It took a last-minute electricity price cut to close the deal, but the B.C. Liberals can go into their convention this weekend with a check mark beside the promise to start a liquefied natural gas industry.
A very small check mark.
Friday’s green light from the Singapore investor in the Woodfibre LNG plant near Squamish is for a plant that will produce about nine per cent of the volume just one of the promised major plants on the north coast was to ship. And there were supposed to be three of them coming on stream by 2020.
Woodfibre is a little tabletop model of the mammoth enterprises that were first promoted by the government years ago. It’s still a welcome investment. A $1.6-billion project that will employ about 100 people and produce sizable tax revenues is nothing to dismiss. It’s the biggest private-sector project in the Lower Mainland in years and building it will involve about 650 jobs.
But Premier Christy Clark set expectations so high in her original LNG-fever dream about boundless prosperity, 100,000 jobs and “debt-free B.C.” that there’s bound to be some letdown.
As the old song asked: “Is that all there is?”
The oil-price drop wiped out the gas price and has delayed green lights on the major plants by several years.
So for the moment, yes, that’s all there is.
(The NDP greeted the news with: “Only 99,900 jobs to go.”)
It was still enough to get a standing ovation at the opening of the B.C. Liberal convention hours later.
Despite serious concerns from Squamish residents and some nearby municipalities, the plant has been edging toward the final investment decision for the past year. The electricity-price change appears to be the final piece of the puzzle the proponent was putting together, and it’s the most intriguing one.
After inventing a whole new tax and environmental regime over the past couple of years, the government made it clear the table was set for the industry. There would be no major changes in what B.C. was offering on terms.
Then came Friday, when Clark boated out to the old mill site on Howe Sound to hail the company’s all-systems-go announcement. The new electricity rate revealed at the same time was described as the key factor in going ahead.
It’s the price set for power used to chill natural gas and compress it in liquid form for shipping. That’s an expensive part of the process, and most of the other major proponents are planning to power it with gas, partly because it’s cheaper, partly because the required transmission lines aren’t currently up.
Now there’s a new “edrive rate” that’s pitched as an incentive to use electricity instead of natural gas, which lowers greenhouse-gas emissions substantially.
Comparisons between the old and new price are difficult because the rate structure is so complicated. But Woodfibre and all other LNG proponents are being offered electrical power at the standard industrial rate. It’s considerably cheaper than the original calculations, although the North Coast proponents would still have to pay for the transmission lines. The prospect of the bigger plants changing to edrive is likely even further down the road than the actual plants are.
Another intriguing wrinkle is that Woodfibre is in the midst of getting a unique First Nations environmental approval from the Squamish Nation. Squamish Chief Ian Campbell was absent from the announcement, saying the approval isn’t quite finished. A legally binding First Nations approval adds another layer of complexity to future developments.
Just So You Know: One (former) chief who did show up Friday was ex-Haisla leader Ellis Ross, who addressed the Liberals as the Liberal candidate in Skeena.
He captured attention with personal remarks about being heckled for not running as a New Democrat: “I have the freedom to join any party I want.”
Ross has been an ardent LNG backer and is going to be one of the party’s star candidates in the north.
He told the crowd he met Clark for the first time in 2011. He “didn’t trust politicians” but now wants to be one, because he said she delivered on a promise to get things done with First Nations away from the treaty table.