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Premier Christy Clark during her year-end interview with the Globe and Mail in Victoria, December 9, 2013.John Lehmann/The Globe and Mail

Premier Christy Clark says she is confident that British Columbia need not fear efforts by potential customers to establish a so-called buyers' club for liquefied natural gas.

Gas buyers from China, South Korea and Japan – the three countries Ms. Clark just visited on a trade mission to promote LNG – as well as India and Taiwan met last week to discuss how they can use their collective purchasing power to negotiate lower prices. They scheduled a follow-up meeting for February. There are reports that India and Japan are considering combined LNG tenders, hoping to decouple the price of gas from the price of crude oil. It is that linkage that underpins the B.C. economic case for LNG – currently Asian prices for natural gas are five times higher than in North America.

"I don't know that there will be a buyers' club – I don't know all the competitors in Asia will be able to get together to set those prices," Ms. Clark said in an interview in her legislature office on Monday. "Typically when it comes to energy exports, it has been the seller that sets the prices."

Ms. Clark ran her successful election campaign last spring on the promise of a "trillion-dollar" LNG industry that could eliminate the provincial debt. Since then, however, negotiations with industry about a B.C. tax regime have bogged down. Ms. Clark had hoped to have the framework for the tax and regulatory landscape in place prior to her trip. Now it is not expected to be unveiled until early in 2014.

There have been very few final investment decisions on LNG in the past two years, creating growing pressure on the countries that are vying to produce LNG for Asia to secure contracts. The Premier said it is all part of the nature of a high-stakes negotiation.

"We have to be competitive, there is no doubt about it. If we want to attract that quantum of investment – and it's huge, potentially – we have to be selling at a price the market wants to buy at but this is the way negotiations work," Ms. Clark said. "Buyers want it cheaper and the sellers always want it to be a little more expensive. So that's where we are at, at the moment."

While Ms. Clark's government has been very eager to trumpet the financial benefits of LNG, it has been less enthusiastic about discussing the potential greenhouse-gas emissions associated with the sector.

The B.C. government hired two accounting firms earlier this year to help estimate the potential revenue of five LNG facilities on the West Coast – although there are currently a dozen proposals – and has published those findings. The Premier has even announced the creation of the B.C. Prosperity Fund to collect industry revenue and steer some of it toward debt reduction.

However, the province has refused to release its own studies on the environmental impact of developing LNG. A recent report out of Harvard, published in the National Academy of Sciences, found methane that is leaked or vented during oil and gas production may be up to five times greater than current estimates. If that is the case, that would undermine Ms. Clark's argument that B.C. natural gas is a cleaner alternative to coal.

Ms. Clark maintained on Monday that her government is "paying close attention to the total environmental impact of developing liquefied natural gas."

She said she had not read the Harvard report. "I suspect they are referencing environmental conditions that don't exist in British Columbia. … We've been doing this for 50 years, we have a pretty good idea of the GHG emissions from different reservoirs of natural gas in the province."

The province has to meet GHG reduction targets by 2020 by law, but the Premier has not yet said how her government will measure the emissions from LNG. She has promised that the facilities will be "among" the cleanest in the world but she does not count the significant upstream emissions that come from getting natural gas out of the ground and transporting it to those facilities for processing.

But, she added: "We do see it as the biggest opportunity we have ever had as a province to reduce greenhouse-gas emissions around the globe. … And we intend to take it."

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