By Laurie Parkinson and Eoin Finn
Published: Oct 18, 2014
(Editor’s Note: This article was pulled out earlier because there was some confusion about its authorship since a similar article written by Finn had also appeared in a Lions Bay paper. Eoin Finn and Laurie Parkinson say they colloborated on both articles and will share a byline on this one.)
Are there any profits from selling LNG ?
Sorry – profits will go overseas. Why? Because Woodfibre LNG (WFLNG) is owned in Singapore, and the owners are pretty good at dodging taxes on profits.
http://www.theguardian.com/world/2014/may/10/asian-logging-giant-tax-labyrinth-british-virgin-islands and listen to
http://www.cbc.ca/player/Radio/The+Sunday+Edition/Segments/ID/2441808835/
OK. So what about federal taxes?
Sorry, none, because of Woodfibre LNG’s (WFLNG) organizational setup, transfer pricing and those international tax treaties. WFLNG may be taxed by Singapore, won’t be taxed in Canada.
http://www.fin.gc.ca/treaties-conventions/Singapore_-eng.asp and
And, if, as it says it prefers to do, WFLNG builds the plant components overseas, there will be no GST (or PST) or employment taxes on that investment either.
But what about the BC taxes?
3. Low provincial taxes (proposed) on net profits from LNG sales, taxes the LNG companies say are too high: http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/bc-keen-to-become-world-player-in-lng/article17303859/ and http://blogs.edmontonjournal.com/2014/09/25/malaysias-petronas-threatens-to-cancel-its-10-billion-lng-project-in-b-c/
Who knows if BC will get actually receive much LNG tax. Why? The global price of LNG is dropping (global supply is increasing) and the less a LNG co earns, the more the construction cost write-off will cut into BC’s LNG tax on net profits. https://www.policyalternatives.ca/sites/default/files/uploads/publications/BC%20Office/2014/04/CCPA-BC-Path-To-Prosperity.pdf
And… no carbon tax either, as that only applies when the gas is burned in BC. If we taxed on the volume of natural gas sold, instead of on net profits, we could make lots of money. That’s what Norway does.
Oh. So, what about municipal taxes? At least there will be lots of municipal taxes for Squamish, right?
Sorry, not much – because the provincial government plans to cap these taxes for oil & gas proponents.
Also on July 14, 2014, WFLNG asked Squamish Mayor and Council to charge them the same property tax ($2 million/year) the former Woodfibre pulp mill paid in 2005: for 25 years, to a maximum of $3 million/yr. If the initial property tax for WFLNG should be $5 million/year (reflecting increased property value in the 9 years since 2005), this is less than half the property tax that Squamish expected. https://squamish.civicweb.net/FileStorage/FAC7CC15250B4269A78EC79D7B489316-Woodfibre%20Tax%20Agreement.pdf
Well, won’t BC Hydro make money selling electricity to WFLNG?
BC Hydro actually loses money on this. The rate charged large industry is lower than the cost of production. (http://prrd.bc.ca/board/agendas/2013/2013-07-4832096588/pages/documents/06-D-1SiteC_001.pdf) Large industry electricity rates are subsidized by residential and light industry/commercial customers. See below.
And Minister Bill Bennett is thinking about further reducing the rate large industry pays. (http://www.vancouversun.com/business/mining+industry+struggles+continue/9839837/story.html, paragraph 20/21) If that happens, electricity rates that you and I pay (already expected to rise 100% in the next 10 years according to the article below), will rise further. https://www.policyalternatives.ca/publications/commentary/subsidizing-dirty-industries-expensive-clean-electricity-recipe-major-rate-h
Well, there’ll be lots of jobs for locals. Long term jobs, right?
6. Sorry, there will be “up to” 100 long-term jobs. Though it says it will try, WFLNG doesn’t expect to hire many people presently in Canada for running the LNG export plant. There aren’t any such plants here – none! To run an LNG plant, a person needs prior experience in the same job.
The 100 long term jobs will include the following skilled jobs: tug boat operators, water taxi operators, millwrights, pipe fitters, management, accountants, finance, power engineers, mechanical/electrical and some maintenance type jobs. There will be some general labourers, as well as security guards and probably cooks. http://www.woodfibrelng.ca/wp-content/uploads/2014/03/SGM1-Woodfibre-LNG-Project-Squamish-1-Meeting-Notes-February-4-2014.pdf page 7 and http://www.woodfibrelng.ca/wp-content/uploads/2014/03/SGM4-Woodfibre-LNG-Project-Squamish-2-Meeting-Notes-February-6-2014.pdf page 17
Squamish really wants local more jobs for their citizens. WFLNG’s talk of jobs locals actually means jobs for residents of Squamish, Whistler, and the Lower Mainland. (WFLNG Community Consultation June 16, 2014, Squamish, pg 8. http://www.woodfibrelng.ca/the-project/project-overview-document/
What about short-term construction jobs?
Better news there – maybe. WFLNG says there will be approximately 500 construction-type jobs (250 a year for 2 years). Some of these will be for connections to the new pipeline for natural gas and for upgrading the BC Hydro electrical supply. http://www.woodfibrelng.ca/wp-content/uploads/2014/03/SGM5-Woodfibre-LNG-Project-Squamish-3-Meeting-Notes-February-6-2014.pdf page 9. But it isn’t clear whether these jobs will be needed only if the plant is constructed or assembled on-land, rather than WFLNG’s preferred floating configuration, which will almost certainly be constructed in Asia and floated here. WFLNG’s plans change over time, sometimes without the BC Environmental Assessment office being told about the change.
