BC election campaign "unofficially" under way

[NAB]

Let's say the wonderful Natural gas dreams all come true and we get 150 billion from it.

Will we get a good portion this year, or next? Can you balance a budget now, or selling future prosperity as a reason to run bigger losses now?

The throne speech could have included the future not relied on it.

Neither party looks attractive, but this made the Liberals look a a tad silly to me. I hope the industry is a big benefit to BC, I'd love our province to do well, but you need to plan for tomorrow and deal with today, not hope that tomorrow will save you from today.

Excellent Post! Rate 10/10
Nab

[flamingfingers]

Rafe's take on 'pie-in-the-sky':

Rafe on Liberals' Delusional LNG Scheme
Written by Rafe Mair Thursday, 14 February 2013 10:23

Don’t eat that, Elmer. Them’s horse buns!

The BC Liberal Government's speech from the throne on February 12 - which hinged on promises of a $100 Billion windfall from BC's heretofore nonexistent Liquified Natural Gas (LNG) industry - was an appalling attempt to divert attention away from reality with pie in a distant sky.

This government must be thrown out and one can say with certainty that any replacement would be an improvement.

Billions in a few years hence, perhaps trillions after that. We’ll become the LNG capital in the world! There are one or two dark spots on this sunny painting we should look at carefully.

The LNG will come largely from fracking, which is taking the world by storm. It involves drilling deep underground into shale beds where gas is trapped, then drilling horizontally through them, and ultimately pushing huge amounts of chemical-laced water through to crack open the shale and force the gas to the surface. Under Christy Clark's grand LNG scheme, this gas would then be transported by pipeline to Kitimat or Prince Rupert, where it would be converted into LNG for export, mostly to Asia.

The first questions - the conditions precedent to this operation - are to do with the environment. In a radio interview with the CBC's Rick Cluff Wednesday, Premier Christy Clark repeatedly referred to this gas a "clean". Really?
Where does this water come from? The requirements are immense, so a large supply must be found.

Where does the chemically loaded water go? Into the water table, thence to the water supply of local residents?

What is the impact of the extraction of this gas on the stability of the area? Will there be earthquakes as a result of fracking, as a recent report from the Oil and Gas Commission suggests?

What is the impact of huge water extractions on the general ecology of the the supply area? Are there fish losses? What happens to the fauna and flora after the water is extracted? What impact is there on people, especially First Nations? What will be the impact of the water lost to this process on BC Hydro and its ratepayers - like the billions of litres coming from the Williston Reservoir?

There is this question Premier Clark won't deal with because she doesn’t give a damn - what about the impact of pipelines (all four of them proposed to cut across BC), especially on wildlife?

The fact is that these concerns are being dealt with in several regions with a moratorium on the enterprise until the answers to these and other questions are answered.

What we do know is that these sorts of concerns do not bother the Chinese in the least, which leads into the major economic concern. Asian prices are high now - 5 or 6 times higher than in North America, which is the basis for this whole scheme. This is a direct reflection of the current lack of cheap, local supply.

So here’s the rub - what if China develops its own supply of “fracked” gas? What happens to the overseas market price then?
One doesn’t have to be an economic genius or Nostradamus to predict that our proposed customer, China, will find plenty of shale and be awash with natural gas.

Even if China does not develop its own supply, who says BC can compete with other countries, such as Australia, which is into this big time?

Another nasty question: how does Premier Clark know how much tax room there will for BC in this development? Are we to suppose that the feds will see huge money without wanting to get into the taxing game themselves, big time?

It should be noted that at present there is no LNG plant in BC.

This is the bunch that wants to be re-elected on May 14. This is their blueprint. Not only have they done nothing to relieve our financial woes they have taken us for fools by feeding us a load of unattainable and inedible pie in the sky.

This government is unfit to govern.

http://thecanadian.org/item/1935-rafe-o ... lng-scheme

[Gone_Fishin]

Seems that people actually in the industry, not Nab, FF, Mapleweed, or the NDP, seem to think the numbers being bandied for the LNG projects are quite real. Lemme see, who do I believe has more credibility?


VICTORIA - Critics of B.C. Premier Christy Clark say her election pitch involving a lucrative liquefied natural gas industry for the province is a "fantasy," but industry experts are siding with the premier.

Several experts within the natural gas industry said Wednesday Clark's LNG timelines and potential financial windfalls are on target despite projections ranging between seven years and 30 years.

The Opposition New Democrats say her trillion-dollar revenue forecasts highlighted in the government's throne speech appear based on fantasy and myth.

