LNG Exports from British Columbia: The Cost of Regulatory Delay
British Columbia’s natural gas resources are substantial and the international market for liquefied natural gas is growing, particularly in the Asia-Pacific region. British Columbia is well placed to serve that market: under conservative assumptions, BC’s export capacity could be 42% to 74% of Asia-Pacific imports of LNG in 2020. Benjamin Zycher and Kenneth P. Green demonstrate in LNG Exports From British Columbia: The Cost of Regulatory Delay that, while strong environmental and other protections are necessary, regulatory and other delays are hindering the ability of British Columbia to compete for those sales. The International Energy Agency notes, for example, that, because of these delays, “no Canadian LNG project will start production” by 2020, even as 17 international projects were under construction as of May 2015, with target on-line dates between 2015 and 2019.
Under the conservative assumption that actual sales of BC LNG to Asia-Pacific importers would be only 11% to 20% of that market in 2020, the annual export revenues lost due to delay would be equal to between 2% and 9.5% of BC’s GDP in 2014. This cost is substantial: CA$22.5 billion in 2020, rising to CA$24.8 billion in 2025. The magnitude of these lost export revenues should encourage policy makers to streamline the regulatory process so that British Columbia is able to make use of its large natural gas resources.