Canada’s oil and gas industry provides Canada with declining royalty revenues, jobs

Earth scientist David Hughes argues that Canada cannot possibly meet its national GHG emissions targets while expanding exports in the oil and gas industry, building pipelines, and developing liquified natural gas in a new report, Canada’s Energy Sector: Status, evolution, revenue, employment, production forecasts, emissions and implications for emissions reduction, released on June 1.   Hughes documents the declining health and importance of the sector with economic statistics: “The energy sector’s contribution to Canada’s GDP, currently at 9 per cent, has declined over the past two decades, and government revenues from royalties and taxes have dropped precipitously. Despite record production levels, royalty revenue is down 45 per cent since 2000, and tax revenues from the oil and gas sector, which totalled over 14 per cent of all industry taxes as recently as 2009, declined to less than 4 per cent in 2018. Direct employment, which peaked at over 226,000 workers in 2014, was down by 53,000 in 2019 although production was at an all-time high due to efficiencies adopted by the industry.”

Combining statistics from the Petroleum Labour Market Information office with industry projections from the federal Canada Energy Regulator, Hughes concludes that energy jobs have peaked and previous levels of employment are unlikely to return.

“Jobs are often cited by industry proponents as a reason to support expansion of oil and gas production. Yet despite record production levels, jobs in the oil and gas sector are down from their peak in 2014 by 23 per cent …..Thanks to technological advances, the sector has become more efficient and is able to increase production using fewer workers….This jobs scenario is particularly true in the oil sands, where much of the production growth is expected. Oil sands production per employee is 70 per cent higher than it was in 2011 (production per employee has increased by 37 per cent in conventional oil and gas and by 50 per cent in the sector overall since 2011). In Canada’s overall employment picture, the oil and gas sector accounted for only 1 per cent of direct employment in 2019 (5.5 per cent in Alberta).”

At the same time, oil and gas production accounts for the largest portion of GHG emissions in Canada, at 26 per cent of the total – and Canada‘s GHG emissions have actually increased by 3.3 per cent since the Paris Agreement was signed in 2016 – the highest increase of any G7 country.  With such limited benefits and such serious negative consequences, Hughes argues against expansion of oil and gas exports – especially LNG in British Columbia and the TransMountain pipeline expansion, and Line 3.

Canada’s Energy Sector: Status, evolution, revenue, employment, production forecasts, emissions and implications for emissions reduction is summarized by the National Observer, here. Author David Hughes has written substantive reports previously, for example: A Clear Look at B.C. LNG (2015); Can Canada increase oil and gas production, build pipelines and meet its climate commitments? ( 2016); B.C’s Carbon Conundrum: Why LNG exports doom emissions-reduction targets and compromise Canada’s long-term energy security (2020); and Reassessment of Need for the Trans Mountain Pipeline Expansion: Project Production forecasts, economics and environmental considerations (2020).

The full report was published by the Corporate Mapping Project, a project of the Canadian Centre for Policy Alternatives in British Columbia and the Parkland Institute in Alberta. The report was co-published with Stand.earth, West Coast Environmental Law, and 350.org.

Covid recovery clouds World Energy Outlook, but IEA calls for unprecedented changes to avoid lock-in to 1.65 degree temperatures

The IEA World Energy Outlook 2020 , the flagship publication of the International Energy Agency, was released on October 12, stating, “The Covid-19 pandemic has caused more disruption to the energy sector than any other event in recent history, leaving impacts that will be felt for years to come.” The report is a comprehensive discussion and  analysis of those impacts, and attempts to model the crucial next  10 years of recovery. Modelling is provided for all energy sources – fossil fuels, renewables, nuclear –  under four different scenarios, including a longer-than-expected Covid recovery and a Sustainable Development Scenario. Key highlights:

Solar is “king”: In 2020,  global energy demand is forecast to fall by 5% overall:  8% in oil, 7% in coal and 3% in natural gas demand. Under the heading “Solar becomes the new King of electricity” , the report states: “Renewables grow rapidly in all our scenarios, with solar at the centre of this new constellation of electricity generation technologies. Supportive policies and maturing technologies are enabling very cheap access to capital in leading markets. With sharp cost reductions over the past decade, solar PV is consistently cheaper than new coal- or gasfired power plants in most countries, and solar projects now offer some of the lowest cost electricity ever seen.”  

