LNG Spill Would be Catastrophic, Activist Warns

By Gagandeep Ghuman
Published: Sept. 6, 2014

The BC LNG industry will add to the GHG emissions, spur fracking, and worsen global climate change, but even the economic arguments for it isn’t sound, said Sean Lumb, a member of My Sea to Sky.

In an interview with the Reporter, Sean Lumb, a Phd in Chemistry and director of new ventures at UBC, said LNG price fluctuate and Canada faces tough competition from Australia and the Unites States.

Even though big Asian buyers such as Japan and South Korea make their purchases through longer contracts at fixed price (80 per cent of it in some cases), the remaining is bought at the spot price.

The spot price fluctuates dramatically as new suppliers compete in an open market place to sell LNG to countries where demand isn’t always as high. Lumb said the vagaries of the market reduced prices from $17 to $18 per million cubic feet to $10 this year.

“Once you get to the 10 dollars mark, that is the cost of the production,” he said.

With tax incentives to industry and infrastructure additions in BC, the public has a part in subsidizing the LNG industry but may not see the promised prosperity fund. Woodfibre LNG will operate on hydro, but that doesn’t mean the environment will be left unscathed, he added. Leaky infrastructure along the way and at the site will add to emissions.

“You get emissions when they are filling in, you get emissions out of pipes, compressor systems, out of the wells,” he said.

In addition, there are non-liqufiable gases—oxides of sulphur and nitrogen— that have to be scrubbed out and add to emissions.

Methane, he added, is also a potent climate forcer, which means it traps heat better than Co2 by a much bigger factor.

Lumb said it also remains to be seen what happens in a scenario if there is a LNG spill.

A massive spill from the plant or a tanker will only occur with collateral damage caused by an explosion, container rupture, but 

it could ignite the methane and cause a massive spreading flame, he said. 

“Methane is flammable when it hits 5-15 per cent concentration in the air,” he said.

“Any kind of spark or ignition source will set it off and once it’s going there’s no stopping it.  A large spill would be catastrophic.”

Methane gas has 600 times the volume of LNG, so an amount as small as one cubic meter can vaporize to produce 600,000 liters  of flammable gas at regular atmospheric pressure,” he said.

 

 

 

 

Comments

  1. Jean says:

    Finally some trustworthy information. Why was he not chosen as one of the 13 handpicked advisers to council?
    There are many more worthy advisers as him, that could give the DOS the real picture, what Squamish would be going into, by letting the Chemical-Alley again start up in Woodfibre and definitely with the Ocean kept, fully laded….. 70 + Hiroshima Bomb power of LNG floating, as an easy target for terrorist, with no way to mop it up in the water, not even just as a small leak, what a brain dead idea and nobody on council ever had put in a stop to this, with a directive of the Municipality, not to allow water based storage of LNG. Should this absolute ridicules enterprise start up, with now only a hand full, full time jobs and several part time shifts, conveniently labelled Full time ( a new way to describe a part time job that could last for a non described length ) and subsidized by the public with low hydro rates , with Fortis footing the bill for there huge CNG Pipe expansion to feed W-LNG with gas, an expenditure of many 100 millions, to put the line in, with the speculation that LNG would be viable and if failed, we end up with a heap of old scrap and face higher cost for domestic gas, as Fortis would have to still pay for the infrastructure not utilized …remember Thumbler Ridge… BC probably is still paying with our tax contribution to that fiasco.

    • Ron says:

