WHILE the cancellation of the Douglas Channel LNG project will have an economic impact on its partners and on the overall prospect of a B.C. energy industry, northwest natural gas consumers will take the biggest hit, says Skeena NDP MLA Robin Austin.
That is because there is now no relief in sight to the high prices being charged to deliver the commodity to businesses and homes.
Those delivery prices would have come down once Douglas Channel LNG began operations as it would have used all of the large surplus capacity of the Pacific Northern Gas (PNG) natural gas pipeline which serves the region.
Douglas Channel LNG’s payments to PNG would have then reduced the prices that the natural gas utility now charges its current business and residential customers to maintain its pipeline.
“We now pay very, very, very high prices for natural gas relative to anywhere else,” said Austin.
“That really began when Methanex pulled out [of Kitimat],” Austin said of the company which produced methanol at a plant in Kitimat until 2006 using natural gas delivered by PNG.
“When I tell people down here in Victoria what we pay for gas, for the delivery, they just can’t believe it.”
The MLA added that he can see no solution to high natural gas prices simply because PNG must pass along its maintenance and other costs to its business and residential customers.
PNG’s natural gas northwestern delivery rates in this region are more than three times higher than anywhere else.
The most current residential delivery rate here is $12.91 a gigajoule while it is $3.921 a gigajoule in Fort St. John, which is also served by PNG.
On the lower mainland, Fortis, that region’s natural gas utility, charges residents $4.939 a gigajoule for delivery, storage and transport.
Natural gas utilities in B.C. are regulated by the B.C. Utilities Commission which reviews prices and costs quarterly as well as approves rate applications made annually.
Utilities cannot add on anything to the cost of natural gas itself.