Crashing Asian LNG prices could deliver a body blow to Christy Clark's economic fantasy
Earlier this month, The Carbon Bubble author and former CIBC World Markets chief economist Jeff Rubin dropped by the Georgia Straight building to pour cold water on the province's liquefied-natural-gas dreams.
He explained that B.C.'s hopes took a big hit when China signed two massive deals to obtain Siberian natural gas far below the prevailaing price for LNG.
"It doesn't matter whether it's coming from B.C., Louisiana, or California," Rubin said. "It's 30 to 40 percent below that."
This week, there's even more bad news for the nascent B.C. industry.
It needs prices to average US$12 to US$13 per million British thermal units (delivered) to be viable, according to an Ernst & Young report quoting Deutsche Bank figures.
Reuters has reported that Japanese LNG import costs in May averaged only US$8.84 per million British thermal units. That's the lowest price since September 2009.
Japan imports about a third of the world's LNG, mainly because it shut down dozens of nuclear reactors following a March 2011 earthquake and tsunami.
What's worse is that Reuters has reported that the LNG spot prices in August in Asia fell to US$7.30 last week.
Maybe it's time for the B.C. government to do as Rubin suggests: pay less attention to cranking up the export of carbon-based fuels and get on with the business of building a long-term sustainable agricultural industry.
For more on that, check out the video below.
Jun 29, 2015 at 12:12pm
But LNG companies do not make investment decisions based on today's prices, or next month's. They work with expected prices 10 and 20 and 30 years out. And all those forecasts are for increased demand (and higher prices) over the long run.
Neo Cons Fantasy
Jun 29, 2015 at 12:25pm
The Neo CON servatives both provincial and federal believe in Corporate Welfare.
They actually believe that if you give massive Corporate Welfare in this case LNG Subsidies and sweat heart long term Tax and Royalty subsidies which ensures that BC and its citizens will never benefit from these LNG projects in any meaningful way.
It's great for the Foreign Corporations and Sovereigns (Foreign Government owned Corporations) they get the planets most heavily subsidized industry to make a profit and ship those profits offshore.
All the while destroying our Environment.
Instead those subsidies could go toward Green Energy development like Germany which would grow a prosperous long term Economy in BC and Canada.
While doing good for the Environment, imagine that Profit and Great Environmental stewardship / Leadership.
But the CON servatives know nothing about Leadership they take there marching orders like Communists from Government controlling Big Oil and Financial Corporations.
In Canada we ought to have the same Royalty structure as Norway and have a Trillion Dollar surplus Fund which Politicians can't touch more than 4% of as in Norway.
Instead we give away all our resources and subsidize Big Oil & Gas are we that dumb?
Resulting in massive structural deficits both in Alberta and Canada Federally.
The CONs like illusions, delusions and massive Corporate Welfare.
@ the Donald Your Fired!
Jun 29, 2015 at 12:37pm
The price trend for LNG is DOWNWARD to 2040 Natural Gas is projected at $8.78 Industrial.
LNG projects in Australia & Russia means Global supply is increasing driving down prices!
The LNG projects in BC can not exist without massive Government Subsidies taken from us.
The decision made by Foreign Oil & Gas Corporations to invest in BC is as follows...;
1. based SOLELY on the massive Corporate Welfare, Tax and Royalty holidays for the next 30+ years not on commercial LNG Prices!
2. nothing else!
Instead we ought to look at the Norway model instead of Corporate Welfare.
Jun 29, 2015 at 1:35pm
christy clark = corporate shill
( you figured it out yet )
hammer them in summer legislative session
Jun 29, 2015 at 2:21pm
i want the ndp to force them to have a public inquiry into this health scandal, in which negligent homicide was committed against the PhD student who killed himself.
And NO MORE IGNORANCE ABOUT NATURAL GAS PRICES BEING TOO LOW TO BOTHER DESTROYING THE ENVIRONMENT!! I do NOT want to see more PR stunts by these Liberal losers about how they are doing something for the economy. Rich Coleman is the Minister of Housing -- he needs to work on that file, not on BSing us about gas we can't sell.
J Horgan: If the Liberals have the temerity to show their faces during summertime, you need to hammer them over and over about the public health scandal and how LNG is not worth it.
Media: Hold their feet to the fire!!! The public wants the truth on the environment. Vaughn Palmer: Listen guy, you got us into this mess because you are too spineless to tell the public to not vote in these greedy corporate pigs. Turns out, I still see you with your head in the sand telling us the ombudsman is just fine for a public health scandal. Not sure what to say to you other than "Shame on you!" We are so stupid and we have no media to tell us the truth. If I watch the news from other countries I will see the more truth from people using English as a second language to their mother tongue than what we are witnessing in Canada.
We need to fix the environment -- not more ignorance you fucking losers!
Jun 29, 2015 at 10:54pm
B b b b b b ut there were going to be b b b billions ???????
Jun 30, 2015 at 9:01am
These recent prices are not a surprise to anyone. Even while she was making wild claims about the billions to be made, the Asians were making it very clear that they would only pay prices based on depressed North American gas prices.
Like the 'debt free BC', the projected LNG riches were just fantasies to attract gullible voters.
Jun 30, 2015 at 9:09am
It's OK - Clark still has a couple of years to come up with another idiotic scheme to fool the public into voting Liberal again.
How bad is the screw job?
Jun 30, 2015 at 9:36am
How much of our recent BC Hydro rate increases were the result of the need to pay for the infrastructure required for the LNG industry?
How much are BC taxpayers subsidizing this industry?
Jun 30, 2015 at 11:55am
Everybody who has watched LNG supplies being developed in Russia and Asia has known that their output would be appropriate, if not far exceed, current and future demands for the area the Liberal party has so long touted as a financial boon to this country. Honesty in government seems to be, as always, sadly lacking. In my opinion Canada needs to develop sustainable industries in the technical fields in which we have so much background with the young experts avaialable today.