Despite all the talk of jobs for BC residents, the BC government is presently signing agreements for the import of temporary Chinese LNG workers. http://www.vancouversun.com/China+agree+allow+foreign+workers+help+build+industry/10063770/story.html
Fortis isn’t planning to hire anyone new for maintaining and operating the gas pipeline. Any jobs with BC Hydro beefing up the Hydro system for Woodfibre will be temporary, and will require high-voltage electrical skills. For safety reasons, BC Hydro will probably use only current staff for this work. Locals trained in the next year probably won’t get a BCHydro job.
Sounds like Woodfibre LNG is paying very few taxes and is being subsidized a lot. Seems a little odd.
You are right:
a) taxes: no federal, provincial taxes, and minimal municipal taxes (paying $2 million/year instead of a market value of around $5 million – or perhaps even less depending on how WFLNG is categorized),
b) profits go overseas
c) new source of electricity ($8Billion Site C dam?) needed to power WFLNG, paid for by the public
d) Big industry pays lower electrical rates (see #5 above) compared to the public. This is a public subsidy. Liquefying natural gas uses a lot of electricity – doing the math on a 140 MW supply, that’s somewhere around $64 million/year, or a breathtaking $640,000 a year for each of the 100 long-term jobs WFLNG proposes to create. And most of these jobs won’t be held by residents of Squamish, as they won’t have the required LNG skills and certifications.
I’m confused. So…..why are we committing to let Woodfibre make and sell LNG for 25 years, to ship the product and profits overseas and employ TFWs rather than locals to do it?
Jean says
I like to see people like you in the next council in Squamish and would urge any candidates not agreeing with you, on the merit of LNG, from the mainly financial side alone, to drop out voluntary at this time, as I believe it takes people like you that can analyze and present an issue, as well as you just did, to run our Municipal affairs, even so many Voters think, we have no say and sadly enough, they consider the Canadian political system flawed, that,s why the young are not interested and feel helpless, to join and to help change a “one day in 5 year Democratic system” and afterwards being bullied by a faint majority vote count, to be the absolute dictators until next time, hoping that all will be forgotten by then and they might get an other term, of course heavily supported by the big players that are expecting there rewards after the election… check https://www.wahl-o-mat.de/ We should start with a similar web venture created for Canada and maybe things would change.
Chris says
Beautifully written, our politics are up for a big change this election, we are waking up. Articles like this is a mandatory education for all of us through all aspect of industry.. If it doesn’t make sense we don’t do it period! and this article is just on the financial end, when we get into the environmental, and spiritual aspect of this.. It just does not make any sense.. Well maybe to some rich dudes.. But not us who have to live with it.
Laurie says
Thanks, Chirs. I agree there are also major environmental concerns, and I guess the spiritual concerns are what keep me working on this.
Jon S. says
You want to see people like her in office.
I guess I shouldn’t really be surprised. She has the ability to throw down a few loosely related links and call it research. Not to mention that this “research” was, as we just learned, done by two people.
Big deal.
MattB says
What a fantastic presentation of articles Laurie! I have been researching this topic extensively over the last couple of months and you presented articles and papers that I had not seen yet. The Canadian-Singapore tax treaty does mean that all profits made by the Singapore parent of Woodfibre LNG would not be subject to Canadian tax and instead subject to taxes in Singapore which the last time I checked were 20%. However, in many jurisdictions (like Hong Kong) corporate profit taxes are pro-rated based on where the operation is conducted so the company would probably end up paying a much lower rate on operations based overseas (Canada) and Canada would see none of the corporate income tax revenue.
But the main concern in my books is that because the vast majority of the gas exported through LNG plants will come from shale gas extracted by hydraulic fracturing which has a very high rate of fugitive methane escape (leakage), this type of fuel is actually dirtier than coal!
“[If] B.C. government’s LNG dream comes true, it will be the equivalent of adding 24 million to 60 million cars to the world’s roads. The economist also stated that the premier has provided no evidence to back up her contention that the LNG-export industry is a net benefit for the environment because it will reduce coal consumption in China. “Those claims generally ignore the leakages of methane that have proven to be a really major issue, particularly in fracking operations,” Lee said. “In general, you get leakages of two to four percent over the life cycle from the wellhead to final consumption.” He noted that methane has a global-warming potential 86 times that of carbon dioxide over a 20-year period. Even at 1.2 percent leakage, Lee said, fracking natural gas is worse for the climate than burning coal.”
http://www.straight.com/news/617826/fracking-fuels-bc-governments-liquefied-natural-gas-gambit
Estimates from the National Oceanographic and Atmospheric Adminstration (NOAA) put the average rate of methane leakage during fracking extraction at between 6 and 9% in the US. Canada has conducted no studies or if they have, have not made them public, on the true rates of methane leakage.
Keep up the great work of helping educate British Columbians on that vast differences regarding what we are really getting into versus to what our politicians are telling us by buying into the LNG gamble!
Laurie says
Chris, You are correct that this is a very big subject. I agree with your concerns re the fugitive methane gas from fracking, and the green house effect. Also contamination of ground water from fracking. Sadly we all depend on natural gas from fracking, and the more we export, the more methane will be released into the air. I have read that between the fugutive methane, the methane lost from leaky gas piping, and the carbon dioxide released from the ground when the methane comes out, LNG is no better re the greenhouse effect than coal. We need to add alternate energy to our sources of power quickly!
