Shell, partners approve huge $31 billion LNG Canada project. How long till Canadian Federal government Environmentalates it into the ground?

[Tom Kirkman + 8,860]

Significant.

Grab some popcorn, get comfy, and wait to see how the Canadian government will eventually, somehow, screw up this massive LNG project.

The Canadian "KEEP OIL & GAS IN THE GROUND ZOMG ELEVENTY" lynch mob will react somehow, soon.  And press the federal government to stall, delay, regulate, environmentalate and impede this project for years.

[ "Environmentalate" is a Canadian word meaning "kill it with excessive and unnecessary environmental regulations and litigation" ]

Just wait for it.

I'll be very happy to be proved wrong.

Shell, partners approve huge $31 billion LNG Canada project

Royal Dutch Shell Plc and its four partners have agreed to invest in a multibillion-dollar liquefied natural gas project in Kitimat, B.C. — the largest new one of its kind in years that would carve out the fastest route to Asia for North American gas.

LNG Canada — comprised of Shell, Malaysia’s Petroliam Nasional Bhd, Mitsubishi Corp., PetroChina Co. and Korea Gas Corp. — is set to announce a final investment decision on the $40 billion project as early as Monday, said people with direct knowledge of the plans, who asked not to be identified because the matter isn’t public. The exact timing still hasn’t been decided.

PetroChina and Korea Gas announced approvals of their share of the investment on Friday. The others partners declined to comment.

[Tom Kirkman + 8,860]

I'm shocked.     Shocked I tell you.

Huge LNG plant in Kitimat, B.C., gets the green light, reports say

But the project is politically sensitive. LNG facilities could dramatically increase greenhouse has emissions and further imperil B.C.’s pollution-reduction targets, which Green Leader Andrew Weaver has warned would cause him to end his support for the minority NDP government and potentially force an election.

Shell’s $40B LNG Canada project to be announced as early as Monday: report

But Tom Green with the David Suzuki Foundation warned that weak regulations in B.C. around methane leakage in LNG extraction would mean the province would miss its target to reduce emissions of that gas by 45 per cent by 2025, helping accelerate climate change.

“Really we should be transitioning to a low carbon economy, to less greenhouse gas pollution, so our focus should be on building out renewables, and this is doubling down on yesterday’s economy,” he said.

 

[Marina Schwarz + 1,576]

'My town has just been saved': Northeastern B.C. celebrates LNG investment decision

And political parties are already fighting over who gets the medal for making LNG Canada happen. It's a sitcom.

@Tom Kirkman, did you really say "emissions"? Wow, that cannot be. 

[Tom Kirkman + 8,860]

8 minutes ago, Marina Schwarz said:

'My town has just been saved': Northeastern B.C. celebrates LNG investment decision

And political parties are already fighting over who gets the medal for making LNG Canada happen. It's a sitcom.

@Tom Kirkman, did you really say "emissions"? Wow, that cannot be. 

Yes, it is quite an amusing sitcom.

Amazingly, the Canadian federal government seems to be looking forward to green lighting this LNG project, after successfully strangling via government mandated environmental red tape all the previous LNG proposed projects.

Now that local Canadians are loudly celebrating an expected uptick in jobs and work for supporting industries, the politicians have flipped and are trying to claim credit.  

Even the Greens have seen the celebratory response from Canadian workers and have wisely decided not to fight this LNG project.

Seems that happily, (so far anyway) I have been proved wrong about my prediction that the Canadian federal government would screw this up somehow.

@Marina Schwarz the "emissions" excuse seems to have been swept under the political carpet due to celebrations about potential jobs.

[Tom Kirkman + 8,860]

Amazing.  After all of the earlier Canadian government environmental red tape strangulation for previous LNG project proposals, it has now done 180 degree turnabout...

LNG Canada lauded as environmental saviour

B.C. Premier John Horgan and Prime Minister Justin Trudeau have joined global energy players in describing Canada’s first liquefied natural gas development as a path to low-carbon energy.