NDP finance critic Bruce Ralston said British Columbians should be wary of Clark's long-range LNG plan, given her government's poor record of hitting its recent revenue projection targets.

"The centre-piece of (Tuesday's) speech was the empty promise of a fantasy windfall of revenue up to 30 years away," he said.

Clark said in her government's throne speech the LNG export possibilities represent a possible $1 trillion boost to B.C.'s gross domestic product over the next 30 years.

She announced a B.C. Prosperity Fund that will funnel between $130 billion and $260 billion in LNG royalties and taxes to the government. Clark said the fund will be used primarily to pay down the $56 billion debt, but she also mused about eliminating the sales tax.




The premier is refusing to elaborate on government plans to impose some form of royalty fee or tax on LNG fill the Prosperity Fund. She said the tax will keep B.C. competitive in the world LNG market, but also represents an opportunity to benefit the province.

Whistler-based LNG expert Zoher Meratla said companies like Chevron, Shell and Mitsubishi, who are making plans to develop LNG export terminals in northwest B.C., are making plans that extend beyond 20 years.

Meratla, who has worked on LNG plants in Qatar, Algeria and Peru and helped with the original design work on the Kitimat Chevron project, said companies are looking for stability and solid regulatory environments when investing as opposed to considering market fluctuations.

"You have to look at least 25 to 30 years ahead for LNG, simply because that's the nature of the business," he said. "If somebody is going to spend $5 billion you are going to look at that sort of horizon to get a return on the investment."

Meratla said it will take time, but the LNG returns Clark is touting are available to the B.C..

Calgary-based energy consultant Geoff Hill, a partner at Deloitte, said oil and gas companies are making long-term plans when it comes to developing B.C.'s LNG export potential.

"There's always risks in the forecast, but B.C. is far from the only place in the world that has an LNG strategy," he said. "I think it's a fairly safe bet."

Hill said B.C.'s LNG export developments are attractive investment opportunities because of the huge available supply in northeast B.C., stable government and solid economy, and the potential to sell the product at much higher prices in Asia.

But potential labour shortages concern the industry and could potentially play a role in future investment decisions, he said.

Skills training and labour shortages are destined to become major issues in this spring's election campaign as both the Liberals and NDP have staked claims as the leader in skills training.

Recent estimates of the impact of LNG development in B.C.'s north includes the creation of 39,000 jobs over the nine-year construction period and 75,000 new full-time jobs if the five facilities reach full production.

Shell Canada spokesman, whose company is also planning an LNG export terminal near Kitimat, said long-range planning is involved in developing the Asian opportunity.

"The best opportunity for the abundance of natural gas in B.C. — cost competitive natural gas — is to find its way into Asian markets," he said.

The Liberal government promised in its September 2011 jobs plan the development of three LNG plants in northwest B.C. by 2020. That figure has since been upgraded to five plants, but the completion dates are not as firm, and the companies have yet to make their final investment decisions.

Since last year, major gas and oil companies, including Chevron and Shell have invested $6 billion in British Columbia LNG projects, including preparing export sites in the Kitimat area.

The LNG projects involve building pipelines from northeast B.C.'s natural gas fields to LNG terminals near Kitimat, where the product would be shipped to Asian markets. LNG is natural gas that is cooled to a liquid form where it can then be loaded onto tankers.

Last year, Clark said her government's plan to export LNG to Asia is B.C.'s economic equivalent to Alberta's oilsands.

Oh c'mon twobits, you'll never convince the NDP shills that anything good can come from this. The shills are praying for a complete collapse of the province, since their own dismal failures they call "lives" want company in their misery.

I'll definitely listen to industry experts before I listen to a bunch of NDP union grunts that have never had a single business success in their dreary lives.

[Drip_Torch]

... And how's that oil and gas game working out in Alberta?

February 13, 2013

Industry concerned about 2013 Alberta budget

work here? RICHARD GILBERT

The Alberta government is facing a massive revenue shortfall in the next provincial budget caused by a so-called "bitumen bubble", which has the construction industry worried about cuts to spending on infrastructure construction and maintenance.

“We appreciate that the government is in a tough position, but there is an argument to sustain a good level of capital spending,” said Bill Stewart, vice-president of the Alberta Merit Contractors Association.

“Everyone knows we have a fiscal problem, but budget cuts can’t be done disproportionately or we will have negative long-term consequences.”

Premier Alison Redford made a television broadcast on Jan. 24 to outline her government’s financial problems to Albertans.

