Tuesday, July 28, 2015

Huge cost, high risk, low government revenue, few permanent jobs, better choices

LNG and Employment in BC, Marc Lee, Canadian Centre for Policy Alternatives, Juy 28, 2015:
This brief examines the BC government’s claim that 100,000 jobs will be created from liquefied natural gas (LNG) projects in this province. We find that this claim is not credible and that potential employment impacts have been grossly overstated.

In fact, based on data provided by the companies that propose to engage in the production and transport of LNG, BC’s LNG sector could be expected to support only 2,000 to 3,000 construction jobs per plant over three years and 200 to 300 permanent workers once operational. Real-world experience in Australia supports these numbers.
  • LNG job claims were inflated to 100,000 through a series of exaggerations and the misuse of input-output modelling techniques.
  • the growing use of “fly-in, fly-out” (FIFO) workers is an emerging issue for large resource projects, including LNG development. Using FIFO workers greatly reduces local economic benefits in the areas where development takes place.
  • To get to the “100,000 jobs” number used in the 2013 pre-election throne speech, in the weeks beforehand the BC government commissioned a consultancy, Grant Thornton (GT), to develop employment estimates. Included in the resulting Employment Impact Review was GT’s disclaimer that its analysis was based on information provided by the province.
  • if LNG merely leads workers to shift from an already existing job to an LNG job, this benefit is limited to the difference in income received by the worker. If LNG leads workers to move from another jurisdiction to BC, this could be shown to have positive economic impact for BC; however, doing so ignores the offsetting negative impact on the other jurisdiction.
  • The most suspect numbers in the GT report are in the indirect category, which comprises the majority of claimed new jobs...
  • The rise of temporary migrant workers from other countries has also been widely noted. Numerous cases show that BC is already bringing in temporary foreign workers for projects in the north, including the upgrading of Rio Tinto Alcan’s aluminum smelter in Kitimat, BC Hydro’s Northwest Transmission Line and northern coal mines.
  • Australia’s experience with a mature and expanding LNG industry is worth considering for lessons. Its LNG plants are located in relatively remote locations, similar to what is being proposed for BC. Construction is primarily done by migrant workers
  • In Western Australia, 87 per cent of the construction workforce and 60 per cent of the operational workforce in the broader mining sector (including gas) are FIFO workers
  • Recent data from Asian LNG markets shows that market prices have dropped substantially. Landed prices of LNG were $7.85 per unit in Japan and Korea and $7.45 in China as of February 2015.29 Thus, at current prices the export of BC LNG is not a profitable venture
Reducing BC’s carbon emissions to something close to zero within a few decades will require a lot of work to be done, including transportation, building retrofits and clean energy. If BC embraces that possibility, and plans appropriately, a full employment strategy around climate action would represent a pathway towards harmonizing environmental and economic policies — one that would create far more jobs than LNG.


Here's one of the better choices; one that is put at risk by Woodfibre LNG. It seems Sea-To-Sky Gondola offers about the same number of permanent jobs as the proposed LNG facility.

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  1. What would you expect from this government and their foreign handlers.

    The BC Liberal government A.K.A. "Gangsters R Us", have sold out the BC taxpayer completely, for just a few baubles, with no care for the future.

    The deluded followers of this evil and malignant group still sing hosannas about "free enterprise" and the global economy, but they are blinded by political dogma to the point of being willfully blind to the reality, just like those in Germany during the war, who remained willfully blind to the mas extermination of the Jews. History repeats itself, just on a smaller scale.

    Until we get political heroes who are willing to fight for the province, and not indulge special interest groups, I do not see any end to the a determined and willful raping of the province.

    1. Very true. Perhaps the term "free enterprise economy" should be renamed "the globally manipulated economy", since trade deals and various forms of international trade agreements have all but eliminated, the individual countries ability to challenge or seek restitution, for inconsistencies or down right manipulation or wrongs, under those agreements.
      The only ones that win are the lawyers.
      We are dealing with organized malfeasance, in this province, part of a "dogma", that has betrayed our values and is "wrecking" our futures. The "rape" of the resources of this province, is truly a crime.

