Rich Coleman pushes for B.C.'s 'win-win' $36 billion LNG project

B.C. politicians are back in Victoria this week for a rare summer sitting of the legislature to debate a memorandum of understanding that the government has signed with Pacific NorthWest LNG.

The proposal calls for a natural gas liquefaction and export facility on Lelu Island near Prince Rupert which would receive natural gas via pipeline from B.C.'s Peace Region for shipment to Asian markets.

• Political lines drawn on 'historic' LNG bill
• LNG protected from tax hikes for 25 years in deal with B.C. government
• B.C. government plans rare summer legislature session for LNG deal

Rich Coleman, B.C's minister of natural gas development spoke with the Early Edition's Rick Cluff ahead of the rare summer legislative session to discuss the project.

Under the proposed deal with Pacific NorthWest LNG, the province is promising not to raise royalty rates for LNG operations, not to add carbon taxes that specifically target the industry, not to reduce natural gas tax credits and not to make changes to rules on greenhouse gas emissions.

All of those have been locked in for about 25 years. Why limit British Columbia's flexibility in being able to govern the LNG industry?

If you're asking someone to make what is the largest single capital investment perhaps in the entire history of Canada and you're not going to give them any certainty of what their investment would look like if they're going to spend $36 billion… you're not going to attract that investment.

We negotiated a projected development agreement with this company, and we have negotiations on project development agreements going on nine other projects as well.

The critics of this deal say the Premier's desperation to get this industry off the ground has led to a deal that significantly favours the company. Would you ever offer a forestry company, or a mining company, or a tech company 25 years of unchanging tax rates and environmental regulations?

I think it is appropriate because there's 13,000 people in the Northeast part of the province who work in the oil and gas industry.

Right now, because of the price of natural gas in North America, they're seeing a slow down and their jobs are being cut back.

Without us moving gas, which we can't sell to anybody else but Asia, there's two things that will happen.

One, the stability of the jobs for the people who work in the oil and gas industry will be put at risk.

Secondly, the gas, which is going to come out of the ground, will go to a plant that will be liquefied and they'll pay an additional tax on that gas.

So it's a win-win for British Columbia because we have 150 years of gas in the ground and this one project will bring us the same amount of revenue to the province as the forest industry does.

This project is expected to create 4,500 jobs at peak construction. According to the company's website, only about 700 of those would be long-term. Would that mean your government would have to land dozens of deals this size to live up to Premier Clark's promise of 100-thousand jobs?

The fact of the matter is, the plant itself is 4,500 jobs under construction. At the same time, you're building a pipeline that's probably another 2,000 to 3,000 jobs. 

Each one of those jobs has a spin-off impact on the community, if there's a stable industry in a town that brings along with it additional contractors and opportunities such as hotels and restaurants and the rest of it.

70 per cent of the emissions won't be covered and the company will be compensated if BC's environmental regulations change over the next 25 years.  How does your government consider this a green project?

The emissions and things that are covered in the oil and gas industry are already covered by the carbon tax and other standards.

This is about the plants themselves. We've set a standard of emissions on LNG plants that are the cleanest in the world — lower than any operating plant anywhere on the planet.

Premier Christy Clark now says she will revisit the Water Sustainability Act, to see whether the province should charge companies more for access to BC water. Given the amount of water used for fracking, how would higher water charges affect B.C.'s competitiveness for those LNG companies?

It wouldn't affect it dramatically because a lot of the water that's being used is deep-earth saline water, which isn't fresh, drinkable water. The reality is if there's an additional charge on water

What we do have understand is if we're going to talk about charging for water, what is actually used in the northeast part of the province during fracking is probably only maybe one or two days of the use of water in the Metro Vancouver region by people in their homes.

This interview was condensed and edited. To hear more, click the audio labelled: Rich Coleman promises jobs, prosperity with B.C. shift to LNG.