http://www.vancouversun.com/news/Finance+Minister+Flaherty+nixes+request+break+help+liquefied+natural/8133958/story.html
The Federal Government told the BC Government and LNG Industry to get stuffed, no more tax breaks, no more subsidies(details in the above Vancouver Sun link)..
As you know Geoff Morrison(spokesman for CAPP) told Christy Clark and the media in British Columbia that without a change to manufacturer status, which would bring a massive capital building write-off, without this help from the Federal Government they couldn`t go forward with their proposed British Columbia projects, Geoff Morrison said they couldn`t compete with Australia and other countries without this help..
Well, there it is, BC`s fledging LNG export industry is now dead, caput, finished, unless Geoff Morrison was lying?...
Anyone confused about what we`re talking about, below post explains in detail....
British Columbia`s LNG Corporate Welfare Scheme Exposed
What is going on with LNG for export development in British Columbia, it really is an important question?
For several years at least we have been hearing about our financial
saviour in waiting, the LNG industry, in the last year this fledging
industry`s rosy forecast have been front in center in expensive ad
campaigns, the promise of a need for millions of workers, the promises
of $trillions of dollars in revenue, numbers so large, numbers so
lucrative that soon our roads will not only get the potholes fixed but
be repaved with gold,
wealth beyond our dreams, who needs "
chump-change" tar sand coinage when British Columbia can start our own mint fueled by natural gas..
Why the delay, why the holdup, for years LNG producers have been talking
a good game and they really have spread LNG promotional sauce liberally
over the last 18 months, so why is nothing happening, why indeed..
Companies pitting countries against each other, the race to the bottom,
who will giveth the most, who will look the other way while corporate
corruption skews the books, plays the field and creates another
corporate welfare industry..
Alberta, a $6 billion dollar deficit this year, their 5th deficit in a
row, all the development, foreign investment, big corporate takeovers
with massive premiums paid on share prices, the most oil and gas
production in their history and the deficits to Government are growing
exponentially each year...Why, how can this be, by accident, by market
forces, or by sinister corporate design, the race to the bottom,
subsidies, kickbacks, financial fraud and offshore tax havens, you can`t
name just one of those items because those corporate activities are all
in
play, all of the time, including deliberate corporate fraud...
Let`s look at Australia, $100s of billions of dollars have been and are
being invested in LNG export terminals and related facilities, every LNG
project from every company doing
business
in Australia, every single project is and has gone over-budget by
30%..40%..50% even by 100% in some cases...A Chevron LNG plant build,
Chevron`s Gorgon LNG plant has ballooned from a $30 billion dollar build
cost to now an estimated $60 billion dollars plus..And Chevron isn`t
alone, every company building similar facilities have seen similar cost
over-runs..Coincidence, bad luck, how about deliberate guile and
deception, how about corruption, ingrained systemic corporate
corruption..
What if I told you the Australian Government pays 30% of all LNG capital
costs, meaning company X building an LNG export terminal in Australia,
they budget $30 billion dollars for the build, $10 billion dollars of
that money comes back to the company as tax breaks and or subsidies, and
just imagine if the corporate petroleum industry and their many
partners colluded to bring build costs up, and up, and up, projects all
running 40%..50%..60%..100% over budget, with winks and nods and
corporate guile company X doesn`t
receive
$10 billion dollars back from the $30 billion dollar build but receives
back from Government(public tax dollars) a sum of $34 billion dollars
on an inflated $100 billion dollar build..In a sense, systemic corporate
corruption has found a legal loophole to have the general public in
Australia pay for the entirety of the LNG plant builds...!
With a wink, with a nod, supplier A doubles his prices, producer Q triples his cost, all
bills
flow to the general corporate contractor where this excess gravy is
skimmed right back to the general corporate builder.... It`s a ponzi
scheme, exactly what is going on in the Alberta tar sands, the more oil
production being done the financially poorer the province gets, British
Columbia LNG exporters want in on the action,....
___________
Perry Williams and Jennifer Hewett....
"
Australia’s biggest ever resources development, Chevron’s Gorgon liquefied natural gas project, faces a $20 billion cost blowout to more than $60 billion because of the high dollar, union demands, high-cost local manufacturing and productivity issues......
The Gorgon cost blowout means the budgets of new LNG projects in
Australia and Papua New Guinea have increased by more than $35 billion
since May last year.
On Monday, ExxonMobil, Oil Search and Santos raised their estimated
cost of PNG LNG by $US3.3 billion to $US19 billion and cited the higher
than expected Australian dollar, delays in accessing land, bad weather
and logistical difficulties.
PNG LNG is just the latest in a string of cost rises among Australasia’s unprecedented line-up of LNG construction ventures.
