Despite having federal and provincial approvals in place, Petronas announced this week they are scrubbing plans to build their $11-billion Pacific Northwest liquefied natural gas plant.
No doubt, this comes as a big blow to anyone looking forward to the literally trillions of dollars the previous B.C. Liberal government promised us would flow through our economy in the LNG bonanza.
But that was in 2014 when the price of LNG was over four times the price it is today.
Supporters of LNG have been gleefully suggesting the newly minted NDP government must wear this, saying their pre-election rhetoric scared off the big time investment.
We missed the part where the new minority government passed legislation forcing other countries to beat us to the punch, establish a glut on the market and lower the commodity price.
There’s no question Petronas could have expected much more favourable terms on everything from taxation to environmental regulation under Christy Clark’s government, but experts outside the B.C. Liberal caucus have been pointing out for years that the economics of these expensive LNG plants and export facilities don’t make sense.
This week’s announcement is actually just the latest in a string of similar announcements from LNG companies that they will hold off on big projects. The decision didn’t happen overnight.
So far, Woodfibre LNG is among a very few projects said to be moving forward, and they have the advantage of selling their gas to subsidiaries in Asia. The market remains the biggest factor in these investment decisions – not politics.
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