VANCOUVER (NEWS1130) – The provincial government’s projection of riches from liquefied natural gas is “based on assumptions that are too good to be true,” according to a think-tank.
Premier Christy Clark’s projection for a $100 billion wealth fund from natural gas is a “fantasy” and the government is “rushing to get resources out of the ground regardless of the returns,” according to an analysis of the plan.
The Canadian Centre for Policy Alternatives says the massive fund “would take every best-case scenario to materialize.”
The left-wing think-tank estimates tax revenue from liquefied natural gas exports will be between $200 million and $600 million a year once the sector is fully developed.
CCPA economist Marc Lee thinks prices will not be as high as projected.
“A lot of the spike in prices was due to Japan’s downtime around nuclear power in the past three years since the Fukushima nuclear disaster, and they are now looking to turn that capacity back on.”
Lee also points out that the 7 per cent LNG tax won’t be paid by companies for some time.
“At the best-case scenario it’s going to take four of five years before they really start paying the tax. At lower levels of price it’ll take longer for that to happen, and it could take up to 12 years.”