October 22, 2020 Read More →

IEEFA: British Columbia’s LNG strategy ‘doubling down on a bad hand’

The Energy Mix:

The Conference Board of Canada stands accused of “doubling down on a bad hand” after the Cleveland-based Institute for Energy Economics and Financial Analysis (IEEFA) reviewed its latest assessment of British Columbia’s prospects for a successful liquefied natural gas (LNG) boom.

A Conference Board report issued in late July “claims an expansion of the British Columbian LNG industry could add almost 100,000 jobs annually and more than $158 billion in revenue for provincial and federal governments,” IEEFA writes in a release.

But “the most important fact is that the fundamentals of British Columbia’s LNG export cost structure are not competitive enough to keep private capital interested,” said Melissa Brown, IEEFA’s director of Asian energy finance studies. “Although many pundits cite political and regulatory issues, Canadian LNG’s biggest problem is profitability.”

She added that the Conference Board’s “exaggerated demand assumptions and disregard for China’s manifest price sensitivity are the fatal misunderstandings of its argument.” That means the Ottawa-based think tank is ultimately calling on provincial and governments to buy in to “sustained subsidies that may only yield stranded assets, depleted finances, and delayed retraining obligations.” 

[Staff Report]

More: IEEFA Foresees ‘Stranded Assets, Depleted Finance’ in British Columbia’s LNG Strategy

Posted in: IEEFA In the News

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