Liquified Natural Gas in BC

The scene is the Dragon's Den and a new prospect has just walked in.

Hello Dragon's, I am Christy Clark, the leader of the British Columbia Liberal government and I am looking for a $50 billion dollar investment for a 15% share in the BC Liquefied Natural Gas industry (LNG)

The questions start:

Dragons: That is a $600 Billion valuation of your product.  Do you have a plant or any sales?
CC: Why yes we do. We have a plant at Kitamat that is ready to start production in 2015. We have some purchase agreements and should be ready for 5 mmtpa (million metric tonnes per annum)

Dragons: LNG worldwide sells about 300 mmtpa (or $200 Billion) and is anticipated to grow by another 200 mmtpa (or $135 Billion) by 2020. What percentage of that new growth do you expect to capture?
CC: We are ready to capture 15% or $20 Billion a year, with 30 year agreements to make up the $600 Billion valuation.

Dragons: Currently you appear to be on track to only capture 1/6th of that with your Kitamat plant. And $20 Billion/year is more than your entire oil and gas industry currently produces. How do you intend to increase production to the point where you will be able to take 15% of the growth in the market from the existing players who are also vying for the same industry increases?
CC: That is where your $50 Billion comes in. We need to double the size of the Kitamat plant and built at least 2 or 3 other plants.  Of course we only need $7 or $8 Billion up front and then the rest as the gas purchase agreements are signed.

Dragons: So you need $7-8 Billion to do the ground work in order to make the sales so that you can expand this industry to a size larger than you entire oil and gas industry to date and do it all quickly enough to capture 1/6th of the new growth in an industry where the other producers have been working for decades and have close ties with all the clients you are hoping to sign up?
CC: Yes, I am confident because I believe in jobs and this will make thousands of jobs.  It is a staggering number but we can do it if my government is given another term.

Dragons: This is a great opportunity that needs to be aggressively pursued but your valuation is at least 5 times over inflated, so I am out.

The numbers that Christy Clark is glibly throwing around ($600 Billion over 30 years) represent 10% of our province's GDP. Those numbers apear to be for re-election consumption only. This is a growing industry to be sure but we are late adopters. If we can capture 5% of the growth in this industry we would be doing exceedingly well and would likely be at the highest capacity that the Kitamat plant can be expanded to handle. (10 mmtpa). That would be only $6-7 Billion/year or $200 Billion/30 years. Even this would be an enormous goal.

I am not saying that we shouldn't strive for this and more, I am just saying that the numbers don't appear realistic and I would like to see the plan to reach them. Otherwise, this is just massive exaggeration to sell a government that is in desperate need of some good news. I know I wouldn't want my performance evaluation to be tied to hitting those targets.

short list of sources reviewed to find the math behind the promises:
http://www.vancouversun.com/news/Clark+embarks+second+trade+mission/6595365/story.html
http://www.kitimatlngfacility.com/
http://en.wikipedia.org/wiki/Liquefied_natural_gas
http://www.bcstats.gov.bc.ca/Files/5fba2481-01e9-4579-83d3-6b6c6c1c15c8/BCGDPbyIndustryCurrentDollars.xlsx
http://armiesofliberation.com/archives/2010/06/19/yemen-natural-gas-sold-at-one-third-of-market-price-193ton-vs-689ton/

Success of Nazinga Game Reserve

The Nazinga Game Reserve is just south of Ouagadougou, where I worked in Burkina Faso, West Africa. It was founded by 2 Canadian brothers, Clark and Robert Lungren. They believed that when human prosperity is generated through sustainable management of natural resources, both people and environments win.

The wildlife in the area had been decimated by poaching and drought. So they built dams to maintain the water supply and roads to access the area. Then they hired the best poachers as game wardens. Even before the herds began to recover, they started culling them and selling the meat in the local markets.

By providing jobs to the local villagers and allowing hunting, they got the cooperation of the local municipalities and with the large amount of meat becoming available at reasonable rates in the markets they effectively put the rest of the poachers out of business.

Although they took a lot of criticism for the dams, roads and culling of the herds (including elephants), this is what allowed them to manage the resources and make them profitable. The result was that within 10 years the herds had increased ten fold including 800 elephants and 5000 warthogs. The local communities also benefited and the children were healthier due to the better meat supplies and reduced poverty.

The success of the Nazinga Game Reserve demonstrates that if we want to preserve our natural resources, the best way is to develop them. When they are profitable, they can be protected. If they are not profitable, they will be neglected.

The BC Conservative Party believes in managing our natural resources through environmentally sensible development. This will provide jobs for British Columbians, taxes to support our social structure and value that will allow our natural resources to be protected in perpetuity.

Liberals Are Ready to make nice

The BC Liberals are ready to deal and put it all on the table to bring back the BC Conservatives. Well maybe not all, but they ARE willing to change their name!

http://www.news1130.com/news/local/article/354699--change-bc-liberal-party-name-conservative-stalwart

I am more insulted than I have words to express. They at basically saying that I must be willing to topple the current government simply because I don't want to be called a Liberal. Excuse me!  I am amazed they are seriously floating this rubbish in public. 