Questionable future for new Liquified Natural Gas projects: For natural gas, “different policy contexts produce strong variations”. For the first time, the business as usual scenario for advanced economies shows a slight decline in gas demand by 2040. And “An uncertain economic recovery also raises questions about the future prospects of the record amount of new liquefied natural gas export facilities approved in 2019.”  In certain scenarios, “the challenge for the gas industry is to retool itself for a different energy future. This can come via demonstrable progress with methane abatement, via alternative gases such as biomethane and low-carbon hydrogen, and technologies like carbon capture, utilisation and storage (CCUS).”

Peak oil within sight despite growing importance of plastics manufacturing: The era of growth in global oil demand comes to an end within ten years, but the shape of the economic recovery is a key uncertainty. The report notes “The longer the  (Covid) disruption, the more some changes that eat into oil consumption become engrained, such as working from home or avoiding air travel. However, not all the shifts in consumer behaviour disadvantage oil. It benefits from a near-term aversion to public transport, the continued popularity of SUVs and the delayed replacement of older, inefficient vehicles.”  The analysis also considers the impact of plastics manufacturing on oil demand.

Inequities will persist or be made worse.  “Reversing several years of progress, our analysis shows that the number of people without access to electricity in sub-Saharan Africa is set to rise in 2020. Around 580 million people in sub-Saharan Africa lacked access to electricity in 2019….and in addition, “a rise in poverty levels worldwide in 2020 may have made basic electricity services unaffordable for more than 100 million people who already had electricity connections”.

Structural change, not Covid, will bring lasting CO2 emissions decline: The economic downturn related to Covid has brought a temporary decline of 2.4 gigatonnes in annual CO2 emissions, although an accompanying decline in methane emissions is not clear.  And emissions are expected to rebound. “The pandemic and its aftermath can suppress emissions, but low economic growth is not a low-emissions strategy. Only an acceleration in structural changes to the way the world produces and consumes energy can break the emissions trend for good.”….  “ if today’s energy infrastructure continues to operate as it has in the past, it would lock in by itself a temperature rise of 1.65 °C.”

Finally, the report concludes by advocating a future path built on its Sustainable Development Scenario  , calling for “unprecedented” actions, not just from government and business, but from individuals.

“Reaching net zero globally by 2050…. would demand a set of dramatic additional actions over the next ten years. Bringing about a 40% reduction in emissions by 2030 requires, for example, that low-emissions sources provide nearly 75% of global electricity generation in 2030 (up from less than 40% in 2019), and that more than 50% of passenger cars sold worldwide in 2030 are electric (from 2.5% in 2019). Electrification, massive efficiency gains and behavioural changes all play roles, as does accelerated innovation across a wide range of technologies from hydrogen electrolysers to small modular nuclear reactors. No part of the energy economy can lag behind, as it is unlikely that any other part would be able to move at an even faster rate to make up the difference.

To reach net-zero emissions, governments, energy companies, investors and citizens all need to be on board – and will all have unprecedented contributions to make. The changes that deliver the emissions reduction in the SDS are far greater than many realise and need to happen at a time when the world is trying to recover from Covid-19.”

The full World Energy Outlook 2020 is only available for purchase. An overview, FAQ’s, and related reports including modelling details and a methane tracker are all available here .

Fossil fuel and LNG subsidies in B.C., and an alternate viewpoint on the issue

The International Institute for Sustainable Development (IISD) maintains an ongoing initiative, the Global Subsidies Initiative , to research fossil fuel subsidies worldwide.  Their most recent publication relating to Canada is  Locked In and Losing Out: British Columbia’s fossil fuel subsidies. The authors calculate that BC’s fossil fuel subsidies reached  $830 million Cdn.  in 2017–2018, with no end in sight. Despite B.C.’s clean energy image, the report documents the significant new support granted by the current B.C. government to encourage the liquefied natural gas (LNG) industry.  Locked In and Losing Out calls for the provincial government to create a plan to phase-out its own subsidies, and coordinate with the federal government in its current  G20 Peer Review of fossil fuel subsidies, launched in 2019 and administered by Environment and Climate Change Canada.   In August 2019, the IISD also released its Submission to Environment and Climate Change Canada’s Consultation on Non-Tax Fossil Fuel Subsidies calling for Canada to re-affirm its long-standing  G7 commitment to reform fossil fuel subsidies by 2025 and provide a detailed action plan to achieve the goal.  