      Excuse me trustworthy? ok. this is getting more interesting by the day. let’s talk about this. Terrorism: ok fair enough. only one issue, you need some serious threat against Canada in the first place to make this a threat. Lets stop being like the Americans, keep it real. The only threat that exists against industrial targets are the EarthFirst!, RAN, GP types. So lets keep this in perspective shall we? 70+Hiroshima bombs? not bad, whats next, why not 90+ or 120+…..please be a bit more funnier and come up with a better narrative instead of rechewing the old Greenpeace or RAN or whatever babble bs you rechewing. It is boring.
      Next, safety: go wikipedia and check. 3, repeat 3 [!] incidents since 1944 happened world wide only involving LNG! More people get injured skiing (http://www.piquenewsmagazine.com/whistler/injury-stats/Content?oid=2140945). like 2,000 or so. Lets immediately close the slopes. I dont see you making noise about that issue.
      Jobs. Ok, not enough jobs? what are the jobs numbers at minimum, if they don’t deliver, penalize them. But what you suggests instead? basket weaving? oh yeah working for what, Lucas film? your economic model needs some reality check.
      I agree we need to have safety concerns addressed, the environment, impact on local economy, etc. And, yes, “what if” , what if something will go wrong and some crazy eco-terrorist decides to go postal or causes an unsafe condition threatening the public? Are we equipped to deal with this? Whats the fire, safety and security crisis management plan. Not some bs rent-a-cop. Point taken.

  2. Brad Hodge says:

    “With tax incentives to industry and infrastructure additions in BC, the public has a part in subsidizing the LNG industry but may not see the promised prosperity fund. ”

    But we’re not subsidizing. We’re investing, remember? This is what folks of a certain political stripe told us was the rationale for borrowing billions to create shovel ready jobs. The incentives and infrastructure monies aren’t disappearing into a sinkhole, they will be spent building the needed infrastructure. That will employ people and fuel BC companies with work. I thought we wanted that?

    “Methane, he added, is also a potent climate forcer, which means it traps heat better than Co2 by a much bigger factor.”

    Yes but methane also degrades much, much faster in the atmosphere than CO2 does. The effects are not as long lasting. Further, unlike CO2, methane is worth actual money. What they allow to escape is lost dollars. There is every incentive to minimize those losses, and in fact, that is exactly what the industry is doing. They have been getting better and better with leak containment here and in the US.

    “Methane is flammable when it hits 5-15 per cent concentration in the air,” he said.
    “Any kind of spark or ignition source will set it off and once it’s going there’s no stopping it. A large spill would be catastrophic.”

    There’s a lot of ‘could be’s in this statement. LNG has been around awhile and we’ve yet to see one of these ‘catastrophic’ scenarios take place. LNG does not explode and its burn potential is more like a warehouse full of wood than a bomb. That we’ve yet to see a catastrophic LNG disaster is probably in no small part due to the heavy duty safety measures.

    We have however seen catastrophic failures of ordinary natural gas lines in homes. Should we rip them all out? What about airplanes? We all saw the damage just four of them could do on 9/11. Every day *800* make their way to and from YVR. Hundreds of individual kerosene bombs that could wipe out whole neighbourhoods each, not to mention the direct pollution. Why are we not clamouring to stop this madness? Simple: because we’ve weighed the risks and benefits, and the latter outweighs the former. That is the case with LNG, though the naysayers would tell you, disingenously, there are no benefits.

    • Elijah Dann says:

      Brad, it comes as no surprise that you invoke classic cost/benefit analysis into your model for looking at risk and promoting Woodfibre LNG. This is the ethical model by which most corporations and industry operate. http://www.scu.edu/ethics/practicing/decision/calculating.html

      That is: “There is a risk to human life because of our product. But what is the cost to our industry to correct that risk, compared to possible litigation due to injury or loss of life?” If the the cost/benefit analysis shows that payout to families who have lost a loved one, because of industry negligence, will be less than recalling the product, then industry continues to sell the product.

      Over the decades, industry has demonstrated that the “cost” of human lives can be justified if the bottom line – “profits” (viz., money) – come out ahead. (Less money paid out to grieving families as opposed to recalling a product.) And as such, this is this ethical model’s greatest defect: it ignores basic principles of rights, duties, and justice. What about a person’s right not to be treated as a commodity? Something that can have a price tag on it? How much is a son or daughter’s life worth? And justice – on what basis can an industry risk harm to a community? Is it their decision to make?