Other problems with Woodfibre LNG:
1. environmental:
– LNG plant cooling: 3,400,000 gallons/hour sea water sucked up from
Howe Sound, chlorinated, heated 10C, and returned to the Sound – 24 hours/day for 25 years!
– the warming and chlorination of Howe Sound via the cooling water
will probably damage salmon runs, carefully replanted eel grass in the
Squamish estuary, and herring. Marine mammals, salmon, water birds, and
otters all depend on herring for food, and eagles eat salmon – it’s all interconnected!
– light pollution: from a tall (115 m) gas flare
– noise: from gas flare (130 decibels) and from electric turbines
cooling the natural gas
2. public safety:
– international LNG terminal siting standards clearly state that an
LNG plant should not be built in a long narrow heavily-used waterway
– LNG tankers are so large that the captain can’t see anything 1.2 km ahead,
and the ship takes 8 km to stop
– LNG tankers are rated as class A marine safety hazards; one tanker has
the explosive power of 70 Hiroshima A-bombs
– If LNG spills onto the ocean, once it warms, it becomes flammable. Contrary to what Woodfibre LNG says, the natural gas won’t just rise and disappear. Especially if there is wind, the flammable portion will drift in a cold fog to somewhere there is an ignition source – a cigarette in Lions Bay, a car on the Sea-to-Sky, a stove in Whytecliffe. The 1000-degree fire from the contents of an LNG tanker would fill Howe Sound. As we know, accidents with little chance of happening, like Mt. Polley and Lac Megantic, do happen.
.- Woodfibre LNG is being built with minimum safety spacing between
LNG liquefaction, storage, and loading facilities. If a fire starts one place, it can easily spread to other places in the facility. You can’t put out a large LNG fire with water.
Laurie says
Correction: LNG fires are not put out with water, but with foam etc. And large LNG fires are left to burn out.
Nate Dolha says
Once again, the info you, or Mr. Finn, have provided above is completely false. It’s one thing to oppose a project (even if you are not a resident here), it’s another to flat out lie to achieve your goals.
First, under SITTGO standards, the minimum channel width should be about five times the beam of the ship (approximately 250 metres).
Second, the turning basin should have a minimum diameter of two to three times the ship’s length (approximately 600 to 900 metres).
As Howe Sound is generally over 1600m wide, the terminal will exceed SITTGO standards. The BC Pilots Association has already provided their opinion on the matter, I suggest you go to the source for correct information.
As for the water, the release has a lower concentration of Chlorine (which is produced from the sea water) than our drinking water and effluent discharge from sewage treatment. Also, the water will be +/- 1 degree of ambient temperatures within 10m of discharge. The claim that the estuary, which is over 7 km away, will be damaged is a complete fabrication, and highly irresponsible.
M L Stathers says
Well done, Laurie. After the first ‘Council Confrontation’ I tried to give Councillors Chappelle & Race print-outs of some very well researched opposition positions – TOTAL REFUSAL, accompanied by an almost hystgerical reply by Chapelle. The ‘Devil is surely in the details’ – but too many citizens don’t want to hear!
Jon S. says
I don’t blame them. I’m sure your quality “research” included reputable sources like Wikipedia and biased third parties, such as Greenpeace.
Glenne Campbell says
Jon, you should know that international, reputable investment companies make enquiries to Greenpeace. You might want to try it sometime. You may be surprised at what you learn.
Julia says
Yes, declaration of war for example. If you google “greenpeace declares war” you get 124,000 hits. http://www.theguardian.com/sustainable-business/rio-20-greenpeace-war-finance-sector or charged with criminal breach? http://www.usatoday.com/story/money/business/2014/03/05/procter-gamble-breach-greenpeace-activists/6092945/. The use of research to fit their objectives is well known. thats not research, i think they call it propaganda?
Wasn’t Greenpeace & Climate Works Foundation just banned by the government in India recently for being a threat to national security? (you google that term you get 424,000 hits!) http://indianexpress.com/article/india/india-others/ib-report-to-pmo-greenpeace-is-a-threat-to-national-economic-security/ or how about the Canadian government revoking its ‘charity’ permits, http://www.iea.org.uk/publications/research/canada-leaves-greenpeace-red-faced? Good research includes facts from both sides of the coin.
PatJ says
WLNG is a registered Canadian company. Canadian companies that do business in Canada pay taxes in Canada.
Laurie says
Yes – Canadian corps. do pay taxes – on Canadian profits. Trouble is – Canadian-registered Woodfibre Natural Gas Ltd. isn’t likely to ever make a profit. Under the proposed structure, Woodfibre LNG Ltd. (the Canadian corp.) won’t ever own the gas – the other same-owner company – Singapore-registered Woodfibre LNG Export Pte. Ltd. – will. And will contract (via a “tolling agreement”) with Woodfibre Natural Gas Ltd. to liquefy, store and ship the LNG. If, as expected, the contract pricing is for cost-recovery only – no profits for the Canadian corp. and therefore no income or LNG taxes to Canada or BC. This is called transfer pricing and is quite regularly used by multinationals to spirit profits away to low-tax countries. You can check out Woodfibre’s proposed ownership structure at https://docs.neb-one.gc.ca/ll-eng/llisapi.dll/fetch/2000/90466/94153/552726/977416/977417/977584/A3J4C8_%2D_Schedule_A%2C_Ownership_Structure_Diagram%2C_July_23%2C_2013.pdf?nodeid=977311&vernum=-2
MattB says
PatJ – Are you an international corporate tax specialist?
