LNG - Through a gas darkly Part 1 and Part 2

Peter Ewart

“For now we see through a glass, darkly” – 1 Corinthians 13:12, The Bible. There is no doubt about it.  Premier Christy Clark wants a drastic re-ordering of our provincial economy.  In her keynote speech to the Second International LNG conference on May 22, 2014, she declared that the provincial government is looking at “every decision we make through the lens of whether or not it furthers our purpose in creating an LNG industry here in BC … This is our central preoccupation.”

She further noted that she personally chairs “a special cabinet devoted to making sure we coordinate our decisions across government” so as to create an LNG industry in BC.

In effect, she is saying that British Columbia must become a petro-state, whereby the affairs of state and of the economy are dominated by natural gas interests, where all matters are seen through the murky prism of the natural gas sector.

Perhaps this is not surprising given that individuals and companies connected to the natural gas / LNG industry played a major role in funding her Liberal Party leadership campaign, catapulting her into power as premier.

The impact of this dramatic re-ordering, or as some would argue, skewing of economic vision is already upon us.  The provincial government recently created an entire ministry all on its own for the natural gas / LNG sector, i.e. the Ministry of Natural Gas Development.  Other key industrial sectors are not so lucky, being forced to share a lumpy bed with other sectors in huge conglomerate ministries such as Forest, Lands and Natural Resource Operations; Jobs, Tourism and Skills Training;  Technology, Innovation and Citizens’ Services; and Energy and Mines.

Recently, Gwyn Morgan, former CEO of EnCana Corporation, the giant natural gas monopoly, was  appointed as chair of the province’s Industry Training  Authority which oversees B.C.’s trades training system.  This appointment to such a key position is another indicator of the relative importance that the natural gas / LNG industry now holds for the Clark government in relation to other industrial sectors in the province.

Indeed, the Clark government has promised to “re-engineer” B.C.’s entire education and training system to meet what it terms to be labour market priorities, natural gas / LNG development being at the top of the list.  The shift in training funds is massive, starting off with $160 million a year and eventually reaching $400 million annually, amounting to $3 billion over ten years.

In case anyone overlooks which sector has priority in training, government documents repeatedly cite LNG as the first, or in some cases, the only example.  In the government news release / backgrounder on the topic issued on April 29, 2014, the LNG sector gets a special section devoted to it (no other industrial sector gets this treatment).

Nowhere, of course, does the provincial government raise the issue that the biggest problem in trades training is that these giant private companies refuse to adequately fund and provide apprenticeships for their own workers.  Instead, they expect government to use public funds to shoulder the bulk of the training costs, which amounts to a massive subsidy for these companies.

In addition, it is in the interests of these companies to hype and exaggerate future training needs, the aim being to create an over-supply of workers, thus creating a downward pressure on wages and benefits.  One of the problems often cited in business publications about the Australian LNG sector is that shortages of workers have caused wages to rise there, thus cutting into corporate profits.  Creating an over-supply of workers helps solve that problem, at least for the big LNG companies.  But, of course, it will be a big problem for all those workers who, when the crunch comes, won’t be finding a job in a flooded labour market, as well as for the communities they live in.

To think that this won’t happen is to be naïve about the cyclical nature of the economy, and especially the highly volatile and unstable natural gas sector.  Yet, as to be discussed further in the next installment of this series, it is precisely this volatile industry that the Clark government is using as a smudged prism or “glass” to peer through when making its decisions, not just in the gas sector, but across the entire operations of government from agriculture and provincial parks to environmental policy and the K-12 curriculum .

What are the implications of such a distorted vision, of seeing things “through a gas darkly” so to speak?  Will it lead us to 100,000 new jobs, elimination of the provincial debt, a $100 billion Prosperity Fund, and a trillion dollars of economic activity, as the Clark government claims?

Or will it lead us somewhere else?  To a skewed provincial economy with all the negative political and economic features of a petro-state, such as lack of diversification, erosion of manufacturing, extreme boom and bust fluctuations, and so on?

Has the natural gas / LNG sector literally seized control of the province’s economic and political agenda before our eyes?  If so, what are the implications of this reckless coup and what happens to the public interest as a result?

Furthermore, what does it mean for our forests and forest industry which have sustained us for over one hundred years but are in desperate need of rejuvenation and renewal? Or for other key industries such as tourism, technology and agriculture which are put off in the shade?

These are matters which all British Columbians should think about.

LNG - Through a gas darkly Part 2

By Peter Ewart
Wednesday, June 11, 2014 03:45 AM

As discussed in Part 1 of this series, Premier Christy Clark has emphasized that the province is making all of its decisions “through the lens of whether or not it furthers our purpose in creating an LNG industry here in BC,” and that  LNG is the government’s “central preoccupation.”

Part 1 also highlighted how this natural gas / LNG lens was being used to make dramatic changes to post-secondary training and apprenticeship in the province.  But there are other dramatic changes as well.

