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Pacific NorthWest LNG could boost B.C.’s treasury, study says

The document signed by Premier Christy Clark and Pacific NorthWest LNG president Michael Culbert in Vancouver May 20 2015.

John Lehmann/The Globe and Mail

The B.C. government's tax coffers would receive a huge lift in the event that Pacific NorthWest LNG forges ahead, a new study shows.

The fate of the liquefied natural gas project led by Malaysia's state-owned Petronas is uncertain. But the Conference Board of Canada said if the $11.4-billion terminal near Prince Rupert is built, the B.C. government is positioned to rake in $85-million a year from an LNG tax and $294-million in annual royalty revenue from natural gas drilling over a 30-year period.

The venture is considered the frontrunner among 20 B.C. LNG proposals. A glut of LNG supplies on world markets, however, has sent prices for the fuel tumbling.

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In 2012, Petronas acquired Progress Energy Canada, which drills for natural gas in northeast British Columbia. The conference board said Progress provided funding for the new study, part of a broader report that was recently released.

Over the 30-year period, Pacific NorthWest LNG would inject a further $79-million a year in corporate income taxes into the B.C. government's treasury and $204-million annually into federal tax coffers, the conference board said a confidential appendix. "The construction of the Pacific NorthWest LNG facility would allow Canada's natural gas to reach markets characterized by growing demand, which would generate revenues and employment opportunities that would not otherwise exist," said the study's co-authors, who estimate the creation of 18,500 jobs from the terminal and related activities.

The Petronas-led consortium is awaiting a regulatory decision from the Canadian Environmental Assessment Agency (CEAA).

"Our project continues its constructive relationship with the government of Canada on our environmental assessment, which includes determining the project's effects from greenhouse gas emissions," Pacific NorthWest LNG president Michael Culbert said in a statement Monday. "We look forward to the conclusion of the public comment period of the draft report and, ultimately, a decision by the government of Canada on our project in due course."

CEAA has received more than 1,400 comments since it asked the public on Feb. 10 to provide feedback to the regulator's draft environmental assessment report. CEAA, which started its review into Pacific NorthWest LNG in April, 2013, said the 30-day public comment period will wrap up this Friday. Any conditions set by federal Environment Minister Catherine McKenna will become legally binding. She is expected to make her decision on or around March 22, barring any further delays in the process.

Supporters and critics are trying to sway Ottawa's view of Pacific NorthWest LNG, which has already invested roughly $100-million in the project while Progress has spent billions of dollars on drilling. Groups such as Sierra Club B.C. and Skeena Watershed Conservation Coalition have urged people to write to CEAA to express their opposition to plans to build the export terminal on Lelu Island, located in the Skeena River estuary. Environmentalists and the Lax Kw'alaams Band Council argue that the project will damage juvenile salmon habitat in Flora Bank, a sandy area next to Lelu Island.

"You have a chance to help stop this project," Skeena Watershed said in a message on its website.

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But pro-LNG groups such as Voices for Responsible Development and Canada's Energy Citizens are telling supporters to speak up in favour of Pacific NorthWest LNG. "Ottawa needs to know that British Columbians want to see this project move forward," said Canada's Energy Citizens, which is backed by the Canadian Association of Petroleum Producers.

Last month, CEAA said in its preliminary ruling that Pacific NorthWest LNG would likely harm harbour porpoises and contribute to climate change, but the export terminal could be built and operated without causing major ecological damage to Flora Bank.

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About the Author

Brent Jang is a business reporter in The Globe and Mail’s Vancouver bureau. He joined the Globe in 1995. His former positions include transportation reporter in Toronto, energy correspondent in Calgary and Western columnist for Report on Business. He holds a Bachelor of Commerce degree from the University of Alberta, where he served as Editor-in-Chief of The Gateway student newspaper. Mr. More

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