LNG in BC: “If we can pull this thing off!”

This morning we attended the LNG in BC: Opportunities and Challenges session at the Union of British Columbia Municipalities convention in Whistler, BC. The session should have been called LNG in BC: If we can we pull this thing off!”

The presenters highlighted the opportunity presented by the Liquefied Natural Gas (LNG) industry in British Columbia, but it lacked the balance needed to provide a fair analysis of what is really going on in the B.C. gas fields.

The forum presenters highlighted how communities in rural and coastal British Columbia are benefitting from the economic growth brought by the speculative investments of LNG companies. Chief Councillor Ellis Ross of the Haisla Nation in Kitimat talked in depth about the positive impact in his community. Today they are managing wealth rather than poverty.

Unfortunately with the good also comes the bad. Despite the potential opportunities of LNG in BC, there are also significant challenges. Since introducing LNG as a “once-in-a-lifetime” opportunity for the province, British Columbians have heard about the potential economic windfall that the industry may offer and now we are beginning to be introduced to the social, economic and environmental challenges.

As the discussion unfolded, several issues began to emerge that would concern any local government official. Issues such as rapidly increasing housing costs and organized crime which are the result a massive population increase, and the economic uncertainty of the whole LNG endeavour.

Chief Councillor Ross was the first and only presenter to raise the issue of emissions that the industrialization of Kitimat will bring. Despite Minister Rich Coleman’s reassurance that the Kitimat airshed can handle the increased emissions, Oak Bay-Gordon Head MLA Andrew Weaver shed light on the problems with the findings of a provincial airshed study in a post earlier this summer.

There continues to be significant challenges in the labour supply with a potential need for hundreds of thousands of new skilled workers. The experts on the panel presented a best case scenario, which includes thousands of temporary foreign workers and an odd assumption that every new working migrant and immigrant to the province (23,000 to 25,000 per year) in the next decade will be headed to work in the natural gas industry.

One of the major developments yet to be talked about at length in public is the notion that the provincial government could potentially cap the industrial taxes levied on LNG properties. This would limit the local governments ability to tax the industrial properties.

The provincial government may very well find an alternative way for local governments to generate the revenue they need to service these properties but the notion of capping property taxes on industrial land has got to make every residential and commercial property owner squirm. Imagine if residents were left to subsidize the corporate profits because the province was unable to secure another alternative with the industry.

Finally, it appears the government is hedging their position. The public has been waiting for the province to provide details on the tax regime for the LNG industry and a final investment decision. While both have been promised in past legislative sessions, neither have come to fruition yet.

With all our economic eggs in the LNG basket, it should raise some concern that Minister Coleman’s confidence is flagging in LNG. After all Minister Coleman repeated “if we can pull this thing off!” at least three times.

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