      But when it comes to corporate ethics, you even manage to outdo yourself by also claiming that “we’ve yet to see a catastrophic LNG disaster is probably in no small part due to the heavy duty safety measures.” This would only charm someone who never reads the news. If you’ve never read of industry accidents from bursting pipelines to exploding platforms in the Gulf of Mexico, then there isn’t much here I could say to correct such baleful ignorance. And talk about short-term memory loss, maybe you haven’t also heard of Imperial Metals and the Mount Polley disaster? Another example of industry regulation and government oversight? http://commonsensecanadian.ca/rafe-mount-polley-mine-proves-liberal-de-regulation-doesnt-work/

      Is this what you mean? And I suppose it would also be important to mention that former VP of Imperial Metals is now the Woodfibre LNG VP, Byng Giraud? The parent company of Woodfibre LNG, the one that has a history of destroying forests, certainly doesn’t care much for your industry regulations. But they sure got the “cost/benefit” analysis down right. http://www.ran.org/tags/forests?page=4

      I don’t know what’s in it for you with this Woodfibre LNG proposal Brad, but I think we’ll see that most of us want nothing to do with your and their ambitions. Or tolerable “risk.”

      • Brad Hodge says:

        “How much is a son or daughter’s life worth”

        Good question. How much is the life of someone living in Asia sucking in coal particulates, gases and smog worth? Or that of a coal miner? How about the virtual slave labourer who built the device you used to write this? It’s funny how we value things. And I say, we, not the corporations because remember we are the ones buying what they’re selling. Would it be fair to say you don’t value the life of that device maker because you bought the device anyway? Or is it fairer to say you had a need for said device and right now that labourer is the only realistic way to get it, while we work towards better? Because that’s my attitude on LNG. Yours seems more bent on making the perfect the enemy of the good while casually ignoring all the things you’re doing every day to contribute to the problem.

        “I don’t know what’s in it for you with this Woodfibre LNG proposal Brad, but I think we’ll see that most of us want nothing to do with your and their ambitions.”

        Why does there have to be anything in it for me? Why is it so difficult for you to conceive of the idea that a reasonable person weighing the information at hand has come to a conclusion at odds with yours? This is why civil discourse is heading off a cliff, because there’s no tolerance for dissent. If I disagree with you, well, I must be on somebody’s payroll then, because Elijah Dann is never wrong. Support for LNG is much greater than you realize. You need to get out of your circle and at least get to know some of the supporters. Perhaps you’d realize nobody’s getting paid and maybe reasonable people really can disagree without anyone being a bad person for it.

        • Elijah Dann says:

          Brad, it’s getting a little tiring to hear supporters of Woodfibre LNG and the fossil fuel industry detail all the ways their product has permeated our environment and our addiction to them – from computers to cell phones and plastics etc. – as if this is an argument for your side. But I’ll explain it once more to you. (Now don’t get all angry and sensitive, thinking I always have to be right. Just first read and think about it.)

          It’s EXACTLY because the fossil fuel industry has permeated our environment with their product that we want it no more. That we want alternatives. Not short term alternatives like LNG that’ll only exacerbate climate change, but real alternatives that even China and India are now using.

          Now, I know you like arguing by analogy, so let me break it down this way for you: Telling a meth addict that his life is surrounded by drugs and that somehow he’s being a hypocrite using them while trying to get off the pipe, is hardly a good argument. If you are truly concerned about our addiction to these chemicals and substances, quit telling us how much we are using them, and defending their use. Instead, get with the future and promote sustainable, renewable alternatives.

          That being said, accusing me of self-righteousness and that I apparently can’t tolerate dissent, is, once more, something you seem to have backwards. Even projecting a bit here. Why do you assume that you get a pass on everything you claim in support of Woodfibre LNG? That you can make whatever charge that suits your fancy and not have to respond to challenges?

          Let’s see for ourselves: in your “response” above, instead of explaining how cost/benefit analysis isn’t an attack on individual rights and principles of justice; or how industry truly is self-regulating and government oversight really is at full-strength, you prefer to say that somehow I always think I’m never wrong. That might be the case when arguing with you Brad, but that’s hardly my fault. That’s because in the real world, big industry won’t put “fruit cups” in everyone’s household and eliminate want; that “close to $3m” is not $2 million; that leaving out central environmental impacts of the LNG facility is not fair to the truth any more than claims that industry shows itself to be environmentally responsible.

