Column: A different look at LNG for BC
There will many announcements and pronouncements for and against the federal government’s approval of the Petronas LNG project if, in view of the 190 pre-conditions, approval is the appropriate term. What aroused my curiosity was the identity of developer: who is Petronas?
Petronasis an oil and gas giant created a little over 40 years ago by the Malaysian government; it is a Malaysian crown corporation. Its annual revenues exceed $130 billion. That is a lot of money; it is nearly half of the annual revenues collected by our federal government. I was surprised to find, on a closer look, that Malaysia has a lot in common with Canada.
The country’s population, approximately 31 million, is similar to ours. Malaysia is a federation whose governance is based on the British parliamentary system. It has a House of Representatives and a Senate, its cabinet is headed by the prime minister, the ceremonial head of state is their king, and its legal system, just as ours, is based on English common law. Malaysia’s 19th and early 20th century history is more troubled and violent than ours, and it achieved full independence in 1957 as Canada was nearing its first centennial.
How did Malaysia come to own a corporate giant such as Petronas? The World Economic Forum’s (WEF) 2015-16 Global Competitiveness Report Index reveals important answers to that question. Canada is in 13th place on that index; Malaysia is in 18th place. Canada progressed from 14th to 13th over the past three years; Malaysia from 25th to 18th. In 1991 Malaysia’s parliament adopted a comprehensive development plan with the ambitious goal to achieve industrial self-sufficiency for the nation by the year 2020. This plan was focused on all aspects of life; it sought to balance progress in the country’s economic prosperity with social well-being, education, and political stability.
Today Malaysia records better gross national savings and lower general government debts as a percentage of GDP than Canada does! The WEF’s data shows that Malaysia outperforms Canada with its macroeconomic environment, goods to market efficiency, business sophistication and innovation. Today Malaysia outperforms Canada in its capacity for innovation, in company spending on research and development. Malaysia’s energy crown corporation today plays a key role in the country’s economy. Petronas was created one year before we created Petro-Canada. We decided to privatize our energy crown corporation.
Instead of politically grandstanding about the success of a subject to 190 conditions development deal, should we not try to learn how a country of similar size to ours, governed by the same parliamentary and common law systems as ours, has managed, after only 60 years of independence, to outperform us in national savings and general debt while at the same time developing a crown corporation producing revenues of half our national government’s total income?
Twenty countries exceed Canada’s proven natural gas reserves. We cannot dominate the global natural gas market having only 5 percent of Russia’s proven reserves. We cannot improve the quality of our natural gas to make it a superior product. We can only compete by lowering the price. Malaysia’s crown corporation can search the market for the lowest energy price to give a competitive advantage to its manufacturing industry.
The LNG project will add costs to our industries in terms of carbon taxes and other essential measures if we are to honour our carbon emission commitments. It is time for us to end our focus on peddling our non-renewable resources on promises of short-term jobs and billion dollar dreams. We could learn from Malaysia how to develop and implement a long-term plan.
The challenge is to benefit society for the long term. We must subjecteconomic development to the reality of the environment. Is economic progress worthwhile if it fails to increase social well-being, education, and political stability?