new labor forumAn alternate view

Sean Sweeney of Trade Unions for Energy Democracy takes an alternate view on fossil fuel subsidies in “Weaponizing the numbers: The Hidden Agenda Behind Fossil-Fuel Subsidy Reform” appearing in the January 2020 issue of  New Labor Forum. As might be expected, Sweeney challenges the findings and assumptions of the International Monetary Fund (for example, in a 2019 working paper by David Coady ). He also takes issue with some progressive analysis – notably, he cites  Fossil Fuel to Clean Energy Subsidy Swaps: How to Pay for an Energy Revolution (2019) and Zombie Energy: Climate benefits of ending subsidies to fossil fuel production (2017)  – both published by the International Institute for Sustainable Development (IISD).  After a brief discussion of the main concepts, Sweeney concludes:

“For activists in the North, making fossil-fuel subsidies a key political target is a mistake. It buys into the IMF’s obsession with “getting energy prices right” which targets state ownership and regulation of prices. Such an approach may lead to a more judicious use of energy, but it would not address the mammoth challenges involved in transitioning away from fossil fuels, controlling and reducing unnecessary economic activity, or reducing emissions is expeditiously as possible.

The problem is fossil fuel dependency, not underpriced energy. Raising the price without alternative forms of low-carbon energy available for all will not produce the kind of emissions reductions the world needs. This does not mean that progressive unions and the left should support subsidies for fossil fuels—especially when the beneficiaries are large for-profit industrial users or billionaire Lamborghini owners cruising the strips in Riyadh or Shanghai. But there is a need to be aware of what the IMF and the subsidy reform organizations are proposing, and what these proposals might mean for workers and ordinary people, especially in the Global South.”

 

 

 

Federal government announces $275 Million subsidy to LNG Canada in B.C.

Despite the ongoing contentious development of Liquified Natural Gas (LNG) in British Columbia and commitments to end fossil fuel subsidies, on June 24 federal Finance Minister Morneau  announced that the federal government will invest $275 million into LNG Canada’s $40 billion liquefied natural gas project in Kitimat: $220 million to be spent on energy-efficient gas turbines for the project, and  $55 million spent on replacing the Haisla Bridge in Kitimat. The announcement is summarized by the CBC in “Feds announce $275M ‘largest private sector investment in Canadian history’ — Kitimat, B.C.’s LNG project”

The Narwhal maintains an ongoing archive of excellent articles which chronicle the controversy over fracking and LNG in B.C,  here .  Two recent “must read” articles from: “6 Awkward Realities behind B.C.’s big LNG Giveaway”  (April 6)  which discusses the B.C. government’s move to bundle tax exemptions and cheap electricity rates into a $5.35 billion  incentive package for  LNG Canada in March 2019, and “B.C. government quietly posts response to expert fracking report” (June 28) which discusses the government’s  response to the report of its own  independent Scientific Review of Hydraulic Fracturing in British Columbia, released in February 2019. As noted in the Narwhal article, the panel was mandated to assess the potential impacts of fracking on water quantity and quality; on seismic activity, and on  fugitive emissions – but not on public health, despite concerns raised and the known scientific evidence.  According to the government news release,  a working group has been established to address the  97 recommendations made by the expert panel.

