Why is Christy Clark working so hard to build the Woodfibre LNG plant? Why is she so determined to trade 100 industrial jobs against the tourist potential of the sound and the Sea to Sky Corridor? The tourist potential has been strongly underlined by the recent success of the new gondola.
The events of the past several weeks have clouded the B.C. LNG dreams. The LNG market is turning into a high-stakes race; those who are building their projects are leading the race.
• The Russia/China deal has lowered the bar of the potential revenues
for LNG.
• The tremendous cost overruns on current construction projects in Australia will give additional impetus to sell their product at any cost.
• The fact that only one of all the LNG B.C. projects has signed sales agreements.
• The order by President Obama to reduce emissions from coal-fired electricity facilities will significantly increase the use of natural gas.
• Will the U.S. coal reduction emphasis put pressure on Alberta to reduce its electrical reliance on coal?
The North American (NA) gas market is very different than that of our LNG competitors in Qatar and Australia. The NA market will need much more gas and with healthier prices in NA will reduce the impetus for developing massively expensive LNG export projects.
An example of increased gas use: NA is producing NG at record volumes. Why, then, are storage levels in the U.S. at record lows, 45 per cent below the average? It is estimated that by 2020 in North America, 90 gigawatts of electricity will be converted to natural gas from coal. That amount of electricity would consume a new volume of 3.95 tcf, or all of the current targeted storage volume of 3.8 tcf. There is mounting concern by the IEA that current levels of shale gas production growth cannot be maintained due to rising depletion rates. Read Cold, Hungry and in the Dark: Exploding the Natural Gas Supply Myth by Bill Powers.
Has Christy got a crystal ball that is forecasting that these recent moves are telegraphing this small facility as the only one of the myriad of B.C. projects touted that will be built? Surprise, surprise: It could be operational prior to the upcoming election. A sliver of the pie is better than none! The political election promise fulfilled!
Does this have any resemblance to the Ferry Fiasco? We will build it because we said so! Squamish, the Sound and the Corridor will be left holding the bag.
Gord Homer
Furry Creek
