Report: LNG investment generates jobs and GDP growth

Key Takeaways:

• A report by Resource Works and the First Nations LNG Alliance (FNLNGA) examined the economic benefits of liquefied natural gas (LNG) projects in B.C.
• A $4.1 billion investment in engineering/construction leads to a $4.5 billion increase in GDP and creates over 35,000 jobs.
• Engineering/construction in B.C. generates 8.9% more GDP compared to the average investment project in Canada.
• B.C. and Alberta capture most of the benefits (90.6%) from engineering construction projects in B.C.
• LNG projects also benefit from lower liquefaction costs due to B.C.’s cool climate and lower shipping costs due to its proximity to Asian markets.

Investment in LNG projects in B.C. can generate massive economic benefits, a new report found.

The study, prepared by Resource Works and the First Nations LNG Alliance (FNLNGA), investigates the economic impact of LNG projects with the goal of offering a clear, data-driven view of how LNG development can lift up the economics of B.C. and Indigenous peoples.

Using Statistics Canada’s Input/Output model, the paper reveals that LNG investments substantially boost the provincial and national economy, generating more GDP and jobs compared to other investment projects in Canada. A $4.1 billion investment in engineering construction, closely related to LNG projects, yielded a $4.5 billion increase in GDP and created over 35,000 jobs. The study also shows how these benefits ripple out to provinces outside of British Columbia.

To create the report, the groups enlisted the help of Philip Cross, a career statistical scientist who does research for various institutes across Canada and is a member of the Business Cycle Dating Committee at the C.D. Howe Institute. He has written extensively on natural resources and the Canadian economy. Before that, he spent 36 years at Statistics Canada, the last few as its Chief Economic Analyst, where he researched various economic and statistical issues and wrote its monthly assessment of the economy.

The study comes at a time when billions have already been invested in B.C.’s LNG sector. After years of planning and construction, the province’s first major LNG facility—LNG Canada—is about to be completed, followed by the smaller Woodfibre project. The LNG Canada $18 billion investment is supplied by TC Energy’s 670-kilometre Coastal GasLink pipeline connecting northeastern BC to Kitimat. LNG takes natural gas and cools it in terminals to –162 degrees Celsius so that it becomes a liquid, which requires 600 times less volume in tankers that transport it to overseas markets, where another terminal
converts it back to gas to be shipped by pipeline to customers.

It might not stop there. Here are other LNG projects with their eye on B.C.:

• Cedar LNG: A joint venture between the Haisla Nation and Pembina Pipeline Corp., located at Kitimat.
• Ksi Lisims LNG: A floating LNG project on Pearse Island, currently undergoing environmental assessment.
• LNG Canada Phase 2: A potential expansion of the existing LNG Canada project.

The report concludes that LNG projects offer significant economic benefits for BC and Canada. By overcoming regulatory hurdles and capitalizing on global market opportunities, Canada can become a key player in the international LNG market.

“As we launch this report, we aim to engage with policymakers, industry stakeholders, and the communities affected by these projects,” wrote officials from Resource Works and FNLNGA. “The findings underscore the critical need for thoughtful regulatory frameworks that support the growth of the LNG industry while balancing environmental considerations and the well-being of our communities. Together, let us move forward with the knowledge and insights gained here to harness the opportunities that LNG projects present for British Columbia and Canada.”