later, and there are no LNG facilities in operation, and the government has drastically weakened the royalty regime and lowered corporate taxes in a desperate bid to attract foreign investors. As a consequence, even in the best case scenarios the BC Liberals concede that revenues to the government won’t come close to the hype of a $100 billion “Prosperity Fund.”

Last week, the government announced a memorandum of understanding (MOU) with Malaysia-based Petronas for an LNG export project in Prince Rupert. According to a report in The Globe and Mail, the terms include: “…$8-billion from the LNG project in royalty revenue to government coffers over the 23-year period. In addition to royalties, an income-tax framework will start with a minimum 1.5-per-cent rate, applying to net operating profit.” The MOU locks in future BC governments to the low tax and royalty rates, a cynical and undemocratic “Hotel California” style arrangement for B.C.’s citizens.

But even the Petronas deal still faces significant obstacles: First and foremost the fact that a key First Nation has rejected LNG development on their territory. Members of the Lax Kw’alaams recently voted unanimously to reject $1 billion in cash from Pacific NorthWest LNG, part of the proposed Petronas project near Prince Rupert.

Leaders of the Lax Kw’alaams issued a statement following the vote: “Only Lax Kw’alaams have a valid claim to aboriginal title in the relevant area. Their consent is required for this project to proceed.” The rejection was described as based on spiritual and environmental considerations. The proposed LNG export terminal is slated to be built on Lelu Island, next to Flora Bank, an important salmon habitat.

Christy Clark met with Petronas President and CEO Tan Sri Dato’ Shamsul Azhar Abbas during the 2014 Spring Trade Mission to Malaysia.| Photo courtesy of BC Government Photos

Christy Clark met with Petronas President and CEO Tan Sri Dato’ Shamsul Azhar Abbas during the 2014 Spring Trade Mission to Malaysia.| Photo courtesy of BC Government Photos

The BC government went ahead and announced the Petronas deal in spite of this decisive rejection, and Premier Clark claims to have confidence that an agreement with the Lax Kw’alaams can still be brokered. This hardly looks like a government that respects First Nations’ land and title rights, nor their responsibility to obtain free and informed consent from First Nations before plowing ahead with development. In this case the company tried to buy consent with a massive offer of $1 billion in cash, and they still failed. It turns out there are still some things that money can’t buy. The proper response to such an assertion of Indigenous rights would be to take this whole project back to the drawing board.

But the BC Liberals don’t have time for those kinds of niceties. The window for BC LNG is closing fast, due to the sheer number of countries developing shale gas and the related drop in global prices. The window, in fact, may have already closed on B.C., according to the latest research.

Writing in the online publication, Andrew Nikiforuk summarized a major new study of BC LNG prospects by the Oxford Institute for Energy Studies: “The window of opportunity to capture Asian gas markets has eluded proposed liquefied natural gas projects in British Columbia, and as a consequence it is unlikely that any LNG projects will likely be commissioned or economic for another decade.”

The BC Liberals’ promises for LNG in BC have been exposed as fantasy. Christy Clark’s promised LNG miracle turned out to be a mirage.

Any government whose main election promises prove to be fraudulent does not deserve to be re-elected.

We need a provincial government with a better economic plan than just ‘dig it up and ship it out.’ In an era of climate change and growing inequality, we need political leaders who will commit to get off of fossil fuels and to create green jobs that help us transition to a renewable energy powered society.

One thought on “Christy Clark’s LNG economic miracle turned out to be a mirage

  1. I voted for NDP. This whole deal with Canada getting there hands dirty with oil and gas is 50 years too late. The investments are a bust oil prices are not going to sky rocket like they have been for the past 20 years. Its a high cost investment with low returns. Should voted NDP our province would be making some kind of progress and would have nothing to do with the oil and gas industry keeping our coast , land and future safe and financially secure.

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