Wednesday, November 27, 2013

British Columbia`s LNG Future, As Told By An Expert, Full Of Holes, Guesses And Bafflegab

I like to read, and occasionally write, and every now and then one runs across a story so well written, so articulate, compelling and in plain understandable English tongue, no ambiguity..

And tonight I read that article...

Focus Online
Victoria`s magazine of people, ideas and culture

The article is titled..

Manufacturing consent

 By David Broadland, November 2013

 I`m going to post a few passages from David Broadland`s outstanding worldclass article on LNG, and I know it`s worldclass because I have read thousands of LNG stories from around the world..This is the story of ponzi, of desperation, of myth, fabrication and plain old spin-doctoring, it`s a story of political donations to the BC Liberals from energy companies who gambled in B.C. and lost...It`s a story of guile, illusion and guesstimations disguised as science...

I don`t want to understate the story...Let`s get are only a few passages of many from the article titled...


Manufacturing Consent


 By David Broadland


 "Between 2005 and the 2013 election, EnCana Corporation made 52 contributions to the BC Liberal Party totalling $791,270. EnCana is an Alberta-based company that produces and markets oil and natural gas in several North American locales, including northeastern BC. The company is second only to mining giant Teck in the amount of money it gives to the Liberals. EnCana isn’t the only natural gas producer in BC providing financial assistance to the Liberals. Other donors include Spectra Energy, Talisman Energy, Apache Corporation, Crew Energy, Nexen, Devon Canada, Imperial Oil, Suncor Energy, ConocoPhillips, Arc Resources, and Penn West. ......

though the NEB released an Energy Briefing Note in November 2010 indicating that the average cost of producing Horn River Basin shales was $4.68 per gigajoule in 2009, not including pipeline tolls.”According to the BC government, in 2013 the average price a BC producer was expected to get for its natural gas “at plant inlet” was $2.25 per gigajoule, less than one-half the NEB’s estimated cost of production from a Horn River Basin well—not including pipeline tolls.....

And therein lies the rationale for liquefying and exporting BC’s natural gas to Asia. North American gas marketers will buy BC shale gas, but only at the same price they pay for gas produced much closer to major markets from wells that are much less expensive to drill. The NEB estimates a single horizontal well in the Horn River Basin costs up to $10 million.......

 But even without knowing that cost, it’s clear the distance between the NEB’s estimate of $4.68 per gigajoule and the current market price makes Horn River Basin production a losing proposition. BC gas producers, who miscalculated the impact American shale gas production would have on North American prices, invested close to $3.7 billion acquiring drilling rights on Crown land in BC shale gas plays between 2005 and 2010. Now they’re looking for a way to recoup their bad investment......

 Coleman is expected to announce that formula in November and the Liberal government will presumably “lock it down” in the legislature soon thereafter. Will Coleman lower, or eliminate the royalty to make conditions more favourable for LNG investors?
It’s already at rock bottom. Last February’s budget stated the Province would collect $228 million in royalties from natural gas production this year, which, it said, was a rate of 20.9 percent. That was somehow reassuring because the maximum royalty rate is 27 percent. But those who were reassured were being misled. The effective royalty rate is actually less than 7 percent, lower than BC’s supposedly lowest rate of 9 percent.....

 The Ministry spokesperson obliged: “Producer prices since June have ranged from $0 per thousand cubic metres to $88 per thousand cubic metres.”
That big fat zero suggests a gas well that’s a losing proposition. A money-losing well would certainly produce the minimum royalty. So would one where the producer price was $50. But more importantly, in an industry where producers also operate pipelines and processing plants, or have joint ventures with pipeline companies and processors, what’s to stop companies from charging themselves or their partners enough to bring the producer price down to zero, and then splitting the unpaid royalty on some other balance sheet?

 The uniqueness of the Horn River Basin study is noteworthy. To date, the Basin is the only shale gas area in the Province that has undergone even a probabilistic determination—by government—of the volume of natural gas that might be found. That is to say, the Province has only a vague idea of how much natural gas can be economically extracted in BC....

