To those who see the Pacific NorthWest LNG project as an environmental threat 鈥� don鈥檛 give up. To those who see the project as the path to sa国际传媒鈥檚 prosperity 鈥� don鈥檛 bank on it. There鈥檚 no guarantee the proposal will ever become a reality.
And the sa国际传媒 Liberal government should probably pin its dreams of prosperity on something more substantial.
The federal government gave approval Tuesday to the Petronas-led $36-billion project near Prince Rupert, expected to be one of the largest infrastructure projects in Canadian history. It would also be one of the largest greenhouse-gas emitters in the country. The facility would ship 19 million tonnes of liquefied natural gas a year to Asian markets while emitting more than five million tonnes of carbon dioxide annually.
Ottawa鈥檚 acceptance of the project removes one hurdle for the project, but many others stand in its way, including 190 conditions imposed by the feds.
One of those is a cap on greenhouse-gas emissions. Others concern requirements for proper consultation with First Nations.
And what is proper consultation? If First Nations are massively opposed, will the project still proceed? The coastal facility would have to be fed by a pipeline from northeastern sa国际传媒 that would traverse First Nations lands. Can First Nations veto the project or any of its components? That issue could be tied up in the courts for years.
That would fulfil part of Premier Christy Clark鈥檚 promise of the LNG industry creating employment, but not in the way she envisioned.
LNG was the centrepiece of the 2013 throne speech, delivered three months before an election, with the government pledging to build a $100-billion Prosperity Fund from LNG revenues.
Government officials said at the time that if Asian natural gas prices remained high, and if the fund were dedicated solely to debt relief, it could erase sa国际传媒鈥檚 debt, which then stood at $56 billion, by about 2028. (Today the debt is ticking close to $66 billion, according to debtclock.ca.)
At one time, plans for 20 or so LNG plants were being tossed around. Clark鈥檚 2013 plan hinged on the development of five proposed liquefied natural gas plants 鈥� three large-scale plants and two mid-sized ones, with hopes that one of the smaller plants would be operational by 2016.
The government committed in its sa国际传媒 Jobs Plan to having three of the proposed plants running by 2020.
Even then, the LNG market was fiercely competitive, and sa国际传媒 was already late to the party. Gas prices have plummeted since then, and prospects for an LNG-fuelled future, never particularly bright, have dimmed correspondingly.
In April 2015, the investment-consulting firm Moody鈥檚 Investors Service said the vast majority of North American LNG proposals are likely to be cancelled.
鈥淢any sponsors 鈥� including those in the U.S., sa国际传媒 and Mozambique that have missed that window of opportunity as oil prices have declined 鈥� will face a harder time inking the final contracts, most likely resulting in a delay or a cancellation of their projects,鈥� said Moody鈥檚.
鈥淚t鈥檚 no fantasy,鈥� the sa国际传媒 Liberals said of the Prosperity Fund during the 2013 election campaign.
Perhaps not, but it was wishful thinking. As the sa国际传媒 Liberals pursue their Jobs Plan, they should focus on what is, not what might happen.
Meanwhile, those who have well-founded fears about the environmental threats posed by LNG still have plenty of time to oppose the project. Federal approval notwithstanding, market forces mean this project won鈥檛 happen for a long, long time 鈥� if at all.
