The global LNG market is growing, particularly in the Asia-Pacific region. British Columbia (B.C.), Canada, has substantial natural gas resources and, therefore, is well suited to serve this market. Conservative estimations suggest that, by 2020, B.C.’s LNG exports to the Asia-Pacific region could represent 42% – 72% of all Asia-Pacific imports.
However, a new study from Fraser Institute entitled ‘LNG Exports from British Columbia: the Cost of Regulatory Delay’ suggests that the province risks losing out on revenue unless its regulatory process for LNG is simplified.
Benjamin Zycher and Kenneth P. Green of Fraser Institute point out that regulatory and other delays are hindering B.C.’s freedom to compete for the Asia-Pacific market. For example, the International Energy Agency (IEA) points out that, as a result of such delays, “no Canadian LNG project will start production” by 2020, regardless of the fact that, in May 2015, 17 international projects were already in the construction phase, and expected to be completed at some point between 2015 and 2019.
Therefore, a conservative estimate of the sales B.C. LNG can realistically expect to make to Asia-Pacific buyers is 11% – 20% by 2020. This means that annual export revenues lost as a result of regulatory delays would equal 2% – 9.5% of B.C.’s GDP in 2014. The cost would, therefore, be significant – approximately CAN$22.5 billion in 2020, to CAN$24.8 billion in 2025. As a result, Zycher and Green argue that regulatory processes need to be streamlined so that B.C. can take greater advantage of its substantial natural gas resources.
Mr. Green said: "The longer Canadian LNG projects take to move forward, the more likely it is that Canadian producers will be displaced by producers in other nations [...] As a result, British Columbians will invariably forgo higher levels of job growth and billions of dollars in tax revenues which could [be used] to pay for things like health care or public education.
"It's certainly the role of the government to impose appropriate environmental, safety, and financial controls to protect community interests but it's in government's best interest to impose these regulations in an expedited manner."
Edited from various sources by David Rowlands
Read the article online at: https://www.lngindustry.com/liquefaction/23092015/regulatory-delays-could-mean-a-high-cost-for-canadian-lng-exporters-1343/