Will NDP walk into liquefied natural-gas trap?

Michael Smyth

The B.C. government has now bent over backwards for the LNG industry to such a spine-twisting extent that it’s amazing Premier Christy Clark hasn’t appointed a new minister of contortionism.

The latest back-bender: The government will indemnify energy giant Petronas against future tax increases and lock in a sliding-scale royalty rate for 23 years.

No other project, sector or company anywhere in B.C. has a deal anything this sweet. It is unprecedented.

The agreements signed by Clark and project president Michael Culbert say the state-owned energy giant from Malaysia and its partners will receive “compensation” if taxes are increased over a “threshold” level in future.

So how much money are we kissing off here? The government refused to say, saying how high (or how low) the compensation-triggering thresholds will be set won’t be revealed until later.

The same secrecy hangs over the term of the agreement. How long would this tax indemnity be in place? The government wouldn’t release that either, saying it was “commercially sensitive information.” (Bet on 20 years or more, like the royalty deal).

It all had NDP Leader John Horgan fuming.

“The premier continues to put the needs and interests of the corporate developers ahead of the people of British Columbia,” Horgan said.

“We’re tying the hands of future governments because a desperate government made commitments that they over-promised on.

“My concern is too much lolly has been put on the table by a province and a government and a political party that’s bent on getting a deal at any cost.”

All of which must be music to the ears of Clark.

Clark and her Liberals would love nothing more than to see Horgan and the NDP oppose this project.

Did Clark over-promise in the 2013 election campaign? You bet she did. We won’t get anything close to the trillion-dollar LNG industry and 100,000 jobs Clark promised, at least not before the next election.

But the fact is this $36-billion Petronas project — formally known as Pacific Northwest LNG — is massive and would bring big economic benefits.

The company and its partners have said there will be 4,500 construction jobs and 330 permanent operational jobs once the LNG plant near Prince Rupert is up and running.

Petronas also said Wednesday it still intends to remit its previously promised $1.3 billion in new taxes and royalties every year to all levels of government. (A nifty feat considering the government’s fresh concessions in these agreements.)

Here’s the timetable: Petronas and its partners get to review and consider all the secret numbers first, to assist in their investment decisions.

Then the deal will be put to the legislature this fall for a vote.

That will just be a formality, since the Liberals hold a majority. But if the NDP votes against the deal, it will give Clark a perfect re-election slogan.

Can you hear it now? “I promised LNG. I delivered LNG. And the NDP opposed it.”

Horgan wouldn’t say if the NDP would vote against the deal or not. But the trap has been set. We’ll see if he walks into it.