As I understand it, don’t tax treaties permit transferring the tax liability from a subsidiary (in a higher tax jurisdiction) to the parent company (in a lower tax one)? One vehicle I’ve heard of is called transfer pricing.
Can anyone with international tax experience comment? This could be a hugely important issue that if true punches a major hole in the BC governments’ announced revenue projections from the LNG industry.
Laurie says
There is a great primer on how transfer pricing works in multinational companies at http://www.cbc.ca/thesundayedition/features/2014/03/16/tax-fairness/
Jon S. says
Are you an international corporate tax specialist? Is Laurie?
I didn’t think so. This is 2014, the government has the capabilities to ensure that these companies pay their fair share.
How the tax treaties work for foreign based companies is a company that pay’s it’s taxes on it’s operations in Canada, it doesn’t have to pay those taxes at home (unless home is America.)
Laurie says
People might want to read the article in the Sun this, paragraph 5-9. http://www.vancouversun.com/business/Experts+mull+complexity/10323002/story.html
Byron Bestwick, a partner in the tax practice of the accounting and consulting firm EY was interviewed.
Glenne Campbell says
Thank you Laurie for presenting the evidence so well.
I contacted an highly regarded international investment firm in Calgary Alberta to enquire as to their involvement with participation in Woodfibre lng, to not. They have studied the Woodfibre lng proposal and determined it to not be a sustainable business model due to BC being so late out of the gate. They state that Australia and America are too far ahead, to make this a profitable business venture. As well, I am currently in a UBC municipal planning program of study, which has resulted in being grouped with two classmates – one from Aberdeen Scotland, and the other from Perm, Russia. As they are living in petroleum capitals of Europe we discussed the trickle down effect for municipal coffers. The Aberdeen fellow, who works for the municipality there, referred to the constantly used term in his jurisdiction as ” Privately Wealthy, Publicly Poor” The Russian spoke to constant devolution of citizens having any say in the matters of the municipal jurisdiction. I am very concerned that complacency will rule here. So many Squamish folks are saying ” We have no control, it’s a provincial matter.” Squamish is in BC , we pay taxes to the province as well, that gives us the right and responsibility to be be involved. Don’t give up, Speak Up. There are industrial options for the property at Woodfibre that are not so contentious.
Peter Kent says
Thank you Laurie!
For your succinct article and your research and references. This should be the handbook for the boondoggle that WFLNG is.
After reading this and understanding the dynamics ( economic and ecological) and realizing the utter lack of benefits for our town, how can anyone conscionabley support it?
Jon S. says
Peter, clearly you have a lack of understanding about Woodfibre LNG. The environmental assessment isn’t done. You’re clearly basing your view on Woodfibre on just your opinion.
A minimum annual tax contribution of $2 million dollars is a pretty clear economic benefit. Even if you are not willing to take a deeper look into the ecological benefits (i.e. how much better natural gas is when compared to coal) you cant deny the significance of $2 million dollars.
Laurie says
Hi Jon, Indeed the environmental assessment isn’t finished. However at the June 2014 community meetings, it was very clear that dealing with the environmetal effects of Woodfibre LNG the plan. I thought the purpose of an environmtal assessment was trying to deterime if this plant would cause too much damage as planned to be built in Howe Sound. For example, no long term studies to investigate the ecological effects of animals with up to 5 year life cycles, such as some types of salmon, were planned – in a way that if things looked bad, the plant wouldn’t be built.
The type of cooling system being planned for Woodfibre LNG is now banned in Caloifornia due to major environmental effects, despite the fact it is pleasantly cheap to build (compared to the systems California is now requiring). http://www.unep.org/regionalseas/publications/reports/RSRS/pdfs/rsrs045.pdf
Conventionally obtained natural gas (vs fracked), burned locally (vs transported great distances), is indeed better than coal for the greenhouse effect. However, most of the natural gas you and I use now, as well as that which is exported, is fracked. During fracking, a significant amount of methane (a powerful greenhouse gas) leaks out of the ground and is lost into the atmosphere. It’s called “fugitive gas”.
http://desmog.ca/2013/05/08/unreported-emissions-natural-gas-blows-british-columbia-s-climate-action-plan-bc-s-carbon-footprint-likely-25-greater see paragagraph 5
Also a lot of natural gas is used to transport the LNG to Asia, producing carbon dioxide as exhaust. The LNG plants that burn natural gas to liquefy the natural gas into LNG, produce lots of carbon dioxide as exhaust. So in total, LNG is about equal to coal in greenhouse effects.
Yes, $2 million is a lot of money. However, I gather that the Squamish Council was hoping for 5 million/year property tax, in line with how much more valuable the property has become in almost 10 years. Starting the property tax at 2 million, which the old Woodfibre pulp mill paid in 2005, and having it max at about 3 million ofer 25 years is a pretty big difference!
Jon S. says
Let’s go over the flawed logic of “your” opinion piece:
Do you know who else uses a “once through” cooling system like Woodfibre? Google. That’s right, one of the most sustainable companies on the planet uses the same cooling system that Woodfibre LNG will.
https://gigaom.com/2011/05/24/google-to-switch-on-worlds-first-seawater-cooled-data-center-this-fall/
The report you referenced about leaking gas is solely based upon the Howarth report. The problem with this is many in the scientific community disagree with his flawed report. It is entirely based upon a limited number of sites in America, and not BC. Read this for more info:
http://www.forbes.com/sites/jonentine/2012/03/02/new-york-times-reversal-cornell-university-research-undermines-hysteria-contention-that-shale-gas-is-dirty/
A lot of natural gas is used to transport it to Asia? Well I’d rather that than a lot of dirty dirty bunker “c” fuel used in shipping a load of coal. Like the coal that leaves Neptune Terminals in your hometown, North Vancouver. Maybe you should worry more about that?
