Province's opportunity to take advantage of its position in the LNG industry may be passing it by
CALGARY—With the regulatory process for developing the province’s liquefied natural gas industry in limbo, B.C. risks losing billions of dollars in export revenue, a new Fraser Institute study says.
With the loss of international market share as the central issue, the slow approval process from federal and provincial authorities, as well as First Nations groups, could cost the B.C. economy more than $20 billion a year – the equivalent of nearly 10 per cent of the province’s 2014 GDP – according to the study.
“Regulatory delays mean that no Canadian LNG project will start production by 2020. The longer Canadian LNG projects take to move forward, the more likely it is that Canadian producers will be displaced by producers in other nations,” said Ken Green, senior director of Natural Resource Studies at the Fraser Institute and co-author of the study.
“British Columbians will invariably forgo higher levels of job growth and billions of dollars in tax revenues which could to pay for things like health care or public education.”
Given B.C.’s substantial natural gas reserves, which the National Energy Board estimated at 10.6 trillion cubic metres in 2013, the Fraser said the province is “well-placed” to produce and deliver 42 to 74 per cent of the Asia Pacific region’s LNG demand by 2020. The study notes if all NEB-sanctioned projects had already been green-lighted by other authories, B.C. would be the largest LNG exporter in the world in the medium term.
“Instead, the regulatory delays mean that British Columbia is destined to be a laggard resulting in lost market share,” the study said.
Though Green said it’s government’s role to impose appropriate environmental and safety controls to protects community interests, he added it is in the government’s best interest to do so in an expedited manner.