LNG industry could add $7.4B over 30 years, says Conference Board of Canada
The study—which is based on a model of three hypothetical projects—says most benefits would come from the upstream production side of the LNG industry
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VANCOUVER—A new study shows Canada would get a big economic boost from a liquefied natural gas industry, especially British Columbia, including tends of thousands of jobs and billions of dollars in economic activity.
The Conference Board of Canada’s report was issued Monday as the future of the Canada’s LNG industry is complicated by low global energy prices that have delayed at least two B.C. projects.
The Conference Board found that if the industry produces 30 million tonnes per year of LNG, Canada’s economy would grow by $7.4 billion a year over 30 years.
British Columbia would be the main beneficiary, with 46,800 of those jobs, and $5.3 billion a year of the economic growth over the 30-year horizon.
Annual government revenue including corporate, personal and indirect taxes, as well as royalty revenue, would increase by about $6 billion annully for Canada, including $3 billion to the provincial government.
But the study—which is based on a model of three hypothetical projects—comes out only days after the AltaGas-led group behind the Douglas Channel LNG project stopped development, citing low prices and an oversupplied market.
And while the Douglas Channel project is the smallest of the 21 proposed LNG projects in B.C., Royal Dutch Shell announced in early February it was postponing a final investment decision on the much larger 24-million-tonne-per-year LNG Canada project.
Both projects have been pushed back as the global LNG industry is reeling from a plunge in prices brought on by oversupply of both oil and natural gas.
And the supply issue isn’t going away soon, with a number of major LNG projects just starting to ship, including in the U.S. which made its first shipment of LNG just last week.
The Conference Board said it scaled back its study to a more conservative 30 million tonnes a year of development, compared with the 80 to 120 million tonnes per year the B.C. government based its initial impact studies on, but noted the findings are still subject to a “great degree of uncertainty” because no projects are yet under construction.
The study found the vast majority of the jobs and spending would come from the upstream production side of the industry, with the opening of export markets leading to around a doubling of natural gas production in B.C.