Petronas and LNG – How can we leverage our natural resource advantage?
By Peter Ewart
Petronas, the Malaysian state-owned energy company, has just announced it will be putting off again a decision to build an LNG plant near Prince Rupert. This delay, along with delays from other companies, pose serious problems for the Clark government’s plans to have at least 5 LNG plants up and running in the next few years.
During the last provincial election, Christy Clark envisioned that LNG would mean a $1 trillion boost in BC’s economy over 30 years, a $100 billion prosperity fund, an elimination of the provincial debt, and the creation of 100,000 jobs.
What is becoming clear is that BC will likely at most to have one or two LNG plants operating by 2020, if any. In the meantime, as noted in previous articles, even our education system is being reshaped to accommodate this extremely volatile export industry.
In the 2013 provincial election, this whole issue should have been seriously debated, but it was not, either by the Liberals or the NDP. Yes, the Liberals promoted a pipedream, but the NDP presented no serious economic alternative. As a result, the pipedream and the “rip it and ship it” mentality prevailed.
What is the problem? For one thing, both parties seem to implicitly accept that global energy corporations, like Petronas, should be the ones in charge of making decisions about LNG production in the province. There is some irony in this in that Petronas is a state-owned foreign corporation while Canada, unlike Norway, Malaysia and a host of other countries, does not have a public energy corporation that stands for the national and provincial interest.
Why is it that publicly-owned energy corporations can work very well in other countries and provide huge revenues, but in Canada it is verboten for politicians to even mention the idea, let alone call for their establishment? As a result, Canada is overridden with giant foreign corporations who set the agenda – first and foremost, of course, in their own interest.
Secondly, the question is too often posed as whether to export LNG or to not export LNG. A better question is: How can LNG and other natural resources be used to leverage and support an industrial strategy that aims to further process raw materials and develop manufacturing in the province?
Our forest industry, shipbuilding and other manufacturing sectors are in serious decline. Being reduced to a mere exporter of raw materials, a hewer of wood and drawer of water for the industrial machines of other countries, presents a bleak future for our province in terms of jobs and economic development.
Yet we have this great advantage of our abundant natural resources, whether it be our forests, minerals, metals, oil & gas, hydroelectric and other riches, including the human factor. How can we utilize this great advantage to advance our own provincial interest, our own made-in-BC industrial strategy?
That is one of the most pressing economic questions of our time.
Peter Ewart is a columnist and writer based in Prince George, British Columbia. He can be reached at: peter.ewart@shaw.ca
Comments
Well I noticed it doesn’t mention of these 100,000 jobs how many are long term and not contractors. Maybe a couple thousand in total, not that many really but at least it’s something. Also most of the contractors will be from out of province/country so the numbers are false. Clark and company are dropping the ball on this and in turn not living up to her promises ( I know, a politician that lied to get votes, what a shock)
Its been like that since I studied Canadian history in high school and that a few years ago.
Smart move by Petronas, Shell may be next. Why invest anything in a province that will have a project tied up in court by so-called special interest groups.
Ship everything east, the markets have that figured out already.
Many years ago Canada did have Petro Canada but it was pretty much dismantled by private interests. Currently, the Americans are in Prince Rupert building an industrial facility and the Free Trade Agreement that was negotiated with Canada requires only American workers and suppliers from American sources for this particular project. The biggest problem BC and Canada has is that as a country we are electing people into political office wHo are in politics as their “go to” job after they flame out in other careers ;and/or, we are not seeking really talented people to build our resource businesses to great profit like Norway. Our billion dollars defecits are what the Norwegians have in profits in the bank. Example. Look how quickly and weakly Pat Bell allowed the Chinese into ownership of BC resources during the last economic downturn. Didnt do much when Chinese were bringing in their workers for coal. Somehow as a country we need to find a way to create our own Canadian owned companies to build LNG for our Canadian citizens
Not too hard to figure out what’s happened. Bureaucracy, enviro-zealots and other various paid and unpaid protesters have shut down pretty much all the development in North America. When it takes over a decade to get a pipeline built, there’s a problem.
Could you imagine getting the infrastructure we rely on built today? It would never happen.
And by ‘decade to get a pipeline built’, that’s just jumping through the various hoops to get it from the proposal stage to approval, not to mention getting ‘social licence’ whatever that means.
Ewart: “Our forest industry, shipbuilding and other manufacturing sectors are in serious decline.”
It’s not too hard to figure that one out either. We’ve priced ourselves out of the market. Many forget we are not living in a bubble, but rather competing on the world stage.
Since we have those enormous debts at the federal, provincial, municipal and per capita personal levels we may have lost the option of taking a stand in favour of a Canada/Province First policy!
As a result, Canada is overridden with giant foreign corporations who set the agenda – first and foremost, of course, in their own interest.
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What a mouthfull. Great artical Peter.Cheers
Maxima. The American project in Prince Rupert require that it be built with American products, ie; steel, etc; because it is being paid for by American tax dollars. Not sure that they are required to use American Workers.
Peter think unelected foreign NGO’s, native threats, politicians with no guts. The biggest threat to our economy are the rich envronuts like Suzuki, ignorant celebrities who want to deny the so called common person a piece of the pie while living their super rich life style.
Hey how come these nut cases only want to save the world for a fee, think about it.
Now slow down seamut Suzuki isnt buying up our farm land and big gas industries.
Cheers
The ferry terminal in Prince Rupert should be built by the city or the province and leased to Alaska Ferries. End of problem.
my2bits… that ferry terminal land is already leased to Alaska Ferries for 50 years.
How is it that other social democracies, Scotland, Germany, Norway, Finland, etc, etc, can have viable industries yet we are told we “pricing ourselves” out of the global marketplace? Sorry, not buying it.
@govsux, if you can offer something that can’t be easily outsourced, you stand a better chance.
“How is it that other social democracies, Scotland, Germany, Norway, Finland, etc, etc, can have viable industries…”
Generations of hard determined work at establishing a global reputation for quality products lead to viable industries and continued success. It also means never resting on your laurels and not taking anything for granted.
That too.
The energy industry and much of the global resource sector is about creating a race to the bottom, i.e., lower taxes, lower royalties, lower community economic participation, lower environmental standards, fewer benefits to regions, higher taxpayer involvement (esp. w/ infrastucture and mop up after the messes). This is the global game of fake austerity and resource pillaging. Not to mention that LNG is already uneconomic for most who are not already in the market. Get over it.
BC and Canada is rich. We can do a hell of a lot better than settling for this sad sack loserdom.
Jens you are sharp. please keep your wisdom comining…please..
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