Public Affairs Update Header
December 8, 2014
In This Issue
Petronas defers final investment decision on $36 billion LNG project
B.C. government intends to use budget surplus to combat provincial debt
Canada could meet energy needs with clean energy by 2015: Report
Ottawa launches online pre-budget consultation
The Public Affairs Update is your weekly insight, perspective and analysis on politics in British Columbia and Canada.  This newsletter is brought to you by the largest and most broadly-based business organization in the province, the BC Chamber of Commerce – the Voice of Business in B.C.

Petronas defers final investment decision on $36 billion LNG project
Petronas has deferred its final investment (FID) decision on its proposed $36-billion Pacific NorthWest LNG project. 

The state-owned Malaysian oil and gas company says the project’s construction costs are too high and oil prices are too low. FID was originally anticipated for mid-December 2014.


Shamsul Azhar Abbas, Petronas president and CEO of Pacific NorthWest LNG, said the company will continue to review the economic viability of the project and work on regulatory approvals. No new target date for a FID has been specified.


Abbas said it’s still possible the project will proceed. He said he “hopes that all outstanding factors can be resolved as soon as possible to enable the FID to be made within the identified LNG supply and demand window. This is vital in light of the current intense market environment and for Pacific NorthWest LNG not to lose out on long-term contracts to competitive United States LNG projects.”


The deferral is a potential blow to Premier Christy Clark’s economic vision for B.C., which hinges on the creation of an LNG industry in the province. However, Natural Gas Development Minister Rich Coleman remains optimistic, saying the Province has done everything it possibly can to secure an investment by Petronas in LNG, including clarity about environmental rules and taxation. He says the company’s focus is now on other areas, including supplier costs and federal issues.


BC NDP critic for natural gas development Bruce Ralson said Petronas’ decision is “a setback,” and noted other proponents have also delayed FID, including the BG Group.


B.C. government intends to use budget surplus to combat provincial debt
Premier Christy Clark and Minister of Finance Mike de Jong say they will use a projected $444-million budget surplus to repay debt. 

“Like any family that’s been through tough times, the first thing you need to do when you get back to finding a job and making an income again, is to pay off your credit card,” Premier Clark said.


Total provincial debt is now $64.7 billion.


NDP children and family critic Carole James says the surplus is the result of increases to medical premiums, ferry fares, BC Hydro rates and other charges. She says the money would be better spent providing improved social programs to British Columbians.


Canada could meet energy needs with clean energy by 2050: Report
A report by the Clean Energy Canada indicates that renewable energy has experienced significant growth in the last five years, so much so that Canada could meet all its energy needs with renewables by 2050 if the right policies are put in place. Led by B.C., Ontario and Quebec, who have invested heavily in wind, solar and hydro power, public and private investment in green energy totaled approximately $24 billion. 

Employment in the sector – which includes hydro power, wind, solar and biomass – has increased 37 per cent to 23,700 employees over the last five years, outpacing employment in the oilsands which stands at 22,340.


Clean Energy Canada further said that the federal government is missing out on opportunities to invest in renewable energy and recommends: favourable tax treatment for development of power storage and solar technologies; help to build clean energy infrastructure; less emphasis on oil exports and more on renewable exports in trade talks; rebates for electric vehicles; and carbon pricing to discourage the use of high-carbon alternatives.


Ottawa launches online pre-budget consultation
Federal Minister of Finance Joe Oliver launched an online pre-budget consultation this week, providing Canadians with a chance to have their say on the last federal budget before the 2015 federal election. 

Submissions can be made by visiting the consultation website.


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This weekly report produced for the BC Chamber of Commerce by Fleishman-Hillard.  While every effort has been made to ensure the accuracy of the information included in this publication as of the date of issue, events and government policies are subject to frequent change.  Therefore, the BC Chamber of Commerce and Fleishman-Hillard cannot assume any responsibility for actions taken solely or principally on the basis on the information contained herein.