In an eight-minute speech broadcast across the province, Redford warned that the Alberta government will be facing an expected deficit between $3 billion to $6 billion, due to a drop in oil revenue.

“Today, 30 per cent of our budget is funded by revenues from oil and gas.,” she said.

“This means we are vulnerable to swings in resource prices, as we have seen with natural gas prices in the past, and now the price we receive for Alberta oil.”

According to Redford, the government forecast last year that West Texas Intermediate (WTI) oil would average about $100 a barrel in 2012.

This number is important because it is used by economists, governments and industry experts as a benchmark price for oil prices in North America.

WTI averaged about $94 last year.

The difference in price has cost the province almost $1 billion in royalty revenues since April.

However, Redford said the price of oil in Texas is not the real cause of Alberta’s economic problem.

“Historically, the price we receive for our oil has been a few dollars lower than Texas oil, and that differential had been manageable,” she said.

“But, since September, that gap in the differential has grown considerably and the trend is getting worse for the foreseeable future.”

The root cause of the problem is that Alberta exports most of its oil to the U.S., which is currently experiencing rapid growth in the production of oil.

As a result, Alberta is getting paid a little more than $50 dollars a barrel.

Redford said this “bitumen bubble” is responsible for the drop in oil revenue, the provincial deficit and the difficult choices about spending reductions that are being made as the government prepares to table the 2013 budget on March 7.

“We certainly wouldn’t want to see a return to what happened after 9/11, when the capital budget was brutally slashed,” said Stewart.

“But when the government decided to increase investment in infrastructure development, a lot of the capacity was employed by private sector clients. There was a shortage of capacity, which meant a lot of public sector jobs couldn’t find contractors.”

Stewart said the construction industry’s capacity has returned to previous levels, so there is a need to maintain stable capital funding.

For example, he said there are documented deficiencies in the budget for maintaining basic infrastructure.

In addition, there are a lot of people moving to Alberta each year, which requires new infrastructure construction. About 95,000 people moved to Alberta last year.

[Gone_Fishin]

How many more IDs are you going to create?

[NAB]

""Vaughn Palmer: So far, 2013 has been an annus horribilus for the B.C. Liberals

VICTORIA — The B.C. Liberals began the year needing major momentum to close a substantial gap in public opinion with the New Democrats before election day.

So far, that hasn’t happened. With seven weeks gone already, the year has been marred by a string of embarrassments, fizzles and gaffes for the Liberals.

The lowlights package:

Jan 5. News breaks that the B.C. Liberal members of a legislature selection committee have schemed to deny Auditor General John Doyle a second term. The clumsy revenge move, targeting an independent financial watchdog who has bitten the government multiple times, will blight the governing party for weeks.

Jan. 13. The Liberals launch yet another round of advertising to promote their jobs plan, provoking more backlash from people fed up with tax dollars being used for partisan political purposes.

Jan. 15. The optics are against the Liberals as the Toronto Stock Exchange marks the return to trading of B.C.-based Catalyst Paper. Standing alongside the CEO Kevin Clarke to ring the bell is Opposition leader Adrian Dix, a rare placement for a New Democrat. Missing, though she was invited, is Premier Christy Clark.

Jan. 16. Scrambling to reverse the perception that her party is out to get Doyle, Clark suggests that the Liberal klutzes on the selection committee offer him a two-year extension. This only serves to prolong the agony because Doyle, stung by what he calls a “Mickey Mouse process” will reject the offer.

Jan. 19. Surrey council turns down a $100-million casino project that the province had been promoting. Cabinet minister Rich Coleman and lotteries boss Michael Graydon then blow a gasket in the direction of B.C.’s second city.

But Surrey is not to be intimidated by the bullying minister and his out-of-line Crown corporation head. Over the next few days, Mayor Dianne Watts, Liberal MLA and caucus chair Gordon Hogg and Liberal MLA Kevin Falcon will all say that council got it right, meaning Coleman got it wrong.

Jan. 23. Moe Gill, the Abbotsford councillor and raspberry farmer, exacts his revenge on the governing party for vetoing his bid for a nomination in Abbotsford South. He announces he’ll run as an independent against his former ally, cabinet minister Mike de Jong, in Abbotsford West.

Jan. 24. Premier Clark takes the wraps off her vaunted 10-year plan for labour peace in the K-12 education sector. Some good, albeit overdue ideas. But none of the major players in the sector can take seriously a 10-year plan from a government with mere weeks left in its mandate.

