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  • How to make NAFTA sustainable, equitable July 19, 2017
    Global Affairs Canada is consulting Canadians on their priorities for, and concerns about, the planned renegotiation of the North American Free Trade Agreement (NAFTA). In CCPA’s submission to this process, Scott Sinclair, Stuart Trew and Hadrian Mertins-Kirkwood point out how NAFTA has failed to live up to its promise with respect to job and productivity […]
    Canadian Centre for Policy Alternatives
  • What’s next for BC? July 4, 2017
    Five weeks ago the CCPA-BC began a letter to our supporters with this statement: “What an interesting and exciting moment in BC politics! For a bunch of policy nerds like us at the CCPA, it doesn’t get much better than this.” At the time, we were writing about the just-announced agreement between the BC NDP […]
    Canadian Centre for Policy Alternatives
  • Could skyrocketing private sector debt spell economic crisis? June 21, 2017
    Our latest report finds that Canada is racking up private sector debt faster than any other advanced economy in the world, putting the country at risk of serious economic consequences. The report, Addicted to Debt, reveals that Canada has added $1 trillion in private sector debt over the past five years, with the corporate sector […]
    Canadian Centre for Policy Alternatives
  • The energy industry’s insatiable thirst for water threatens First Nations’ treaty-protected rights June 21, 2017
    Our latest report looks at the growing concerns that First Nations in British Columbia have with the fossil fuel industry’s increasing need for large volumes of water for natural gas fracking operations. Titled Fracking, First Nations and Water: Respecting Indigenous rights and better protecting our shared resources, it describes what steps should be taken to […]
    Canadian Centre for Policy Alternatives
  • Betting on Bitumen: Alberta's energy policies from Lougheed to Klein June 8, 2017
    The role of government in Alberta, both involvement and funding, has been critical in ensuring that more than narrow corporate interests were served in the development of the province’s bitumen resources.  A new report contrasts the approaches taken by two former premiers during the industry’s early development and rapid expansion periods.  The Lougheed government invested […]
    Canadian Centre for Policy Alternatives
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The Progressive Economics Forum

BC’s Natural Gas Strategy nothing more than a fairy tale

I have an oped in Saturday’s Vancouver Sun. The editor wanted me to focus on the claims of economic gains for BC, so the piece ended up being a complementary piece to the Behind the Numbers report on GHG emissions and the Natural Gas Strategy. The title was his choice not my own, but I like it.

Natural gas strategy nothing more than a fairy tale: Economic benefits for ordinary British Columbians will be minuscule, environmental costs high

BC’s quest to substantially boost natural gas development seems like a real winner at first glance: heaps of new jobs in the Liquified Natural Gas (LNG) industry, billions in government revenues, and exports that fight global climate change by displacing coal in China.

Alas, this story is too good to be true. Many are questioning whether these ventures work at all from a corporate profitability perspective, given interest by other countries in LNG exports. But it is also the case that economic benefits for ordinary British Columbians, in terms of jobs and government revenues, will be miniscule, and environmental costs high.

Last week’s front-page story that Chinese temporary foreign workers will be brought in to mine coal in northern BC should give us pause. Use of temporary foreign workers has surged in recent years, particularly in the oil and gas industry. In Alberta, more than 58,000 temporary foreign workers were on the job in 2011.

Even assuming all work is done by British Columbians, the natural gas industry is very capital-intensive, and not a big employer. Extraction and processing of gas, plus various support services, amounted to about 7,000 jobs in 2011, or just 0.3% of BC’s 2.3 million workers.

Jobs for LNG projects are mostly in the construction phase, with a much smaller number of long-term jobs. For the Kitimat LNG facility, the government estimates 3,000 short-term jobs in the construction of pipelines and the LNG terminal facilities, but only 125 long-term jobs once built.

On the higher end, up to 2,500 long-term jobs have been claimed, if five large LNG plants are built. This seems willfully optimistic, but even at face value that latter number represents a mere 0.1% of BC’s current employment.

As for royalties to the government, don’t bank on them. Current year natural gas royalties are estimated at $157 million, 0.3% of the BC budget, in spite of record high production levels. BC is basically giving away the resource right now, even as the North American market is flooded.

BC’s gas reserves are not going anywhere – this is a finite resource after all – so why the rush to liquidate? A real commitment to reforming the gas royalty regime is needed to ensure that British Columbians receive fair compensation.

Big picture: activity in this sector needs to be managed for wind-down, not ramp-up. Natural gas may be the cleanest burning fossil fuel, but it’s still a significant contributor to global warming, which is now breaking weather records all over the world and causing tens of billions of dollars per year in damage to housing, infrastructure and food production.

BC’s plans for expanding the natural gas industry would be like adding 24 million cars to the roads of the world. And emissions from extraction and production would mean BC breaking with 2007’s Greenhouse Gas Reduction Targets Act, and its 2020 target of a 33% reduction in GHG emissions.

The government’s assertion that BC’s natural gas is good for the climate because it will displace coal use in China is wishful thinking. Natural gas will only pile on to China’s growing demand for energy. Meanwhile, Japan wants LNG to displace its nuclear capacity, which will mean a major increase in their emissions.

Natural gas can only be a useful transition fuel if managed as part of an international climate action plan, and only if exported to jurisdictions that have GHG targets as tough as our own. Otherwise, it’s just another fossil fuel contributing to global warming.

The infrastructure investments BC really needs are in public transit, building retrofits, district energy systems and waste reduction. Funded by a rising carbon tax, these investments would create 10-20 times the number of jobs per million dollars as fossil fuel investments.

BC would be much better off by finishing what we started five years ago, and by making sure all political parties commit to obeying the law of the land by sticking to its GHG reduction targets. Some progress has already been made: GHG emissions were down 4.5% between 2007 and 2010.

The BC government lacks a strategy to meet its 2020 legislated target. Jettisoning natural gas ambitions and making a new round of investments in a Climate Action Plan 2.0 is not only better for the climate, but it’s a much better jobs plan for BC.

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