The BC Conservative party was revitalized by a flood of members after 

1. The BC Liberals continually refused to answer allegations about corruption in their highest levels. The sale of BC Rail is the biggest example of this but by no means the only one and more keep coming. 
2. The BC Liberal leadership proved themselves to be inept. Look at the BC Place name embarrassment for an example but more flood in weekly and sometimes daily
3. Then as a final straw, the BC Liberals moved substantially to the left and abandoned their conservative base

We had absolutely nothing left to stay for and we have nothing to come back for either. 

But now they are ready to change their name for us. Thank you but I am not that void of purpose. They may keep their name and I will keep my BC Conservative party

BC Conservative Next Steps

Congratulations to the NDP candidates Joe Trasolini and Gwen O'Mahony. They ran good clean campaigns and had solid wins. 

Last night, we made great strides too and captured 10 times the share of votes that we did in the last election. However, the BC Conservative party was not able to frame our position in such a way so as to capture enough of the voters who have been fleeing the Liberal party. Many have gone to the NDP or just stayed home. We must reframe our position so as to better connect with the public.

I believe that one area we have to control is our dissatisfaction. Lets face it, we have many people joining our party because they are angry about:

• the HST
• the carbon tax
• Smart Meters
• The BC Rail scandal
• Hydro increases that go to general taxes
• add your issue here

In short, we have a portion of our party that are a conglomeration of various protest votes. We must pull in these edges and allow our unified voice to speak about how we would govern and take our province forward rather than focusing on what we would fix from previous mismanagement. 

I believe in what our party stands for more than what we stand against. I am more convinced than ever that we are the right choice and I will work at reframing our position. 

Liberal Internet Suggestion Box

The BC Liberals have started a suggestion box on the internet.  You can check it out at:

http://www.ideaslab.ca/

I did, and the first thing I saw was the question, "What would you like to see in the BC Liberal 2013 Campaign Platform?" Although this sounds good at first blush, I am not a fan for a few reasons.

1. I would have thought that any credible party would be offering a vision of where they want to go rather than begging for a vision. 
    
2. The suggestions that are dropped off cannot be properly refined through debate, nor can they be defended. 
    
3. This is gimmicky rather than being genuine. It has to be, because anyone can post anything.
    
   For example, one person posted that the BC Liberals should keep the HST. Now, regardless of whether that is a good or a bad idea, we have had a referendum and the government CANNOT keep the HST. They must rescind it. If they what to bring it back later they can do that, but they have no choice but to get rid of it first. So suggestions may come in from well meaning people that simply cannot be acted on.
    
   Also, conservatives and socialists may post suggestions. Here, the BC Liberals will not be able to act on the suggestions AND maintain their distinction as a liberal party.
    
   So I believe this is gimmicky because they do not intend to use any suggestions that do not come from intelligent liberal sources, nor should they.

The real way to garner this input already exists and every party does it.

• We seek out like minded people to join the party.
• Then the local party members put forward their suggestions and they are debated and refined.
• Then the ones that stand the test are brought forward to the AGM and further debated at a provincial level.
• The ones that make it through that process are now worthy of becoming party platform and they are brought full circle to the public in the next election.

This is a far more effective approach and I encourage everyone to join the party of their choice and participate in it. The ideas website is more window dressing and is just for show to make a beleaguered party look friendly.

Bonuses Don't have to be bad

Should government or crown corporations pay out bonuses?

The point of a bonus should be to hold back a portion of an employee's salary and then pay it out plus a little more if they do a good job. For example. Instead of giving a salary of 100,000 with no bonus, a bonus structure would offer a salary of 90,000 with an opportunity to make an additional 20,000 in bonuses. 0 if you under perform, 10,000 if you do average and 20,000 if you exceed expectations.

Therefore, not getting any bonus is actually a cut in pay for poor performance and if you miss more than 2 years in a row you should be fired too.

I am in favour of that kind of bonus. Unfortunately, bonuses have often been used as a cash cow to allow already overpaid positions to load up the trough one more time. 

I would not move to do away with bonuses. Rather I would go to the root of the problem and insist on a full review of all salary and compensation packages for all senior positions in gov't and crown corporations.

If the salary and benefits are brought in line first, then a bonus to incentify excellence can be a good accountability tool.

What Makes a Party Legitimate?

This has been a tumultuous week in BC politics and it has been all good for the BC Conservatives. 

• high profile Liberal supporter Rick Peterson said he will run for the BC Conservatives
• John vanDongen crossed the floor and joined the BC Conservatives as our first MLA
• Kevin Falcon and  George Abbott say they don't think they will run again for the BC Liberals

People are saying that this gives legitimacy to our party. They have it backward.  Our party has legitimacy and that is why these things are happening and will continue.

People are coming to our party because they ate starving for something to vote for. They are tired of supporting a party they don't believe in just to prevent an NDP win.

The BC Conservative Party is the the only legitimate free enterprise party in the province and we will see a landslide of likeminded people coming home.  People who have been bullied by the Liberal's NDP fear mongering for too long.

We offer fiscally responsible, honest, transparent government. 

• Government that will support job growth in our province by actually supporting investment and businesses by controlling spending and lowering taxes. 
• Government that will address the problems with our court system. 
• Government that will support our natural resources while protecting the environment.

Our policies and our integrity are what give  us legitimacy.  What we see now is that British Columbians understand this and people are re-aligning with where their beliefs have always been.