Jan. 29. After months of telling Hydro ratepayers that they have no choice but to accept smart meters, the Liberals back off, sort of, leastways until the election. Another reminder that this $1-billion exercise should never have been denied a proper review by the independent utilities commission.

Feb. 4. Opposition energy critic John Horgan has been going over the latest numbers from Hydro and announces that the Liberals have saddled the giant utility with a surplus of expensive power, setting up a potential loss of $1 billion over the next four years.


Feb. 7. “B.C. Liberal faces tax-evasion charges,” says the front-page headline in The Vancouver Sun, reporting on the sizable legal difficulties of “star” candidate Sukh Dhaliwal. A key backer of Clark’s leadership bid, he didn’t even tell the party about his legal troubles until contacted by reporter Kim Bolan. Still, party headquarters briefly sticks by him until the inevitable public outcry forces a resignation.

Feb. 8. The Liberals discover the downside of spending millions of dollars touting the jobs plan: What if the numbers head in the wrong direction? StatsCan reports that B.C. shed almost 16,000 jobs in January, second worst performance in the country.

Feb. 12. The legislature resumes with the speech from the throne, second of the Christy Clark era. The Liberals stake their hopes on a $100-billion fund that would supposedly be generated from five — count ‘em, five — liquefied natural gas terminals. To reach that place, set your sights on the second star on the right, and fly straight on till morning.

Feb. 13. For the first question period of the session, the New Democrats disclose that the Liberals have bumped the budget for taxpayer-funded partisan ads to $16.5 million, including a scheduled blitz following the coming provincial budget. All of this comes straight from a confidential report given earlier to the Liberal caucus, which is leaking.

Feb. 14. The Liberals mark Valentine’s Day by discounting speculation about a less-than-loving atmosphere in their caucus room. Will the government be able to muster a majority for every vote in the house? Not to worry, say caucus leaders.

But the premier herself was sufficiently concerned to reach out to disaffected independent MLA John Slater and ask him to vote with the government.

Her hand-picked party brass had declared Slater unfit to run for office for the Liberals. “But can we count on your support on the budget?” Slater rebuffed her. “I can’t do a flip-flop like that,” he tells Cassidy Olivier of the Province.

So ended another discouraging week for the premier and her team. And just 12 more to go until the voters have their say.""

http://www.vancouversun.com/opinion/col ... story.html

[Gone_Fishin]

Judging a premier by her sex becoming a Vaughn Palmer specialty


The Vancouver Sun’s provincial political columnist seems bent on judging B.C. premier Christy Clark by her sex alone. This week his free pass to Clark’s male rival on a question of personal ethics brought into sharp contrast his steadfast unwillingness to acknowledge Clark’s political accomplishments when they happen. What’s up with that?

In a scorching critique of a kind that B.C. press gallery scribes almost never level against each other, Palmer’s fellow press gallery writer Tom Fletcher summarized a recent Palmer column about Clark’s former communications director Sarah MacIntyre in a way that was remarkably candid.


“Sad to report that after Global TV took out MacIntyre in a classic hit piece, the Vancouver Sun decided to drag her body through the street, Mogadishu-style,” wrote the Black Press columnist.

“The Sun’s eminent Vaughn Palmer retailed her plaintive e-mails, supplied by the NDP, in which she asked for a job description and length-of-stay expectations in the wake of her sudden transfer to a ministry communications shop.”

Palmer was the agent of a Dec. 4 NDP personal attack on MacIntyre, which made up the substance of his so-called Mogadishu column.

What Fletcher politely leaves out is some breathtaking hypocrisy on Palmer’s part, since only two months ago Palmer was hailing B.C. NDP leader Adrian Dix’s “new” style of leadership in which Dix supposedly forbade the B.C. NDP from using material of a personal or personnel nature.

And that is why B.C. Political Reports is wading into this issue for the second day in a row. But don’t worry, fresh ground is being covered.

The leak of the the MacIntyre emails represented a total and transparent reversal of Dix’s fleeting dalliance with the art of respectful campaigning, dealing as they do with the former Clark communications director’s emails looking into her own employment status following what was obviously for her a difficult change of assignment.


The day after the column, Palmer popped up on CKNW radio to demonstrate once again that it is of no interest to him what Clark actually does as Liberal premier – or how low Dix and his NDP staffers are willing to stoop.

Host Philip Till’s chosen topic Dec. 5 was the gap shown in public opinion polls between men and women when it comes to Christy Clark – that apparently she does better with men than with women, by a wide margin.

