Energy market economics are turning against British Columbia Premier Christy Clark’s strategic bet on liquefied natural gas, Clean Energy Canada argues in a recent Victoria Times-Colonist op ed.
“The promise of LNG—investment, jobs, taxes and royalty revenue—is becoming more uncertain by the day,” write CEC Executive Director Merran Smith and Policy Director Dan Woynillowicz.
The op ed ties a series of recent setbacks for B.C.’s LNG ambitions to a long-term contraction in anticipated Asian markets for the fossil fuel. LNG proposals in the Pacific Northwest have been postponed or abandoned at the rate of one per month so far this year, mainly for lack of demonstrated markets for the gas they would have shipped.
The project closest to groundbreaking was delayed again last week when the Canadian Environmental Assessment Agency (CEAA) demanded more information about the impacts from the proposed $36-billion Pacific NorthWest LNG project on fish and marine mammals.
Smith and Woynillowicz offer several reasons for the deflating markets for North American gas. “The restart of nuclear reactors in Japan, coupled with growing use of renewable energy, are expected to push down LNG imports by as much as 10.5% by 2020,” they write.
China has increased its clean energy investment to US$110 billion, Japan to US$43.6 billion, and India to US$10.9 billion, they note. “The very markets B.C. LNG companies are hoping to export to are investing significantly in clean energy.”
“A big driver of this is simple economics,” Smith and Woynillowicz add. “Renewable energy is fundamentally different from commodities such as LNG because it is driven by technology and the fuel is free. Commodity prices are a rollercoaster ride of ups and downs. Technologies, on the other hand, follow a predictable price pattern—they get cheaper over time.”