B.C. Election Analysis: Questions raised about Conservative plan to triple LNG production

The B.C. Conservatives are betting big on LNG to help drive economic growth in B.C. over the coming years, promising to double production by 2032 and triple it by 2035. But the NDP says the province is already on track to meet that goal, while some experts say the future of the sector is uncertain due to slowing demand.

On one of the first days of the campaign, Conservative leader Lorne Doerkson made his LNG promise one of the party’s signature planks, along with an income-tax cut, of a plan to “supercharge” the B.C. economy.

His party’s platform projects that this plan will increase GDP growth from the current projection of 1.9 per cent to 2.5 per cent in 2027, and from 2.1 per cent in both 2028 and 2029 to 2.8 per cent in 2028 and 3.2 per cent in 2029.

“If a project is good for British Columbia, it is going to get a yes,” said Doerkson.

However, the promise has been greeted with derision by the NDP, with leader David Eby saying once again on Wednesday that projects approved by his government, including LNG Canada Phase 2, Cedar LNG and Woodfibre LNG, are already set to triple production.

He said that his party’s platform projects LNG production will increase to 48 million tonnes by 2035 if all five projects currently underway or awaiting a final investment decision, including Ksi Lisims, get completed, a more than doubling of current production of 14 million tonnes per year.

“Mr. Doerkson’s projections about supercharging the economy with LNG actually has lower projections for LNG production than what’s currently in development in British Columbia,” said Eby.

Clark Williams-Derry, an energy finance analyst at the Institute for Energy Economics and Financial Analysis — whose mission is to accelerate the transition away from fossil fuels — said neither the NDP nor the Conservatives are facing the reality that LNG imports are declining in countries such as China, Japan and Korea, as well as within the European Union.

He said others, such as Thailand, are trying to move away from the fossil fuel given the volatility of supply, particularly amid the ongoing conflict in the Middle East that has effectively shut down production in places like Qatar.

“LNG markets have gone through two major shocks since 2022. We’ve seen slower demand growth globally, and evidence that Asian economies are no longer as wedded to LNG as part of their future energy development strategies,” said Williams-Derry.

He added that there is so much supply coming online in places like the U.S., Mexico and Nigeria that, prior to the start of the U.S. bombing of Iran, prices were already falling.

Werner Antweiler, a UBC economist, said neither the NDP nor Conservatives are promising anything new outside of what is already happening on LNG, but are using their promises to expand the sector to inflate economic growth figures.

He said both parties’ platforms are fiscally irresponsible and reliant on “sheer optimism” and that the Conservatives’ growth targets are not realistic.

“These gross projections are not in line with what experts actually predict from various macroeconomic models, and the banks in particular, and the commercial companies that work on forecasting,” said Antweiler.

“This is not a way to gain confidence among investors by making up numbers.”

Marc Lee, senior economist with the Canadian Centre for Policy Alternatives, agreed with Antweiler and said that neither the NDP nor Conservatives have much of a say over whether companies decide to expand LNG production in B.C., and that LNG production is already set to triple with or without a Conservative government.

He said that if a provincial government could build out the industry through sheer force of will then there would have been almost a dozen facilities constructed while Christy Clark was premier.

“The idea that politicians can somehow just push a button and make more LNG happen, ask Christy Clark about that one. She was touting 11 projects. This was 15 years ago and we have one project that has come to completion,” said Lee.

“What happened to climate change? We just went through a summer where everything was burning. We’re having crazy extreme weather events all around the world, and we have just completely given up, 100 per cent. It just drives me nuts that we’ve completely lost the plot on that.”

Not everyone is pessimistic, with Jock Finlayson, chief economist for the Independent Contractors and Businesses Association, stating the Conservatives’ plan to triple LNG production is a positive policy for them to be campaigning on.

He was also more optimistic about the party’s GDP growth projections than some of his colleagues.

“This goal can be reached, in my view,” said Finlayson.

“With the various economic development measures proposed in the Conservative platform, a B.C. government in office that will instil more confidence in the business community than Premier Eby has enjoyed, and with a federal government in Ottawa that is determined to adopt a ‘build-build-build’ agenda after the chronic stagnation of the (Justin) Trudeau era, a stronger economic growth rate is a realistic scenario for B.C. over the 2027-2030 period.”