$2 million was the guaranteed minimum from Woodfibre LNG. Property taxes are based upon land and building value – not equipment. Woodfibre LNG will be using less than half of the site and will have a lesser amount of smaller buildings than the mill had. The immense value is the equipment, not the buildings. It makes sense that would be close to what the mill paid.
Finally how do you gather the council was hoping for $5 million. You don’t even live in Squamish? This sort of lie is shameful.
Tracey Saxby says
Where has WLNG stated that they’re using the same seawater cooling system as google? Curious if you have a source of info we don’t.
Please note that the forbes article is an opinion piece. There is a big difference between a peer-reviewed scientific article and an opinion piece that attempts to discredit it. There are also several scientific journal articles that are now backing up the original Howarth paper.
Jon S. says
The source was in my post. Google uses a once through seawater cooling system, like Woodfibre LNG. You don’t have any info as you are only selectively “researching” what you feel are negative aspects of the project.
Yes, the Forbes article is an opinion piece, like many of the sources “My” Sea-to-Sky frequently throws down. Please note: the main difference is that the article is a summation of researched sources that you would see if you had bothered to read the article.
Yes indeed there are a handful of small journal articles that back up the Howarth paper, but the vast majority of research discredits Howarth’s deeply troubled findings.
Do you really think that natural gas is worse than coal? Do you really want to see children dying in poor countries from the poor air quality, or are you more concerned with simply CO2 emissions?
Laurie says
Hi Jon,
Re fugutive gasses, you may want to read:
http://www.nature.com/news/methane-leaks-erode-green-credentials-of-natural-gas-1.12123#/b1
and
http://desmog.ca/2013/05/08/unreported-emissions-natural-gas-blows-british-columbia-s-climate-action-plan-bc-s-carbon-footprint-likely-25-greater
and
http://www.dailykos.com/story/2013/08/07/1229636/-NOAA-Investigation-Finds-Massive-Methane-Emissions-from-Utah-Fracking-6-to-12-Lost-to-Atmosphere
Re Google’s cooling system, I read about it the other night. There is no mention of chlorination (I know WF is doing this by electrolysis of sea water, not adding chlorine). Google cools the sea water before they return it to the ocean, though that is done with more cold sea water so I am not sure how it all works out. If you add lots of warm water to a body of cold water over a long time, the body of cold water is still heated. There wasn’t much detail in the articles.
You might want to read the attached article re why California is no longer useing once-through cooling systems. Their main concerns are all the animals etc killed via being sucked up and killed, and the heat in the cooling water. Google has 4 separate filters to keep the animals out of the system, but I suspect the animals still get killed. http://www.energy.ca.gov/2005publications/CEC-700-2005-013/CEC-700-2005-013.PDF
Tracey Saxby says
Hi JonS,
I’m asking where you got the information that the system that google uses is the same as what Woodfibre LNG is proposing. I read the link you posted, and it doesn’t seem like the same system to me, so I was wondering if Woodfibre had stated somewhere specifically that they’re using the same system that google uses.
Apparently, the seawater cooling system proposed for WLNG is being phased out in California as adding heat and chemicals to the local marine environment is not a good idea.
You discredit yourself in your attempt to belittle me and tell me what I am and am not researching or reading.
I’m still curious what your real name is, because right now I have no idea who you are, where you’re from, and what your background is. If you are a real person (and not just a paid troll) please step up, give us your full name, and stop hiding behind your computer.
Gailforce says
what a great article. i’m so glad there are bright, succinct individuals like you that can disseminate the information in a way that should get people interested and drawn into reading and then learning about this lng fiasco.
Russ says
Wow, seems like a majority of people are opposed to the LNG proposal, I wonder hiw much they would like a pulp mill. To say there will be no GST on the olant components built of shire is wrong they are billed GST upon import and PST kicks in after import as well. TFW are temporary NOT for long tdrm operations. And IS this all bad, do you not think Canadian workers and canadian companies do business like this over seas???
Get off your high horses and focus in projects that are actually BAD for BC not just a poor income earner.
Maybe go blocade a pipeline instead of realising that the true horror is the alternative to the pipeline…. trains in waterhseds and communities burning to the ground.
The District if Squamish pumping effluent directly to the water is a much bigger issue.
Pick your battles
Laurie says
Hi Russ, I doubt people would like a pulp mill either 🙂 , however a pulp mill would be dealing with a renewable resource. One of the concerns re the BC LNG industry is that it will sell BC’s natural gas so fast that by around 2017 BC will become a net importer of natural gas, forever. Then we import it from US? China? How good is this for BC? http://www.watershedsentinel.ca/files/files/Hughes-BC-LNG-Jan2014.pdf This article is written by David Hughes, a very respected Canadian geoscientist.
Re PST and GST:
PST will not be paid on the mega parts for the liquefaction plant that are made in Asia (via 2,000 workers, WF’s Feb public meetings) and barged across the Pacific to Squamish. PST will be paid on hooking these parts together, here.
