By Rich Coleman,
Minister of Energy, Mines and Natural Gas
British Columbia is showing signs of new economic growth and job creation as a result of an emerging liquefied natural gas (LNG) export industry. The latest details were released today in a one-year update to government's LNG Strategy.
With timely, concentrated actions, the government of B.C. has built the foundation necessary to reach, and perhaps surpass, the BC Jobs Plans goal of having three LNG facilities in operation by 2020.
Progress made since the release of B.C.'s LNG Strategy last year includes:
i) Significant investments in B.C.'s natural gas sector, with approximately $6 billion to prepare and accelerate the province's growth prospects and an additional $1 billion to further LNG proposals.
ii) Major LNG proponents have come forward with plans to build an export operation, with five large projects proposed right now. When the LNG Strategy was released last year, there were only two facilities proposed for development.
iii) A workforce strategy and action plan is underway with the leadership of government and the guidance of industry and training authorities. This strategy will ensure British Columbian's will be trained with the skills to fill tens of thousands of jobs created from LNG construction and operation.
Power supply discussions with proponents are moving forward, with the government of B.C. focused on having the cleanest LNG industry in the world. In July 2012, government updated the Clean Energy Act to ensure a reliable, timely and cost-competitive option of gas-fired electricity generation could be used to meet the large power demands of LNG industry.
Actions have been taken to protect residential ratepayers and to ensure hydro rates for industry remain competitive. LNG proponents will be required to contribute capital for any new power infrastructure built. Government also amended its self-sufficiency policy so BC Hydro can mitigate rate increases by planning electricity supply against average-water availability, instead of critically low water levels.
The global attention on B.C.'s LNG potential will be the highlight of an international conference this month in Vancouver. The theme, Fuelling the Future: Global Opportunities for LNG in BC, highlights the province's emerging role as an energy powerhouse that will serve Asia Pacific markets with a stable, long-term supply of natural gas. Multiple panel discussions will focus on topics such as global market opportunities; workforce and skills planning; LNG as a transportation fuel, and more.
The establishment of a LNG export industry supports the BC Jobs Plan by building on the province's strengths to create jobs and economic opportunity from natural resources and proximity to growing Asian markets.
The market potential is clear, and demand for LNG is growing. Our LNG Strategy has attracted the interest of the world, and the progress made to date is proof that we are destined to be a global supplier of natural gas. LNG is an unprecedented opportunity to build economic wealth for our province and to build a lasting legacy for British Columbians.
As of January 2013, there are five LNG project proposals that have been formally announced. If five large LNG plants are built, the cumulative gross domestic product benefit to British Columbia is expected to add up to $1 trillion by 2046.
Currently, LNG development is expected to create on average 39,000 new full-time jobs during a nine-year construction period. There could be as many as 75,000 new, annual full-time jobs once all LNG plants are in full operation.
Job creation will be in many different sectors and areas of the province, including construction; skilled trades, and professional services. In addition, indirect jobs will develop as a result of new LNG activity.
With access to new markets with a demand for B.C.'s energy resources, LNG will increase long-term revenue-generating natural gas production in northeast B.C. The production of this gas will, in turn, increase royalty payments to government. Revenue to the Province from natural gas is used to fund key public services including health-care, education and social programs - services which benefit all British Columbians. Based on higher production volumes alone, at least $1 billion in royalty revenues could be achieved by 2020 from the first three LNG projects.
As the cleanest burning fossil fuel, natural gas is integral to a lower carbon-energy future, including broader use in transportation and power generation. For example: the electricity generated by natural gas has 50 per cent fewer GHG emissions than coal-generated electricity. As a result of LNG exports, B.C.'s natural gas is expected to replace coal-fired power plants, as well as nuclear power generation, in Asia.