Columbia River Revelstoke MLA Norm Macdonald says that it was clear from Monday’s Throne Speech that the BC Liberals were stepping back from clear commitments on Liquid Natural Gas (LNG).
“It was a bit of a strange Throne Speech, particularly short,” Macdonald said. “But there was also a significant step back from what were really clear commitments on LNG.”
Macdonald says that during the last election campaign the BC Liberals promised a $100 billion prosperity fund, a trillion dollars in economic activity and 100,000 jobs, plus the first plan of 12 to 15 planned by 2015, as well as a promise to get rid of the provincial debt and the sales tax.
“Now we are being told that those weren’t promises, merely “aspirational”,” he said.
“I said during the election campaign that those promises were likely removed from reality, a misrepresentation of the reality of opportunities available. There is opportunity but it needs to be put in the perspective of what is real.”
According to the provincial government website, LNG is natural gas chilled to -160 degrees Celsius so that it can be converted into a liquid form. After it has been liquefied, natural gas is compressed so it takes up much less space – approximately 1/600th less than natural gas.
Some of the world’s most promising areas for LNG, also referred to as shale gas, are in northeast B.C.
“The Province manages industry’s access to natural gas on behalf of British Columbians, who actually own the rights to the resource. As a result, the Province collects a portion of revenues from the natural gas industry – known as royalty payments. In turn, the Province uses the revenue to help fund vital programs and services in health care, education, infrastructure development and more,” says information on the website. “As an entirely new industry, LNG creates an opportunity for the provincial government to collect additional revenue and secure a brighter economic future for our province.”
However, Macdonald says the BC Liberals overpromised on just what those royalties may be, and ate now scrambling to walk those promises back because the large multi-national energy companies involved don’t like what they have seen.
“The government has put themselves in a real spot with promises made. The companies they are dealing with know the BC Liberals over-promised. We are hearing that the tax royalty structure has been presented and the companies are pushing back.”
Proof of that will come with the introduction of legislation this week, Macdonald says.
“We are hearing that bill dealing with royalties and taxes, which we expected today (Tuesday) may not come until the end of the month. They’ve had a year. If it doesn’t come this week, there is only one reason to push it back. They are re-writing it.”
Bill Bennett, Minister of Mines and Energy and MLA for Kootenay East to the south says:
“The reason we’re having a fall session is to deal with two components of LNG. One, the taxation—how are we going to deal with our commitment to the people of the province that we’re not going to have this industry unless British Columbians actually benefit from it?
“And so that’s one of the things we’re going to deal with in this session, is the taxation aspect of it. So we just signed a five-year deal with teachers that has an increase, there’s demands on health care, there’s demands on infrastructure, highways, local governments all want more money—there’s always huge demand on the province. One of the new ways we can increase our revenue, obviously, is through a new industry like LNG.
“The second component that we’re dealing with this session that relates to LNG is what we’re going to do about the greenhouse gas emissions, not only from the LNG industry, but from all industry, so we’re also going to be passing legislation that deals with greenhouse gas emissions and that’ll cover off the LNG industry and all other industry as well.
“That’s the two components of the legislative session that’s coming up and that was a big focus of the throne speech.
More at a higher level, I think the throne speech made a commitment to British Columbians that we’re not going to take our eye off the ball in terms of a commitment to balancing the budget and making sure we don’t spend more than what we bring in.