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There is a future for natural-gas exports from British Columbia, but it's looking much further out on the horizon than its boosters hoped.

The overall concept of moving gas from B.C.'s massive northeastern reserves to the coast, cooling the heck out of it in pricey plants and shipping it to more lucrative overseas markets makes a world of sense.

What the province and industry are dealing with, though, are myriad bugbears that keep conspiring to put Premier Christy Clark's target for LNG in jeopardy. That is three operating plants by 2020, and the eventual creation of 100,000 jobs.

Now, global energy markets are in turmoil, Asian LNG demand is increasingly in question, regulatory delays for some projects are a virtual certainty and numerous First Nations issues have yet to be talked through and settled.

None of 20 proposals on the drawing board has an unqualified green light, with little more than four years before the end of the decade. When and if that happens, developers will need to assemble work forces and infrastructure from afar to even begin work on the massive projects in locales such as Kitimat and Prince Rupert, B.C.

Why not push the goal back by about five years?

Making such a declaration wouldn't be throwing in the towel, but instead would ease pressure on developers and keep public expectations in check after initial euphoria.

There's no question that B.C. LNG has supporters who are pretty sure the proverbial window to move forward with a new industry remains open, and a welcoming breeze is blowing in.

This month, AltaCorp Capital Inc., the Calgary-based investment dealer, issued a detailed report on the industry's prospects after a series of meetings with proponents as well as site tours, and came away with an optimistic view of Canada's LNG prospects.

It cited the B.C. Liberal government's industry-friendly moves, including establishing a favourable LNG tax regime, as helping drive momentum for such projects as Douglas Channel LNG, a small-scale project led by AltaGas Ltd., and the Royal Dutch Shell PLC-led LNG Canada venture.

Pacific NorthWest LNG had been seen as a front-runner because the backers, led by Malaysia's Petronas, have conditionally decided to proceed. It now faces a challenge from the Allied Tribes of Lax Kw'alaams on the B.C. coast, which AltaCorp says has thrown timing of a formal go-ahead into question.

The First Nation, which has turned down a $1-billion cash payment, is claiming title to Lelu Island and Flora Bank in the Port of Prince Rupert, where the terminal would be located, arguing it would interfere with aboriginal fishing rights.

The Douglas Channel development could get corporate approval before the end of this year. It would be in the $500-million range, a fraction of the size of proposals such as LNG Canada and Pacific NorthWest, which could each top $30-billion. Those are of the size offering the most bang for the government's hoped-for employment buck.

AltaCorp said WCC LNG, proposed by Exxon Mobil, could be sanctioned in two to three years. The company currently estimates startup in 2024.

Canadian LNG has more than its share of skeptics. They argue that the United States has moved quickly to develop LNG export capacity in the Gulf of Mexico, adding to competition from the likes of Qatar and Australia.

In fact, there are now worries about a lengthy worldwide LNG oversupply unless numerous developers poised to make final investment decisions this year and next put their projects on hold.

Wood Mackenzie, the global energy consultancy, said demand is now sputtering in China, which is also seen as a culprit in the collapse of oil prices. This comes with about 140 million tonnes a year of capacity already under construction, adding to the current 250-million-tonne-a-year global market.

Other forecasters, from Citigroup to Moody's Investors Service, have suggested Canada's window of opportunity for building up a new LNG industry may be closed for now.

Feel free to choose a position, but it all shows that the potential for a massive industry pumping out large quantities of gas for seaborne export in the next 51 months is anything but certain.

But it's a self-imposed deadline. The best thing that government can do is to level with the public on whether it will be met.

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Tickers mentioned in this story

Study and track financial data on any traded entity: click to open the full quote page. Data updated as of 27/03/24 4:46pm EDT.

SymbolName% changeLast
ALA-T
AltaGas Ltd
+0.27%29.47
C-N
Citigroup Inc
+1.77%62.75
XOM-N
Exxon Mobil Corp
+1.04%114.97

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