As British Columbia’s fledgling liquefied natural gas industry stalls, the country’s economy will be the loser if the LNG dreams fail to materialize, the Conference Board of Canada says.
Investments during a 30-year period could boost Canada’s real gross domestic product by $7.4-billion annually on average from three LNG projects, including $5.3-billion in growth within B.C., the economic think tank said in a 70-page report titled A Changing Tide.
The study predicts 65,000 jobs nationally on average, of which 46,800 would be in B.C., while LNG exports to Asia would swell government tax coffers.
Pacific NorthWest LNG, led by Malaysia’s state-owned Petronas, is awaiting a regulatory decision by the end of March from the Canadian Environmental Assessment Agency.
In 2012, Petronas acquired Progress Energy Canada, which spent an average of more than $2-billion annually with its partners from 2013 through 2015 on natural gas drilling projects in northeast B.C.
The conference board said Progress provided funding for the new study.
Last July, a report by the Canadian Centre for Policy Alternatives said the B.C. government has vastly overstated the economic benefits of LNG.
The conference board forecasts that, if two major LNG terminals and one small facility go into service from 2021 to 2025, the economic impact would be enormous from exports totalling 30 million tonnes a year.
“The findings in this report are subject to a great degree of uncertainty, given that none of the proposed projects have progressed to the construction stage,” said the study by Allison Robins, Prince Owusu, Dan Munro and Len Coad.
“What is certain, however, is that in recent years, Canada’s net natural gas export volume to the United States has declined and the North American market remains constrained on demand.
“A future LNG industry would create new markets for Canada’s natural gas, which would generate revenues and employment opportunities that would not otherwise exist.”
While much of the attention has been focused on proposed LNG terminals in northwest B.C., plenty of economic spinoffs in the northeastern part of the province are at risk too, the co-authors said.
Proponents want to pipe natural gas from operations in northeast B.C. to planned terminals on the West Coast, including sites in Kitimat and Prince Rupert.
“Although the terminals themselves will result in significant spending and employment in the Kitimat/Prince Rupert area, the majority of the spending will occur in the upstream segment of the industry,” the report said.
The trouble with B.C.’s nascent LNG industry is that many backers are getting cold feet, including Royal Dutch Shell PLC-led LNG Canada, which has delayed a final investment decision on the Kitimat joint venture until late 2016.
Last week, AltaGas Ltd. and its partners said they had shelved their Douglas Channel LNG project after falling short of their goal for long-term contracts with Asian buyers.
The tepid state of the petroleum industry is casting doubt on all 20 proposals to export the fuel from British Columbia amid a global glut of LNG.
Community leaders from the Prince Rupert region will hold a pro-LNG meeting on Tuesday.
Speakers scheduled at the event in Prince Rupert include Dave MacDonald, the mayor of Port Edward.
Pacific NorthWest LNG wants to build an $11.4-billion export terminal on Lelu Island. The site, administered by the Prince Rupert Port Authority, is within the District of Port Edward.Report Typo/Error