Some recent relevant reading about LNG and the fracking associated with its production: 

RE the Emissions of LNG: The New Gas Boom , published  on July 1 by the Global Energy Monitor, an international non-governmental organization that catalogues fossil-fuel infrastructure. The report states that a growing global supply of natural gas is on a “collision course” with the Paris Agreement, and that the increase in natural gas is driven largely by the North American fracking boom- with 39% of new development  occurring in the U.S., 35% in Canada.  The GEM report is discussed from a Canadian viewpoint in  “Global boom in natural gas is undermining climate change action: reportNational Observer (July 2)  and  “’Clean’ natural gas is actually the new coal, report says: Don Pittis” at CBC  .  Previous to the Global Energy Monitor report, Marc Lee had weighed in on the high GHG emissions of fracked natural gas in  “ LNG’s Big Lie”, an article in the Canadian Centre for Policy Alternatives Policy Note ( Lee’s arguments were also published in The Georgia Straight,  (June 17) and an OpEd in The Globe and Mail . )

compendium re frackingIn the U.S.   in June 19, The sixth edition of the Compendium of Scientific, Medical, and Media Findings Demonstrating Risks and Harms of Fracking  was published by Physicians for Social Responsibility and Concerned Health Professionals of New York. Written by scientists, doctors and journalists, it is an analysis of original research studies published from 2016-2018 on the health impacts of fracking . One of the most impactful statements from the press release: “The notion that natural gas can serve as an intermediate “bridge fuel” between coal and renewable energy is fallacious and now disproven by new scientific evidence showing that methane is a more powerful greenhouse gas than formerly appreciated and escapes in larger amounts from all parts of the extraction and distribution process than previously presumed, including from inactive, long-abandoned wells. Grossly underestimating methane emissions threatens to undermine the efficacy of efforts to combat climate change.” A summary press release is here ,  or see the Common Dreams article “’We Need to Ban Fracking’: New Analysis of 1,500 Scientific Studies Details Threat to Health and Climate”   (June 19).

International Energy Agency report, LNG Market Trends and their Implications   (June 20) provides statistical analysis of the changing Asian markets for LNG.

Federal Government approves Pacific NorthWest LNG project in B.C.

Is there a pattern  emerging in the federal government’s leanings regarding controversial energy projects?  After its approval of the Site C dam in B.C. in August 2016,  the Minister of Environment and Climate Change announced, late on the evening of September 27, approval with 190 conditions  for the Pacific North West LNG project, to be built near Lelu Island, north of Prince Rupert, B.C. . See the Government of Canada press release and the full text of the Decision Statement, including conditions, released by Canada Environment Assessment Agency.  For summaries, read the the Globe and Mail (Sept. 28)  or  the Vancouver Province (Sept. 28) or the National Observer   .  CBC offers a brief analysis at “Trudeau government at pains to explain Pacific West LNG” at the CBC.

More reaction is sure to pour in as environmentalists analyse the Decision and conditions, but an article in The Tyee (Sept. 28) summarizes initial reactions by major environmental groups.  The Pembina Institute’s Matt Horne been writing about the climate change implications for a long time, as recently September 27  in IRPP’s Policy Options,  “Cabinet should not allow BC’s and Petronas’ mistakes in Pacific NorthWest to be locked in for the next 30-plus years”. For Pembina’s initial reaction, plus links to many earlier critiques, see “Pacific NorthWest LNG approval is step backward for climate action in Canada” .

B.C. also awaits a federal decision about the proposed expansion of the Trans Mountain pipeline from Alberta to Burnaby, B.C., due in mid-December.

ECONOMIC IMPACTS OF B.C. LNG DEVELOPMENT

A May 2015 report from the Canadian Centre for Policy Alternatives considers six possible scenarios for liquefied natural gas export development in B.C., ranging in the number of export terminals from zero to five (the current government estimate). A Clear Look at BC LNG: Energy Security, Environmental Implications and Economic Potential  states that government claims of available gas supplies for export are greatly exaggerated, and that production would involved massive disruption, given that most wells would be fracked wells. Further, author David Hughes argues that is unlikely that anything close to the revenue projected by the BC government will ever be realized. And beyond the environmental dangers to the citizens of B.C., LNG will not reduce global GHG emissions: “From wellhead to final combustion, there are substantial leakages of methane, a much more potent greenhouse gas than CO2. Given this, liquefied fracked gas from BC actually has GHG emission rates similar to coal.”   Researchers who wish to pursue these concerns will welcome a new interactive planning tool, called the B.C. Shale Scenario Tool , available online at the Pembina Institute website. It allows users “ to quantify the potential impacts of shale gas and liquefied natural gas (LNG) development in northeast B.C. in terms of carbon pollution, land disturbance, water use and wastewater.”

