B.C.'s liquefied natural gas boom to fuel $100 billion Prosperity Fund

VICTORIA – Premier Christy Clark’s Liberal government says the development of liquefied natural gas in northern British Columbia represents a generational opportunity that has the potential to wipe out the provincial debt and eliminate the need to pay sales taxes.

The government’s throne speech delivered Tuesday — less than three months before the start of an election campaign — said LNG export possibilities represent a possible $1 trillion boost to B.C.’s gross domestic product over the next 30 years.

Clark announced in the throne speech a new B.C. Prosperity Fund that could accumulate between $100 billion and $260 billion in revenues from LNG royalties and business taxes, enough to wipe out the province’s current debt of $56 billion by 2028.

“Future revenues will be designated to this fund, ensuring British Columbia families can benefit from the prosperity created by natural gas in our province,” said Guichon, who read the government’s intentions in its speech from the throne.

But the government also emphasized that the fund can’t be used as type of slush fund.

“Your government is resolute that the Prosperity Fund cannot become a backstop or excuse for poor fiscal management of government.”

The main focus of the Prosperity Fund will be to cut the provincial debt, which costs the province $2.4 billion annually in debt-servicing costs, said Guichon.

“Whether it’s eliminating the provincial sales tax, or making long-term investments in areas like education or vital infrastructure that strengthen communities — these are the kinds of opportunities the B.C. Prosperity Fund can provide,” she said.

Recent estimates of the impact of LNG development in B.C.’s north includes the creation of 39,000 jobs over the nine-year construction period and 75,000 new full-time jobs if the five facilities reach full production.

The Liberal government promised in its September 2011 jobs plan the development of three LNG plants in northwest B.C. by 2020. That figure has since been upgraded to five plants, but the completion dates are not as firm, and the companies have yet to make their final investment decisions.

But since last year major gas and oil companies, including Chevron and Shell have invested $6 billion in British Columbia LNG projects, including preparing export sites in the Kitimat area.

The LNG projects involve building pipelines from northeast B.C.’s natural gas fields to LNG terminals near Kitimat, where the product will be shipped to Asian markets. LNG is natural gas that is cooled to a liquid form where it can then be loaded onto tankers.

Last year, Clark said her government’s plan to export LNG to Asia is B.C.’s economic equivalent to Alberta’s oilsands.