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Christy Clark projects $100 billion LNG windfall for B.C. in throne speech

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VICTORIA – Premier Christy Clark on Tuesday staked her political future on her approach to liquefied natural gas, promising her government’s strategy could transform the province’s massive resource stores into a more-than-$100-billion fund, enough to erase the province’s debt by the end of the 2020s.

“This will be a transformational change for our province and we cannot afford to be short-sighted,” said Clark’s throne speech, read Tuesday by Lieutenant-Governor Judith Guichon.

With just 13 weeks to go before a provincial election, Clark said a liquefied natural gas industry would be running full steam in the province by about 2020, and could mean between $4.3 billion and $8.7 billion in extra government revenues each year.

Following in the footsteps of resource-rich jurisdictions like Alberta and Norway, Clark promised the bulk of those revenues would go toward a new B.C. Prosperity Fund, to be used for long-term priorities such as tax reduction or debt repayment.

“We have to decide if we can forever ensure that the proceeds from natural gas, which is a product that belongs to the people of the province, are spent well and wisely,” she said.

“I do think it’s important that government, when we build the Prosperity Fund, put some real clear markers around it so we know that no future government can be profligate and just decide to increase government spending at a fantastical rate,” she added.

Projections for the fund rely on the introduction of a new LNG tax to be applied in addition to existing royalties. With all these measures in place, the government is projecting the fund will collect a minimum of $100 billion over 30 years.

Government officials added that if Asian natural gas prices remain high, and if the fund is dedicated solely to debt relief, the fund could completely erase B.C.’s $56 billion debt by about 2028.

But Tuesday’s speech made clear that other choices are on the table as well.

“Whether it is eliminating the provincial sales tax, or making long-term investments in areas like education or vital infrastructure that strengthen communities — these are the kinds of opportunities the B.C. Prosperity Fund can provide,” said the speech.

Clark’s plan hinges on the development of five proposed liquefied natural gas plants — three large-scale plants and two mid-sized ones.

The government says it hopes one of the smaller plants can be operational by 2016, meaning it could be three or four years before the fund is even started.

The government committed in its BC Jobs plan to having three of the proposed plants running by 2020.

As for the other proposed facilities, none of the would-be builders of any of the expected major plants has announced construction or inked final contracts to sell their product.

Also still to be concluded are negotiations with producers on how to provide enormous quantities of power to the LNG plants. Government disclosed Tuesday that BC Hydro will release a plan outlining “LNG electricity requirements” in August, three months after the election.

Critics, including New Democratic Party leader Adrian Dix, were skeptical about Tuesday’s announced plan to bank more than $100 billion on an industry that has yet to begin exporting its product from B.C.

Dix pointed out the government was forced to announced last September that plummeting North American natural gas prices had blown a three-year, $1.1-billion hole into projected provincial revenues, showing just how volatile things can be.

“Let’s talk about real revenue projections, like the ones they made in the last budget,” said Dix.

“They were dramatically wrong over six months in terms of natural gas revenues,” he added, saying Tuesday’s speech is further evidence of a government that has reached the end of its mandate.

“Of course natural gas will play a role in the future economic success of British Columbia but, unlike the government, I believe forestry will play an important role, I believe film and television will play an important role, I think high-tech will play an important role,” he said, saying the speech did nothing to address obvious challenges in those areas.

“What this shows is we have a government that after 11 long years in office has very little more to say to British Columbians.”

Geoff Morrison, a spokesman for the Canadian Association of Petroleum Producers, said one of his concerns was about how the government appears to be making its assumptions, including the projection of a possible new tax on LNG.

“I think it will cause industry to reflect on their business assumptions. I don’t think it will send anyone running for the hills but they are going to take a long look at this and decide what it might mean to them in the future and likely have a discussion with the government about that,” Morrison said of Clark’s plan.

He said the LNG industry is competitive, capital is fluid and despite price differences of $3.50 a unit in North America and $15 a unit in Asia, the margins, once all the costs of development are considered, are quickly whittled down to just a few dollars per unit.

“It’s a much tighter proposal that people imagine.”

Energy Minister Rich Coleman brushed aside the criticisms Tuesday, saying things are moving fast, with several serious players showing interest in B.C.