B.C. LNG Setor: New Legislation and a New Report

In the week of October 20, British Columbia introduced the Greenhouse Gas Industrial Reporting and Control Act and the Liquefied Natural Gas Income Tax Act. The former requires liquefied natural gas plants to purchase carbon offsets and punishes those who fail to limit their carbon emissions to 0.16 tonnes per tonne of LNG – the strictest standards in the world, according to B.C. Environment Minister Mary Polak.

However, Merran Smith of Clean Energy Canada criticized the Act for focussing exclusively on port facilities, at the end of the supply chain. Matt Horne of the Pembina Institute asserted that 70% of the industry’s emissions would be released before reaching the ports. See “B.C.’s New LNG Emissions Regulations A Good Start, But Not Enough” from Desmog Canada at: http://www.desmog.ca/2014/10/22/bc-new-lng-emissions-regulations-good-start-but-not-enough, and Pembina’s comments at: http://www.pembina.org/media-release/pembina-reacts-to-tabling-of-bc-lng-carbon-pollution-legislation.

The new tax legislation imposes a 3.5% rate on operating income, half the amount B.C. had initially planned. Read the government press release at: http://www.newsroom.gov.bc.ca/2014/10/bc-to-have-worlds-cleanest-lng-facilities.html, and for details on the Act, see the government’s website at: http://www2.gov.bc.ca/gov/topic.page?id=75BD4BF2B6B5493FB8A36DB05EBA764D. Jack Mintz, from the University of Calgary, states: “the B.C. shale gas royalty is one of the most distortionary systems developed in industrialized countries”.

For his financial and policy critique, see “Jack M. Mintz: Why B.C.’s LNG tax policy sets a bad precedent” in the Financial Post at: http://business.financialpost.com/2014/10/22/jack-m-mintz-why-b-c-s-lng-tax-policy-helps-neither-the-province-nor-the-industry/. For a broader view, see Marc Lee’s reaction in “A B.C. Framework for LNG, part 2: The LNG income tax” at Rabble.ca at: http://rabble.ca/blogs/bloggers/policynote/2014/10/bc-framework-lng-part-2-lng-income-tax.

And the last word: Pembina will release a new report on October 27th, LNG and Climate Change: The Global Context.

British Columbia Tripartite Working Group Makes Workforce Recommendations for LNG Development in the Face of Environmental Controversy and Public Opinion

Since September 2013, the Premier’s Liquefied Natural Gas Working Group has met to discuss workforce planning, skills training, and the use of temporary workers in LNG projects. Described by the government as “unprecedented”, the working group included representatives from government, industry, the Haisla Nation, and organized labour, specifically: United Association of Plumbers and Pipefitters Local 170; B.C. Federation of Labour; B.C. and Yukon Building and Construction Trades Council; B.C. Government and Service Employees Union; Construction and Specialized Workers Union Local 1611; and Sheet Metal Workers International Association Local 280. The Working Group released their final report on March 31st and all fifteen recommendations were accepted by the Premier on April 3rd. Next step: a 10-year skills-training plan. The Terms of Reference did not include the environmental impact of the proposed LNG development and the contention that the LNG production will make it impossible for B.C. to meet its legislated carbon emissions targets.

The Final Report provides an inventory of existing and proposed LNG development in B.C. as of March 2014, as well as analysis of the workforce data and issues as identified by the B.C. Natural Gas Workforce Strategy and Action Plan, released in July 2013 and since updated by the government. Fifteen recommendations include the use of best practices relating to apprenticeship, mobility of labour within B.C. and Canada, and most contentiously, the use of temporary foreign workers. The report calls for the formation no later than July 2014, of an ongoing body which would include government, labour unions, industry and contractors, and First Nations, to participate in workforce planning, skills training, and to develop a protocol for the use of temporary foreign workers, “to limit their use, but also to plan accordingly for their use if and when needed”.