  2. Couldn't find Mark Lee's links, so here they are, Employment and Potential Revenue. The first is a Sure thing, and the second???? has 'potential' to the BC Liberals that means Jobs, Jobs, Jobs

    Employment impact review / Ministry of Energy, Mines and Natural Gas ; Grant Thornton.

    Potential LNG revenue to the BC government / Ministry of Energy, Mines and Natural Gas ; Grant Thornton

  3. I listened to Rich Coleman spouting off on ‘NW today (with nary a challenge from host Simi Sara) and he presented the government’s explanation for the 100,000 jobs. I’m surprised every government in the world isn’t immediately hiring him to implement his formula. It goes something like this: 3,000 permanent jobs = 97,000 spin-off jobs.

    He claimed he had some folks into his office the other day looking to expand their workforce by 200 to 300 workers just to build a camp for the construction workers near where the Petronas LNG plant would be built. He said they would be cooking 45,000 meals per day out of that camp. Petronas said in their environmental assessment review application there would be 3500 workers at peak building the plant. So according to Coleman those workers will eat over 12 meals each per day, and the workforce to build their temporary lodgings will approach 10% of the workforce required to build the whole $11 billion LNG plant. And this is the guy that negotiated a 25-year deal for our resources with one of the largest consortiums in the world?

    Incidentally, I note that Mike de Jong was summoned to Malaysia this week. News reports suggested it was to discuss next steps in the LNG deal, and some assume they want to squeeze some more blood out of our stones. I suspect they really wanted him to give them some tips on how to stay afloat politically during a scandal. They know that as Attorney General he brought us the Basi/Virk payoff and that as Minister of Health he presided over the health ministry firings, yet he’s now amazingly trusted with the controls of the Finance Ministry doling out our goodies to Malaysia. They know where his real expertise lies.

    1. You're always right.... and what a great comment. It's worth repeating & I will.

      Guy in Victoria

    2. Petronas knows that to get all the goo they've been promised in BC, a perfidious charade must be maintained---are the BC Liberals up to it? This is an international deal, and the BC Liberals aren't, thank goodness, a national government. Nevertheless, the poison has been tested, and it's good (for the perps, bad for BC); but Petronas must be wondering what happens if the BC government itself becomes swamped in scandal; will dirty Malaysian money find a safe haven in the melee? Or will the government simply tear up the contract with "tough-titty" flourish? "Come pick up your shit or it'll be auctioned to the Alaskan bidder!"

      The foreigners daren't protest too much, else get clapped in irons and extradited to the genteel affections of their own penal system. What honour can be expected of thieves?

  4. Transalta in the news:


    Transalta - owned IPP in BC:


  5. Funny how major LNG exporter Australia appears to be plunging deep into debt:


    1. Hugh, if you're looking at Australian websites, you might have seen this recent headline:

      "Queensland government slashes LNG royalties revenue forecasts."

      Turns out that current years revenues will be less than 23% of the amount forecast.

      No trillion dollar wealth fund there either, I guess.

  6. I Listened to Mr. Coleman on CBC this morning and when questioned about the thousands of jobs expected when the last election was run on these promises , I burst out laughing when he said something about Timmies opening up along the road that could be counted as spin off jobs for locals, Norm how do we stop this charade ? where are the trillions of dollars? if that is the pot at the end of the rainbow a job at Timmies somewhere up north?

    1. If social welfare rates frozen more than eight years were raised, every dollar would immediately begin circulating in local communities. Spin-off jobs jobs would result because none of the money would pay for expensive German cars or holiday cruises.

      Coleman justifies billions in subsidies to foreign socialist gas companies on the basis of spin-off jobs so we are left to wonder what hidden secrets motivate him.

    2. "...foreign socialist gas companies ..."

      Strange, the liberals aren't as afraid of the socialists as they claim we should be come election time.

  7. The picture of Clark & deJong on your headline at the top really paints a thousand words. I simply have nothing to add more than what it says. Perfect choice of image Norm.

  8. "To get to the “100,000 jobs” number used in the 2013 pre-election throne speech, in the weeks beforehand the BC government commissioned a consultancy, Grant Thornton (GT), to develop employment estimates. Included in the resulting Employment Impact Review was GT’s disclaimer that its analysis was based on information provided by the province."

