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British Columbia's Legislature is debating whether to accede to the provincial government and allow a C$36 billion deal to build a liquid natural gas (LNG) terminal on Canada’s Pacific coast that’s been touted as a key to the province’s financial well-being by proponents while condemned by critics as a sop to the energy industry.
Petronas, the Malaysian energy company, has formed the consortium Pacific NorthWest LNG to build the terminal near Prince Rupert. The B.C. Government, under Liberal Premier Christy Clark, is seeking legislation that over the next 25 years would protect the facility from tax increases aimed specifically at the LNG industry in order to achieve business stability.
Under the bill, the provincial government would compensate Pacific NorthWest by C$25 million per year or more if a future government raised the tax rates for its LNG operations, added carbon taxes, reduced credits for producing gas and make costly changes to rules on greenhouse gas emissions.
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Provincial Finance Minister Mike de Jong called the plan the largest single private investment in British Columbia’s history. He estimated that if approved, it would contribute more than C$9 billion to the B.C. treasury over 25 years and create 4,500 new jobs.
The provincial government introduced the measure on July 13, and Clark was present to support the proposal about to be considered by the Legislature. “It really will be a historic debate, one that people will look back on for decades,” the premier said.
John Horgan, leader of the opposition New Democratic Party (NDP), already had said he and his party won’t support the plan, saying they had determined that the project would require an estimated 70 percent of foreign workers to complete.
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Horgan said Clark’s Liberals had failed to ensure job guarantees for local workers and the financial interest of the province’s citizens for an entire quarter-century. “A 25-year deal?” he asked. “Who does that? Who does that in the 21st century?” he said.
What the measure includes, Horgan said, is as bad as what it lacks. On the first count, he decried a “25-year tax holiday to a foreign company” that will rely heavily on temporary foreign workers. On the second, he insisted on “local-hire provisions … local-procurement provisions,” which he said the measure lacks.
Clark dismissed the NDP’s arguments, especially on the jobs front. “They are inventing numbers out of the blue,” she said. “My view – and I’ve expressed this to all the proponents – is B.C. first, Canada second, and then start looking in the United States and other places in the world for temporary workers.”
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The proposed project also raises environmental concerns. Matt Horne of the Pembina Institute, the Canadian environmental think tank, said that in supporting the project, Clark’s Liberals are “locking in climate policy so that future governments have limited ability to strengthen it,” he said, even in the face of unforeseen ecological challenges during the next 25 years.
Supporting Horne’s view was a group of protesters, who chanted “No consent, no LNG!” in the legislative chamber, disrupting Clark’s remarks. The premier was forced to sit down while guards were removing the demonstrators from the building.
One of the protesters, Anna Gerrard, said she and her colleagues were baffled by Clark’s stand on the deal for the terminal. “We’re wondering why the province has called an emergency session to hold the door open for industry that will actually accelerate climate change,” she said.
By Andy Tully Of Oilprice.com
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Andy Tully is a veteran news reporter who is now the news editor for Oilprice.com