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Coleman still pumped for LNG despite report's caution
Deputy premier Rich Coleman says he's not apologizing for talking up the liquefied natural gas (LNG) windfall awaiting B.C. and dismissed a report that criticizes the B.C. government for being overly optimistic.
"I don't mind being accused of being an optimist," he said in an interview Wednesday. "I was accused of that last year when everybody thought we were not going to ever win another election in B.C."
The minister responsible for natural gas development spoke to the Surrey Board of Trade as part of a panel on LNG.
He was reacting to a critical report this week from the Calgary-based Canada West Foundation, which cautioned B.C. needs to adopt "realistic expectations" and understand the case for creating a major new LNG industry is solid but not guaranteed.
Titled "Managing Expectations," the report cautions other LNG projects in Australia are further advanced and others around the world pose a threat of competition that will push down potential revenues.
"B.C. is coming late to the party," it says. "Expectations of just a year ago may be tough to deliver."
The report also notes the proponents in B.C. face potentially large costs relative to other areas to build new pipelines to the coastal LNG plants that would chill and liquefy shale gas for export by tankers to Asia.
The think tank recommends the province move fast to outmaneuver competitors but also prepare for a "more modest natural gas boom" in case the industry doesn't blossom as fast as Victoria hopes.
"I get a kick out of that because at the same time they also say there's a huge opportunity in British Columbia for liquefied natural gas," Coleman said of Canada West's findings.
In his address to the business audience, he said B.C. has 150 years worth of natural gas reserves to sell that promise to "change the face of the province" like no other opportunity since the years of Premier W.A.C. Bennett.
Coleman said five LNG plants would be equivalent to adding $1 trillion to the B.C. economy over 30 years, making the province debt-free within 15 years and creating a $100-billion prosperity fund for future programs.
He also insisted B.C. has advantages for LNG, among them its shipping proximity to Asia and the cool temperatures of the north coast, which mean cheaper costs to supercool natural gas compared to hot climes like Perth, Australia.
Coleman said a partnership led by Shell on a potential Kitimat LNG plant will see $1 billion spent just in the process of making the final investment decision.
The nearby Chevron-Apache LNG partnership has already spent more than $500 million and "taken the top off a mountain" as part of site preparation work.
"These guys are spending real money in real places and they're dead serious about being here," he said of the various proponents.
He said the capital investment for five plants could hit $100 billion, far exceeding the biggest recent private investment of the new $3.3 billion RioTinto Alcan aluminum smelter in Kitimat, and creating more than 100,000 jobs.
That work can extend across the province, Coleman said, noting remote camps are already being built by Britco at its plants in Langley and Agassiz.
Trades training to fit the future needs are a major challenge – presuming the projects go ahead.
A key to ensuring they do, Coleman said, is assuring foreign proponents that they will have business certainty in B.C.
The government will soon decide its tax and royalty structure and Coleman said that will be legislated to assure operators that it's "written in stone" and no future government will try to extract more money from them.