For example, in March 2014, the BC government pushed through Bill 4, the Parks Amendment Act.  This Act will open the door to the further penetration of BC parks by natural gas and other industrial interests.  As Al Martin of the B.C. Wildlife Federation has commented, “The government has sent a clear signal that it is open to having pipelines cut through our globally renowned protected areas.  The Act will now allow industrial expansion in some of B.C.’s most beloved parks, placing them at risk” (Linnett, Carol. DeSmog Canada, March 25, 2014).  To make things worse, these same private interests will be put in charge of any public consultation about the removal of this land from BC parks.

Then there is the controversy over Bill 24 and the Agricultural Land Reserve in the Interior and North of the province.  Bill 24, which was barrelled through the provincial legislature after raucous debate, will make it easier for farm and ranch land to be removed from the ALR for industrial development.  This development could include “fracking, mining, diversion of water for oil and gas, and other invasive activities” (CommonsBC, June 8, 2014).

Unfortunately, some of these natural gas / LNG related decisions are taking place behind closed doors or unleashed on the public at the last minute.  This is what happened to the Fort Nelson First Nation band in the midst of a conference on LNG on its territory.  Unbeknownst to the band, the provincial government, while its government officials smiled and toured the land, was quietly passing an order-in-council eliminating environmental assessments for sweet gas plants.  Because of swift action by the Band leadership, the government was forced to back down in humiliation.  Nonetheless, the BC government’s obsession with changing everything in the province, by hook or crook, to facilitate the natural gas / LNG industry was revealed for all to see.

It is also revealed in the arbitrary way in which privileges are hand out to the natural gas / LNG sector.  For example, BC Hydro was blocked from burning natural gas at its Burrard Thermal Generating Station under the 2010 Clean Air Act, which resulted in the closure of that back-up facility.  At the same time, an exemption to the Act has been granted to LNG companies allowing them to burn huge amounts of natural gas to power their operations.

The natural gas / LNG bias of the provincial government even seeps into the discussion over the K-12 curriculum.  Many educators feel that environmental education is being sidelined or diminished in the proposed new curriculum for elementary and high school students.  Even words like “habitat, ecosystem, pollution, biodiversity, and sustainability” are being removed (Sierra Club letter, Jan. 15, 2014).  Furthermore, resource materials for teachers on these topics are no longer being generated by the province.  Instead, teachers often have to rely on lesson plans and materials provided or funded by the Canadian Association of Petroleum Producers (CAPP) or the National Energy Board (Penn, Briony. Feb. 2014, Focusonline).

These are just some examples of the pronounced bias the current provincial government has towards the natural gas / LNG industry.  Judging from the recent Premier’s remarks, even more instances will be forthcoming.

Natural gas reserves are part of the resource wealth of the province, and, like any other resource, must be handled prudently and with a long term view in mind.  In that regard, an argument can certainly be made for some LNG development, but in a measured way, given the environmental issues associated with its extraction, as well as the well-known volatility and uncertainty of the industry itself, which could lead to stranded assets (and government having to use public funds to clean up the mess).

But for an entire government to be consumed by and obsessed with a gold rush mentality for one particular industry is dangerous to the economic diversification and well-being of the province.  Even worse is to claim that all government decisions must be made through the lens of that industry.  Where is the sense of balance here?  Why does this volatile industrial sector get such priority, while other tried and true ones are neglected?

Indeed, this mania is one of the features of neo-liberalism.  The corporate and political elites that follow this policy have given up on province or nation building.  Instead, it is all about the fast buck and the quick score.  Neo-liberalism is characterized by virtual coup d’etats, whereby factions of big business literally seize control of government and bend the entire society to their will.  The public interest is trumped by private interest.

The old arrangements have been tossed aside whereby government, before making its decisions, engaged in at least the appearance of public consultation or consensus.   Furthermore, within particular industries and business groupings, government often does not seek even the pretense of consensus anymore, but rather acts on behalf of this faction or that of the biggest, most powerful companies, while other players, especially the smaller ones, are elbowed aside.  

In a globalized world, all kinds of places have natural gas reserves and LNG facilities.  But not many places have the rich diversity of our forests, our rich farm and ranch lands that produce prized crops, our wild salmon and other seafood, our pristine parks and sparkling clean water.  On this basis, a diversity of occupations and industries has developed, some in existence for a hundred years or more.  That is our economic strength.  That is our legacy.  And it has served us well.

Instead of building upon this strength and uniqueness, of renewing and rejuvenating our forests and our traditional, as well as our more recently established industries, we have a Premier who is dazzled, like a moth, by the flare of some natural gas wells to the point that all sense of perspective and balance has been lost.  It is fickleness at its worst.

And it will have consequences for the province.

(Last in a series of two articles).

Peter Ewart is a columnist and writer based in Prince George, British Columbia.  He can be reached at: peter.ewart@shaw.ca