The B.C. Liberal government's claim that liquefied natural gas (LNG) exports will create 100,000 jobs is a vastly exaggerated forecast, says a report by a think tank that has touched off a controversy about how much of an employment boon the sector will actually create.
"We find that this claim is not credible and that potential employment impacts have been grossly overstated," said the study by the left-leaning Canadian Centre for Policy Alternatives.
The Liberals touted LNG-related job creation during the 2013 provincial election and have repeatedly mentioned bright prospects for employment over the past two years. On July 13 in the B.C. Legislature, Premier Christy Clark highlighted the economic benefits of the fledgling LNG industry as she referred to "100,000 new jobs in the province over 30 years from all of the projects, should they get started."
Marc Lee, a senior economist at the policy centre, said in an interview that the government's rosy view is based on giving too much weight to new investment. "It is a work of fiction, originally created to support the Liberal Party's election platform," said Mr. Lee, whose group supports alternative energy sources.
But the minister responsible for LNG development, as well as the head of an industry alliance, said the study is flawed. Last Tuesday, the government used its majority to push through an LNG bill, with 43 Liberals voting in favour while 27 NDP members and the B.C. Green Party's Andrew Weaver opposed it. The bill's passage also resulted in the ratification of a project development agreement between the government and Pacific NorthWest LNG, a venture led by the Malaysian state-owned oil-and-gas company Petronas.
There are 19 B.C. LNG proposals, though industry experts say there is only room for a handful of terminals due to fierce global competition for exports to customers in Asia.
"The B.C. government commissioned a consultancy, Grant Thornton [GT], to develop employment estimates," Mr. Lee wrote. "There was no practical reason for GT to be hired to use the government's own numbers and model apart from providing the appearance of independent justification for an absurdly large jobs number."
The Liberals padded the statistics with temporary construction jobs as well as vague references to thousands of positions created in architecture, engineering and an array of supplier industries, he said. "To be clear, the B.C. government made this misrepresentation, not GT," Mr. Lee said.
Natural Gas Development Minister Rich Coleman said the government stands by its outlook for strong economic spinoffs in B.C. "We still believe LNG will create up to 100,000 jobs," he said in an interview. "Over time, LNG builds a base of skill, jobs and attraction of investment that sort of starts to feed on itself, not just on the LNG plant. That's where people sometimes miss the understanding of this."
If Pacific NorthWest LNG forges ahead, that project will produce spinoffs for the Port of Prince Rupert, Mr. Coleman said. "I also look at the northeast part of the province for natural gas drilling. This will be a significant impact for the economy. It really will change lives in the north," he said. "I always try to stay in my optimistic mindset and let the naysayers have their day."
The BC LNG Alliance, which represents seven projects, has not released job forecasts for the provincial LNG sector but said the centre's study misses the mark. "The narrow focus of the report ignores the province-wide benefits of LNG," alliance president David Keane said in a statement. "From suppliers to contractors to professional services, the LNG industry will create thousands of new permanent jobs to support the industry long after the construction phase. When operational, the plants will provide new revenues to all levels of government that may well run into billions of dollars every year."
Mr. Lee said the job numbers don't add up, even if five terminals are built as envisaged by the B.C. government under its modelling for LNG production capacity of 82 million tonnes a year. "This projection of LNG exports from B.C. is wishful thinking," he wrote. "At current prices, the export of B.C. LNG is not a profitable venture, although Asian state-owned companies like Petronas may well be interested in paying a premium to lock up supply for several decades."