Palmer: “Women don’t like that excessively aggressive, in-your-face style of campaigning, whereas men may actually enjoy that. So that’s a factor here too, Philip.”

The columnist said he has talked to women who think Clark is inauthentic, phony, and aggressive.

Palmer’s analysis: ”I think women like Adrian Dix’s more conciliatory style.”

So instead they prefer Dix’s slimy tactics of securing personal, personnel emails so as to attack female government employees? A conciliatory style consisting of cheap, deeply personal attacks? Amazing.

Pause for a moment to consider for a moment the actual job performance of Dix versus Clark on one key issue.

The most significant economic news in early December, and possibly all of 2012, was the Dec. 4 announcement by state-owned Petronas of Malaysia that it is going to partner with Canadian-based Progress to develop what may prove to be British Columbia’s first liquefied natural gas terminal.

Naturally, Palmer would want to analyze news of a $9-billion B.C. project moving ahead, right?

After all, he had flagged it as an important issue back in early October when he wrote:


“A year after first launching an LNG strategy, Clark continues to insist her government is ‘focused single-mindedly’ on bringing it to fruition. She’s also upped estimated benefits from the billions to an even trillion dollars and the number of potential terminals from three to five.”

Palmer wasn’t buying it. As far as he was concerned, Clark was spinning a pipe dream: ”Rather than indulging her penchant for hyperbole, Clark would be wiser to focus single-mindedly on getting even one terminal signed, sealed and delivered. Otherwise, B.C. risks being the chump on LNG, once again.”

Palmer’s entire knowledge base on LNG appeared to based on the single wire story out of a petroleum industry convention in Alberta that he cited.

Had he assembled a body of insight like, for example, that of his colleague the Sun’s resources reporter Scott Simpson, he might have brought a more valuable perspective. Here is what Simpson recently concluded in a broad-ranging analysis piece published just a few days before the Petronas-Progress deal was announced:


“B.C., even without the rest of Canada, could emerge as one of the world’s top five producers if its LNG projects reach full capacity.”

In his Dec. 1 2012 overview piece, Simpson quoted the B.C. operations manager of the Canadian Association of Petroleum Producers, Geoff Morrison: ”We need to get that infrastructure built. It’s new for us but there is an existing market right now.” Simpson reported that a Clark-driven change to the Clean Energy Act had given the LNG industry confidence that progress could be made.


Anything else? Well, she made it a centrepiece of her jobs plan, there is an LNG conference planned for February looking at the opportunity, and various provincial ministers and ministries have weighed in with contributions toward making a very complex set of conditions fall into place. These are conditions that the B.C. NDP could not possibly hope to deliver, as has been demonstrated in this past B.C. Political Reports post and hinted at by Palmer in this column about NDP policy on fracking.

Did Palmer see in the Petronas-Progress announcement an opportunity for himself to get up to speed with what was happening? Maybe he could even spin it as Clark saying: ”Hey, great idea from Vaughn to stop it with the hyperbole and actually do something for a change on this issue!”

Apparently not – the deal seems to be of no interest whatsoever, on any terms. Palmer remained content to let stand his unfounded slagging of Clark two months earlier for having harebrained ambitions, with no willingness at all to bring his readers up to date with his take on things.

Maybe that’s because something far more significant happened in Palmer’s world to supply a topic for his column following the Petronas-Progress deal: Adrian Dix had a brain fart.

As the week continued, it appeared that Palmer had an iron determination to judge Clark by her sex. In his next column he offered a lame rationalization for why he is quick write about a male politician’s policies but steadfastly ignores an obvious policy accomplishment when it comes from a woman. Writing about “the data” from polls showing Clark’s evident trouble with women voters (nearly a week after it was news), it is a classic piece of self-justification:


“I raise them as part of an effort to better understand one of the defining concerns of Christy Clark’s 21-months and-counting tenure as premier, namely her troubles with women voters.”

It seems that when it comes to the analytical framework of B.C.’s leading political commentator, there is but one lens for considering Clark – that of her sex.

[flamingfingers]

Tom Fletcher's MOTHER doesn't even read Tom Fletcher!!

Here is just one example of how highly he is regarded:

Your paper every so often publishes nonsense written by Tom Fletcher.

Over and over again his articles are insulting and predictable to the point of nausea. His facts are half-truths and his views are mostly upside down when not sideways.

He claims that most problems and crisis with economy, employment, health, education, environment, wars, politics or such, are due to the general public being confused or mislead by those not agreeing with him.

