When thinking about the Petronas LNG project (PNW LNG), we should consider which supporting claims for it were believable. For example, proponents have routinely misrepresented the value and benefits of the project. The Star Online explains how the capital cost was calculated:
Adding values of the export terminal and TransCanada’s troubled Prince Rupert Gas Transmission pipeline, the number is $17.5 billion. The other half of the estimated $36 billion is questionable.
When Petronas bought Progress Energy, its operations were not dependent or contingent upon LNG. Today, the company’s website describes a viable enterprise:
A leader in Canadian natural gas development, Progress Energy is building upon its history of performance excellence in North America.
Progress is an upstream energy company focused on the responsible exploration and development of unconventional natural gas in the Western Canadian Sedimentary Basin. The company’s dominance in the world-class Montney play and abundant long-term growth potential positions Progress as a partner of choice…
Progress Energy’s properties in the giant Montney gas fields of Alberta and BC produce gas and liquids with very low operating costs and little obligation to pay royalties to the people of British Columbia. Encana CEO Doug Suttles said in 2017, “Our world-class, condensate-rich Montney asset keeps getting better.”
LNG proponents aim to deceive when they imply that Petronas’ $5.5 billion investment in Progress is now “lost” because PNW LNG is suspended. Including another $13 billion of the gas producer’s future operating costs adds a flagrant distortion.
Every examiner of fact knows that when subjects make false assertions about one aspect of a scheme, other claims cannot be trusted. Experts find the veracity of claims for LNG in British Columbia have been inflated.
In FY 2016, with net royalties of $ 129 million and rights sales totaling $16 million, the province accrued more liabilities for gas subsidies than it received from those revenue sources.
BC Stats reports that oil and gas extraction provided 3,900 jobs in 2016, a number that represents 0.16% of BC’s industrial employment. While important to Northeast BC, the BC Liberal choice to cede revenues to the private sector means that fossil fuel companies no longer make a significant contribution to the provincial treasury.
— Norm Farrell (@Norm_Farrell) July 29, 2017
Economist Marc Lee scrutinized job claims for PNW LNG and found them deceptive. The article below was first published July 28, 2015.
LNG and Employment in BC, Marc Lee, Canadian Centre for Policy Alternatives, July 28, 2015:
This brief examines the BC government’s claim that 100,000 jobs will be created from liquefied natural gas (LNG) projects in this province. We find that this claim is not credible and that potential employment impacts have been grossly overstated.
In fact, based on data provided by the companies that propose to engage in the production and transport of LNG, BC’s LNG sector could be expected to support only 2,000 to 3,000 construction jobs per plant over three years and 200 to 300 permanent workers once operational. Real-world experience in Australia supports these numbers.
- LNG job claims were inflated to 100,000 through a series of exaggerations and the misuse of input-output modelling techniques.
- the growing use of “fly-in, fly-out” (FIFO) workers is an emerging issue for large resource projects, including LNG development. Using FIFO workers greatly reduces local economic benefits in the areas where development takes place.
- To get to the “100,000 jobs” number used in the 2013 pre-election throne speech, in the weeks beforehand the BC government commissioned a consultancy, Grant Thornton (GT), to develop employment estimates. Included in the resulting Employment Impact Review was GT’s disclaimer that its analysis was based on information provided by the province.
- if LNG merely leads workers to shift from an already existing job to an LNG job, this benefit is limited to the difference in income received by the worker. If LNG leads workers to move from another jurisdiction to BC, this could be shown to have positive economic impact for BC; however, doing so ignores the offsetting negative impact on the other jurisdiction.
- The most suspect numbers in the GT report are in the indirect category, which comprises the majority of claimed new jobs…
- The rise of temporary migrant workers from other countries has also been widely noted. Numerous cases show that BC is already bringing in temporary foreign workers for projects in the north, including the upgrading of Rio Tinto Alcan’s aluminum smelter in Kitimat, BC Hydro’s Northwest Transmission Line and northern coal mines.
- Australia’s experience with a mature and expanding LNG industry is worth considering for lessons. Its LNG plants are located in relatively remote locations, similar to what is being proposed for BC. Construction is primarily done by migrant workers
- In Western Australia, 87 per cent of the construction workforce and 60 per cent of the operational workforce in the broader mining sector (including gas) are FIFO workers
- Recent data from Asian LNG markets shows that market prices have dropped substantially. Landed prices of LNG were $7.85 per unit in Japan and Korea and $7.45 in China as of February 2015.29 Thus, at current prices the export of BC LNG is not a profitable venture
Reducing BC’s carbon emissions to something close to zero within a few decades will require a lot of work to be done, including transportation, building retrofits and clean energy. If BC embraces that possibility, and plans appropriately, a full employment strategy around climate action would represent a pathway towards harmonizing environmental and economic policies — one that would create far more jobs than LNG.
Here’s one of the better choices; one that is put at risk by Woodfibre LNG. It seems Sea-To-Sky Gondola offers about the same number of permanent jobs as the proposed LNG facility.