Another liquefied natural gas egg has been added to sa国际传媒鈥檚 economic basket, and like all the others, it will be a long time before it hatches, if ever. The project joins more than a dozen other LNG facilities proposed for the West Coast, none of which has received final approval.
The announcement of a proposed LNG facility at Barkley Sound stands out for two reasons 鈥� its Vancouver Island location and its partnership with the Huu-ay-aht First Nation.
The $30-billion complex would be located in Sarita Bay, about 70 kilometres southwest of Port Alberni on Huu-ay-aht land. Its construction would create more than a thousand jobs, with 400 permanent jobs for the facility鈥檚 operation.
That would be a huge economic jolt to the quiet, remote region. The Huu-ay-aht hope to reap some of the economic benefits.
鈥淚f it does come to fruition, we鈥檙e hoping that people would be looking at some of the jobs that are going to be there, long-term jobs, well-paying jobs,鈥� said Huu-ay-aht Chief Councillor Jeff Cook.
The project was launched by Vancouver-based Steelhead LNG. CEO Nigel Kuzemko admits the plan faces some major hurdles, including working with pipeline companies to get the gas from northeastern sa国际传媒 to the west side of Vancouver Island, but his company has already cleared one hurdle 鈥� it has at least one First Nation onside.
Steelhead has been discussing the project with the Huu-ay-aht for the past six months and is forming a partnership that would involve profit-sharing and a land lease. Kuzemko said he doesn鈥檛 believe any other project has had a partnership with First Nations at this early stage.
Especially in light of the recent Supreme Court of sa国际传媒 decision on aboriginal title, it pays to regard First Nations鈥� roles in resource development as more than an afterthought. Instead of seeing First Nations as an obstacle, Steelhead has recognized them as an asset.
鈥淭hey understand the environment and all the environmental issues in the area,鈥� said Kuzemko.
Besides regulatory approval from the National Energy Board, for which Steelhead has applied, bringing the gas from northeastern sa国际传媒, under the Strait of Georgia and across Vancouver Island will be a monumental undertaking. If it succeeds, it will give tankers more direct access to the open Pacific than those that would be required to navigate around Vancouver Island.
And nothing is certain. Kuzemko estimates it will take four years to obtain approvals and four years to build a pipeline. In that eight years, markets could change; supply could outstrip demand.
It鈥檚 the same worry that plagues Premier Christy Clark鈥檚 ambitious plan to make sa国际传媒 a leader in the production and sale of LNG.
鈥淥verseas investors tell me the demand for sa国际传媒鈥檚 natural gas is growing,鈥� says Clark in a government publication explaining sa国际传媒鈥檚 LNG sector. 鈥淲ith each passing day, it is clear our province is building a new industry which will put us among the global leaders in natural gas production and export.鈥�
Perhaps not that clear. China recently signed a $400-billion natural gas deal with Russia and might not be inclined to pay premium prices for Canadian gas. More sources of natural gas are being developed around the world; prices are declining and could fall further. Japan, which consumes more than a third of the world鈥檚 LNG, is pondering restarting a significant number of its 54 nuclear reactors shut down after the 2011 earthquake and tsunami.
Putting all the economic eggs into the LNG basket might not be wise, given that there is no guarantee if and when those eggs will hatch.