Woodside Petroleum’s $15 billion Pluto venture ended more than a
quarter over budget, while BG Group and Santos have both had to lift the
cost estimates for their coal seam gas-based LNG projects in
Queensland."
http://www.afr.com/p/national/huge_lng_cost_blowout_kaLHigEKnRVunB0go7TRkJ
http://www.arcticgas.gov/2012/cost-overruns-could-hurt-competitiveness-australia-lng
http://www.telegraph.co.uk/finance/newsbysector/epic/bgdot/9244190/BG-Group-shares-hit-by-5.4bn-cost-overruns-on-Australian-LNG-project.html
http://www.ft.com/intl/cms/s/0/62e4f5e8-3f84-11e2-b0ce-00144feabdc0.html#axzz2KdUKKDdT
http://www.smh.com.au/business/too-much-too-soon-has-left-lng-industry-overstretched-20120803-23kit.html
http://www.downstreamtoday.com/news/article.aspx?a_id=36651&AspxAutoDetectCookieSupport=1
http://www.forexlive.com/blog/2012/11/19/shell-having-second-thoughts-on-australian-lng-investments/
http://www.macrobusiness.com.au/2012/11/drunken-insights-lead-the-lng-debacle/
If you peruse those above links the picture becomes very clear, LNG is a
welfare industry on steroids, the Australian Government will probably
never get back their investment of public tax dollars
You see what is going on, imagine $300 billion is being spent on LNG
facilities in Australia(It`s true), guess what, the Australian public
has to surrender back to the corporation...$100 billion dollars...And if
that $300 billion dollar upfront cost was really only $100 billion in
value..With winks, nods and monies flowing from Company X`s left hand to
the Company X`s right hand...Then in reality the tax payer is paying
for everything, in other words, corporate welfare dependent on
Government(read subsidies and tax relief)steroids...
The exact same scenario is playing itself out in Alberta, the petroleum
producers are crying about paying discounts to the refiners, paying a
per-barrel discount of up to..$30 dollars per barrel, yet these oil
extractors also own the refineries, in other words, Alberta Tar oil,
(which is more expensive to refine because tar oil has to go through
what is called an up-grader first, then on to a regular refinery) is
being peddled cheap to the refiners, this allows the tar oil extractors
to claim big losses in the oil patch, it allows companies to pay almost
no royalties, just look at Alberta`s massive yearly deficits that have
all accrued under a Stephen Harper oil obsessed Federal Government,
coincidence?..Not a chance..
These so-called steep Alberta oil extract
discounts
are not being passed on to consumers, prices at the pump are at record
highs, what we are witnessing is big corporate oil companies have
figured out ways to avoid paying any taxes, one hand of a company that
pays royalties to Governments loses money to avoid paying anything, the
right hand of the company that refines, gets the discounts, make huge
margins of money, money not subject to capital gains or royalties, it`s
all a shell game designed by big oil to avoid paying any taxes, hence
Alberta running its 5th straight massive multi-$billion dollar deficit,
this deficit $6 billion dollars...
(This linked story by Robyn Allen explains the Alberta discount oil shell game in detail
http://thetyee.ca/Opinion/2013/01/29/Canadian-Oil-Producers/)
http://powellriverpersuader.blogspot.ca/2013/02/british-columbias-natural-gas.html
So LNG exporters are proposing spending $150 billion dollars on LNG
facilities in BC, and if like Australia the projects all balloon way
over budget, let`s say they claim spending $300 billion dollars after
all is said and done.....
Well, blow my socks off, I was wondering why there was delay after delay
for actually starting the builds of any of the proposed LNG facilities
in British Columbia, I`m not wondering anymore, the one issue front and
center, securing long-term contracts from Asian buyers at lucrative
prices has been a non-starter, no one will sign the papers, that reason
is obvious, the price is low, there`s a world glut including China
itself which has a 300 year domestic supply of natural gas, LNG
exporters are just like our IPP run of river companies who did nothing,
built nothing, acted only on their own behalf, laid out no money to
build 1 kilowatt of power without 30 and 40 year guaranteed contracts,
contracts that Gordon the thief Campbell was more than willing to
sign..IPP`s did not take one single risk, we, that taxpayers, the BC
Hydro ratepayers were ripped off...
So anyway, here I was musing to myself as to why BC LNG exporters, why
the proposed LNG exporters who by the way have already been granted
export licenses haven`t pulled the
go-ahead and build lever,
finding countries to sign long-term energy buying contracts has been
problematic at best, in other words, there are no takers...The other
issue is a cheap supply of electrical power, no, make that other issue
LNG exporters wanting a free supply of electrical energy, LNG exporters
require massive amounts of electricity to freeze natural gas, LNG
producers do NOT want to use their own product to generate electricity,
they want Site-C dam built and they want IPP expensive power, with a
caveat, they want you the taxpayer guaranteeing the payment to IPPs for
40 years, they want this expensive niche power for virtually free, only
one problem, there is no free power, these IPPs are guaranteed $140
kilowatt or more, guaranteed for 40 years, and as we are dumping excess
power now, no buyers, LNG exporters are using that exact argument to
justify free power, that and the
we must be competitive with other countries argument..