          We have every right to ask you – along with other political and corporate sycophants – to back up these, and other claims you’ve been making in your support of Woodfibre LNG. And if that always makes you feel like you are surrounded by self-righteous people who always think they are right, perhaps you are giving them every reason to feel that way.

          • Brad Hodge says:

            “It’s EXACTLY because the fossil fuel industry has permeated our environment with their product that we want it no more.”

            See this is the problem. You extrapolate your own personal beliefs onto everyone. I think most people are more nuanced about oil and gas, and while they may be rightly concerned about the environment they also cognizant of the fact that their way of life literally would not be possible at this moment without.

            “Now, I know you like arguing by analogy, so let me break it down this way for you: Telling a meth addict that his life is surrounded by drugs and that somehow he’s being a hypocrite using them while trying to get off the pipe, is hardly a good argument.”

            I think we can both agree that key to ending drug addiction is to stop USING drugs. I think we can also agree that trying to stop an addict from using drugs by preventing access to the drugs doesn’t work (War on Drugs 101). But that’s exactly what people in your movement are trying to do. They are the fossil fuel version of George H.W. Bush. What they should be doing is a) massively reducing their own use of ALL of the products involved, and b) encouraging others to do the same. I suspect the temptation to take the shortcut by dressing up the oil and gas industry as the Dark Side stems from the fact that many of those other users don’t actually want their help. Which is probably because use of oil to heat your home is not really at all analogous to using meth.

            “but real alternatives that even China and India are now using”

            You mean like coal? Because that’s a good chunk of what both countries are using. Thermal power accounts for 60%+ of India’s generated power. Beijing looks like Mordor on its best day. The problem with what your proposing isn’t that people are against wind or solar (why would I be against free energy for myself?). It’s that we know the technology is not up to snuff, and the critical problems dogging it (cost, limitations, etc) are still dogging it decades later. In short, we’re ready for renewables. Renewables, however, still aren’t ready for us. In the meantime, we can certainly ship out more coal, generate more CO2 and kill more people with particulates as Germany is doing now that they’ve realized the wind doesn’t blow reliably.. but I’d rather attempt to shift with LNG. And collect jobs, and millions in taxes and so on. Personal preference.

            “Why do you assume that you get a pass on everything you claim in support of Woodfibre LNG?”

            I’m not sure offering rebuttals to anti-folks constitutes getting a pass. Auli cited an NEB report to support her statement that we might be running out of natural gas by 2017, then essentially denied saying it by accusing me of ‘misquoting’ her, then went back to it again on the basis of that NEB report while simultaneously calling the NEB report I had claiming much higher natural gas reserves nonsense. How do you not challenge stuff like that? When/if I receive a response that isn’t “I’m picking up my ball and going home”, I’ll rebut it again, if I can, and on it goes. I’m sorry you don’t like the answers.

            “Let’s see for ourselves: in your “response” above, instead of explaining how cost/benefit analysis isn’t an attack on individual rights and principles of justice; or how industry truly is self-regulating and government oversight really is at full-strength, you prefer to say that somehow I always think I’m never wrong”

            Except I never said government oversight is at full strength. I have been at pains to acknowledge government’s many shortcomings. I am fairly libertarian in that regard. Whatever system you design will ultimately be run by human beings. You are looking for the sunny uplands of perfection that don’t exist. Meanwhile you’ve rendered judgment on this thing before giving the admittedly flawed process a chance to even work.

            “That’s because in the real world, big industry won’t put “fruit cups” in everyone’s household and eliminate want; that “close to $3m” is not $2 million”

            Disagree. LNG may not hire the struggling family directly, but the economic benefit of 100 well paid people living and working here would. We’ve lamented the lack of affordable/social housing options. $2M (or more) annually would go a considerable ways towards alleviating that. And that *would* directly benefit those in difficult circumstances.

