Four years ago, BC Premier Christy Clark declared liquefied natural gas (LNG) was “the economic opportunity of a lifetime.”
At the time, Clark led a deeply unpopular, decade-old Liberal government up against a resurgent NDP, aggressively branding the incumbents as corporate sellouts that were out of touch with the working class. Clark limped into the campaign facing certain defeat, but managed to reframe the NDP’s anti-development platform as an existential threat to the very workers it claimed to champion.
It worked. Clark’s Liberals won a shocking majority government by convincing British Columbians that only she could deliver jobs and a prosperous economy; and to do that, she leaned on LNG.
Throughout the campaign, Clark pitched LNG as an economic panacea. She claimed it would create 100,000 new jobs, establish a $100 billion prosperity fund, and eliminate the province’s $60-billion debt. She even hinted that LNG revenues could eventually replace the reviled Provincial Sales Tax. It was, in her words, “the economic opportunity of a lifetime.”
Fast-forward to 2017.
Of the two dozen LNG projects proposed, zero have been built. Clark’s Liberals are gone, replaced by an NDP-Green Party partnership willing to zap virtually all forms of non-renewable resource development in the province.
Recently, the largest approved LNG project was cancelled when Petronas pulled the plug on their $36-billion Pacific NorthWest LNG facility.
How did LNG go from Clark’s cure-all to an economic albatross in less than half a decade?
It’s important to note how dramatically the natural gas market has changed in recent years. As late as 10 years ago, Canada was considering proposals for coastal natural gas import facilities. Now, with our newfound glut of domestic supply and gas replacing coal in developing countries in Asia, Canada is attempting to shift on the fly.
Such agile economic maneuvering might be feasible in a different political climate. But Canada’s debate around resource development has grown increasingly more intransigent, with lawful but lengthy regulatory approvals hijacked and trumped by foreign influence, special interests, and partisan politics.
This instability, coupled with Canada’s bungling shift from natural gas importer to exporter, has allowed the United States to meet the world’s growing demand for natural gas. There are currently seven LNG export facilities under construction in the US and another four are ready to go. This is happening after the very first LNG cargo ship left American soil only 18 months ago.
Not surprisingly, Pacific NorthWest’s demise has become political fodder for partisans on both sides of the issue. LNG supporters say it’s ironclad proof that BC’s new government will drive all innovation and investment out of the province, while LNG critics say the market has rendered its verdict on the resource as uneconomical regardless of who is in power.
Adverse market conditions for natural gas have been accumulating for years without Petronas indicating cancellation, but just days after a hostile government is installed they pull the plug. To suggest the change in government was not a factor certainly pushes the bounds of reason and logic.
Brock Harrison is the Director of Communications and Policy with the Alberta Enterprise Group.