Written by Grant G
Time for a Straight Goods look at the LNG Canada deal....
Justin Trudeau and the stranger known as John Horgan were quick to plant their faces in as many smiling photo-ops possible...all taking credit for "Canada's largest ever private sector investment" ..
Funny stuff indeed....The project itself got federal approval many years ago under Stephen Harper, the project received taxpayers gifts and provincial approvals under Christy Clark's BC Liberals...
Johnny come lately Horgan was actually opposed to Christy Claek's LNG taxation framework, he and his entire flock of opposition MLAs came out screaming in disgust...John Horgan called it a "Generational Sellout"
The NDP will vote against legislation introduced July 13 that paves the way for a proposed $45 billion liquefied natural gas project in...
The NDP will vote against legislation introduced July 13that paves the way for a proposed $45 billion liquefied natural gas project in Northern British Columbia, party leader John Horgan said.
The Liberals failed to secure job guarantees, protect the environment or get a fair return for the people of B.C., according to Horgan.
“A 25-year deal? Who does that? Who does that in the 21st century?” he said.
My oh my...taking credit, come 40 years from now nobody will be wanting to take credit for it..
As you know...John Horgan campaigned against Site C, called it unneeded power...Horgan claimed we could create far more jobs with small scale detachable power....many agree, including myself..
Horgan won the election and something happened, something changed and all of a sudden, with no business case, no customer Horgan approves the already started Site C dam...and added $2 billion dollars to it's budget bringing the cost to in excess of $10 billion..Site C is experiencing many geo-technical issues, it's two years behind schedule and the budget for Site C will be revised upwards..We may end up closer to $15 billion by the time its built..
So why did Horgan approve Site C....the same reason Christy Clark and the BC Liberals did...Site C and the cost to build it, being paid for by residential BC Hydro ratepayers is and always was carrot power to entice LNG....let's go back in time to early days with LNG Canada....
BC Hydro, LNG Canada ink deal to power proposed Kitimat LNG facility
PUBLISHED NOVEMBER 4, 2014
Potential electricity demand would depend on the location of new facilities, Mr. Coleman added. LNG plants in Kitimat, for example, could connect to the provincial electricity grid, while plants in other places – such as Prince Rupert – are expected to depend more on natural gas.
B.C. announced its electricity rules for the LNG sector as it is mulling whether to build Site C, a Peace River dam that would produce about 5,100 gigawatt hours of electricity a year.
Opponents of that project, which is expected to cost about $7.9-billion, have questioned whether it is needed.
Interesting don't you think, that article is dated November 2014....it wasn't long after that when Christy Clark rammed the LNG carrot power boondoggle dam through....notice the price tag for Site C in 2014....$7.9 billion....here we are in 2018 and the latest but not last revised Site C budget has ballooned to $10.7 billion...
Horgan crowing about the deal with LNG Canada...it's the same deal that was hatched 5 years..BC Hydro to supply LNG Canada 20% of their power...the only difference is, Horgan slashed the hydro rate for LNG Canada in half..he exempted them from PST and carbon taxes....all total Horgan added $6 billion in subsidies, and that not counting the over $3 billion in accumulated drill credits...LNG Canada can deduct that from any monies they may one day owe B.C..
Taking credit for a "$40 billion dollar" investment....really..LNG Canada's 2013 LNG project proposal for Kitimat was a 26 megatonne per year export facility...
$40 billion for terminal(26mt)...pipeline and upstream expenses..
Remember Petronas...their Lelu Island LNG proposal..They used the figure "a $37 billion dollar investment".....that number was false....the terminal cost was $11.4 billion, of which $8 billion was to be spent in Asia...$6 billion for the pipeline to supply is..so where was other $20 billion...who knows...Petronas did buy Progress Energy for $6 billion..but that wasn't investment, that was merely paying shareholder...even counting upstream activities, nowhere could that $37 billion dollar figure could be squared..
I've followed LNG Canada over the last few year..they have talked up how they sharpened their pencils and brought the project costs down..a less expensive pipeline(That they aren't financing, TransCanada Pipeline is)....LNG terminal construction costs have fallen over those years too..more modular, more streamlined...
LNG Canada got Justin Trudeau to wave Asian steel import duties(even before the Appeals court rendered a decision, making the court hearing redundant)....those import duties were in place when LNG Canada in 2013 pitched their $40 billion dollar project..
That tariff removal will save LNG Canada a $1 billion dollars..
LNG Canada's 2013 $40 billion dollar proposal was for a 26 megatonne facility...LNG Canada is not building a 26 megatonne facility...they're building a 12 to 14 megatonne facility...
So riddle me this Batman.....with all the belt tightening and pencil sharpening LNG Canada did...with tariff relief...with cheaper LNG modules, with PST exemptions.....with building a facility that is only half the capacity of the original $40 billion dollar 26 megatonne facility, a 2 train plant rather than a 4 train LNG plant how come....
How come Trudeau..Horgan and Postmedia and industry spindoctors are still using the $40 billion dollar number?
There's an easy answer...Politicians want the big number bandied around...so does industry..Postmedia refuses to report accurate details, not that they don't have the ability, its because they are corporate controlled cheerleaders....same old same old corporate spindoctoring..
The real value of this LNG Canada project is about $20 billion..
The terminal itself..the 14 megatonne terminal is pegged at..
and I quote...
