LNG investment may be too late after 2016, companies say
Energy workers are facing a 'triple whammy' due to poor economic conditions, says representative
The organization representing contractors and service providers to the B.C. oil and gas industry says time is running out to invest in LNG, after what it calls one of the worst years for LNG in the province.
The B.C. government has made no secret of its intentions to back major LNG projects, saying the investment will yield money to pay back the province's debt and tens of thousands of jobs.
But skeptics have continually criticized the government for falling behind on its plans to grow the province's LNG sector. Now, the executive director of Energy Services B.C,, says contractors and firms servicing the industry need to know now whether or not that investment is coming.
"We really need it in 2016. We need to know the answer and move ahead," said Art Jarvis.
"A triple whammy"
Jarvis says LNG workers suffered in 2015 due to three main factors, including cuts — as much as 20 per cent — to companies' profit margins, fewer projects, and more competition for jobs due to waning LNG sectors in other provinces.
"We're kind of hit with a triple whammy in this region," he said.
"What that means of course is less income to the communities, less income to the province, and of course, [it's] pretty tough to be sustainable," said Jarvis.
Jarvis is optimistic that if more projects break ground this year there will still be opportunity for B.C. workers to benefit. He says workers in the energy service industry have no choice but to look forward.
But the window of opportunity for LNG is closing quickly because prices are dropping while costs are rising, according to Jarvis.
"When you look at the sale price for natural gas internationally and the cost to develop it regionally, those are fast coming to parallel to each other. And if they ever get that way, they're close enough that it makes it more difficult."
Small companies are already out of the game, said Jarvis.
"The only producers that can play this game are people with a large budget and a big pocketbook. Because it's already knocked the smaller producers off the pole."
"We're pretty concerned here about the future — the near future and the long future."
To listen to the full audio, click the link labelled: LNG industry concerned about upcoming year.