Many First Nations groups oppose LNG development, and a new public opinion survey released on April 24 shows that 78% of British Columbians agree that “B.C. should transition away from using fossil fuels to cleaner sources of energy to prevent climate change from getting worse. More than two thirds (67%) agree the province should decrease its reliance on fossil fuel exports to avoid future boom and bust economic cycles”. The survey was commissioned by the Pembina Institute, Clean Energy Canada and the Pacific Institute for Climate Solutions, and conducted by Strategic Communications Inc. in April of 2014.

LINKS

Premier’s Liquefied Natural Gas Working Group: Final Report is available at: http://www.labour.gov.bc.ca/pubs/pdf/lng_final_report.pdf, with a press release and backgrounder from B.C. Premier’s Office at: http://www.newsroom.gov.bc.ca/2014/04/premiers-lng-working-group-recommendation-road-map.html

“Key Native Group in Northern B.C. threatens to Stop Talks on Pipelines” in the Globe and Mail (April 21) at: http://www.theglobeandmail.com/news/british-columbia/native-group-threatens-to-stop-talks-on-pipelines/article18088799/, but also see “B.C. and First Nations sign first LNG revenue-sharing Agreement, and Backgrounder” at: https://www.newsroom.gov.bc.ca/2014/04/bc-and-first-nations-sign-first-lng-revenue-sharing-agreements.html

Public Opinion Survey is available from the Pembina Institute website at: http://www.pembina.org/pub/2539

See also the BC LNG Info website, maintained by the Northwest Institute, SkeenaWild Conservation Trust, and Headwaters Initiative, with the stated goal of providing impartial, up to date information about the LNG industry in B.C. for the benefit of the community. See http://bclnginfo.com/newsroom for news and updates.

LNG Production Powered by Renewables would Create More Jobs, Less Pollution, without Sacrificing Competitiveness

lock in jobsOn January 15, CleanEnergy Canada released the latest in its reports regarding the production of Liquefied Natural Gas (LNG) in British Columbia. Lock in Jobs, Not Pollution urges the government of British Columbia to use renewable electricity to power the LNG facilities. The report explains that the heart of LNG facilities are their compressors, which can be powered by the traditional technology of gas turbine drives (also called direct drives or D-drives), or by the more innovative electric motor drives (E-drives), now in use in Norway. The report contends that, in comparison to the use of fossil fuels, the use of renewable energy to power e-drives would “increase regional permanent employment by 45 percent, decrease carbon pollution by 33 percent, reduce smog, and build the foundations of a renewable energy economy in Northwestern British Columbia.” The report contains detailed appendices of the methodology by which job projections and estimates of cost and competitiveness were calculated.

The report quotes numerous government statements that claim that the LNG initiatives will be the “cleanest in the world”; notably, Premier Clark stated at the World Economic Forum in China in 2012, “We want our LNG plants to be principally fuelled by renewables.” Yet in a radio interview in response to the report’s release, the B.C. Minister of Energy stated, “If we were to introduce a brand new condition, at this stage of our discussions with these LNG proponents, it would first of all be foolhardy, it would be unprofessional.” Two government-industry agreements for LNG development were announced in January, one for Kitimat and one for Prince Rupert.

For a broader discussion of the many potential sources of carbon emissions from LNG production (including the extraction of shale oil gas and transportation to the LNG processing facilities), see a recent OpEd by Alison Bailie. According to Pembina Institute estimates, if LNG development is to achieve the revenue claims made by the B.C. government, B.C.’s LNG sector would produce three-quarters as much carbon pollution as the oil sands, by 2020. The author contends that the government could reduce the carbon footprint by limiting the growth of the LNG sector, prioritizing low-carbon job creation, and setting high standards for emissions reductions technology for any projects that are allowed to proceed.

LINKS:

Lock in Jobs, Not Pollution is at CleanEnergy Canada at: http://cleanenergycanada.org/wp-content/uploads/2014/01/Lock-in-Jobs-Not-Pollution.pdf, with links to previous CleanEnergy Canada reports about LNG at: http://cleanenergycanada.org/category/news-coverage/

Carbon Footprint of B.C. LNG Boom Could Rival Alberta’s Oilsands, OpEd by Alison Bailie, from Pembina Institute, originally posted at The Tyee, (Jan. 13), at: http://www.pembina.org/op-ed/2515

B.C. Government press releases re industry agreements for LNG facilities are at: http://www.newsroom.gov.bc.ca/2014/01/major-lng-contract-awarded.html (Jan. 13, Kitimat) and http://www.newsroom.gov.bc.ca/2014/01/second-lng-agreement-reached-for-grassy-point-with-woodside.html (Jan. 16, Grassy Narrows, Prince Rupert).