Given a chance, Fletcher would accuse even Oliver Twist of being greedy.

His persistent sucking up to the elite and establishment is shameless.

The only remedy is to automatically turn any of his name-calling into praise and any of his facts into comic relief.

[flamingfingers]

Justifying $16.6 MILLION of our tax dollars on the "Jobs Plan".. courtesy a point made by V. Palmer:

Vaughn Palmer wrote this:

Feb. 8. The Liberals discover the downside of spending millions of dollars touting the jobs plan: What if the numbers head in the wrong direction? StatsCan reports that B.C. shed almost 16,000 jobs in January, second worst performance in the country.

And THIS is premier photo op’s response:

...Clark said the (multi-million dollar ad) campaign has successfully promoted the BC Jobs Plan Facebook site. "A million people visiting the (government jobs plan) site, that's confirmation the ads are working," she said. "These ads are connecting people with jobs. Despite the fact we're getting into an election season, I am still determined to govern the province."...

So I presume that she feels that Facebook is the Success-O-Meter that justifies her spending $16.6 MILLION of OUR tax dollars to promote Today’s Liberals?

[Donald G]

Many poly-ticians are merely men and women who self manufacture a synthetic position for the purpose of getting elected. Poly-ticks are a parasitic or saprophytic beings who provide poly-ticians with resources in the hope of gaining subsequent access to the poly-ticians key to the public larder. I greatly admire those politicians who truly try to serve their communities ... unfortunately both the Liberal and NDP leaders are staunch poly-ticians engaged with poly-ticks.

[NAB]

""Pipe dream: No flush future for B.C. natural gas exports
By MICHAEL SMYTH, The Province February 17, 2013 12:15 PM

Is British Columbia’s untapped natural-gas reserves really the greatest potential money-maker since Bill Gates first heard about a thing called a microchip?

That’s certainly the vision expressed by Premier Christy Clark and her government, as they outlined their trillion-dollar dream for B.C.’s glorious debt-free future.

Natural-gas prices may be depressed in North America, but that’s not the case in power-hungry Asia, where gas is about five times more expensive and currently linked to the price of oil.

That’s why the rush is on to extract North America’s cheap natural gas — using the environmentally controversial “fracking” method to do it — cool it into liquid form and ship it to places such as China, Japan and Korea.

It sure looks like easy money right now, and jumping all over it is a no-brainer for the Clark government.

But a trillion dollars? A “prosperity fund” that could erase the province’s $60-billion debt in just six years? A windfall so big we could scrap the provincial sales tax?

Hold your horses, little buckaroo. There may be a few speed bumps on the yellow-brick road before we get to magical tax-free land of Oz.

Just consider:

THE COST: First we have to build pipelines to get the gas to Kitimat. Then we have to refrigerate the gas to -161 C so it liquefies, requiring a tonne of electricity we don’t currently have. Then we have to ship it across the Pacific Ocean in tankers.

In other words, liquefied natural gas (LNG) is a costly enterprise. Which is fine as long as the price in Asia stays high. But...

COMPETITION: Australia is doing the same thing we’re doing, and the U.S. is getting into it, too.

But the biggest competition may come from Asia itself, which is sitting on its own massive gas reserves.

China announced last year its reserves of shale gas, newly unlockable by fracking, is now estimated at 25 trillion cubic metres, enough to meet domestic demand for 200 years!

Newly developed domestic supplies in Asia could deflate prices — and spoil the party here at home.

ENVIRONMENTAL OPPOSITION: “Fracking” involves sinking a deep, narrow well into the earth and bedrock and pumping tonnes of pressurized water and chemicals down the pipe.

The pressurized fluid cracks the rock at the bottom of pipe, releasing the natural gas trapped within it.

Environmentalists such as David Suzuki are already warning about toxic waste water, accidental spills, contaminated drinking water and even increased risk of earthquakes.

We’ve already seen what environmental opposition has done for the proposed Enbridge pipeline. Get set for Act 2.

In China, by the way, they don’t have any pesky tree-huggers to get in their way.

TAXATION BACKLASH: In last week’s throne speech, the Christy Clark government said it would slap billions of dollars of new taxes on LNG exports to fuel its “prosperity fund” and erase the provincial debt.

That’s not exactly the kind of valentine the industry wanted to receive from government.

“It appears the honeymoon is quickly coming to an end for the LNG business in British Columbia,” energy columnist Stephen Ewart wrote in the Calgary Herald.