The $40 billion LNG Canada project, announced in Vancouver by a global consortium led by Shell, is the way to “save Mother Earth,” said Kitimat Mayor Philip Germuth. 

... “There will come a day when traditional energy sources will give way to new energy sources, just as coal gives way to LNG,” Trudeau said.

[Tom Kirkman + 8,860]

1 hour ago, Tom Kirkman said:

Even the Greens have seen the celebratory response from Canadian workers and have wisely decided not to fight this LNG project.

Whoops, I spoke too soon.

B.C. Greens will vote against LNG Canada going ahead

[Jan van Eck + 7,558]

You folks are all counting the proverbial chickens before the roosting.  Let's remember an unpleasant fact: this is not going to be built overnight.  Let's remember another unpleasant fact:  as the terminal is in the North Pacific Ocean, none of this gas is going to make it to the high-priced European markets.  It is headed for Asia, and nobody knows what the competition picture will look like by the time the players get all done blowing forty billion dollars.  How many years?

I remind readers of yet another (this is now the third) unpleasant fact:  where you have various tiers of suppliers able to operate at various price points, and consumption levels below the amount of gas being offered, then the highest-cost gas is the gas that is going to get shut in.  Now, ask yourself:  compared to gas from say Qatar, which nicely flows out of the ground and no ice storms to disrupt anything, and no frozen-up harbors  (incidentally, is Kitimat totally ice-free?), is this Western Canada gas from inside the Rocky Mountains going to be inherently cheaper to sell?   

And here's your next question, one that should give anyone pause:  given the vast amounts of gas up there is Siberia, and the stated intentions of Putin to build a monster pipeline into Northern China, and probably into both North and South Korea, are the Russians going to be the lowest-cost and dominant supplier into the North Asia market?  

I would have been a lot happier if that BC gas were going to be piped down the valley floor into Calgary, then by pipeline to Quebec, then liquefied into LNG on the St. Lawrence River somewhere, and then access is there to the European and East-coast US markets, which are under-supplied, higher-priced, and exploitable markets. Interesting that the Canadians are not thinking along those lines.  Especially since a nat-gas pipe can be built on saddles above the ground, it is not as if the stuff is going to freeze in the Winter.  Make it a combined gas and rail corridor, with a gravel road in there for access, and you have the makings of a cheap new set of trunk lines, plus with rail you can bring in the pipe for peanuts compared to trying to truck it in.  Interesting that the Canadians are so obsessed with selling into Asia that they forget their traditional, and friendly and receptive, markets. 

[Marina Schwarz + 1,576]

I'm just making fun of the hypocrites and will continue to do so every chance I get. But from what you say, @Jan van Eck it seems that this FID might have been, not to put too fine a point on it, a tiny little bit unwise?

[Jan van Eck + 7,558]

3 hours ago, Marina Schwarz said:

this FID .......

Sorry, do not recognize this.  What are initials?

[Marina Schwarz + 1,576]

Oh, that's final investment decision.

[Jan van Eck + 7,558]

3 hours ago, Marina Schwarz said:

I'm just making fun of the hypocrites and will continue to do so every chance I get. But from what you say, @Jan van Eck it seems that this FID might have been, not to put too fine a point on it, a tiny little bit unwise?

Not necessarily.  Remember that lots of these capital projects are driven by tax considerations.  Just speculating, the driver might have been an "investment tax credit," where in effect some governmental taxing body is handing the developers a fat ITC check for say 30% of the capital costs.  You get that with both industrial wind and commercial solar panel installations in the USA.  Governments thus distort both markets and fuel-supply sources by making a determination to do a tax subsidy.

For example, just to show an extreme, suppose that the US government got it into its head that industrial, gigantic windmills would be built by the thousands across the US central plains and the Eastern Slope of the Rocky Mountains.  In order to encourage that, the US Government offers developers a 100% tax credit. And they offer to buy all power produced, which they can do by ordering fossil plants to shut down during high wind production, at say $0.25/Kwhr.  Now, what would be the result?  You bet:  those machines would go up so fast it would make your head spin.  Does it make any economic sense without the subsidies? Probably not.  

