BC LNG: the time is coming

We shake our collective Alliance heads when we get zealous comments such as these posted on our social media channels:

“LNG is dead, dead, dead.” “LNG is a thing of the past.” “Do you not understand that LNG is gone and we must move on renewables?”

A thing of the past? This is not what we are hearing from expert forecasters—or from energy companies whose investors are betting big billions that LNG is definitely a fuel of the future.

We and they may see it as the “transition” fuel that takes over from coal and some oil as the world moves—slowly, over some decades—into the realm of renewables. But LNG is far from dead, dead, dead.

Indeed, if you’ve heard of a so-called glut in world LNG supply, listen to the CEO of Royal Dutch Shell: “The LNG glut — conspicuously absent isn’t it?”

And a leader of the US LNG company Tellurian added last week: “We need all the LNG we can get.”

Hear, too, the International Energy Agency: “LNG ushers in a new global gas order.” It now sees world gas and LNG demand rising by 74% by 2040.

And we see almost daily such stories as these:

  • LNG is the world’s fastest-growing traded commodity
  • India plans massive natural gas expansion, LNG imports to soar
  • Asia’s rapacious thirst for liquefied natural gas is sucking supplies from surprising places.

It all adds up, most agree, to a big worldwide window of opportunity beginning to open as early as 2022, and perhaps earlier. (One Canadian analyst even sees the window opening in 2020.)

  • Some 38 countries now are LNG importers, and demand for the chilled gas has already grown to 260 million tonnes per year. That’s expected to very soon to reach 280 million tonnes per year.

“Every year, two or three more countries are added to that list,” notes Andy Calitz, CEO of LNG Canada in Kitimat.

He says Canadian projects need to be built before even more competing projects are announced, in Oregon or Alaska, the US Gulf Coast and gas-rich places such as Qatar and Mozambique.

Given that it can take four years to build a big plant like his, we would therefore hope to see at least one Final Investment Decision (FID) for BC in 2018.

For along with it will come jobs and opportunity for First Nations and others.

Tragically, the cancellation of the Petronas (Pacific NorthWest LNG) project was a huge blow to those First Nations who had counted on a go-ahead for the project to boost their economies.

(The BC government valued the Lax Kw’alaams Band’s deal, for one, at $98.5 million, including millions in payouts the day a go-ahead Final Investment Decision was made. The agreement with the Metlakatla First Nation was valued at $46 million, with $5 million cash upfront.)

Now we have to underline the optimism of Calitz, who holds out hope for LNG Canada’s FID in the fall of 2018, and says: “I actually believe that B.C. will have an LNG industry.”

— Dan George, Chief of the Ts’il Kaz Koh First Nation (Burns Lake Band), and chair of the First Nations LNG Alliance