“The industry isn’t happy.”

Unhappy industries often invest their money elsewhere. But the LNG sector might be even unhappier after the next election.

THE NDP BOGEYMAN: The poll-topping New Democrats say they support LNG exports, but they’ve also threatened an independent “scientific review” of the sector and have not ruled out a moratorium on fracking.

The NDP has also talked about an expanded carbon tax and raised concerns about increased greenhouse-gas emissions in the region.

“To say there’s going be trillions of dollars is absolute fantasy,” said NDP energy critic John Horgan. “There will not be trillions of dollars over 30 years — I can guarantee that.”

I’d believe him. Especially if the NDP is in power.

Watch for Christy Clark to now turn this one into an election “wedge issue” and argue only the Liberals can make B.C.’s trillion-dollar dream come true.

But maybe that’s the biggest problem of all: After the Liberals’ double-cross on the harmonized sales tax, do voters really believe anything they say anymore?""

[NAB]

In today's B.C. budget, don’t bank on gas-revenue forecasts

Les Leyne / Times Colonist
February 18, 2013

One sobering thing that shines through economist Tim O’Neill’s quick, partial review of B.C.’s budget process is that natural-gas-industry experts don’t have much of a clue.

The industry and industry-watchers on whom the government relies for a crucially important piece of information have been missing the mark for years. When it comes to projecting prices even as short as a year out, the industry has a habit of chasing the past, rather than nailing the future. Since the price is key to figuring how much revenue the industry will produce for government, it has created headaches for the Finance Ministry over the years.

People commonly assume it’s the government that makes revenue projections when putting together a budget.

It’s not.

The government takes the best guesses from a number of experts in each sector, throws out the high and the low ones, and relies on the average estimate. In the natural-gas world, when it comes to making the important prediction on what the price will do over the next year, the system doesn’t work.

All the experts are usually wrong.

O’Neill, brought in as a third-party validator to bolster the idea that today’s budget for the coming fiscal year is balanced, said forecasting natural-gas revenues is an acute problem.

Natural-gas revenues have been over-projected in five of the last eight years, he said. The average error is $584 million.

The actual benchmark price has been significantly overestimated in each of the last four years, and in six of the last nine years.

Those price and revenue figures are reached by using about 20 forecasts from industry experts. They throw out the high and low ones, then use the average of the remaining ones.

But even using that safety feature, estimates are mostly wrong. The experts have a tendency to “chase” prices on the way up or down. They underestimate on the upswing, and overestimate on the way down.

O’Neill gave the rest of the process his seal of approval, as expected. But in that one key sector, he saw a persistent pattern of overstatement on revenue.

His recommended fix is to shade the price estimate lower, so that it is below the median. In today’s budget, his recommendation means knocking the revenue estimate down by about $70 million. Finance Minister Mike de Jong said Monday that was done, and the gap was made up partly by reducing the surplus figure.

Royalties paid to the government slide according to price. So when the price drops, royalties decline. The same happens in reverse.

In normal times, the private sector’s poor track record on predicting its own future amounts to a degree of embarrassment.

But these are not normal times. B.C. is on the verge of going all-in on a brand-new industry, liquefying natural gas and shipping it to Asia. Billions of dollars are already invested in this concept, and billions more are coming. But the big wager is being made by people whose record of accuracy in guessing the future is pretty weak.

If they can’t even come close to estimating the price in the relatively confined North American domestic market, how will they fare when it comes to guessing the export price, once liquefied-natural-gas plants are up and running and the market is created?

It’s a hundred times more complicated because there are countless more global factors to take into account.

The B.C. Liberals have tied their entire economic plan to the natural-gas sector. The New Democrats have quiet hopes invested in it as well.

It’s all based on the fact natural gas sells in Asia for five or six times the North American price.

But the volatility and the poor track record in guessing what the price will do next makes you wonder about assuming anything when it comes to that resource.

http://www.timescolonist.com/opinion/co ... ts-1.76395

[Gone_Fishin]

Natural Resources

Earliest LNG projects will be the most profitable, say industry experts

February 14, 2013


The most profitable LNG projects in North America will be the first ones into production, industry experts heard this week in Houston. It is a significant message for B.C. where up to five proposals are being developed.


A liquefied natural gas tanker arrives in Boston, MA (Photo credit: Wikipedia)

“Early movers will probably export a decent amount of LNG,” said Keith Barnett of Asset Risk Management at the Platts’ 12th Annual LNG conference in Texas.