So subsidies and tax credits can move markets.  It will drive investment decisions.  Whether or not the decision was realistic, given other factors, absent that government subsidy is yet another thing.  I don't know the details of this project but would be surprised if government subsidies and tax credits are not a big part of the picture. Canada wants to sell that gas, and various levels of government pick up a so-called "extraction tax,"  basically a royalty, on stuff taken out of the ground, and I have to assume that there will be an extraction tax on the gas also, so there is that motivation.  The various governments can thus afford to walk away from income taxes if they are going to pick up a future extraction tax or royalty stream.   Nothing like a new tax stream to warm the hearts of bureaucrats. 🤩🤩

Edited October 3, 2018 by Jan van Eck

[Dan Warnick + 6,100]

5 hours ago, Jan van Eck said:

Interesting that the Canadians are so obsessed with selling into Asia that they forget their traditional, and friendly and receptive, markets. 

After the Hong Kong exodus into BC some 15-20 years ago, there are few 2nd Nations Canadians left there.  Maybe that explains it.  Hah!

[Outlaw Jackie + 78]

Lots of good discussion here.  But my experience has taught me to "never bet against the Queen" Meaning Royal Dutch Shell. 

[TomTom + 183]

Apparently, all these big companies think that the LNG glut isn't as bad... A C$40 billion FID during the Trudeau administration is quite something. 

[Tom Kirkman + 8,860]

ZOMG Canadian LNG will create forest fires!  ELEVENTY PANIC !!

B.C.'s thirsty LNG industry is a threat to water supplies

LNG project approved despite droughts, wildfires and need to curb climate change

Monday night's decision gives the green light to a very thirsty industry that will abuse even more water at a time when water supplies are unpredictable. 

As more than 500 forest fires burned across B.C. this summer, drought warnings were also issued throughout the province and across Canada. 

 

No idea if this bit is true or not:

Last May, the Canadian Centre for Policy Alternatives reported that:

"A subsidiary of Petronas, the Malaysian state-owned petro giant courted by the B.C. government, has built at least 16 unauthorized dams in northern B.C. to trap hundreds of millions of gallons of water used in its controversial fracking operations. The 16 dams are among 'dozens' that have been built by Petronas and other companies without proper authorizations, a senior dam safety official with the provincial government told the Canadian Centre for Policy Alternatives."

These dams should also be regulated by the federal government but Harper's gutting of the former Navigable Waters Protection Act absolved the federal government from having to review projects like this.

 

And here's a Letter to the Editor:

Letter: LNG Plan Baffling

While Prime Minister Trudeau and BC Premier Horgan are proudly congratulating themselves on building the Canadian economy with the announcement of a multibillion dollar LNG plant, the rest of us are wondering what the hell is going on here.

These two climate warrior leaders are celebrating plans for a massive carbon bomb that will make it impossible to meet greenhouse gas reduction targets.  It will ensure Canada continues as a climate fossil dinosaur in world opinion.

Also baffling is that only a year ago BC NDP politicians were saying don’t worry about LNG (liquified natural gas), the projects are ‘uneconomic’. It costs much more to frack, pipeline, compress and liquify the gas than the world price. The Petronas’ plan for Prince Rupert was cancelled just last year because it wouldn’t make money.

[Dan Warnick + 6,100]

7 hours ago, Tom Kirkman said:

These two climate warrior leaders are celebrating plans for a massive carbon bomb that will make it impossible to meet greenhouse gas reduction targets.  It will ensure Canada continues as a climate fossil dinosaur in world opinion.

LOL!

[Tom Kirkman + 8,860]

9 minutes ago, Dan Warnick said:

LOL!

Yep, sure enough, Canada is right there at the bottom.

[DA? + 301]

Where is the actual money coming from for this project, it's getting harder and harder to find external money for such projects.

[TomTom + 183]

Looks like Shell is already making concessions: https://www.cnbc.com/2018/10/16/reuters-america-shell-gas-project-in-canada-gets-greener-amid-lng-climate-worry.html