VANCOUVER – A new study shows Canada would get a big economic boost from a liquefied natural gas industry, especially British Columbia, including tens of thousands of jobs and billions of dollars in economic activity.
The Conference Board of Canada’s report was issued Monday as the future of Canada’s LNG industry is complicated by low global energy prices that have delayed at least two B.C. projects.
The board found that if the industry produces 30 million tonnes per year of LNG, Canada’s economy would grow by $7.4 billion a year over 30 years.
Its report said the main beneficiary would be British Columbia, which it said would see 46,800 jobs created and $5.3 billion a year of economic growth over the 30-year horizon.
The board said annual government revenue including corporate, personal and indirect taxes, as well as royalty revenue, would increase by about $6 billion annually for Canada, including $3 billion to the provincial government.
The study — which is based on a model of three hypothetical projects — comes out only days after the AltaGas-led group behind the Douglas Channel LNG project stopped development, citing low prices and an oversupplied market.
The Douglas Channel project, with a proposed capacity of 550,000 tonnes of LNG per year, is the smallest of the 21 proposed LNG projects in B.C. But it’s not the only LNG development to have been sidelined.
Royal Dutch Shell announced in early February it was postponing a final investment decision on the much larger 24-million-tonne-per-year LNG Canada project.
Both projects have been pushed back as the global LNG industry is reeling from a plunge in prices brought on by oversupply of both oil and natural gas.
The supply issue isn’t going away soon, with a number of major LNG projects just starting to ship, including one in the U.S. that made its first shipment of LNG last week.
The Conference Board said it scaled back its study to a more conservative 30 million tonnes a year of development, compared with the 80 to 120 million tonnes per year the B.C. government based its initial impact studies on, but noted the findings are still subject to a “great degree of uncertainty” because no projects are yet under construction.
The study said the vast majority of the jobs and spending would come from the upstream production side of the industry, with the opening of export markets leading to around a doubling of natural gas production in B.C.