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D'Avignon Op-Ed: LNG deals good for jobs, economy, climate (The Vancouver Sun)

Recent news that two agreements have been reached for the production and sale of made-in-British Columbia Liquefied Natural Gas (LNG) adds to the momentum of positive job and economic growth in the province. These export agreements also underscore the role that B.C. and our locally-based companies are playing in providing cleaner burning fuels to growing markets abroad as jurisdictions in Asia and elsewhere transition over time to lower-carbon energy sources.

British Columbia is home to some of the largest and most productive natural gas fields in the world. Since the late 1980s, we have benefited enormously from this resource in terms of jobs, investment and government revenue. For example, when natural gas prices were high in 2005-06, the provincial government collected enough gas royalties to fund the entire post-secondary education system.  

Our province has more than 160 years of natural gas supply, far more than we can use in our businesses, homes and transportation. For more than three decades, B.C. has exported natural gas to other provinces and to the United States. However, over the past few years, advances in technology have enabled production from new gas fields, resulting in a glut of gas driving North American prices to very low levels. By contrast, natural gas prices are higher in Asia, where the demand continues to grow and governments and consumers are looking to diversify their energy supply options.

The shifting global market for natural gas means we need to move quickly to find new markets through the kinds of agreements announced during the past few weeks. If we don’t, the jobs and economic benefits will accrue to other supplier jurisdictions and B.C.’s natural gas resource base will become stranded. As this is being written, the northeast and northwest regions of B.C. are hurting because of low natural gas prices and diminished drilling activity.

That’s why it’s heartening to learn that Canadian company Fortis Inc. is working on finalizing an arrangement to export B.C. natural gas to the Hawaiian Electric Companies (HECO), displacing the heavier fuels currently burned by the Hawaiian utility to produce electricity. This follows another B.C. energy success story — Woodfibre LNG’s agreement with Guangzhou Gas Group Co. Ltd., which will result in nearly half of the Squamish-area facility’s annual production being shipped to China to help meet its demand for cleaner fuels.

These agreements are examples of how B.C.’s LNG industry can support the shift to a cleaner global energy system. In many large Chinese cities, for example, air quality is often very poor, caused in large measure by pollution from coal-fired electrical generation. This contributes to more than one million premature Chinese deaths per year from respiratory and other afflictions. Cleaner burning natural gas imported from B.C. can improve China’s air quality while also reducing carbon emissions as Chinese utilities shift from coal to gas for power generation.

The Woodfibre LNG agreement confirms that there is an appetite in Asia for B.C. LNG, and Fortis Inc.’s agreement will bring environmental and cost benefits to the Hawaiian Islands as they transition to fully renewable energy sources by 2045.

Our province has a competitive advantage in natural gas, and we have been at the leading-edge in safe, responsible development of the resource for more than 50 years.  We have some of the world’s most rigorous rules for water use and protection, and spill-response measures and restoration — all strictly enforced by the B.C. Oil and Gas Commission and the Ministry of Environment.

B.C. continues to benefit from the resource economy. In aggregate, almost 200,000 British Columbians are employed in resource-based industries. These industries also support a wide array of technology, service, construction and professional jobs in other sectors. Resources make up three-quarters of B.C.’s international merchandise exports and support thousands of small and large companies in every part of the province.

The recent agreements reached to sell B.C. LNG will create more long-term jobs, businesses and services in the province and spur economic development that will sustain local communities. Furthermore, we can help our trading partners across the Pacific Rim improve their air quality and reduce carbon emissions, thereby contributing to the shared goal of a cleaner energy future.

Greg D’Avignon is President and Chief Executive Officer of the Business Council of British Columbia. 

As published in The Vancouver Sun.