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Stewart Muir is a Victoria-based journalist and head of the Resource Works society.

Northern British Columbia residents are already referring to the July 25 cancellation of the Pacific NorthWest LNG project as Black Tuesday. Meanwhile, some critics have been quick to seize on the announcement as proof that liquefied natural gas is not a "real" opportunity, or that the cancellation has spared British Columbia all kinds of terrible economic and environmental consequences.

While Western Canada's prospects to be a global player in LNG are evolving, continuing developments prove they are not vanishing. LNG remains a rewarding, desirable and realistic play.

The fact that one LNG proposal on the B.C. coast has proved nonviable does nothing to change the fact that the citizens of developing nations will continue to pursue abundant, inexpensive energy that also meets environmental aspirations. LNG represents a major step forward in the use of a gaseous energy resource that Western Canada possesses in immense quantities. It's also an economic booster because it relieves domestic natural gas producers of their dependence on a single market, the United States.

It has created prospects for First Nations who recognize LNG as a desirable product that can support social aspirations on their rural territories.

For some critics of commodity exports, adding more value to Canadian goods before they are shipped away increases the acceptability of resource activities. Even pipeline opponents have applauded oil refinery proposals for precisely that reason. Unlike crude oil or raw logs, which can be cheaply and safely transported anywhere in their original form, natural gas cannot be exported by sea unless it is greatly reduced in volume; in other words, liquefied. LNG is a value-added product that subjects a raw material to a job-spinning manufacturing process near its point of origin.

As it is, the service-intensive natural gas industry spreads economic benefits from Fort St. John, B.C., to downtown Toronto. In addition to creating new customers beyond North America, LNG producers will pay a special levy put into place after protracted study by the last provincial government. If the BC NDP government is feeling pressure to do more on the tax front, it's worth remembering that all of the investment and risk required for LNG continues to be borne by the proposing companies.

While British Columbia sees setbacks, Americans have moved swiftly on the U.S. Gulf Coast to turn our gas (shipped to them already via pipeline) into LNG. The Americans have taken an expansive view of boosted economic activity over all.

There is another irony to pushing Canadian natural gas to Asia via Texas. LNG is just a fancy term for frozen gas. Each day it is aboard ship en route to market, it cools off a little and its value decreases. The B.C. coast is 15 days closer to Japan, an unassailable business and environmental advantage.

Not all LNG proposals are created equal. Some of the competing B.C. business models aim to profit from an inflated commodity price. Others, especially the PNW LNG project, are backed by foreign state-owned utilities that simply need cheap gas. One of those companies, Indian Oil, is the largest commercial enterprise in India. Since Black Tuesday, its chairman has stated that, despite the departure of lead partner Petronas, his company remains interested in developing its 10-per-cent stake.

Companies such as Steelhead LNG are pioneering concepts to reduce the barrier of high capital costs. Steelhead is already winning the recognition of investors. One of them is Seven Generations Energy, which is the single most valuable publicly-traded Canadian equity holding of the Canada Pension Plan. Steelhead's foundational relationships with local First Nations may be one reason why it is attracting supporters of such probity.

Natural gas creates "sticky" customers: once they have switched to LNG, they tend to stay. To Asian buyers, LNG is a coveted green solution. China's demand is up 37 per cent so far this year, thanks in large part to low prices. South Korea recently decided to stop coal-fired generation. Without LNG, this environmental progress isn't possible.

British Columbia needs options beyond a frothy real-estate market. LNG is one opportunity that it can confidently continue to pursue.

British Columbia’s NDP government is seeking to join legal challenges to Kinder Morgan’s Trans Mountain pipeline expansion. Environment Minister George Heyman admits fighting the federally approved project will be difficult.

The Canadian Press

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