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March 8, 2018

Inspired by an October 30, 2017 report in the Globe and Mail

LNG Canada has the potential to hire approximately 6000 skilled construction professionals for the proposed plant and approximately 2800 skilled construction professionals for the accompanying LNG pipeline. (estimates from undersigned)

These are much needed jobs as new capital investment has dwindled, the result of a less attractive investment and regulatory climate in Canada.

Stranded human capital assets marked by trades professionals and their families with significantly reduced opportunities to earn a living in their profession are the direct result of an unattractive investment and regulatory environment in Canada.

For the LNG Canada Project, due to:

  1. the complex logistics of the site and surrounding environment,
  2. the increased environmental & safety protection afforded by constructing modules in a controlled fabrication environment,
  3. a lack of capacity and shipping challenges associated with available Canadian modularization providers, and
  4. constraints that must be overcome in order to make the project economically viable relative to construction costs and LNG pricing,

I believe the Project must secure module capacity from outside of Canada. The potential for the Canadian government to impose a 45.8% tariff on same puts the entire investment including all the associated opportunities for Canada, at risk.

As noted in a prior article, Shell’s method on developing this project has been to

“trudge: to walk slowly with a lot of effort, especially over a difficult surface or while carrying something heavy” [Cambridge dictionary].

I think “walking slowly with a lot of effort, especially over a difficult surface [] while carrying something heavy” quite accurately sums up Canada’s current capital investment and regulatory environment. We put enough hurdles up, and we see projects abandoned all the time.
We hope Shell keeps trudging and note that if Canada loses out on this opportunity to be firmly established in LNG, it will be entirely self-imposed.

I have contacted my MLA on this issue, there is a lot at stake and much to be gained by necessarily excluding LNG Canada project from the application of the tariff.

For an description of the tariff and its implications for the project please refer to this report in the Globe and Mail Oct. 30 Globe & Mail Report

Warm regards,

Sam Kemble