Good morning,
Former B.C. premier Christy Clark’s vision of a provincial economy powered by LNG was so effusive, so infectious, that it helped propel her to an upset victory over the NDP in 2013.
By the following year, there were 14 proposals to export LNG from B.C. to Asia. The largesse would come from three new LNG plants that would be in production by 2020 and would retire B.C.’s debt.
By the 2017 campaign, she had adjusted that prediction to three plants in construction by 2020, but the dream was very much alive. Clark lost that election by the slimmest of margins.
British Columbia missed that opportunity: The only LNG export terminal running so far in this country is the Shell PLC-led LNG Canada project in Kitimat, B.C.
There were always hurdles: Fierce global competition, including rival projects in Australia and the United States. New supplies poured into Asia.
But as Brent Jang reported last week, world events mean Canada and British Columbia have a second chance at creating a competitive industry.
Canada is the world’s fifth-largest producer of natural gas, but it ranked 19th out of 24 countries in exporting LNG last year.
In the United States, eight LNG export terminals have opened since 2016, and another four are slated to be operating by 2028.
François Poirier, CEO of TC Energy Corp., believes Canada could be well-positioned to diversify its economy by further tapping into massive reserves of natural gas.
As the U.S. trade war persists, the federal and B.C. governments have characterized LNG exports to Asia as a crucial way for Canada to reduce economic dependence on American customers.
TC, one of North America’s largest energy infrastructure companies, operates the Coastal GasLink pipeline, which transports natural gas from northeast B.C. to LNG Canada’s terminal in Kitimat.
Shell and four other LNG Canada co-owners are expected to make a final investment decision by the end of this year on whether to forge ahead with Phase 2 expansion plans, which would require increased capacity from the 670-kilometre Coastal GasLink pipeline.
“The events unfolding in the Middle East underscore how fragile global energy systems can be – and why energy security matters,” he told Brent.
“Periods of geopolitical disruption reinforce the importance of reliable, diversified energy supply. As global trade is disrupted and countries seek to diversify energy sources, dependable LNG plays an increasingly stabilizing role in the system.”
The lack of LNG supplies from Qatar has sent pricing shocks across the global industry.
“A disruption of this magnitude exposes how little flexibility exists in global LNG markets,” Josephine Mills, senior analyst at Enverus Intelligence Research, said in a statement.
Woodfibre LNG near Squamish and Cedar LNG in Kitimat are under construction in B.C.
LNG Canada started shipping natural gas in liquid form to Asia from Kitimat last June.
Last September, LNG Canada’s Phase 2 expansion plan to double its capacity made Prime Minister Mark Carney’s list last September of major projects of national interest to be considered for fast tracking.
Later, Carney added the Ksi Lisims project near Pearse Island to the roster of plans submitted to the Major Projects Office,
It cost $14.5-billion to build Coastal GasLink, which had a price tag of $6.2-billion in 2018, when construction began. Industry experts say it could cost roughly $6-billion to add five compressor stations to double capacity along Coastal GasLink’s route.
Coastal GasLink’s expansion is likely once again to run into opposition from the group of Wet’suwet’en Nation hereditary chiefs that protested the original project in 2020, staging rail and highway blockades across the country.
The Ksi Lisims project on Nisga’a territory has faced opposition from nearby Indigenous groups and climate activists.
But B.C. NDP Premier David Eby has taken up the LNG cause with fervour similar to his predecessor Clark.
The province’s dismal financial picture – with a projected deficit at a record $13.3-billion and a debt load by the end of next year almost double that of 2023-2024 – means Eby is grasping as hard as anyone at LNG’s second chance.
“Projects like LNG Canada are the reason that B.C. will be the economic engine of a more independent Canada. It creates good jobs, opportunities that let young people build a life here in the North and generates the revenue we need to improve public services everyone relies on.”
This is the weekly British Columbia newsletter written by B.C. Editor Wendy Cox. If you’re reading this on the web, or it was forwarded to you from someone else, you can sign up for it and all Globe newsletters here.