    Is the disclaimer Grant Thorton's normal practice?

    "if LNG merely leads workers to shift from an already existing job to an LNG job, this benefit is limited to the difference in income received by the worker. If LNG leads workers to move from another jurisdiction to BC, this could be shown to have positive economic impact for BC; however, doing so ignores the offsetting negative impact on the other jurisdiction."

    Note: BCAS has been bleeding paramedics to other jurisdictions for financial reasons and to escape the work culture. This is one of the reasons BCAS has faced challenges providing coverage for smaller communities. The on-call pay of 2 bucks and change is not going to motivate part-timers to stay.

  9. What do you hear about the big LNG plant being built in Alaska? They are already working on it, so they are lightyears ahead of BC and it is HUGE. If there is a world market, these people will get it, not BC. We will just give our resources away to Malaysia to keep that country happy. We get nada. I think we have to consider Alaska because of its proximity to BC and the fact that they are so far ahead of us. The media doesn't seem to have noticed.

  10. Oh, for heaven's sake, stop making sense! (actually, carry on, but having just finished your latest, Grant's over at Straight Goods, and Mound's daily dose, I look at the resulting stirrings of the Liberal conscience (!) and just shake my head.) Great stuff, as usual.

  11. You've really got to give them credit though. Wasn't it Barnum that said 'You can fool some of the people some of the time....', or was it 'There's a sucker born every day'.? Imagine, a person with no formal training being able to hoodwink a whole population. For three years! British Columbians, you should be ashamed of yourselves, not only for facilitating this...sham, but for perpetuating it! Can you even imagine the outright laughter when the rest of the world hears how you've been taken in. And if you bought it all over again two years later! Tsk, tsk.

    Good grief! Can you imagine what would happen is she has a diploma in Human Manipulation?

  12. "Top Drawer" content again Norm. Yes, that picture above speaks volumes!
    Imagine, a Minister of the Crown in a Canadian Province, being "summoned" to the presence of a "socialist" government, with a "dubious past" and currently under suspicion, of graft and corruption in a "state run" investment bank. Hmmm, 4 or 5 ministers sacked and the Attorney General of the country removed, anyone who questioned the leader of that country. Just the sort of people, that most of us here in B.C., would have a problem doing business with.
    But with the B.C. Liberal business acumen, "not so much". Not a problem.
    Both this post and your last post on the revenue information on the Logging returns for the past number of years, is to say the least, damning, insofar as the BC Liberals fiscal management of the provinces resources.
    To state it bluntly, this type of fiscal management is "extremely suspicious".
    The potential for ''fraudulent transfer pricing" of resource exports, would seem to be a question that the CRA and perhaps other foreign investigative bodies, might well have an interest in.
    Its pretty much obvious at this point, that we are dealing with and organized political group, whose "intent", in obtaining the best value for dollar, and the best possible return on provincial resources, is simply not in their play book.
    The "real intent or truth", would require an "open book accounting" of all transactions, negotiations, communications, and most likely
    a judicial enquiry.
    Breach of Trust, Fiduciary responsibility or duty, of a serving Minister of the Crown, malfeasance, organized crime, involvement with a foreign government with a dubious past, and ongoing corruption and political scandal, are all terms that would bring focus and potential for consequence for the hearings.
    This is a "new" benchmark for the B.C. Liberals. A third world corrupt regime, with no accountability for the leadership in that country, and these people want to give away a "declining resource" at fire sale prices?

    What is wrong with these people? Or rather, what are "they", getting for this "betrayal" of the people of B.C., and their resources?

  13. Petronas is a state-owned oil and gas company, owned by the govt of Malaysia.
    Malaysia is a member of the Trans-pacific Partnership, as is Canada.
    The TPP has ISDS, where an investor (such as Petronas) can sue a country (such as Canada) over laws they don't like, made by any level of government.


    The TPP is not signed yet. But it would mean BC would have to be careful about passing laws or policies affecting Petronas. Or Petronas will sue us under ISDS in the TPP. Just like Eli Lilly is suing Canada for $500 million under ISDS in NAFTA:




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