Thursday, June 5, 2014

A cloud or two on the LNG horizon?

While the City of Prince Rupert makes its plans to join in the LNG gold rush and stakes out it's own bit of territory to reap the reward from it.

A bit of caution is being delivered, suggesting that it may be time to level off those grand expectations for development of a large volume of terminals along the BC coast.

Jeff Rubin, a former economist for CIBC outlined a few concerns over the prospect of Canada becoming an energy superpower.  Outlining that it may be required to reduce expectations on a number of fronts,  explaining how some major aspects of the Federal Government's industrial energy plan may have a few flaws.

Putting his thoughts into a column for the Globe and Mail, Mr. Rubin rattled off a list of areas where the Stephen Harper government is having problems moving its ambitious energy projects forward.

The bulk of the item examines issues related to fossil fuel development in Alberta and the impact that world markets are playing in the cancellation of some proposed ventures there.

And while the LNG industry only receives a short mention in his overview, the theme of caution for expectations is picked up in this item in the Edmonton Journal, where the Journal's Gary Lamphier takes a look at the exuberant declarations on LNG in British Columbia.

Among the highlights of his piece, the review that of the many, many proposals for the North Coast, none have made a firm commitment as of yet to make an investment. And like other energy projects, the timelines between proposal and development can be impacted by any number of factors and world events.

Discussion points that might bring a bit of balance to the gold rush aspects of recent talk on the prospects of LNG Terminal development on the North Coast.

For Prince Rupert there is one bit of good news from the decidedly cautious reviews of the week.

In the Edmonton Journal article, the Petronas/PacificNorthwest LNG project is tapped as one that is expected to make a financial commitment by the end of this year or early in 2015.  (see the latter half of Lamphier's article for the Petronas points)

At the moment, their application is working its way through the National Energy Board process, with the proponents recently being asked to provide more background on their environmental work on the project.

As we've outlined in the past, the PacificNorthwest project has been the subject of a fair amount of attention from Prince Rupert City Council.

With representatives appearing in front of Council providing updates on their progress and at times receiving commentary and at times some criticism, from some of the councillors as to their plans for Lelu Island.

In the early days of their proposal, Councillor Thorkelson and then Councillor Rice (Now North Coast MLA)  had many concerns over the project, with Councillor Thorkelson asking if Petronas had given any consideration to sites other than at Lelu Island.

She hasn't followed up on that theme in recent months, so we're not sure where she lands when it comes to an LNG terminal in that location. Though she has continued to observe on a number of environmental issues regrading that proposed site.

While Councillor Thorkelson has held the point position on those themes, we haven't really heard much on the various themes from the rest of her partners on city council. Gaining an understanding on how the rest of council feels about the PacificNorthwest LNG  plans  would be a helpful thing for the city's residents, allowing us to know where  Council stands on such development.

When it comes to any impact on the environment Council has a place to offer advice on any impact of development on Prince Rupert.  However it's a fine line between concern and hectoring, when it comes to expressing comments on any industrial proposal.

Providing a more collegial approach to the prospect of the project development, might help secure that financial commitment by the end of the year or early next.

And as the Mayor and Council sit at their desks in Council Chambers (most likely in a closed session) contemplating the potential of the financial benefits of their proposed Tuck Inlet LNG development, they may wish to keep in mind an old adage.

"A bird in the hand, is worth two in the bush"

Should Petronas make that much anticipated announcement, it would clearly mark a significant change in the economic base for the community and perhaps spur on some of the other fence sitters on LNG development to make their own commitments

However, should there be obstacles put in the way and delays begin to occur, those articles of this week may prove to be fairly prescient in how they describe the fate of LNG in the province.

Regular readers of our blog will know of our archive of items on the prospect of development of the industry, whether it be General observations on the industry (found here) or a more dedicated background to the proposals for the North coast (see here).

Those resources make for a handy archive as to the progress of the LNG plans for the region and the possible impact that could come from it.

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