Re GST, you are right that WF will pay GST, and then they will apply for/receive a GST rebate on expenses etc. Most of the GST will come back to WF via the rebate. Also if the importation of these parts is classified as mining or mining related, no GST will be paid.
Re jobs:
1. You are correct, the foreign workers will be temporary, for specilized plant construction work….the 500 short term jobs that people are excited about.
2. Many of the 100 long term WF jobs are pretty specialized as well.
So, “lots of jobs for Squamish residents via WF” is pretty questionable.
Seems WF realizes this. In addition to TFW, at WF’s June public meetings, we discovered WF considers “local workers” to be people from Squamish, Whistler, and the Lower Mainland (!!).
In BC as a whole, most of the LNG jobs are expected to be on the gas rigs in north eastern BC, see the 9th paragraph of this article. http://www.vancouversun.com/business/natural-gas/Trades+authority+launches+training+plan+prospective/10209210/story.html
I share your concern about communites burning to the ground, much like Lac Megantic, which you may be referring to. This could happen if WF plant is built in Howe Sound. See below (part of what I posted a ways above re public safety):
– If LNG spills onto the ocean, once it warms, it becomes flammable. Contrary to what Woodfibre LNG says, the natural gas won’t just rise and disappear. Especially if there is wind, the flammable portion will drift somewhere there is an ignition source – a cigarette in Lions Bay, a car on the Sea-to-Sky, a stove in Whytecliffe. The 1000-degree fire from the contents of an LNG tanker would fill Howe Sound. As we know, accidents with little chance of happening, like Mt. Polley and Lac Megantic, do happen.
.- Woodfibre LNG is being built with minimum safety spacing between
LNG liquefaction, storage, and loading facilities. If a fire starts one place, it can easily spread to other places in the facility. You can’t put out a large LNG fire with water. Major LNG fires are left to burn out…..like Lac Megantic.
Michelle says
Excellent article. Keep them coming. Please share this article with other newspapers in the lower mainland
Laurie says
Thanks, I”m trying!
Jon S. says
You mean share this poorly “researched” biased manifesto? I doubt even 24 would run it as an ad.
Jaspera says
Fantastic, well-researched, detailed analysis, which should be compulsory reading for all present Council members and for all would-be council candidates. Please circulate this well-articulated analysis widely to friends and colleagues, and ask hard questions of existing councillors and candidates. To date most have relied upon emotional, ill-informed blather. Let’s see if they are prepared to delve into the economic, environmental and social realities of the WFLNG. Thank you Laurie for presenting this in such a useful format.
Donny says
Oh dear! the Provincial Finance Minister just reduced the tax on LNG plants because the poor dears won`t make so much money because of world price declines.
So , out the window goes half the arguments for this insane proposal; just watch how many other taxes don`t stand up for long, eh ! Squamish Council.
Nate Dolha says
Wow, complete garbage…. Site C needed for this project? No. No taxes paid? No.
I am glad you finally worked out who wrote it, though…
Laurie says
Hi Nate, At the moment BC doesn’t have a lot of extra electicity, and when it does have extra, it sells it to Oregon and Washington for 15 cents/kwn. Woodfibre will use a lot of electricity, and we will sell electricity to WF at 4 cents/kwh. It costs BC Hydro 8-10 cents/kwh to produce the electricity. The difference in price will be charged to you and me. Attracting big industry with low electricity rates has worked out ok when the big industry hires lots of people. Big mines require about 2,000 workers for 5 years to build and hire about 1,000 workers for 20-50 years (the life of the mine). WF will use the same amount of electricity as a big mine and hire 100 workers long term. term.https://www.policyalternatives.ca/publications/commentary/subsidizing-dirty-industries-expensive-clean-electricity-recipe-major-rate-h
Attracting big industry with cheap electricity also works ok when you are using old infruastructure that ‘s paid for. New dams are very expensive to build…..and the public pays for that. This generation – or next generation plus interest.
Leanne says
So for clarification, who wrote the article? One was posted here as Laurie being the author, the other was posted as Eoin being the author, they are both obviously written by the same person with a few minor changes. If this was a collaboration, why was it not posted this way originally. Was this present as being written by both, was there an editing error? I am having a hard time trusting information as it is…
Laurie says
Thanks for asking. The original idea for the article was entirely mine, wrote the first version last Sping. I have added information to the article many times over the last 6 months – as was printed in newspapers, and from official transcripts of the 8 or so public Woodfibre LNG meetings (Feb and June 2014) when they became available for me to comb through. Eoin Finn and I did indeed collaborate on the article, he has been invaluable as a proofreader and editor, giving suggestions for improvement, and was the source of some of the tax info. So I was very happy to give him permission in August to print the article under his name in the Lion’s Bay News. The article probably has changed a bit since then; you have sharp eyes! I may have added new info that has been printed in the press, or perhaps I mulled over content and changed details to improve the article. Pity we forgot about the article in the Lion’s Bay News, busy times. I am happy to be listed as a co-author with Eoin. FYI: I have a MSc in Biology and Eoin has a PhD in chemistry, an MBA, and is a retired partner of KPMG, one of the world’s biggest audit and management advisory services.
Nate Dolha says
I wonder if you or Mr. Finn would go into detail about his experience in the shipping (oil and chemical), forestry & mining industries? Seems like odd places to consult for such an ardent environmentalist, no?
