Oil’s dive set to transform LNG market, The Financial Times, November 14, 2014
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| BC taxpayer |
"The downward spiral in oil prices is poised to shake up liquefied natural gas…
"The 30 per cent plunge in crude since the middle of this year, to below $80 a barrel this week, is likely to have a big effect on LNG… By early next year, crude’s slide should be reflected in LNG prices.
"The prospect of lower gas prices to Asia has ignited debate over the viability of new LNG projects planned in Australia and the US…
"This week Beijing signed its second big agreement of 2014 to purchase gas by pipeline from Russia, in volumes that in time could compete with LNG…"
BC Liberals promised that LNG would be worth billions. That may yet be true except the money will be overseas, in the accounts of foreign energy companies.
http://www.thedailybeast.com/articles/2014/11/12/china-is-financing-putin-s-aggression.html
ReplyDeleteAh, the power of the quick buck, the fast hard sell, and "we can get out of debt real quick with this one."
ReplyDeleteLike lambs to the slaughter, the majority of the public, notably the BC Liberal supporters, (read corporate BC) and the rest of their cronies, were led to believe in the mantra that LNG will save us from our skyrocketing debt.
Not a likely scenario now. As the article correctly points out, the market dictates the conditions and potential of any industry. The BC Liberals, have always been "late to the party" on this one.
The political manipulation of a province can only extend to that province not the global stage, especially when the coersion is based on a misreading of market conditions, and global strategies.
Sadly, the people of this once great province have been played, and in a deception that benefits only the backroom supporters and their industry mentors.
When will the public ever learn....
From a 2014 Petronas press release:
ReplyDelete"The floating LNG facility is expected to change the landscape of the LNG business where the liquefaction, production, storage and offloading processes of LNG - previously only possible at onshore plants – will now be able to be carried out hundreds of kilometres away from land and closer to the offshore gas fields.The facility can also be the solution for early monetisation and more agile LNG production."
From another 2014 Petronas press release:
ReplyDelete"PETRONAS will also continue to work with the Government of Canada and its agencies to advance the regulatory process and clarify the fiscal framework associated with this new industry in the country.
"“Coupled with softening crude prices, there is a need for international energy companies such as PETRONAS to seriously prioritise and reassess our investments. The proposed fiscal package and regulatory pace in Canada threatens the global competitiveness of the PNW LNG project. This is further exacerbated by preliminary project costs, which indicates cost of local contractors to be higher and not benchmarked to global contractor's cost,” he added.
"According to PETRONAS, the additional tax and high cost environment will negatively impact the project's economic viability and competitiveness. In fact, in its last portfolio review exercise, the current project economics appeared marginal. Without material cost reduction efforts cross the project the company will have a tough time reaching a positive FID by mid-December 2014."
In other words, they don't want to pay anything significant for gas, pay Canadian taxes and don't want to use Canadian labour and materials to build facilities.
It would be cheaper for taxpayers of BC to give Christy Clark and Rich Coleman a billion dollars tax free cash to split among their friends, with no further questions asked, as long as they cancel the LNG initiative.
Gas companies in B.C. stopped paying significant sums a few years ago. Now they complain that a little is too much?
DeleteLNG questions not asked?
ReplyDeletehttp://the-mound-of-sound.blogspot.ca/2014/11/dear-tony-you-can-kiss-our.html
BC's gas ministry believes that private companies function best without interference or "red-tape" so the province has rid itself of inspectors and other staff capable of auditing industrial activities. That suits private companies quite nicely. Government is reliant on honest reporting of what companies have done and what they are doing.
ReplyDeleteThe industry does not deserve public trust. Chesapeake Energy, 2nd largest gas producer in the U.S.A., is under investigation by the Justice Department over failure to pay royalties due land owners.
Kind of like those movie companies that take in hundreds of millions of dollars but have the accounting records to prove the flicks haven't made any profits. So the partners who are supposed to share profits pound sand.
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