On Friday, June 7 premier Christy Clark announced the members of her new cabinet.
Which set off the usual examination by the politically inclined as to whether she had given adequate representation to every corner of the province.
The north did okay with Shirley Bond (Prince George) and John Rustad (Nechako Lakes) both getting the nod.
The northwest not so much – as in nary a one.
Oh, but wait, that’s because the northwest didn’t elect a single member of the governing party.
So, the whining will go, once again our region is shut out of the corridors of power.
I beg to differ. In fact we will have the strongest representation I can ever recall.
As in Rich Coleman, Minister of Natural Gas Development and deputy premier to boot.
His job, as explained by the premier, would be to “ensure British Columbia seizes the economic opportunity of a lifetime, liquefied natural gas (etc, etc).”
In other words, his task is to ramrod the economic recovery of the northwest, so he is our man in Victoria.
And since Clark has placed all her eggs in the LNG basket, he will certainly have her ear.
But I don’t envy him his task.
When Clark first got all excited about LNG, she pledged an operational LNG plant on the North Coast by 2015 and two more by 2020.
It didn’t look like an overly ambitious target at the time, but it turned out the LNG world is a complicated one. It is now clear that the first target will be missed and I wouldn’t be betting on even the second being achievable,
(Coleman must be grateful his job description doesn’t include any specific target dates.)
So what’s the hold up with the promised boom? Price.
Quite logically, if you are going to spend billions of dollars on an LNG plant/terminal and pipeline to feed it, you need to be sure you can recover your investment and make a profit.
That means you need long term contracts – generally 20-25 years – and at a price that will achieve the above.
Up until now the price for LNG has been tied to that of oil which has made it, well, pricey.
Predictably the countries having to pay that are not happy.
Especially Japan. Following the Fukishima nuclear disaster of two years ago it shut down almost all its nuclear power plants meaning that nukes today provide only 2 per cent of the country’s power compared to 30 per cent pre-2011.
Having no other domestic source of energy, it has had to buy LNG to fill the gap and pay through the nose for it – at one time upwards of $18 per million British Thermal Unit.
With North American prices for natural gas having dropped below $3 per unit, there was apparently a pile of money to be made, hence all the LNG hype.
(As I write this, the spread has shrunk a little with natural gas prices at about $3.75 and the average Asian price $14, but there’s still lots of room to make a tidy sum.)
For reasons noted above, Japan has been trying to break the link to oil and establish a standalone LNG market – and found other countries that would love to see the same if it means lower prices for their LNG imports.
In a perfect Canadian world they could moan all they liked but, starved of energy, they would have to pay what we want or turn off the lights.
After all, with other major producers like Qatar and Australia sticking to the oil-linked regime, where else are buyers going to go?
Enter the Americans.
More on that next week.
Retired editor of The Northern Sentinel in Kitimat, Malcolm Baxter now resides in Terrace, B.C.
