Rather than worry about lost jobs and economic opportunities, British Columbians should celebrate Petronas’ decision to cancel its Pacific Northwest liquefied natural gas (LNG) proposal.
This was a project built on bad economics, climate change denial and wishful thinking. Optimistic predictions for LNG were made a few years ago when gas prices were abnormally high, but it is highly unlikely that prices will return to the highs of 2011-2014, which prompted substantial global investment in LNG projects.
High Asian prices in 2013 brought dreams of LNG riches to the B.C. government and industry, but recent developments in Australia strongly suggest that B.C. should count its blessings that it did not win the LNG lottery.
The Australian experience shows what “success” for B.C. could have looked like:
- A political crisis emerged earlier this year after gas prices shot up for Australian households and businesses;
- In spite of record production, the return to the Australian public treasury for the development of the publicly owned gas resource has been meager;
- Promises of massive job creation have been unfounded. After a surge of 14,500 construction jobs for a few years in the city of Gladstone, Queensland (population 60,000), the completed LNG terminals now only provide 500 permanent jobs;
- Australian greenhouse gas (GHG) emissions are on the rise and the country will miss its 2020 GHG target by a large margin.
B.C. has wasted time and money on LNG instead of developing renewables and investing in energy efficiency and climate-friendly infrastructure. Had a different course been taken, B.C. would be the Saudi Arabia of clean energy and have bone fide bragging rights on climate action.
Natural gas is a finite resource and British Columbians should be thankful that government efforts to quickly liquidate it for export have come to naught.
Even if B.C. had an LNG industry today, it would lose money on every tanker load sent to Asia. The people of B.C. would pay higher prices for the gas they consume and get negligible returns for that publicly owned gas
Sincerely,
Marc Lee
Senior economist with the Canadian Centre for Policy Alternatives