THE provincial government is keeping its plans for a potential liquefied natural gas (LNG) industry under wraps, says Skeena NDP MLA Robin Austin.
“They have some obviously very tricky negotiations both on the tax side and the environmental side,” said Austin, adding that BC won’t likely see a comprehensive LNG strategy tabled until the fall.
“I asked lots of questions in my Hansard debate and most of the answers were ‘that is privileged information right now we are in the midst of negotiation,’” added Austin of the summer session of the legislature.
Austin, re-elected in the May provincial election and since named as the NDP critic for natural gas, said the Christy Clark government needs to find a way to tax the LNG industry in order to deliver the promised Prosperity Fund.
The MLA acknowledged that a natural gas industry will mean benefits for British Columbians but noted that Liberal government taxation plans can’t scare off industry developers who have options in other natural gas-producing countries.
“We are also dealing with an industry that is global. If we tax here, they will go get it from the States or Qatar,” Austin said.
“You’ve got to realize that because people are really excited about all the projects up here, there are 25 projects proposed in Louisiana and Texas.”
At the same time, Austin argues that the Liberal government has the challenge of sticking to the greenhouse gas emission regulations put into force by former Liberal Premier Gordon Campbell, something Clark seems to be standing by with her promise that B.C.’s LNG industry will be the most environmentally responsible in the world.
“It was the Liberal government who brought in the law that said we are going to reduce our greenhouse gas emissions by 2020 down to 2007 levels. Even one LNG plant will blow that out of the water,” said Austin.
“A year ago, they changed the Clean Energy act to read that emissions within the actual plant are not going to be counted as part of our carbon emissions. They are already starting to do that. It’s called ‘within the fence’ which means within the area of the plant it won’t count for our greenhouse gas emissions. Which is giving them a lead.
“It suggests to me that the government is about to figure out how to change their own law ... Of course if you change the goal posts, you can say you are changing anything.”
Austin said there are several ways to tax LNG producers.
“It’s either going to be all put on a prosperity tax that might be an export tax, and probably a tax coming in on venting that will be part of the carbon tax ... so I think it’s going to be a combination of a variety of taxes that will bring in this money. Don’t forget the governmental said they are going to pay off the debt of British Columbia, that’s $57 billion.”
In the meantime, a Shell executive in charge of one LNG project, Canada LNG at Kitimat, is looking for taxation details.
Quoted in the Wall Street Journal, Andy Calitz said the lack of detail is holding up price negotiations with overseas buyers.