            I find it hilarious how you’re hard you’re trying to minimize $2M (or more) in taxes. Name one other employer or proposal in the last 15 years that has offered anything anywhere near that much? The gondola? Not even close. Anyway, keep mocking the ‘fruit cup people’. I’m sure they appreciate your sensitivity.

            “We have every right to ask you – along with other political and corporate sycophants ”

            This is what I was talking about earlier with the self-righteousness-by-way-of-insult.

            Anyways..

          • Ron says:

            Elijah: great article you wrote in the Green Huff post. but… no offense. Lets hear your alternative economic model. And please, dont ram down our throats the old, green agenda. Try to explain me an economic model that is economic feasible, sustainable and creates wealth. Unless of course you are against it. And before you and Brad turning all Hulk on me, food for thought:

            a. the green model even in Germany doesn’t work. We can go now into the depth of the green fantasies and pseudo-babble of the usual purveyors of a green agenda of how the world should be, could be or whatever, but i have not seen any credible green economy model that works. Stop.. do not use solar or alternative wind. Accepted but problematic. So i am all perked.
            b. Why is it always that as soon as anyone doesn’t buy in the crap immediately allegations are levelled, innuendos are made. Guys, if you cant convince a head of middle aged, family household or single mum with a concise logical narrative but instead of trying to suppress a debate and threaten candidates, what kind of credibility you have?
            c. no offense, stop thinking anyone who doesn’t jump on the green band wagon is not for the environment. Stop doing this if you are not with us you are against us-argument. Its soo Bush doctrine.

  3. Ed Alder says:

    Well said Brad, and to attempt to point fingers in a direction that may improve human impact on the earth, are any of these NIMBY eco-terror zealots aware of Canadian Coal export expansions underway? Overseas, in Energy Importing countries, there is huge amounts of coal used to create electricity, dirty energy compared to LNG. We should be embracing this Industry until technology catches up and we humans can put hydrocarbon based energy sources on the shelf forever. Stop coal energy expansion and promote LNG expansion worldwide, and do the earth a real favor!

  4. Jean says:

    Here we go again, how save is LNG and nobody has the prove, so we are 1:1
    Nobody knows what the spot price of gas is going to be, when LNG would be shipped, so once again we are 1:1, for profitability and actual revenue to the BC coffer, it was assumed at 15$ GJ when operating, right now it is below cost of manufacture and extraction at ~10$ G,J in other words, a loss at this moment to even consider to go into.
    Then the way it supposed to be taxed.. to come back as a tax and not as a royalty .. That is a real magical formula for me, if I would be a betting men, I would say we will never see a penny..
    Now the jobs, some accountant and warehouse employees..etc so called full time and then in the same breath, Several 3-5 Hrs shifts, also called Full Time.. who is writing that spin.
    One thing for sure, as a domestic gas consumer, one has to pay up front for the gas line and here, Fortis is building several 100 millions worth of infra structure on a speculation, that Mr Sukanto Tanoto will be a successful partner and around for a wile…or has he already written a check or promised to write one in full, upon approval, so no liability exists to the Domestic Gas consumer, having to pay for it, if Fortis ends up like Thumbler Ridge. As an after thought it would be nice to know, whether Mr. ST is maybe even a shareholder of Fortis ?
    So let just one of these enthusiastic supporters or maybe employees of LNG, give us the assurance that the domestic gas price, once the abandoned UN-natural fracked and polluted Methane Gas is flowing through our town and under our hoses near by, an other potential danger looming and then the always potential tsunami effect, upon an earthquake rocking the LNG Barge filled with 70 + Hiroshima bombs, against the walls of the W-LNG plant and if not by the terrorists, by an act of nature, disintegrating a man made piece of storage barge and with it, back again to the unknown. For what? No more jobs created after operating starts, other then by inviting more Chemical plants to the Woodfibre site, to resurrect Chemical Alley once again. You Pro, harp on with your so called facts, I hang on what I think LNG will or will not bring to Squamish . Not forgetting, that after the shut down of all heavy industry in Squamish, the town actually grew quite a bit and seams to do OK and I like it that way.

