The question of whether we should leave our natural gas in the ground for future generations or dump it on world markets has already been decided.
Dig it up and ship it out says B.C. Premier Christy Clark. Her government has approved numerous liquefied natural gas projects that will send gas to energy-starved Asia.
The sooner the better says Rich Coleman, B.C.’s minister of energy and mines, who warns that we are in a “foot race” with Australia to get into these lucrative markets.
Not so fast, says the Canadian Centre for Policy Alternatives. Don’t forget that by law, B.C. is required to reduce overall carbon emissions by 33 per cent by 2020. While the burning of natural gas is relatively clean, the drilling, compression, and shipping of it is not. If just three of the proposed LNG projects go ahead, B.C.’s emissions will go up by nine per cent.
Ben Parfait of the CCPA laments: “As disquieting as it is to see our government apparently abandoning B.C.’s climate change, equally alarming is that their boosterish stance on LNG exports also ignores some troubling economic realities.”
One of those economic realities is that Australia has already left the starting line in our so-called foot race. As latecomers, the only effect our arrival will have will be to drive down the price of LNG.
Then there is the problem of fracking. This cheap B.C. gas comes from hydraulic fracturing, which has problems, including: the water used to extract the gas becomes toxic and unusable for generations; poor construction of wellheads can contaminate surrounding ground water; and much more land has to be dug up compared to conventional gas wells.
Before this foolish venture proceeds, our carbon tax should be doubled to match Australia’s, says Matt Horne in The Tyee. Money from that tax could go toward the development of alternative energy sources but it would also increase the price of our gas on international markets. Would B.C. companies still be as eager to dig up our gas if the market price is higher due to taxes?
And if your head is still not swimming with visions of climate change, fracking and carbon taxes, consider the complications of accounting, says Connor Curson.
Failure of realistic accounting has left B.C. blissfully ignorant, says Curson in The Vancouver Sun. Traditional accounting practices have arranged an impression of fiscal surplus.
It’s wishful thinking to include revenues from non-renewable resources. When non-renewable fossil fuels are gone, government programs have to be drastically cut.
A better idea would be to put aside revenues from non-renewable resources into a special fund for future investment in human and physical capital such as education, health, infrastructure.
Don’t look to Alberta. While it does have a Heritage Fund, less that 10 per cent of Alberta’s resource revenue went into it. Better to look at Norway, which is only slightly bigger than B.C. and has a fund worth $575 billion from which it withdraws a modest four per cent a year.
Rather than dumping our natural gas on world markets, wait for the inevitable rise in price that always follows the scarcity of a non-renewable resource. Rather than generating an artificial surplus, squirrel it away in a rainy-day fund.