How Could the Provincial Election in BC Impact the Oil and Gas Industry?
British Columbia’s (BC) provincial election is scheduled for May 14, with natural resource policies at the top of the agenda. Major issues include expansion of fracking in Northern BC, liquefied natural gas (LNG) plants along the west coast and crude oil pipelines from Alberta are all major points of contention.
The two main parties vying for the job are the Liberals and the New Democrats. Christy Clark, incumbent Liberal Premier, has built much of her platform around the development of LNG export facilities along the coast. There are currently nine LNG export plants proposed for the BC west coast and the Premier has built a prosperity fund that will house the government earnings from these. Many of the financial promises in her platform are centered on the assumption that at least five of these will be actively exporting in the next decade.
Building LNG terminals is just the final step to take BC’s natural gas to market. There are still some concerns regarding hydraulic fracking in the northeast of the province where the gas would be extracted. NDP leader Adrian Dix was forced to clarify his position on fracking recently after one of his candidates said that the party would place a moratorium on it if they were elected. Dix clarified the party’s position that the NDP would not put a moratorium in place for the first two years until a scientific study is concluded to determine the impact on the environment. It is likely that a scientific study, which could halt fracking, would stall the development of LNG facilities because if there were a moratorium in the future, the source for the natural gas would dry up.
Figure 1: West Canadian Select Crude oil (graph created in ZEMA)
The other major resource development issue for British Columbians to question the candidates on is their stance regarding transporting crude oil from Alberta to ports on the west coast. Federally there has been pressure on BC to help Alberta get the crude to eager buyers in Asia. Expanding the market for Alberta’s oil could help to decrease the gap between itself and WTI prices in the US (see Figure 1). However, Christy Clark has laid out conditions with Alberta and the federal government that must be met for pipeline development to occur. These conditions include environmental regulations and a “fair share” of the fiscal and economic benefits of the pipeline.
The pipelines in question include the Northern Gateway which would bring oil across Alberta to the northwest part of BC and the Kinder Morgan extension which would increase the amount of oil leaving the port of Vancouver. Adrian Dix has been vague on his position about the Kinder Morgan pipeline at first saying he was unlikely to support it, and moving to say that they would not like to see the port of Metro Vancouver radically transformed into an oil exporting facility.
Mr. Dix has been clearer with his party’s position on the Northern Gateway pipeline saying that the NDP would be maintain a moratorium on offshore oil exploration, drilling and tankers on the northwest coast of BC.
For the first time in many elections the provincial parties in BC are sparring over natural resource development. I think it’s great to see citizens being given a distinct choice on how our land should be developed.