Monday March 9th, marked a high and a low in our democracy, right here on Bowen Island. Concerned Citizens Bowen, an all-volunteer organization, invited the public to attend a presentation by Dr. Eoin Finn. Dr. Finn became aware of the plans for the construction of the Woodfibre LNG processing and export facility in Howe Sound a few years ago. Since then, he has been researching BC’s LNG and fracking projects, and subsequently, has been presenting his findings to citizens and Municipal Councils around Howe Sound. He is doing this voluntarily, not being paid by anyone.
Three weeks ago he presented his findings about Woodfibre LNG to Bowen’s municipal council, whose members proceeded to vote on a motion committing Council to submit a letter of concern to the Environmental Assessment Office regarding this project. The motion was adopted, but Councilors Morse and Ander (who voted against the motion) requested that Council invite proponents of the project to make their case before Council as a measure of balance. And so, on Monday March 9th, two paid representatives from the BC Government and the LNG industry came to deliver their message: LNG is all fine, LNG is all safe and BC will get rich from LNG exports.
That message was very different from Dr. Finn’s presentation a few hours later: the people of BC will see very little benefit and most likely will be paying foreign investors to take BC’s LNG. In a nutshell, BC’s royalties on LNG are not paid on units of gas but rather on the net-profits of the LNG producer/exporter. In other words, if there is no profit, BC will get zero royalty income. Norway, on the other hand, claims royalties by the unit of North Sea oil. It now has a trillion dollar heritage fund. Compare this to Alberta. Like BC, it claims a tax on the net-profits and its heritage fund is… empty! On top of that, add the subsidies and tax brakes offered by the Provincial and Federal government and the balance is pushed right into the red.
How is this possible? Well, reality has changed since the idea for BC’s LNG exports to Asia came about. Japan had just been hit by the tsunami, it had turned off its nuclear reactors, went for LNG instead and the price for LNG went up. Since then, most of the nuclear plants have been coming online again, Russia and China are building a pipeline to transfer Russian gas to China, the US is over-producing LNG and the price for LNG has plummeted. For BC, the projection is now that it will take up to 15 years, after the first project starts up, before we see any royalties coming in.
The foreign owners of Woodfibre LNG are in it to make profit, within couple of years or twenty years down the road. Right now they want an environmental approval that will be valid for 20 years. When the facility is eventually built, they won’t pay taxes until all their start-up costs have been absorbed. When profits are made, will they ever pay any taxes? Maybe, maybe not. The profits can always be booked to the parent company Woodfibre LNG Pte. Ltd. based in Singapore, which has very low taxes for LNG firms. And Canada has an agreement with Singapore not to double tax when a firm is already taxed in one of the states.
Taking this all in, you might wonder why Councilors Morse and Ander show support for the Woodfibre LNG project, when the economic benefits for BC and Canada will be non-existent. Their support becomes stranger when we consider the negative impacts on the environment of Howe Sound and the impact daily trips of LNG supertankers through Howe Sound will have on the local tourism economies and real estate values
It leaves me wondering how long someone can remain loyal to an ideology that is so counterproductive to our economy, health, environment and quality of life.
Anton van Walraven