The anticipated boom in liquefied natural gas is seizing not only British Columbia, but the United States as well. B.C.’s LNG plans were on the agenda along with topics like global competition for LNG markets, regulations, global supply and demand, regional consumption of LNG around the world, and the all-important question of how the commodity will be priced in the future. LNG is also a major political issue in British Columbia where the Liberal government has made a pro-development stance a central campaign plank this spring.

Most of the concerns focused on whether the natural gas supply can be developed at a realistic cost and in a reasonable time frame. A Tuesday presentation on Canada’s west coast outlook covered six main topics:
1.Where will the gas supply come from for the growing number of proposed LNG projects on the west coast of Canada
– Montney tight gas growth, Northern Duvernay, and Horn shale gas — is there enough supply?
– what new grass route transport systems are needed to make this a reality – and at what capital cost?
2.What are the Canadian regulators saying? Are there restrictions or limits in LNG export levels? Are there restrictions on foreign investment in Canadian projects?
3.Aboriginal issues – Consultation and agreements
4.Summary of the Canadian LNG projects
5. How many projects can the existing ports accommodate?
6.What is the producer net back? Pipeline tolls, LNG cargoes costs, and country to country economics?
— independent timing to start? Is 2016 likely or are delays expected? And if delayed, why?
— how do the projects compete with the US Gulf Coast on landed LNG pricing?
— price to market

Another presentation contained good news for the Canadian projects, five of which are planned for between now and 2020. Similar proposals on the table in the United States have little chance of success, according to one Wednesday speaker, because they do not have any of the success factors. These, according to Richard Pratt of brokerage group Fearnley, include:
•Availability of cheap gas
•A good geographic location
•Availability of cheap labour
•A supportive environment

While B.C. obviously would not be a contender if the third item in that list was the only determinant of viability, the fact that the other three items are currently present in spades with the coastal proposals has to be a positive factor.

The last item – a supportive environment – would probably lead to doubts about the development process under an NDP government that has internal conflicts on fracking and has gone out of its way this month to discourage the Liberal government’s attempts to accelerate the opportunity.

The conference spent much of Wednesday discussing pricing, a key factor because of attempts by buyers in Asia to reduce their costs and seek to pay for exported North America LNG only what it fetches in home markets. This is known as commoditization of pricing – i.e., will one day LNG become like, say, gold or oil, with a global price that everybody pays no matter where they are.

At the moment this commoditization does not exist. Instead, LNG remains what the experts call a “flawed” commodity that sells for different prices in different markets allowing extra profit to be made on the gap – the so-called arbitrage – between the price in the producing versus the selling market.

The billion-dollar question is whether this gap will vanish. According to Pratt:


“If LNG were to achieve complete commodity status, the arbitrage will shrink.”

If that happens, whether LNG remains profitable becomes just a question of how much it costs to produce. There will still be money to be made for the right producers – but just not as much.

“Once the incentive goes down, it becomes a question of cost,” Pratt said.

Another LNG conference also in Houston this April will look at these topics:
•What role does gas play in the North American fuel mix?
•Will North America be a player in the LNG import market?
•What are the implications of North American LNG exports on global dynamics?
•Will gas exports be economically sustainable and competitive?
•What role will shale gas play in the US LNG market?
•Pricing and contracting structures – short term and long term
•Will the expansion of the Panama Canal have an impact on the North American market?

[NAB]

I guess those are the same "experts" that O'Neill was referring to in his report. It's comforting however to see they are finally going to get serious about trying to figure it out. Too late for their findings to be of any use in this budget and election unfortunately. It only makes sense for government to be cautious when speculating with taxpayer's money, not throwing caution to the wind in an attempt to come up with a roll of the dice quick fix like the Liberals are constantly doing. The odds of winning big are probably better in Vegas or with the Lotto.
Nab

"All the experts are usually wrong."

"O’Neill, brought in as a third-party validator to bolster the idea that today’s budget for the coming fiscal year is balanced, said forecasting natural-gas revenues is an acute problem.

Natural-gas revenues have been over-projected in five of the last eight years, he said. The average error is $584 million.

The actual benchmark price has been significantly overestimated in each of the last four years, and in six of the last nine years."

[The Rooster]

Gee, what a shock , a liberal party that spends too much on their friends and then say that they are RAISING TAXES.

Provincial, federal , or intergalactic , doesn't matter , the Liberal party always raises taxes . Christy Clark spends over a half a million per year on her expense account , maybe she should pay taxes on it .?