Premier Christy Clark has stated that our province is in a race with the rest of the world, a race to develop our Liquefied Natural Gas (LNG) industry and retire British Columbia’s debt with the royalties.But when it comes to government completing the work that needs to be done, the BC Liberals are barely out of the starting gate.
One of the critical things that government must accomplish immediately is to establish the Tax and Royalty regime under which LNG will be produced, and no corporation is going to make any commitments until these key questions are settled.
Mindful of the need to move quickly, the Premier promised that legislation to establish tax and royalty rates would be before the House in September 2013. But instead, the Legislature did not even sit in the fall of 2013.
Next, the Premier promised that the legislation would be ready for the 2014 spring session. On May 29, we wrapped up the spring sitting, and the BC Liberals are now promising the LNG tax and royalty rates will be ready for the House in fall 2014. This is no way to win a race.
Meanwhile, things are continuing to shift in global LNG markets and the projections on which the government is basing its promises of LNG prosperity are getting less and less realistic. But the BC Liberals continue to bank the province’s entire future on this plan.
As a province that is rich in resources, we have many experiences with what happens when a government mismanages the development and sale of our resources.
As the owners of these resources, which we hold in common as British Columbians, we can be enriched tremendously through proper use and management. But we can also be left impoverished when our government miscalculates the needs of the global market.
One recent example was the privatization of B.C. rivers for run-of-river power production (IPPs) to feed presumed global demand for electricity. BC Hydro was forced by the government to pay for the construction of private power projects through over-priced, long-term energy purchase agreements.
As a result, BC Hydro will pay out $55 billion over the next 30 years for power we don’t need. And reduced demand for electricity due to the increased availability of natural gas means there is less interest outside of B.C. in buying our surplus electricity. Since BC Hydro is a Crown Corporation, that $55 billion comes out of your pocket.
Will LNG development be a similar story? Will British Columbia receive full value for its natural gas? Or will BC follow the example of Australia and heavily subsidize construction of LNG plants while receiving little in return?
These are the questions I want Premier Clark to answer. If you are also curious, send the Premier an email at premier@gov.bc.ca.