If all the liquefied natural gas projects that have applied to the NEB to export natural gas from BC ports were operational today, and production for the North American market remained at roughly 1.6 trillion cubic feet per year, BC would burn through its discovered marketable gas in under 3.5 years.
If “undiscovered” gas is included, and that means gas that hasn’t actually been found yet but is assumed to exist and for which a quantity has been estimated by a probabilistic resource assessment—surely a case of counting your chickens before they’re hatched if there ever was one—the reserve of 109 trillion cubic feet would last about 16 years.
So what is Coleman basing his “84 years” claim on?..

Considering the BC Liberals’ indebtedness to gas producers, it’s only prudent to also question what motivated this scheme. Did Clark get her “vision” from EnCana founder and former CEO Gwyn Morgan when she appointed him to her transition team in 2011? Or did it come to her shortly thereafter, when Morgan handed over the second of two $50,000 personal cheques made out to the BC Liberal Party?

David Broadland is the publisher of Focus.


Please go read the whole article, it is quite long but very readable..

Manufacturing consent


Below are links to more critical information on LNG and the big scam, the ponzi, BC Liberals under Gordon Campbell told us IPPs would make us rich as an electrical exporting super-power, now BC Hydro is broke...BC Liberals said the 2010 Olympics would make us rich, put BC on the map, they didn`t even break even..

BC Liberals told us exporting wood to China would make our forestry industry flourish, industry is dead and forest depleted..BC is drowning in debt..And there isn`t one shovel in the ground and no big energy companies have made a final investment decision(FID)..

British Cloumbia is a sick, corrupt province run by what best could be described as...THIEVES!

The Straight Goods

Cheers Eyes Wide Open


Anonymous said...

Thanks for this Grant. I wonder how long it would take little old me to be able to buy my government favours. At the cost of $800K I figure a lifetime, as long as I don't eat, have a home or kids.

Anonymous said...

Grant that article is amazing, bits and bites of what you`ve been telling us for years.


Anonymous said...


Anonymous said...

That article blew my mind, confirmation that Rich Coleman and Crusty Clark are full of it. LNG $trillions for BC, nada chance, LNG $billions for BC, very unlikely!!!!!

Thank you so much for all the hard work you do

Anonymous said...

You are on fire Grant, between writing everything we need to know on LNG, BC Hydro, Ferries, Enbridge you give us links to golden data.

25 great posts this month, while self anointed king blogger has maybe one.


Grant G said...

Thanks..David Broadlabd`s article was real good..

Please anons(3:55 pm), I asked for no comment on what the sewer rat is doing..

Maybe his online plea in his comments for a job with the Van Sun or The Province will bear fruit.

Ha, or maybe they`ll like everyone else, tell him to go fly a kite.

Cheers and..

Good Day

Anonymous said...

It would be interesting to see the numbers behind BC Hydro's 10-year plan. The BC Hydro web site only contains the usual "final, fluffy" version, suitable for the unquestioning public.

Given the length of this planning time line, shouldn't there be some mention of the contributions the province is expected to make to BC Hydro towards the end of this period, when we (ie, the provincial treasury) is supposed to be awash in LNG royalties money? We see that BC Hydro expects the dividend it pays to the province will drop to 0 by fiscal 2022, but the dividend does not go into negative territory - ie, show the province starting to pay off BC Hydro debt and/or truly reducing pressure on residential rates - after that.

Sooner or later the government's rosy portrayal of the future benefits of LNG will have to come face-to-face with reality. If we don't see any of these so-called wonderful benefits in the 10-year BC Hydro plan, when will they start showing up?

Anonymous said...

The anointed one, More like the Tsukmyassinator!

Sorry Grant, I couldn`t resist!


Grant G said...

@JD...That`s not very nice, it however..

Very Funny...Too much!

Anonymous said...

And we the consumers will be paying more, much much more.

Anonymous said...

Crusty promised us the moon and the stars, and the rubes in BC bought it, lock, stock and barrel. Too bad it was a paper moon and tin foil stars.....

no worries, be happy....fools.