“I think people need to know there has actually been a vision here to do something in British Columbia. We have this orphaned resource sitting in northeastern British Columbia — trillions and trillions of cubic feet of natural gas, so much so we can supply North America over the next 150 years — and we have a market in Asia,” he said

“By 2020, I think you’ll see that we are very much matured into the marketplace.”

Tuesday’s throne speech also promised to move toward the creation of a school of traditional Chinese medicine at a British Columbian post-secondary institution, though it did not go into specifics.

The speech also promised coming announcements on improved access and affordability of child care, improved access to early childhood services and measures to help families of young children save for post-secondary education.

The speech also said the government will introduce legislation in the days to come to make good on its promise of establishing a seniors’ advocate in B.C.

Read more: http://www.vancouversun.com/news/Christy+Clark+projects+billion+windfall+throne+speech/7953712/story.html#ixzz2KkV4nBE6

What the frack?

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I'm not getting into the pipeline thing. Even aside from all that: Christy Clark is an awful, AWFUL premier.

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100 billion or 1 trillion... whoever is in power will just find ways to spend more than the provincial revenue.

Unions, civil servants and bureaucrats will just be demanding their "fair share" of the windfall and many businesses will be demanded more kickbacks from the government. Meanwhile, Joe and Jane Six-Pack will be forced to pay more taxes.

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I'm not getting into the pipeline thing. Even aside from all that: Christy Clark is an awful, AWFUL premier.

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My problem with the pipeline is we will be making only a fraction of the revenue generated from the pipeline when our land is the most crucial part generating that income. Give us a 50/50 piece of the pie and then I'll re-consider.

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I'm not getting into the pipeline thing. Even aside from all that: Christy Clark is an awful, AWFUL premier.

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I hatttteee our options, god damn politics.

As you grow up; vote they say, make your opinion heard they say. It doesn't matter when your selected representatives are all terrible and brutally un-politically correct.

Do we want a former radio broadcaster with little to no education in politics, law, science, etc. being used as a puppet, or a former fraudulent government official who admitted to forging documents?

Just brutal.. I'm not one to usually complain, we have a very high standard of living in this province that most people take for granted, but I think people even being considered to be elected into a prestigious position like the Premier of BC should be respected by the general public to some extent. And I realize the slander ads put on by government opposition are trying to make me think this way, but its really the truth with these 2 individuals who represent the only 2 major political parties here.

../endrant

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I hatttteee our options, god damn politics.

As you grow up; vote they say, make your opinion heard they say. It doesn't matter when your selected representatives are all terrible and brutally un-politically correct.

Do we want a former radio broadcaster with little to no education in politics, law, science, etc. being used as a puppet, or a former fraudulent government official who admitted to forging documents?

Just brutal.. I'm not one to usually complain, we have a very high standard of living in this province that most people take for granted, but I think people even being considered to be elected into a prestigious position like the Premier of BC should be respected by the general public to some extent. And I realize the slander ads put on by government opposition are trying to make me think this way, but its really the truth with these 2 individuals who represent the only 2 major political parties here.

../endrant

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If we returned to a public banking system, debt would hardly be a problem even with current revenue.

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“Whether it is eliminating the provincial sales tax, or making long-term investments in areas like education or vital infrastructure that strengthen communities — these are the kinds of opportunities the B.C. Prosperity Fund can provide,” said the speech.
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Is anyone buying the government progections. This coming from a government that promised the deficit would be less than $500 million during the last election. They were WAY OFF, and ta da..... HST.

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Christy is awful, and Dix is just as bad or worse... and I heavily dislike the conservatives just because Harper is doing a good job of raping Canada for money...

When they say pick the lesser evil, did they understand that there really isn't one in Canadian politics?

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"Prosperity fund"? Has a "nice" ring to it, eh? Kind of like "Victory Gin".

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Tuesday’s throne speech also promised to move toward the creation of a school of traditional Chinese medicine at a British Columbian post-secondary institution, though it did not go into specifics.

WTF?

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My problem with the pipeline is we will be making only a fraction of the revenue generated from the pipeline when our land is the most crucial part generating that income. Give us a 50/50 piece of the pie and then I'll re-consider.

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