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B.C. plan for LNG aims to hit 'sweet spot' between province and industry interests

Maryam Adrangi speaks at a rally against dirty energy project in Victoria on Monday.

CHAD HIPOLITO/The Globe and Mail

The B.C. government will reveal next month its export-tax rates for the multibillion-dollar liquefied natural gas sector and the minster in charge of LNG is promising the plan will hit a "sweet spot" between the interests of the province and the industry.

While Premier Christy Clark has said a plan was close, Rich Coleman offered the more specific timeline Monday while announcing a trip to South Korea, China and Malaysia to promote the development of B.C.'s LNG sector. The tax would specify the price energy companies will pay to export natural gas.

"We're very close to that sweet spot, and we're very close to having a situation where we can announce what it is. We think that will come some time in November," said Mr. Coleman, the Minister for Natural Gas Development.

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The deputy premier's comments were made the day after Malaysia's state-owned energy company, Petronas, said it was going to spend $36-billion over three decades on LNG projects in B.C., including an export plant and pipeline.

Mr. Coleman said the province has been talking to the LNG industry on a detailed, confidential basis to reach an agreement that will please industry and the B.C. government, which hopes an export tax could generate at least $100-billion over 30 years for a prosperity fund.

Whatever the province decides will be locked down in legislation so companies know their investment is secure, he said.

"It's really about the certainty."

He said he met in Victoria a few months ago with the CEO and comptroller of Petronas. "They wanted to know there would be some vehicle that said somebody was not going to change the rules of the game after they started to spend billions of dollars. We'll do that because we'll do the legislation on the tax piece."

Mr. Coleman said he expected that the earliest gas might be flowing from some of the province's LNG prospects is 2017 or 2018. The B.C. government has said there are 10 proposed LNG projects – three of which have approved export licences from the National Energy Board.

NDP Leader Adrian Dix, speaking at a news conference in Victoria, said the B.C. Liberal government has been backpedalling on its climate-change commitments as it pursues LNG opportunities.

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"They have abandoned what they said was important, in fact central to the future of the province and the planet and they are not prepared to do the work," he said. On LNG, he said, the Premier has been promoting a green energy product before knowing whether that will be the case.

"The climate-change work can be done, the emissions work can be done, but it requires a commitment to do the work, something the government hasn't done."

But Mr. Coleman was dismissive.

"I don't actually think we have abandoned any of our commitments," he said.

LNG could generate the funds to stabilize government so it can encourage the development of technologies to reduce carbon dioxide, he said. "If we don't have a successful province and industry, we can't build the tech industry around it." He said the NDP has been flip-flopping on the issue. "The NDP have a tendency to jump back and forth, that they really don't know where they want to be when they grow up on this one. They're opposed to fracking, but they say they support LNG," he said. "They have a mix in their own group."

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About the Authors
B.C. reporter

Ian Bailey is a Vancouver-based reporter for The Globe and Mail.  He covers politics and general news. Prior to arriving at The Globe and Mail, he reported from Toronto and St. John’s for The Canadian Press.  He has also covered British Columbia for CP, The National Post and The Province. More

B.C. politics reporter

Based in the press gallery of the B.C. Legislature in Victoria, Justine has followed the ups and downs of B.C. premiers since 1988. She has also worked as a business reporter and on Parliament Hill covering national politics. More

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