"Royal Dutch Shell said it would export LNG from Western Canada by 2025 after approving a $14 billion project"
LNG Canada's LNG terminal is about the same capacity as what Petronas was proposing...Petronas's terminal was pegged at $11.4 billion....LNG canada's terminal is pegged at $14 billion..and once again...140 modules to be barged to BC from Asia...of that $14 billion..about $10 billion of that will spent in Asia..but unlike Asia...they don't have to write-off that money..we do..
So...LNG Canada's project is not $40 billion...it's $14 billion...pipeline is to cost $6.7 billion....add in upstream activities and you reach the $20 billion mark...not $40 billion..
Why is Trudeau and Horgan allowing this fictional number to waft around....it's all about getting good press..Trudeau is begging for a win....As for Horgan...I don't know who he is anymore..
John Horgan stated recently in a interview..this is utter bullshit..here it is..
B.C. premier John Horgan says LNG projects in the province were never likely to succeed under the previous B.C. Liberal government.
Oh come on Horgan.....rewriting history or has Dementia started to creep in..
I find some other $$$ details quite interesting too...
LNG Canada project..it's made up of five mega-corporations..
Shell.PETRONAS, PetroChina, Mitsubishi Corporation and KOGAS – the joint venture
They have NO LONGTERM gas buyers....and that is strange, or perhaps not because it doesn't matter what the world price of LNG rises to..... B.C. will receive only a set amount..in fact Horgan has stated that BC will receive $22 billion over 40 years???? how can that be?..that means it doesn't matter what the world price may be...except...if there is another LNG glut(there already is one)..the price may fall below what it costs the the joint venture to produce the LNG..thus creating tax writeoffs...not to mention the unknown value of deep-well-shallow-well provincial drilling credits...
How can Horgan come to such a hard firm number...including this...something Vaughn Palmer retweeted...
#bcpoli Revised estimates from gov't on LNG revenue, relief. LNG Canada projected to bring in $23B direct revenue over 40 years, up from $22B in March estimate. Relief valued at $5.35B, down from $6B estimate earlier.
How can John Horgan say with such certainty how much BC will receive decades after Horgan is gone.....clearly the world price doesn't matter..he must be counting on pure-raw-royalties for the set yearly volume(14 megatonnes per year)...
In other words...that number is static..won't change, but what does change, is how LNG companies amass tax writeoffs...claim losses, writeoff interest payments on loaned monies for the project build..just ask Australia how that works..
Australia's $20 Billion Missed Opportunity Shows Tax Problem
Need more....Chevron and taxation fraud....LNG...the bigger fraud..
Chevron accused of scam against Australian taxpayers
Oil giant and Gorgon project developer Chevron faces accusations of running an aggressive tax avoidance scheme which derives profits from the Australian Tax Office.
SMH reported the findings of a report commissioned by unions in the United States, which shows the company created artificial interest payments against which it could exploit tax relief benefits.
The report described the Chevron scheme as “a sham” which “actually profited from the act of borrowing money at the expense of the Australian taxpayers”.
“It goes beyond any commercial objective of providing debt finance leverage to the point where the value of its tax benefits from interest deductions exceeds the actual before-tax cost of the loan", the report said.
SMH said the report was yet been made public.
With the ATO(Australia`s version of the CRA) currently pursuing Chevron in the Federal Court for $322 million including penalties, it is alleged the company designed a corporate structure in order to avoid $258 million in taxes from 2004 to 2008.
The scheme involved setting up a US subsidiary of Chevron Australia Holdings Pty Ltd (CAHPL) called Chevron Funding Corporation (CFC), which was established in the US tax-haven state of Delaware.
CFC borrowed US$2.45 billion in several tranches at an initial interest rate of 1.2 per cent and then loaned it to an Australian entity at 9 per cent interest, which it is alleged resulted in $862 million in tax free dividends over five years.
The union report states the interest on those loans “ranged from 8.8 per cent to 10.5 per cent", and that Chevron claimed tax deductions on those interest repayments to the rate of 30 per cent, exempt from withholding tax.
It has also been suggested that the ATO’s court case, in focusing on the margins above base interest rate as being not at arm’s length, has failed to fully tackle the broader issue of tax avoidance intended to make profits at the expense of the taxpayer.
A source said Chevron has recently opted to avoid making media statements
need more...this is where British Columbia will fall to these corporate cons..
Multinational gas companies will soon sell an annual $50 billion worth of Australian liquefied natural gas to foreign markets but the nation will have to wait more than a decade for any revenue boost and some projects will never pay a cent in tax for the resources they extract.
A report prepared for the Turnbull government into the petroleum resource rent tax has confirmed fears, first revealed by Fairfax Media in 2015, that revenue from offshore gas will continue to flatline until at least 2027....
Chevron predicts it will start paying the petroleum resource rent tax some time between 2029 and 2035
Anyway...BC and or Canada didn't win a LNG project...we bought it..
Secondly...any BC climate reduction targets....kiss them goodbye...and yes, even though LNG Canada will increase BC's emissions by 17%, and they are exempt...we the people will be paying more and more carbon tax even as our emissions rise....Horgan blew it...now he's gonna charge the people more money on carbon tax while any attempt to reduce emissions with a LNG is futile..pissing in the wind...
We here at The Straight Goods know...
LNG is worse than coal....
New Horgan government=The same as the old BC Liberal government...
Spin Johnny spin.....it's a $20 billion dollar project, of which $10 billion being spent in Asia....not a $40 billion dollar spin Johnny spin project..
The Straight Goods
Cheers Eyes Wide Open