On June 8, 2013, British Columbia Premier Christy Clark announced the creation of a new Ministry of Natural Gas Development. Rich Coleman, one of her most experienced Ministers, was named as the first Minister of the new department. The extraordinary step – of creating a new Ministry tasked with delivering on the current preliminary plans for LNG Facilities in British Columbia - is just the latest and perhaps the most concrete example of the Government’s consistent commitment to promoting natural gas development in British Columbia, and to LNG in particular.
Since Premier Clark first took office, the Government has first re-formulated its energy policy through the publication of the Natural Gas Strategy in February 2012, accompanied by a specific LNG Strategy. That LNG Strategy was updated in February 2013, and coincided with a Throne Speech that gave pride of place to a vision of the future of LNG in British Columbia generally. The Throne Speech specifically articulated a target of having three major LNG Facilities operational by 2020, and also proposed to establish a BC Prosperity Fund designed to reduce or even eliminate BC’s public debt, improve its social services and/or make life more affordable for BC’s families.
The size and scope of the Government’s commitment to the LNG industry was clarified through background reports by reputable accounting firms, commissioned by the Province and also released in February 2013. Each report analysed certain long-term economic effects of developing up to five significant LNG Facilities in British Columbia. One report indicated, among other things, that Provincial revenues from the LNG sector over a 20 year period from 2018 to 2037, inclusive, could be in the range of $ 80 - $160 billion. The other report indicated that the aggregate capital costs for LNG Facilities could be close to $100 billion for the period from 2013 to 2021, inclusive.
Of course, these various estimates and/or assumptions could ultimately prove to be optimistic, but there are a number of credible syndicates currently proposing to develop major LNG Facilities in British Columbia, involving world-class participants such as Shell, Chevron/Apache, Petronas, and British Gas/Spectra. As the Government pointed out in the Throne Speech, over $6 billion has already been invested to acquire gas fields and/or related facilities to produce LNG for export. The Throne Speech also estimated that a further $1 billion had already been spent in connection with background work for the development of the various proposed LNG Facilities themselves.
Regardless of the credibility of the proponents or sponsors and regardless of the amount of sunk costs incurred to date, these various projects may not be completed on time or at all. But the commitment, the stakes and the ambition involved here are demonstrably huge. History may well judge the Premier's first full term on her Government's success or failure in facilitating delivery of some or all of these LNG Facilities. From her actions in forming a special Ministry, and putting one of her most experienced Ministers in charge, she appears to share that view.