BC Elections Another Obstacle for LNG Exports: Comment

Canadian First Nations’ objections, British Columbia's high environmental standards threshold and low global gas prices have been joined this week by the state's provincial election as obstacles in the way of Canadian LNG exports. The likely outcome will be a minority government with both major parties seeking ruling status.

The Liberal Party of Premier Christy Clark  took 43 seats in the May 9 vote, versus 41 for the opposition New Democratic Party (NDP). The Green Party – campaigning on a platform of bold action on climate change and making BC a leader in the low-carbon economy – holds the balance. With a breakthrough of three seats, this is the most the Greens have ever held in a Canadian provincial or federal election.

The 2013 election saw the centrepiece of Premier Clark’s platform built around the promise of the development of a lucrative LNG industry that would deliver significant jobs and revenues. However, oversupply and the drop in global natural gas prices have seen major projects shelved or placed on hold, including Shell’s $40bn Canada LNG, the Petronas majority owned $11.4bn Pacific North West LNG project and the 3.5-billion Chevron led Kitimat LNG project.

The NDP has stated that it would place additional conditions on LNG projects and re-evaluate industry friendly environmental and tax policies put in place by the Liberals,  a further challenge to the competiveness of BC LNG. The NDP has also it stated would appoint a scientific panel to review the practice of hydraulic fracturing to ensure safe gas production.

Most industry watchers believe that BC has already missed the development window for LNG projects, trailing far behind Australia and the US Gulf Coast.

The outcome of the election will not be determined for another two weeks when 170,000 absentee ballots are tabulated and recounts are held.

Rick Gill