There used to be a joke that Vancouverites loved the forest industry until they found out it involved cutting down trees. It was an overstatement, of course, but it goes to a central issue I see on display in the debate about Liquefied Natural Gas (LNG).
British Columbia was built, in large part, by thriving natural resource industries. Forestry, mining and natural gas are all a big part of our heritage. But those industries aren’t just an essential part of our history; they are also a key to a prosperous future. In fact, over the coming fiscal year, natural gas, forestry and other resource industries are expected to deliver close to $3 billion directly into provincial coffers.
That is a major contribution – enough to cover almost half of what the government will give to school boards across B.C. this coming year to educate our children.
Still, there are those who continue say that we can run our economy simply on industries like tourism, technology and film – important economic drivers to be sure, but not nearly enough to support our entire economy.
I have said many times that relying solely on the promise of LNG to secure our economic future is wrong. I still firmly believe that. But I also believe that LNG has very significant benefits to offer.
By some estimates, building five LNG plants by 2021 could create more than 39,000 jobs over a nine-year construction period, and approximately 75,000 jobs once those plants were operational. Five plants by 2021 may be an optimistic goal, but the fact remains, LNG has the potential to create thousands of jobs in the near future.
In addition to jobs, LNG also presents another major benefit. Natural gas is the world’s cleanest burning fossil fuel. By exporting it to emerging Asian economies, we are able to offset emissions from dirtier fuels like oil and coal.
This, I think, is an enviable goal and something worth our effort.
So what needs to happen for LNG to become a reality?
First, LNG proponents must reach meaningful agreements with First Nations. In the past, many companies thought meeting that obligation meant holding a series of meetings to tell First Nations what they were planning on the land. Not any longer.
Now, First Nations must be treated as true partners. That means offering real economic benefits, working with First Nations to ensure their concerns are addressed and involving First Nations in opportunities for employment and contracting.
There are signs of progress on this front. A recent newspaper report said that at least eight northern B.C. First Nations have signed benefit agreements either with the B.C. government or project proponents. This is a good first step.
But most companies still have work to do with First Nations before they are in position to start construction and, personally, I don’t see how any LNG facility can be built if that work is not done.
Proponents also need to sort out how they will transport the gas from the northeast to the coast, where it can be processed and loaded for export. For the big LNG projects in the north, this means building major pipelines across the province.
For others, the task is somewhat easier. For example, Woodfibre LNG in Squamish will need modest new pipeline infrastructure to access the existing gas supply from FortisBC.
Still, each of these pipelines will be subject to their own individual reviews, and must stand up to the scrutiny of a rigorous environmental assessment.
The final question, of course, is customers – do proponents have a market that is willing to take their product at a price that will cover their costs? To me, that will be the ultimate test.
Answering each of these questions is important to the future of every British Columbian. LNG is by no means a panacea – that remains true. But the industry does promise to create tens of thousands of jobs and expand opportunity for a new generation of British Columbians in the pursuit of a cleaner energy future.
If done right, LNG can be the next step in British Columbia’s proud history of resource development. For that reason, I believe we must keep focused on the goal of building LNG in B.C.
Troy Media columnist Roslyn Kunin is a consulting economist and speaker.