  5. Wolfgang W says:

    Nobly put arguments by both Elijah and Brad! They are, however, also glaringly showing where the introduction of philosophical arguments, in this case about utilitarianism can lead: Nowhere in particular.

    That is not to say that ethics should take a backseat in our collective decision making, but just as Brad reminds Elijah about the origin of his writing device and then makes a case for LNG ‘here’ to improve health ‘there’, would Brad then for a similar reason not also have to be against our proposed Enbridge Northern Gateway bitumen pipeline? Not only are our standards for health and safety – would we refine the stuff here – tighter than in Asia, but we’d have to dig less of it out of the ground to generate the same amount of money, decrease overall global environmental impact, create more local jobs and make Canada truly a fully integrated petroleum producer? These were, by the way, also the PM’s views until about 2008.

    Is the risk worth the reward? It is an argument we make everyday individually and also accepting it as being part of the technological environment we have created for ourselves, Brad is right here. You combine it with ethics and extend it beyond our immediate horizon though and a myriad situations come into focus, which are beyond the scope of this discussion. (e.g. the Manhattan project, the Cold War’s concept of MAD (Mutual Assured Destruction), CERN’s latest experiment, which, had it gone wrong, could have sucked all of us into a singularity, GMO – all made on our behalf without our asking. I would not let corporations get off as lightly as you do, Brad, with your comment that ‘we are buying what they are selling’, implying thereby our complicity. True to a degree, but to paraphrase none other than Apple’s Steven Jobs himself ‘the consumer doesn’t know what he wants until we tell him’. Advertising, marketing, – playing up to the ‘mimetic desire’ in people to bring in yet another philosophical concept – creates the demand, has morphed us from mere humans not all that long ago into a new species of voracious ‘consumers’. Corporations, some of them with resources at their disposal larger than those of sovereign states and, because trans- or multi-national in nature, consequently also well connected in all corridors of power, therefore ought to be open far more to scrutiny when making risk-reward decisions on behalf of the rest of us, wouldn’t you agree, Brad?

    So back from the lofty heights of general philosophical discourse to the nuts and bolts of Woodfibre LNG: Safety and environmental concerns – would our site be approved by SIGTTO? Is Woodfibre LNG a member of that organization for LNG terminal siting standards, and if not, why not? Should we take the risk, however small this might be in your mind Brad, of potentially ‘shutting down’ Howe Sound once more as a thriving environment for marine life? In short, is it worth the risk to reindustrialize what has every possibility of becoming our own ‘Amalfi Coast’ in the most southern fjord on the west coast of North America for the quick fix of a few million in property taxes now and in exchange for possibly foregoing the pursuit of other avenues, the ones that are ever more driving mature Western economies? Fully taking advantage of the proximity to the great international metropolis to the south, rather than continuing to act like some remote clapped-out industrial backwater in need of hand-outs?

    In closing, Brad, about ‘trust’. You have indicated in other posts that we’ve just recently had an election and should therefore trust those with the ‘mandate’ (of 23% of registered voters) to act on that. Trust? Now? With schools still out until who knows when, a mess created years ago by that same lot in charge and finally having blown up in our faces?. ‘Adherence to rule of law’, as you so were wont to point out similarly in previous posts, being flaunted by the powers that be in blatantly ignoring court rulings to force their own agenda? Oh, and you never answered Elijah’s justified comments about the failures of BC’s environmental regulatory watch dog in the Polley Mine disaster. Trust you say, Brad? On then to trust in our hapless Squamish Council: Need I say SODC? Even you, in your mild endorsement for the Mayor’s re-election bid could not help contorting yourself into condemnation in how that process was handled by him and others – it must have hurt, better go and see Susan :)

    And after all that, you really want the rest of us to believe that all is well with the process for Woodfibre LNG, that all is as it should and that we can all go about our business quietly and, in your words, ‘not sit up awake at night’ while Mother in Victoria looks benevolently after our best interests?

