BRITISH COLUMBIA
04/29/2013 02:08 EDT | Updated 06/29/2013 05:12 EDT

NDP Fracking Moratorium Risks LNG: BC Liberals

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VANCOUVER - An NDP candidate's comments and Liberal attempts to use them to suggest an Adrian Dix government would scupper the province's sprint toward LNG riches are being noted by industry, but observers say everything has to be taken in the context of a heated election campaign.

Companies in the energy sector were already alarmed by Premier Christy Clark's proposal in February to impose a tax on natural gas exports.

Statements by Charlie Wyse, the NDP candidate for Cariboo-Chilcotin who told an all-candidates meeting Friday that his party would place a moratorium on fracking for two years, didn't help.

"There's a window of opportunity late this decade where we expect LNG prices globally to be strong, but there does seem to be a lot of supply coming on at the end of the decade and into the next decade," said Michael Dunn, vice president of institutional research with First Energy Capital in Calgary.

"So moratoriums...delays could mean the timelines of these projects get pushed out. And if they get pushed out, companies contemplating building these projects and wanting them up and running late this decade, and then they find it's not possible...they will be reassessing their priorities."

At the same time, Dunn says he doesn't expect many oil and gas companies to take what the main parties in B.C. say about LNG development during an election campaign too seriously.

"Lots of things are said ahead of elections, and if I'm somebody contemplating building an LNG plant, I'll wait until after the election to see what the real policies are before I get too far down the path," he said.

"It's worrisome, but for the most part, shovels are not in the ground for these projects yet, so things can continue to proceed for now without too much of a hold up until whatever the prevailing government decides."

The Liberals held a news conference Monday to release an audio recording of Wyse telling the all-candidates debate: "The position of the NDP is that there will be a moratorium put on fracking for the next two years while the science will be brought together to find out the effect, if anything, that fracking has on the water table."

Energy Minister Rich Coleman said such a moratorium would put at risk tens of thousands of jobs and billions of dollars of investment — money that Clark has insisted will pay off the province's debt and fund social programs.

"So right now in northeastern British Columbia, there are companies spending hundreds of millions of dollars drilling for natural gas," Coleman told reporters. "They've just been told by the NDP that they'd actually shut them down."

Dix, however, says Wyse simply misspoke at Friday's debate.

"The words in our platform are clear, the words we expressed for a number of years are clear, that we don't support a moratorium on hydraulic fracturing," he said. "We do support a review. We are concerned about issues around water use, and we will conduct that, should we be elected, based on the science."

Lindsay Meredith, a Simon Fraser University marketing professor, said contradictory statements coming from the same political party are common, and can cause grief for party leaders.

But in this instance, Meredith says he doesn't think the Liberals' use of Wyse's comments to undermine the New Democrats would benefit or hurt either party.

"There's enough stuff about fracking right now out there that has basically a lot of people both left and right relatively concerned about this issue in terms of exactly how innocuous it is," he said.

Hydraulic fracturing, or fracking, involves injecting water, sand, and chemicals into the ground at high pressure to break up the underlying rock, allowing for the release of gas. The process is crucial for the expansion of the province's liquefied natural gas industry.

Dix has said that an NDP government would support the LNG industry, but in an environmentally sustainable manner. His party's plan for LNG development, which calls for the appointment of an expert panel to assess the environmental and social impacts of fracking, was released in November 2011.

But Clark has criticized the Opposition leader for failing to take a position on the industry at all.

The Liberals back that claim with comments made by other NDP members like John Horgan, who has been quoted in The Province newspaper as saying he would not rule out a moratorium if the scientific evidence points to that, but an assessment must be made first.

"Right now [Dix's] formal position is, we haven't made up our minds, we're going to study this thing first," said Meredith.

"It sounds to me he's trying to hold that overall centrist position so he doesn't give away any potential right-wing votes — ones that are now kind of disconcerted with the Liberals and the Conservatives and might be willing to actually come over to his direction."

Clark, who frequently touts the promise of a financial windfall from the LNG industry during her election campaign, has predicted that the industry could generate as much as $100 billion in revenues for the province and create more than 100,000 jobs over the next three decades.

Those numbers are based on three to five LNG plants opening within the next 10 years.

The New Democrats have accused the Liberals of overestimating the projected revenues and the future demand for natural gas.

Coleman refuted those claims on Monday. Not only does he think the province will make at least that much money based on the current projects, he said there could be more to come as the government prepares to auction land such as Grassy Point, north of Prince Rupert, to establish more LNG-export terminals.

"We definitely have two major players worldwide, and a major Korean company, who'd all come and said we'd like to look at locating there," he said.

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