Jean says
If this Ottawa and Quebec incident of this week is not the beginning of terrorist activities to come to Canada, then you are sleeping .. So as they have time to plan the big one … blowing up a loaded Barge full of LNG equal to 50X explosive power of Hiroshima in front of the W-LNG plant, an alive target, day and night for 365 days a year, totally un protect-able , and then the opportunity to hit a 1400 ft LNG tanker in Horseshoe Bay, taking out half of West Vancouver and a couple Ferries, if properly planed…. then I would say, make the government of BC aware that they could be court marshalled, for allowing such a tragedy to potentially occur… Shut down the plans to have a W-LNG go ahead immediately, without any further consideration and without any further rethinking of your present dangerous action as to proceed, as you are embarked on, just shut it down please.
Laurie says
Jean, let’s hope that the horror in Ottawa will end up being caused by a lone unbalanced person.
On the subject of terrorism, you are correct that LNG is a worry re terrorism – in the US, perhaps in other countries. Each LNG tanker has such explosive power.
http://www.iags.org/n0121041.htm
http://www.iags.org/hurstlng0208.pdf
http://www.cfr.org/natural-gas/liquefied-natural-gas-potential-terrorist-target/p9810
Jon S. says
She’s not even from Squamish! Laurie lives in North Vancovuer. We all need to ask why she’s not worrying about coal expansion in her own backyard?
Shamefull!
Jean says
Economic recovery with LNG
It is a slow day in the small Town In BC , and streets are deserted. Times are tough, everybody is in debt, and everybody is living on credit.
A rich tourist from Asia is visiting the area drives through town, stops at the motel, and lays a $100 bill on the desk saying he wants to inspect the rooms upstairs to pick one for the night.
As soon as he walks upstairs, the motel owner grabs the bill and runs next door to pay his debt to the butcher.
The butcher takes the $100 and runs down the street to retire his debt to the pig farmer.
The pig farmer takes the $100 and heads off to pay his bill to his supplier, the Farmer’s Co-op.
The guy at the Farmer’s Co-op takes the $100 and runs to pay his debt to the local prostitute, who has also been facing hard times and has had to offer her “services” on credit.
The hooker rushes to the hotel and pays off her room bill with the hotel owner.
The hotel proprietor then places the $100 back on the counter so the rich traveller will not suspect anything.
At that moment the traveller comes down the stairs, states that the rooms are not satisfactory, picks up the $100 bill and leaves town.
No one produced anything. No one earned anything… However, the whole town is now out of debt and now looks to the future with a lot more optimism.
And that is how the BC Government is about to create an economic recovery with LNG ….adapted from… http://www.abovetopsecret.com/forum/thread544407/pg1
Wolfgang W says
It’s a funny little story alright, but as flawed as the BC government’s thinking we have a comparative advantage as a LNG producer/exporter.
The story you quoted traces only a $100 bill, it says nothing about the economic activity which created the debts in the first place. Goods and services were exchanged. Ignore the $100 bill and think ‘barter’; that will make it clear.
Sorry Jean, this has not much traction…
MattB says
Jon S;
You have my sympathy. Every time you post you dig yourself into a deeper hole. But quoting a source like forbes on global warming? That’s a new low, even for you. Keep it up, you are the comic relief!
Jon S. says
This is coming from the man who consistently slaps down useless, unrelated links to unreliable sources , such as Wikipedia or the Georgia Strait.
Forbes is a reputable publication, and the sources listed in this article are from credible sources unlike most of the garbage you pull up.
MattB says
I feel sorry for your Jon. You really don’t have a clue do you?
Jon S. says
Answers like that are given by those who really don’t have a meaningful reply.
Laurie Parkinson says
Hey folks, it’s great to have people discussing here. And lets avoid insults. They don’t get us very far in the discussion.
Laurie Parkinson says
Hey folks, just discovered a great article on LNG in BC/Woodfibre printed in the Squamish Chief yesterday. Lots of info in it. The link is below.
http://www.squamishchief.com/news/local-news/lng-projects-like-woodfibre-unlikely-to-become-a-reality-says-expert-1.1456258
MattB says
Laurie;
The recent announcement cutting BC LNG taxes in half is no surprise. A bigger short to medium term problem is the economics of the proposed projects. Estimates from Goldman Sachs put the threshold price at which LNG (and natural gas) are economical at around $85/bbl of oil. As oil has dropped below that price, shale gas extraction margins drop below zero for a number of projects and that is for the U.S. – extraction and shipment costs in BC and Canada are even higher.
Back in May, Russian signed a deal to sell natural gas to China via pipeline at $10.50/million BTUs which is at or below the cost of producing the equivalent LNG in BC. BC had hoped to sell LNG to China for $16/mBTU. Why would China pay 60% more for gas from BC than it pays Russia, especially considering that China has more shale gas reserves than both the U.S. and Canada combined?
Russia-China gas deal: The elephant in the room at BC LNG conference -The Common Sense Canadian
http://commonsensecanadian.ca/russia-china-gas-deal-elephant-room-lng-conference/
Jon S. says
MattB,
You have my sympathy. Every time you post you dig yourself into a deeper hole. But quoting a source like Common Sense Canadianon on a business issue? That’s a new low, even for you. Keep it up, you are the comic relief!
