26 Mar 2014

BC Government Unveils LNG Taxation Plan

Mark Levesque writes:*

On February 18 the Government of BC tabled its 2014 budget. In it the government provided details on its plans to develop liquefied natural gas in the province. LNG development is an important natural resource for the government, as the revenues they expect to receive from its development will be critical to the Liberal Party’s election promise of creating a debt-free BC [pdf].

LNG is a natural resource that exists in a liquefied state when cooled to -162 degrees Celsius. In its liquid state the resource is easier and safer to transport, particularly because as a liquid it is safe to transport at standard levels of pressurization, making it non-explosive.

However, while proponents of LNG development are quick to highlight its environmental benefits, there are costs as well. In particular, developing LNG in BC would require an expansion of the provincial energy system, such as a new dam along the Peace River. While dams provide renewable energy, they have environmental costs associated with them as well.

Bottom Line: LNG has tremendous potential for BC, but the decision to develop it must take into consideration the full spectrum of costs and benefits associated with its development.

* These guest posts are from students in my resource economics class at Simon Fraser University. Please leave feedback on their logic, ideas and style and suggestions of how to improve.

1 comment:

301207138 said...

Interesting post about liquefied natural gas. The post spends most of the time talking about the benefits to the government, environment, and pipeline companies. While you did mention there are cost involved with LNG, it would be interesting to learn more about what exactly these costs are.

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