    • Elijah Dann says:

      I appreciate your comments here Wolfgang. But your charge about “philosophical arguments” that introduce ethical decision making “leading nowhere” isn’t right. I’m not sure how you conceive of the philosophical tradition, but it isn’t an esoteric or ineffectual discipline. To the contrary, in these debates we all appeal to its preferred topics, whether we realize it or not.

      For instance, moral theory has been a central component of philosophical investigation since the pre-Socratics. For over two-thousand years – and very active in the present – we’ve grappled with our source of ethics, to the development of ethical theories, and their respective pros and cons. Then, more recently, ethical theory has been brought to bear in the professional sphere, with biomedical ethics, engineering ethics, and business ethics being introduced to university curriculum. As such, when we invoke utilitarian theory – or any other moral theory – we should be aware of their respective weaknesses and strengths. To not appreciate these components is a recipe for disaster. So understanding moral theory – however minimally – is foundational to our public debates such as Woodfibre LNG and its respective implications.

      Moreover, in philosophy departments all over the world you’ll find courses not only on moral theory, but on political theory, critical thinking (which, among other things, looks at “arguing by analogy,” which you effectively do above Wolfgang), theories of justice, epistemology, metaphysics and the philosophy of science: all of which also can guide us through Squamish’s hot-button topic.

      We don’t have to be experts in these disciplines, but I’d argue they are as important for sorting out the LNG question as the other components like economics, environmental sciences, and the hard sciences (like chemistry and biology).

      • Wolfgang W says:

        I concur with you in principle Elijah. My comment about philosophical arguments ‘leading nowhere in particular’ was not meant as a put-down of philosophical and ethical considerations, but merely to point out how easy it is for such discussion to move into the never-never land of the proverbial ivory tower and thereby losing focus on either the issue raising the argument, the audience, or both.

        • Elijah Dann says:

          Understood Wolfgang. But discussions of this sort could get off track by lack of focus on a number of different fronts. But I don’t see how pointing out limitations in one’s adopted moral theory does such. Or how studies from business ethics might inform the debate. Or notions of what makes a healthy, just society and democracy.
          To the contrary, these questions that philosophers have debated, in some cases for centuries, sharpen the debate and what is at stake. For example, as I pointed out above, invoking cost/benefit analysis on issues like Woodfibre LNG, runs the danger of ignoring principles of justice and individual rights and freedoms. That might not be self-evident for the average reader, so I think it helps to see the danger in such application.
          As for the Ivory Tower, I see the problem as being quite the opposite. It’s unfortunate that most of our university professors don’t get out of their comfortable offices and research labs and engage in these discussions. If they did, perhaps you’d feel more optimistic about their contributions to this and other social matters.

      • Jon S. says:

        To sum it all up: Philosophy has essentially nothing to do with Woodfibre LNG, despite G. Elijahs best efforts.

        • Ron says:

          I totally agree. No offense Dr. Dunn. The narrative you put forth is a politicalization of the narrative and does not address daily realities. I got a family to feed and get them through school. I cant afford your beautiful crafted arguments.

  6. Wendy says:

    BC LNG taxes:
    You can only spend them once – and how much will they amount to?
    The 2013 Throne Speech envisioned using LNG taxes in a number of ways.
    A. Paying for BC’s teachers/health care/social services, as MP John Weston recently suggested:
    Natural gas taxes paid to BC in 2012/13 (paid for removing natural gas from the ground) were $169 million. That wasn’t enough to pay for 2 days of teaching, health care, and social services. How about the LNG taxes we have all been told about? You can read the following carefully written explanation below, or skip to the CAPITOL PRINT further down.

