Evaluating British Columbia's economic policies for liquefied natural gas development
2021
Gunton, Cameron | Markey, Sean | Werker, Eric
Interest in developing liquefied natural gas (LNG) has recently increased with global demand rising at a higher rate than any other fossil fuel in the last ten years. While the increase in demand for LNG has created an opportunity for countries with natural gas stocks, there is a significant amount of competition among these producing countries. As a result, jurisdictions have been implementing policies and subsidies to enhance their competitiveness in the global LNG market. We investigate the impact of this phenomenon in one gas-rich region, British Columbia, Canada, where the provincial government has promoted the development of a large-scale LNG industry. Drawing from staple theory, we explore how government policy has been shaped by the needs of the resource sector to provide incentives for expansion without undertaking comprehensive evaluation of the costs and benefits. As a result, the benefits of the expansion are overestimated, while the costs are underestimated. Our analysis shows that a more comprehensive and transparent evaluation of resource development policies is necessary to avoid suboptimal policies and ensure that development is in the public interest.
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