I knew those above two issues were major stumbling blocks for the
emerging corporate welfare industry, but today it was confirmed by a
representative from CAPP(Canadian Association of Petroleum Producers)
that these are issues, and more, Geoff Morrison confirmed that LNG
producers, proposed builders of LNG export facilities in British
Columbia, LNG pipelines, LNG terminals will not build anything
unless......
Unless the BC Government and the Federal Government agree to allow 30%
capital cost allowances, meaning they want a 30% subsidy on the money
spent building facilities, the CAPP representative claims that unless BC
and Canada MATCH the capital building allowances of Australia they
won`t be able to compete...!!!!
Blow my socks off, read again what is going on with cost over-runs in
Australia, picture this, LNG facility builders(on paper) claim to spend
$300 billion dollars, you taxpayers are on the hook for $100 billion
dollars, meaning we the public, the Government won`t see one single
$dollar of real money until we surpass $100 billion in LNG royalties
paid, only after that, after the $100 billion mark in royalty revenue
would we see any money at all, and I doubt we will ever see that amount
of royalties paid..
And if LNG exporters, like the Tar sand diggers, claim discounts to
their right arm refining buddies, if world LNG prices are so low that
royalties aren`t paid at all, then we will find ourselves like Alberta,
more and more environmental damage, more and more resource extraction
and more multi-$billion dollar deficits..
Today on cknw with Billy Good, between 10:30 am and 11:00 am was a
representative from CAPP, Geoff Morrison speaking on behalf of BC`s LNG
industry said just that, LNG facility producers like Apache, Chevron,
Shell, EnCana gas, all of them want and need to have the LNG industry
re-classified as a manufacturing industry and be able to have the
ability to write off all provincial taxes plus a 30%(To match Australia)
capital expense subsidy..
And yet Christy Clark`s jobs advertising blitz, her advertising the hell
out of a LNG future paved with gold, claiming $trillions of dollars for
BC, millions of needed workers, the talk of lucrative Asian pricing,
just build it and gold will rain from the sky, and as I and others
suspected, behind the scenes, tax breaks, subsidies, capital write-offs,
bribery, subtle threats, pitting country against country is going
on...If this industry is so lucrative why won`t they build it on their
own dime, why do they need re-classification, why the need of huge
subsidies..
This is indeed a boondoggle in the works,
Cheniere energy in
the USA has signed long-term energy buying contracts with Asia, at
about 1/3 of the proposed selling price Christy Clark and Pat Bell talk
about..At $6 dollars per unit these ultra-expensive proposed British
Columbia LNG freezers will never make money or even pay for themselves,
let alone supply BC Governments substantial revenues..
Cue up February 11th..10:00 am, fast forward to just past the 10:30 am news..
http://www.cknw.com/news/audiovault/index.aspx
Listen to CAPP representative Geoff Morrison on cknw cry for Government
handouts and subsidies, listen to Geoff Morrison using the (we must be
competitive with what the Australia Government offers card)..And if the
next country or Province offers even more corporate tax incentives(Right
movie industry?)
LNG producers can`t get long-term energy buying contracts, 2 export
licenses have been already been granted, 1 of them for almost 2 years
now, what are they waiting for, still nothing built, nothing started,
back-room discussions are going on right now, talks about reclassifying
the LNG industry to Manufacturer status which will in turn bring a 30%
plus capital cost subsidy, the companies also want their own HST, the
ability to write off all provincial taxes..The
hold-up is about
making Canadian taxpayers pay for big oil`s profits through subsidies,
tax-breaks and guile..For a promise of some employment our Governments
are on the verge of allowing corporate raiders to dig deep in your
pockets ..
Big Corporate Oil n Gas Companies are asking British Columbians and
Canadians to trust them..Look to Australia and Qatar and see this ponzi
scheme being played out, or look one province over to Alberta and see
them going backwards, their largest ever deficit this year, their 5th in
succession, see big oil companies playing the Wildrose Province for a
sucker, as their yearly provincial deficits grow and grow despite
massive tar sand development..
Another good read below
http://thetyee.ca/News/2013/02/20/Natural-Gas-Gluts/
This one too
http://thetyee.ca/Opinion/2013/02/21/Why-Cant-Alberta-Break-Even/
The Straight Goods
Cheers Eyes Wide Open
