How NOT to sell LNG.

A version of this was written for and published by the BC Conservative.

While the BC Liberals can’t be blamed for the falling price of oil, the blame for much of the economic hardship the industry faces can be laid at their feet. There are two assumptions they have wrong.

First, they failed to recognize that BC’s oil and gas is only a small part of a very large world full of energy sources. Over the years, they’ve promised to export enough gas to fund all of their promised social programs, yet no LNG has been exported. And the price of natural gas is now lower than it’s been for years. The prospects of signing multi-year high-benefit contracts for BC gas grow dimmer and dimmer. They assumed there would be no limit to the demand for BC gas, and as a result never formed a coherent plan to actually get the gas to world markets. Without access to world markets, BC natural gas will always carry a price penalty.

So has the BC government done everything possible to ensure the royalty structure and the regulatory burden does not kill this nascent industry before it can generate a profit? Canada probably has the world’s cleanest fossil fuel industry yet BC has thrown a new regulatory burden on top of the already severe federal laws.

What if things had been done differently? Could we have mitigated the impact of the near collapse of the gas industry in BC? Think of what would have happen had we used the gas to generate BC electricity, rather than place all our eggs in the LNG export basket.

Today, combined-cycle natural gas turbines are the most cost effective means to generate electricity, yet that method has been rejected by the BC Liberals. Had we chosen to generate electricity with natural gas, the industry would have a stable market that would not only provide employment but build the infrastructure needed if and when the opportunity to market our gas around the world does come to fruition in the future.

Alberta has followed this path, having built Shepard Energy Centre near Calgary, generating 800 Megawatts of electrical energy.

But the BC Liberals blew a similar chance. Gordon Campbell’s ill conceived zero-carbon electrical policies prohibits the use of natural gas to generate electricity. As a result the Liberals are ham-strung because they morally hold to the zero carbon fuel goal, while at the same time advocating the export of a carbon fuel. This contradiction is killing the industry, and more importantly, seriously wounding the taxpayers of this province.

The BC Conservatives would reverse this policy. BC Hydro would be allowed to generate electricity using whatever means most cost effectively meets the needs of the BC taxpayer. We would not force Hydro to support wind farms and run-of-the-river power systems, paying four or more times the cost of their own generated power.

The BC Liberals continue to spend massive amounts of your tax dollars with little prospect of any return on that investment. There are many people making money – environmental lobbyists, bureaucrats, consulting lawyers, yet no development has put a shovel in the ground. The development of BC LNG remains stalled.

An outraged public could change things. Help us do so.

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