'Subsidy' question examined | Squamish Chief

'Subsidy' question examined

In his letter to the Squamish Chief (Letters, May 29), Woodfibre LNG VP Byng Giraud denies electrical subsidies for his proposed plant. He apparently needs help with his math and the basic definition of subsidy, because if Woodfibre “goes electric” from our B.C. Hydro grid, B.C. Hydro and all its residential customers will be subsiding the proposed operation to the extent of about $80 million per year. Here’s why:

All new/incremental private power is acquired and delivered at a cost of more than 12 cents per kilowatt-hour, while Woodfibre LNG is banking on only paying the bulk industrial rate of just over four cents per kWh, a subsidy of eight cents per kWh arranged through our B.C. Liberal government. (And government is desperate to get some of these LNG export operations going.)

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Since liquid natural gas LNG plants are notorious power hogs, and this small operation alone would consume 120 megawatts (conservatively estimated from its 140 mw transformer, and known power consumption of LNG process “trains”), this comes to a subsidy of more than $80 million per year. Again, who will pay for this subsidy? The residential customers and small businesses of British Columbia.

It’s almost humorous that Giraud would quote private power lobby “Clean Energy Canada” frontman Merran Smith who says that “… Woodfibre LNG is off to a good start powering the plant with [subsidized B.C. Hydro] electricity, and that it sets the standard for others to follow,” because it’s also easy to see that if the rest of the proposed northern LNG export operations (50 megatons per year of LNG in total, compared to Woodfibre LNG’s two megatons a year) also “go electric” with B.C. Hydro grid power at the bulk industrial rate, our subsidy would then be $2 billion per year.

There’s much more out there on the economic disadvantages of LNG export, including the significant domestic price inflation (higher rates) for natural gas that we will be paying within B.C. for our own home heating if export moves ahead.

LNG export is an economically bad idea that only benefits the foreign corporations promoting it.
Doug Morrison

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