Laurie says
Hi Matt,
I agree; I wasn’t surprised by the LNG tax being dropped. I also agree that the economics of BC LNG is a serious problem. Wow, I had forgotten how much shale gas China has. You might want to read the following article recently written by Eoin Finn re Petronas and LNG economics. http://myseatosky.org/category/articles/
And another big problem is: if the 5 hoped for LNG projects do go forward, BC will sell off our natural gas so fast we will become a net importer in a few years – forever. This article is written by the very respected Canadian Geoscientist David Hughes.http://www.watershedsentinel.ca/files/files/Hughes-BC-LNG-Jan2014.pdf
It’s also odd that Premier Clark says we have a moral duty to help wean China off coal-burning plants. She seems to forget the 10 coal burning plants in Alberta and Saskatechewan – already spewing carbon dioxide and asthma producing sooty particles into the air breathed by our neighbors.
Laurie says
http://thetyee.ca/Opinion/2014/10/13/Four-LNG-Questions/
Good article re who is Christy Clark serving re BC LNG industry?
Wolfgang W says
My observation: As expected tax revenues from LNG and with it the likelyhood of a corresponding ‘BC prosperity fund’ keep dropping, so rises the temperature and shrillness of argumentation coming from the the Nats and Jons. Keep your cool boys, it’s the dynamics of the global economy putting a check to Victoria’s ambitions.
Laurie says
http://thetyee.ca/Opinion/2014/10/24/Global-Oil-Slump/
Interesting article re why the price of gas is beautifully low these days. It’s possibly because people are selling off shares from oil companies (360 degree movement), for moral reasons. The Rockerfeller family, which made its money from oil, has recently started to sell all it’s investments in fossil fuels including tar sands for this reason. http://www.bloomberg.com/news/2014-09-22/companies-pledging-action-as-leaders-set-to-talk-climate.html The Australia National University seems to be doing the same thing. http://www.abc.net.au/news/2014-10-07/anu-joins-mining-divestment-campaign/5795922 Stanford University is selling its coal investments. http://news.stanford.edu/news/2014/may/divest-coal-trustees-050714.html . Glasgow University will stop buying fossil fuel stock and gradually sell them.
All this selling is being done for moral reasons, and probably also for financial reasons. Oil cos are losing money from the increasing costs of extracting oil from poorer quaility material (like tar sands oil). The easily available oil is gone. The rest is difficiult to get, due to being in unstable countries or deep at sea – thus expensive to get etc.
LNG prices are directly tied to oil prices. Makes you wonder re the future of LNG.
Wolfgang W says
Laurie, with all due respect for your’s and Eoin’s above article, your logic about the reasons for the presently lower oil prices is deeply flawed. That is not what Nikiforuk writes about, he pretty much mirrors a recent article in the Economist, stating that a slump in demand because of the state of the world economy coupled with ample supply are the cause. I link their leader article here, you can bring up the in-depth article yourself:
http://www.economist.com/news/leaders/21627619-lower-price-will-boost-world-economy-and-harm-some-unpleasant-regimesbut-there-are
The idea that the selling of stocks by the politically correct, even if done at significant volumes, should have an effect on the price of the underlying commodity is putting the cart before the horse, it is also not to the equivalent of some managers of large hedge funds dumping some futures contracts. Morality certainly has no part in the latter, it’s all about money.
Laurie says
Hi Wolfgang,
Thanks for your careful comment. Selling fossil fuel shares may be strictly due to fear of financial losses vs concern re making money from something that results in climate change. Probably depends on the person.
Nikiforuk’s article mentions, in order:
-political chaos in the middle east that might normally drive the price of oil up
-“The price drop may also be signalling a new angst among global investors due to an enlivened climate change fight, and the adoption of the Keystone Principle by community groups across the world.”
-China is no longer growing like crazy…..
-the global economy is now dependent on extreme and lower quality hydrocarbons (ie oil etc) which has taken a huge financial toll on oil and gas companies , which have reported record debt levels and cash flow probelms in recent years
-low oil prices should be sending shudders through the government of BC. The price of LNG is directly linked to oil prices
-“last but not least a weakening of oil prices may be a signal of growing wariness among investors about the profitablilty of high cost hydrocarbons and their accompanying carbon liabilities given renewed concerns about climate change”
So you are correct. Nikiforuk didn’t directly speak of moral reasons for selling fossil fuel investment, and I overstated the my moral thought. However to me, and to many, concern about climate change is not just financial. 🙂
Wolfgang W says
The ‘growing wariness among investors’ Nikiforuk writes about has to be read as effect rather than the cause of weak oil prices since they obviously impact the profitability of high cost hydrocarbons investments. How long will the slump last? Even the Economist calls the prediction of oil prices a ‘mug’s game’.
Laurie says
Certainly the prediction of oil prices is a ‘mugs game’, and many investors invest simply to make money.
However in my books, concern re climate change, and investment keeping that in mind, has moral clear aspects to it. That includes the Rockerfeller family (who in recent years have been big supporters of environmental causes), the World Council of Churches, and Archbishop Desmond Tutu.
http://www.theguardian.com/env…
In the above article, as Beth Dorsey,the chief executive of the Wallace Global Fund and the Divest-Invest movement, which has led the divestment campaign says:
“In the last great divestment campaign, Harvard said no before it said
yes. I think it’s just a matter of time,” Dorsey said. “Unlike with the
anti-apartheid movement, this is not just an ethical issue. There is a powerful
financial reason as well.”
Wolfgang W says
I am not disputing what you are saying re your concern about climate change and the ethics and moral dimensions associated with actions, but we are getting off course from where the discussion started: The most likely cause of recent drop in oil prices. Let’s not make it more complicated than it has to be, remember Ockham’s razor.