British Columbia’s
LNG Advantage
Steve Carr. Deputy Minister
Ministry of Natural Gas
Development
2014 CAPP SCOTIABANK
Investment Symposium
West Coast LNG Panel Plenary Panel
Our Competitive Position
– Short transport times to
Asian markets
– Competitive fiscal policies
– Secure, stable government
– World leading
environmental standards
– Ongoing First Nations
engagement
– Large gas reserves
– Labour availability
– Strong regulatory regime
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Short transport times to Asian markets
Canada
7,300 km
10 days
Mozambique
13,000 km
17 days
Australia West
6,855 km
9.5 days
US Gulf Coast
17,145 km
23.5 days
Australia East
7,000 km
9.5 days
Source: IHS CERA
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Fiscal and Policy Framework
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Competitive Framework: Tax
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B.C. is committed to providing certainty on tax
Designed to keep B.C. competitive with other jurisdiction
Ensure proponents get capital out early
Based on four core principles for fair and balanced approach:
:
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LNG Income Tax: Creating certainty for
LNG development
• Applies to income from liquefaction process at LNG facility
and applies to LNG for both domestic and export markets
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Application of LNG Income Tax (Plant
Producing 12 MTPA)
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Is B.C. a competitive jurisdiction?
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International Competitiveness: EY Study
• EY analysis & report: review of tax and royalty regimes
of key competitor jurisdictions
– Australia
– Alaska, Georgia, Louisiana, Oregon and Texas
• Concluded B.C. is competitive
– Low overall tax burden and competitive royalty regime
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Competitive Tax Regime for LNG: EY Study
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Low Risk Jurisdiction
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Policy Framework: Environmental Policies
• World-class environmental policies:
– Strong regulatory regime
– Legislated aggressive GHG
reduction targets
– Revenue neutral carbon tax
– Carbon neutral government
– Legislated requirement for 93% clean energy
• Committed to maintaining leadership on climate
change and clean energy by ensuring the
“cleanest LNG operations in the world”
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GHG Emissions and LNG
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As cleanest burning fossil fuel, natural gas
is part of a global climate solution
When replacing coal, LNG can be up to
20% lower GHG emissions for the full fuel
cycle
GHG Policy
• We are considering a single, world-leading
GHG benchmark for LNG facilities
• We exploring flexible compliance options to
meet GHG benchmark
• B.C. will look to mitigate costs
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Policy Framework: First Nations
• First Nations are generally supportive of LNG
development as a “low risk resource”
• B.C. is involved in LNG-related negotiations
with approximately 34 First Nations
• First Nation opportunities in agreements include:
– Financial benefits from B.C.
– Environmental initiatives
– Skills training and jobs
• LNG opportunities throughout B.C. value chain:
upstream, midstream and downstream
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First Nations: Agreements
Upstream
• Several upstream agreements in place with First Nations near
gas fields and negotiating new agreements with remaining
First Nations
Midstream
• Precedent with “Pacific Trails Pipeline” agreement with First
Nations Limited Partnership and pursuing agreements for new
pipelines with about 30 First Nations along pipeline routes
Downstream
• Some agreements with Haisla First Nation and revenue
sharing negotiations underway for new LNG development on
provincial lands
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Policy Framework: Upstream Development
(B.C.’s resource base)
• 2,933 trillion cubic feet (tcf) of
natural gas from tight and shale
• Montney play has 1,965 tcf of
gas
– 271 tcf is expected to be
recoverable for market
• Horn River play has 448 tcf of
gas
– 78 tcf is expected to be
recoverable for market
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Upstream Development: Competitiveness
Upstream competitiveness key element of LNG overall competitiveness
New Royalty Program
• New royalty program (‘Tier 1’) to incent drilling activity in shallower areas
• Opens up 32 trillion cubic feet of natural gas to development in the
Montney
Other upstream initiatives being considered
• 3-year Infrastructure Royalty Credit Program
• Pilot new royalty credit program targeted to innovative, ‘clean’ technologybased joint infrastructure projects (e.g. water recycling, GHG emission
reduction projects, etc.)
• New OGRRIP capital triggered by positive Final Investment Decisions
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Access to Labour – Invest with Confidence
LNG projects need
• Sufficient supply of skilled
workers
• A stable labour environment that
supports business
• Collaborative government
B.C.’s Highly Skilled Workforce
• 2.4 million workers – largest
workforce in western Canada
• Canada has the highest rate of
post-secondary education in the
world
• World-class education and
training system
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Labour Supply Plan – Priorities
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K-12 System
Public and Private Post-Secondary Institutions
Apprenticeship Systems
Labour Market Programs
Web and Marketing
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Pr omotion and Attraction
Labour Mobility
Credential Harmonization
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Federal and Provincial Immigration Streams
Temporary Foreign Workers
Foreign Qualifications Recognition
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Strong Regulatory Regime
• Community Planning
• Permitting
• Environmental
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B.C. is an attractive place to invest
• Continue to work to ensure
that B.C. remains
competitive
• Global and economic
conditions will continue to be
considered as B.C. finalizes
the key components of the
LNG Income tax and
environmental policies to
ensure B.C. remains
competitive
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2014 INTERNATIONAL
LNG IN BC
CONFERENCE
MAY 21-23 2014
VANCOUVER CONVENTION CENTER
https://www.lnginbcregister.ca/register
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