B.C. election spawns uncertain future for resource and environmental policy
Though the British Columbian election results are not yet final, there are some things we do know. With the growth of the Green Party, and the strong performance of the NDP, Premier Christy Clark will likely have to show greater deference to their policy preferences if coalitions are to be formed either on an ongoing basis or piecemeal for specific legislation. This means that the future direction of environmental and resource policy in the province will be uncertain.
The Tyee has several background sheets that neatly lay out the different positions of the parties on energy and climate change. And any triangulation towards the positions of the NDP and Green parties bodes poorly for B.C.’s energy and mining sector, Canada’s energy economy, and especially that of Alberta.
For example, both the NDP and Greens favour strict limits on LNG (liquefied natural gas) exports in B.C.—the NDP supports one such facility, the Greens support none. Both the NDP and the Greens oppose the Trans Mountain expansion pipeline; and both support very strict greenhouse gas emission targets and steep increases in B.C.’s carbon tax (to $50/tonne for the NDP in 2022, and $70/tonne for the Greens in 2021). That $70/tonne will have a serious impact on B.C. competitiveness with the rest of Canada and all of the United States.
We’ve written about what B.C. stands to lose if they don’t develop their natural gas exports, and it’s not pretty. Under conservative assumptions about B.C.’s ability to service Asian demand, the study found that failing to do so could cost B.C. $22 billion by 2020 and $25 billion by 2025.
We’ve also written about the costs of ongoing pipeline obstructionism in Canada, and that scenario is equally negative:
If Canada were able to export one million barrels of oil per day to markets accessible from ocean ports—with the lion’s share of heavy oil and bitumen exports continuing to flow to U.S. oil markets—substantial incremental revenues could result. At a US$40/bbl price this could be as high as $2 billion per year (in Canadian dollars) compared with selling into the flooded U.S. market. At an average price of US$60/bbl, it could reach C$4.2 billion; and at US$80/bbl, C$6.4 billion. If higher netbacks from markets accessed from tidewater connections were realized by all Western Canada heavy oil production, at the US$40, US$60, and US$80/bbl price levels the annual benefits could reach C$8.9 billion, C$18.5 billion, and $C28.2 billion, respectively.
The B.C. election has poured yet another pitcher-full of uncertainty into Canada’s energy markets across Canada, but perhaps most in Alberta, which desperately needs the pipeline capacity that’s now less certain to be developed.
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