If it weren’t for the stakes involved, the stumbling dance between the B.C. Liberal government and Malaysian energy giant Petronas would be almost comical.
In 2013 everything seemed as well-choreographed as an episode of Glee. But now Petronas CEO Shamsul Azhar Abbas is threatening to kick off his tap shoes unless Premier Christy Clark starts performing the tax concession tango.
Abbas is standing with his arms crossed at the edge of the dance floor, leaving Clark to gyrate like Elaine from Seinfeld — lurching from her “$100 billion prosperity fund” to “a change, not a windfall,” with the government’s “core services” dependent on the voodoo economics of liquefying gas for export after fracking it from provincial shale deposits.
Perhaps Petronas is demonstrating the kind of corporate brinksmanship we’ve come to expect in our post-NAFTA world. But the company is also dealing with financial realities: the Asian spot market price has plunged from $18.50 per million British Thermal Units in 2012 to below $11/mmBtu.
Clark has already lost other members of her LNG dance team, including Houston-based Apache Corp, which is abandoning its stake in a proposed Kitimat LNG project and leaving Chevron to find another partner.
The last thing the Libs needs is more bad news for the carbon economy — like the September report from the International Energy Agency, the policy body that acts as clearing house for statistics on the international oil market and other energy sectors.
The IEA predicts solar technology will reach commercial competitiveness with all other forms of energy production in just over a decade, and may become the globe’s largest source of electricity by 2050.
“The take-off is around 2025 to 2030. By then the cost of solar will be $100 per megawatt/hour and will compete with fuels facing carbon prices of $50 a tonne,” according the report.
“Solar parity” with the traditional energy sector has already been reached in Australia, Germany, Italy and Holland. As photovoltaic panels continue to drop in price, the cost of carbon-based fuels will rise.
The IEA projects the latter may hit $150 a tonne by mid-century, making solar the cost-superior option across the board.
Even the U.S. military, recognizing the folly of depending on undisturbed supply chains of fossil fuels, is now busy equipping its military troops and bases with solar technology.
This doesn’t mean that our rainy province will be squeezing sunbeams for all our long-term domestic energy needs. But it does mean it’s astoundingly stupid for B.C. to bank on selling gas to Asian markets that are much closer to Australia, Qatar, Mozambique and Borneo — sunny nations that aren’t just further into the LNG production game than we are, but also subject to creative disruption from solar technology.
The projected growth of solar tech is only limited by the sun’s lifespan. In contrast, natural gas wellpads are exhausted within a few years, so you have to keep drilling furiously to satisfy market expectations — a pattern that energy security expert Thomas Homer Dixon calls “fracking to stand still.”
But as they say in Chicago business circles: “If you’re not at the table, you’re on the menu.”
The shale gas/LNG game was never about you and me, as demonstrated by Abbas’s remark that wages for B.C.’s domestic workers are not “benchmarked to global contractors’ cost.” This game is for insiders, shareholders, shills and temporary foreign workers.
And the game is not going smoothly on the LNG dance floor. Government and industry are stepping on each other’s feet while they try to figure out the tempo.
If the IEA proves right, it’s only a matter of time before the DJ sticks “Dancing With Myself” back in its sleeve and cues up “Here Comes the Sun.”
Monopoly capitalists like the Koch brothers are preparing for the change of tune. Their political arm, Americans for Prosperity, recently conspired with U.S. utilities to write legislation to force solar-using citizens to pay a surtax to the utility companies for the privilege of accessing the grid to sell power.
In other words, the Kochs want to tax sunlight. They and the usual suspects will undoubtedly try to game the alternative energy revolution in their favour now that they have seen the writing on the solar-panelled wall.
geoffolson.com
