Government claims of LNG jobs grossly overstated, not supported by companies’ own numbers

July 28, 2015

(Vancouver) A new report from the Canadian Centre for Policy Alternatives offers a reality check on government claims about massive job creation to come from a BC-based LNG industry.

As recently as last week, Premier Christy Clark stated that the Pacific NorthWest LNG project headed by Petronas would create 4,500 jobs, and that the LNG industry as a whole would create 100,000 jobs.

LNG and Employment in BC reviews LNG proponents’ own employment estimates, and finds them to be substantially lower than government claims.

"In its submission to BC's Environmental Assessment process, Petronas estimates that about 3,500 workers would be required at 'peak construction,’" says report author and CCPA Senior Economist Marc Lee. "After a short construction period, however, the plant will only employ 200 to 300 full-time permanent workers."

Such job numbers are consistent with Australia’s LNG experience. Australia is well ahead of BC in the race to get LNG to world markets.

So where does that 100,000 number come from? First appearing in the February 2013 pre-election Speech from the Throne, the figure was based on a report from consultancy Grant Thornton, commissioned by the government just weeks before the speech.

Grant Thornton (GT) points out in the disclaimer for its report that all the data it used came from the government itself. GT also used the government's input-output model of the BC economy.

“There was no reason to hire GT aside from creating an appearance of independent analysis,” says Lee.

Some specific problems with the analysis include the unlikely assumption that five LNG plants will be built; over-estimation of jobs per plant vs real-world comparators; and undisclosed assumptions about LNG facilities. The paper also reviews many problematic features of input-output modeling, which is often used to justify mega-projects.

“According to the GT study, 2,400 LNG jobs – already an overstatement – will create 72,800 new jobs elsewhere in the economy,” says Lee. “This is simply unbelievable and contrary to the dynamics of any industry anywhere.”

The paper also reviews the growing use of "fly in, fly out" (FIFO) workers in major resource projects, noting that there is no guarantee that these jobs will go to British Columbians, and local economic benefits may be muted.

Lee emphasizes that there are not just two choices – LNG development or status quo – particularly in the face of climate change, which Clark herself has highlighted in recent comments on BC wildfires and the creation of a new Climate Leadership Team.

“BC could play a climate leadership role again by creating new jobs in transportation, building retrofits, clean energy and zero waste – all areas that will lower our greenhouse gas emissions, unlike LNG," says Lee.

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For interviews with Marc Lee, contact Terra Poirier at terra@policyalternatives.ca or 604-801-5121 x229.

Access the report at policyalternatives.ca/BC-LNG-jobs

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