British Columbia Premier Christy Clark was full of big announcements on the first day of the first international conference solely discussing the liquefied natural gas (LNG) industry that is expected to be an economic boon for the province.
Kicking off the Fuelling the Future: Global Opportunities for LNG in B.C. conference in Vancouver on Monday, Feb. 25, Clark announced that her BC Liberal government would be providing $32 million to a partnership of 15 First Nations known as First Nations Limited Partnership so the group could make a non-equity investment in the Pacific Trails Pipeline (PTP) proposed to transport northeast B.C. shale gas to the coast for liquefaction and export.
"B.C. has a once-in-a-lifetime opportunity by exporting natural gas to Asia and we want to make sure First Nations are part of this industry's future," said Clark, discussing the amended economic partnership agreement with First Nations LP that will bring new revenue to all First Nations communities within the group.
"This announcement creates a valuable model for industry proponents who seek to work in partnership with First Nations while ensuring their communities benefit from the growth of our natural gas sector," she continued.
"By working closely with First Nations and industry, we are creating jobs and economic development for remote communities," added Rich Coleman, minister of energy, mines and natural gas.
"This updated agreement is an example of industry's collaboration with First Nations throughout our province to secure a prosperous future for B.C."
If completed, PTP will transport B.C. natural gas a distance of 463 kilometres from Summit Lake to the Kitimat LNG facility proposed by Apache and Chevron. Building the pipeline is expected to generate hundreds of jobs over a three-year period
Infrastructure was also the focus of the second announcement of the day, an offering of as much as $120 million dollars in royalty credits to industry through the Infrastructure Royalty Credit Program (IRCP) that was created in 2004.
"We have a real opportunity to create significant wealth and jobs for British Columbians through continued support to our natural gas sector," said Clark.
The program encourages industry investment in infrastructure such as the 133 pipelines and 82 new roads built since the initiative began. That amounts to a total investment of over $1.7 billion.
"This program keeps our natural gas sector competitive by encouraging investments in new roads and pipelines, which will help B.C. transition into a global supplier of cleaner energy and a world leader in liquefied natural gas," said Clark.
The ministry of energy, mines and natural gas will accept applications for projects under the IRCP until April 18, and only those offering a significant economic benefit to the province will be approved.
The proponents must fund their projects initially, but each can recover up to 50 per cent of the cost of that initiative through royalty reduction credits after the road or pipeline is generating revenue.
LNG is also at the centre of this latest offering of royalty credits, as the infrastructure resulting from the program will assist the production of natural gas necessary to fuel that emerging industry.
Interestingly, the announcement that $120 million of royalty credits is up for grabs comes after months of talk about low natural gas prices and the associated low natural gas royalty revenues being the cause of B.C.'s approximately $1.5 billion deficit.
"Definitely, we're seeing lower gas prices than normal right now," Mike Bernier, mayor of Dawson Creek, said from the LNG conference.
However, he also noted the amount of investment coming into the province's natural gas industry from outside of B.C.
"We've got hundreds of people in this room from all over the world who are here talking about wanting to come to British Columbia, wanting to have major investments in the billions of dollars here in British Columbia," said Bernier.
"We're starting to see some of that already."
Indeed, those investments can be seen in his own backyard where Canadian natural gas giant Encana has partnered with Mitsubishi Corporation to develop their Cutbank Ridge assets in the Montney shale gas play and Shell Canada is working with Canadian subsidiaries of Mitsubishi, PetroChina Company and Korea Gas Corporation (KOGAS) to move natural gas from their Groundbirch operations to an LNG export facility in Kitimat.
"We've already had quite a few billions of dollars invested in British Columbia. And I think that's just a small piece of what's to come."
Besides, the royalty credits can help solve the Province's economic woes, according to Lori Ackerman, mayor of Fort St. John.
"This royalty credit could mean the difference between drilling activity and no drilling activity with the price of natural gas being so low," said Ackerman.
"Producers using this credit will invest in our region on projects that could keep our local companies and workforce busy," she added.
Bernier also discussed the benefits of royalty credits, as well as the Prosperity Fund recently announced by the Clark government.
The Prosperity Fund will use LNG revenues to eliminate the provincial debt, as well as allow the government to cut personal income taxes and invest in health care, education and infrastructure improvements.
"The safe recovery and export of our abundant supply of natural gas presents an opportunity for prosperity unlike anything we have ever seen before," Clark said during that announcement.
It is thought the fund could top $100 million and erase the provincial $56 billion debt by about 2027.
"The Prosperity Fund, I think, is really important as well," said Bernier. "Because, as the industry continues to grow, we need to recognize that some of that money needs to be reinvested, but we need to also put some aside for future generations to be able to help out in tax reductions.
"It's all great news if we can make it come to fruition."
It isn't simply about royalty credits and tax reductions for Bernier.
"At the LNG conference here, it's great to hear all of the hype, all of the discussion, all the great talk about LNG and the prospects we have for northern British Columbia," he said.
"Some of the talks we have around investments for training. And making sure some of that money goes back into the communities to make sure that we have … people in place so as the industry grows we have B.C. workers doing B.C. jobs."