Friday, March 23, 2018

NDP LNG modifications stoke ambitions for Kitimat LNG projects

Premier John Horgan changed the landscape for LNG development on
Thursday, rolling out a number new initiatives from the NDP government
(Photo from BC Gov't)

With  a collection of Northern Mayors from British Columbia in Ottawa this week, the provincial government led by John Horgan has provided the travelling party with a pretty strong hand in their talks with the Federal government.

Thursday, the NDP government revealed the details to what they are calling a "new approach to natural gas development" in the province, introducing a new framework for the industry that will focus on economic and climate targets.

Premier John Horgan outlined the focus of the new approach, while taking a bit of a swipe at how the previous Liberal government handled the LNG files.

“Our new approach welcomes investment that puts our province’s people and future first, and rejects the old ways of resource development at any cost,”  ... Our obligation is to the people who call British Columbia home, and our job is to get the best deal for them and the generations that follow.”

Four conditions for development were included as part of the new framework

Guarantee a fair return for B.C.’s natural resources.

Guarantee jobs and training opportunities for British Columbians.

Respect and make partners of First Nations.

Protect B.C.’s air, land and water, including living up to the Province’s climate commitments.

With a number of past projects now part of a historical narrative on LNG (the majority of them from the Prince Rupert area) the first of the still existing proposals in development that could benefit from the new vision for LNG by the NDP is the Kitimat LNG project proposal for the Northwest.

The new framework released yesterday offers up these new conditions for further LNG development including the Kitimat project.

Relief from provincial sales tax (PST), in line with the policy for manufacturing sectors, subject to repayment in the form of an equivalent operational payment.

New GHG emission standards under the Clean Growth Incentive Program, announced in Budget 2018.

General industrial electricity rates consistent with other industrial users in B.C.

Elimination of the LNG income tax that had required LNG-specific tax rates.

The technical briefing related to the Thursday announcement (available here) offers up a more expansive review of what the Province is bringing to the table towards LNG development.

The Kitimat LNG project appears to be the one Northwest proposal
that may yet make it to the LNG finish line

Premier Horgan did his best to put out the welcome mat for the Kitimat LNG project, which recently made news with rumblings of some possible forward momentum.

The Premier provided some new talking points on Thursday as to the benefits that the large scale investment could bring to the Kitimat area as well as to the province in general.

“The LNG Canada proposal has the potential to earn tens of billions of dollars and create thousands of jobs for British Columbians over the life of the project,”  “It’s a private-sector investment that could benefit our province for decades to come, but not at any price – we need to make sure the values British Columbians believe in come first.”

That left Green party leader Andrew Weaver in a bit of a foul mood, noting the disappointment of his party with the NDP government's new framework.

Though while they have worked up a good bluster, the Green's don't intend to try and force the issue as any confidence measure, not that anyone actually thought that they would.

Weaver loses confidence in NDP government over LNG, but won't take them down

For the Northern BC Mayors however, the NDP announcement has helped them to deliver their message to the Federal Government of the need to help spur on development of the LNG industry, while there is still some interest in it from large industrial players.

The collective of municipal leaders have noted through the week that their message to Federal officials has so far been well received:

Northern mayors, Haisla happy with LNG framework
Germuth says northern mayors receiving a warm reception in Ottawa
Northern B.C. Mayors to press LNG development in Ottawa
Cullen on Mayor's trip to Ottawa 
Peace Region Mayors travelling to Ottawa to talk LNG with Feds

All of the new focus for LNG may be a bit late for Prince Rupert at the moment however, of the five major proposals from the last few years, four of them seem to be placed pretty high on a dusty shelf now.

Most recently Australia's Woodside indicated that they no longer had an interest in developing the Grassy Point site near Lax Kw'alaams for LNG development.

The BG Gas/Shell project was abandoned shortly after the BG/Shell merger, with Shell taking the Prince Rupert option off the inventory list for good in 2017.

The Pacific NorthWest LNG proposal for Lelu Island was cancelled last year, as was the Aurora LNG project, the latter two the focus of much push back from some residents of the region.

Among those who made submissions to the environmental review process was the City of Prince Rupert, which included a range of themes as part of their contribution to the LNG overview of the time.

 March 2017 -- City of Prince Rupert submission among many included in comment process for Aurora LNG
April 2016 -- City of Prince Rupert CEAA submission on Pacific NorthWest LNG now available on agency website

The last remaining LNG project on the short term radar, is the Exxon led Tuck inlet proposal, though even that one is on a much slower pace when it comes to any momentum, with Exxon closing their Prince Rupert office last year, seemingly putting their interest on a back burner for now.

You can review the background to the two Kitimat projects and all of those once proposed projects for Prince Rupert from our LNG archive page here.

Further notes on the latest shift in policy from the NDP government can be reviewed from our political blog D'Arcy McGee.

To return to the most recent blog posting of the day, click here.

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