    LNG tax benefit to BC will be controlled by two things: a) when BC will begin to receive taxes from the LNG plants, and b) how much money will come to BC.

    a) The way the province proposes to do this, LNG taxes will come to BC 8 years after the first plant starts operations. The first LNG plant, Woodfibre LNG, may begin operations in 2017, so we may see LNG tax revenue in 2025. That’s a long time from now.
    b) How much money will come from LNG taxes? That’s controlled by 3 things: the tax rate BC charges, how much an LNG plant will cost to build, and world LNG price. All of this is covered in the following link. https://www.policyalternatives.ca/sites/default/files/uploads/publications/BC%20Office/2014/04/CCPA-BC-Path-To-Prosperity.pdf )

    -BC LNG tax: BC is proposing to tax LNG companies at a very low rate on NET profits (revenue less expenses): 1.5% tax on net profits for the first 7 years (and LNG plants are very expensive to build). Starting year 8, “up to 7% tax” on net profits is proposed – once again costs will be written off. Despite what I said in a) above, it’s hard to say when BC will see LNG tax revenue.
    -Global LNG price is falling. BC’s financial estimates were made at the rosy level of US $18/million British thermal units (mBtu). World LNG price is around $11.
    -LNG plants often cost much more to build than expected.

    So: Because BC LNG cos get to write off all their infrastructure/construction costs before BC gets any LNG tax, both the cost of building the plant and the price they get for their LNG matter a lot. See the above link, pg 10 chart. The blue “base case” bars are if there are no cost overruns building the plant, common for new LNG facilities; peach coloured bars are for cost overruns. Let’s assume no cost overruns. At a price of $16/mBtu, BC will get LNG tax 4 years after a plant starts production (for Woodfibre, that would be in 2021), at $14 LNG tax will come in 6 years (2023), and at $12 LNG tax will come in 12 years (2029). A couple weeks ago the world selling price of LNG was $11. The break -even price, where WFLNG will make/loose no money, is about $10/mBtu. At any price above $10, we have to wait for LNG infrastructure/construction costs to be written off before BC gets any money. And yet at any price over $10, Woodfibre LNG will be taking the profits home, overseas.

    Because both cooling of natural gas (liquefaction) to produce LNG and shipping of LNG to Asia are very expensive, a small drop in the buyer’s price in Asia (say $2 less) can drop total profits by 1/3. Many new LNG plants are in construction around the world, or planned, and in general price drops as supply increases. In May 2014, Russia signed a contract re piping a large amount of natural gas to China; China won’t need to buy so much LNG. http://www.bbc.com/news/business-27503017 BC is late to the global LNG export party.

    SO LETS GET TO THE POINT – what does all this mean re how much LNG tax BC will get? Given low proposed BC LNG taxes on net profits and reducing LNG prices because of world oversupply, BC’s LNG tax is likely to raise $200-600 million/year (see the top of pg 2 in the following link: https://www.policyalternatives.ca/sites/default/files/uploads/publications/BC%20Office/2014/04/CCPA-BC-Path-To-Prosperity.pdf ) .2 – .6 billion is $200 – 600 million. Let’s be optimistic and say LNG taxes of $600 million/year will be gathered. This amount of LNG tax would pay for about 7 days of teaching, health care, and social services.

    If BC LNG tax revenue is used to pay teachers etc, there will be no Prosperity Fund accumulating for other uses.

    B. BC Prosperity Fund
    In the 2013 Throne Speech, the BC government set their sights on a $100 billion Prosperity Fund from natural gas/LNG taxes accumulating over 30 years (2025 – 2055). With falling global LNG prices, let’s be optimistic and say $600 million/yr x 30 = 18 billion over this time frame. There’s a big difference between 100 billion and 18 billion. Is the money supposed to stay in this fund or be used wisely?

    C. If the LNG tax was used to reduce the provincial debt, as mentioned in the 2013 Throne Speech:
    BC LNG taxes, starting 2014, will probably generate $600 million/year. They would have to generate about $2.6 billion/year to pay off the debt over the next 25 years. Sadly, we can only use the money once. And how much higher will our provincial debt be in 8 years, when the LNG tax revenue starts coming in?
    In addition, most of the LNG proposals are foreign-owned and many, like Woodfibre LNG’s owner Sukanto Tanoto, are known for off-shoring profits to international tax havens (see: http://www.theguardian.com/world/2014/may/10/asian-logging-companies-british-islands-tax-havens), avoiding both provincial and federal taxes.
    Makes me wonder how much LNG tax, if any, BC will actually collect.