Radio interview with Energy Minister Bennett in response to the CleanEnergy report is at: http://www.cknw.com/2014/01/16/energy-minister-says-no-to-electricity-powered-lng-plants/, with response from CleanEnergy Canada at: http://cleanenergycanada.org/2014/01/16/media-statement-re-minister-bennett-remarks-powering-lng-plants/

British Columbia Liquified Natural Gas Strategy: Workforce Estimates Released, but Question Keep Coming

A report released on July 23 by the government of British Columbia estimates that 60,000 workers will be needed to build five LNG plants and pipelines throughout 2016 and 2017, with a further 75,000 permanent skilled workers needed once the projects are operational. The B.C. Natural Gas Workforce Strategy and Action Plan is based on information from the LNG Employment Impact Review, conducted for the government by consultants Grant Thornton. However, on August 1, the Environmental Law Centre at the University of Victoria sent a 63-page letter to the federal and provincial Ministers of the Environment, stating, “On behalf of Northwest Institute for Bioregional Research, we hereby request that you direct that a Strategic Economic and Environmental Assessment be conducted of proposed massive new LNG developments in British Columbia.” The economic questions from the Environmental Law Centre do not specifically relate to workforce impact, but rather to the costs to the taxpayer and the consumer, especially in light of the volatility of the high Asian price for natural gas. The letter also raises the issues of the GHG emissions associated with LNG production, along with other environmental concerns.

LINKS

LNG Workforce Strategy and Action Plan full report is at: http://www.rtobc.com/Assets/RTO+Assets/About+RTO/BC+NG+Strategy+2013JUL.pdf (the government press release is available at: http://www.newsroom.gov.bc.ca/2013/07/action-plan-released-for-bcs-lng-sector.html).

Grant Thornton Employment Impact Review is at:

Letter from the Environmental Law Centre, requesting a Strategic Economic and Environmental Assessment of LNG developments in B.C. is available at: http://www.elc.uvic.ca/documents/2013Aug1-Aglukkaq-Polak-Letter-ELC2013-02-01.pdf

Liquified Natural Gas: B.C. Announces Royalty Credits and Grants to First Nations to Stimulate the Industry

The Government of British Columbia released a strategy for LNG development in February 2012, and has now released a one year update. The government now predicts that “LNG development is expected to create on average 39,000 new full time jobs during a nine-year construction period. There could be as many as 75,000 new, annual full-time jobs once all LNG plants are in full operation.”

On February 25 at a conference called Fuelling the Future: Global opportunities for LNG in BC, Premier Christy Clark announced that British Columbia will provide up to $120 million in royalty credits to the industry in 2013, through the existing Infrastructure Royalty Credit Program (IRCP). The program, established in 2004, allows resource companies to recover up to 50 % of the cost of roads and pipelines through credits that reduce royalties payable to government.

At the same conference, the Premier announced that the government will provide $32 million to the First Nations Limited Partnership (comprised of 15 northern First Nations) to facilitate their non-equity investment in the proposed Pacific Trails Pipeline project , a 463-kilometre pipeline planned to run from Summit Lake, north of Prince George, to the proposed Kitimat LNG facility on the coast.

LINKS

British Columbia’s Liquified Natural Gas Strategy: One Year Update is at:http://engage.gov.bc.ca/lnginbc/files/2013/02/LNGreport_update2013_web.pdf, with job forecasts summarized in a news release at:http://engage.gov.bc.ca/lnginbc/files/2013/02/News-Release-Major-progress-job-creation-evident-in-LNG-update.pdf

Liquified Natural Gas: A Strategy for British Columbia’s Newest Industry, published in Feb. 2012, is at: http://www.gov.bc.ca/ener/popt/down/liquefied_natural_gas_strategy.pdf

See the new B.C. government website at: http://engage.gov.bc.ca/lnginbc/ for all LNG developments.