Increased costs of natural gas for British Columbians? Yup.

FortisBC has repeatedly assured us that this project will result in cheaper natural gas for BC consumers (see Item 1.5.1 of Fortis BC's Executive Summary). However, this has not been the case in other countries with LNG exports.

The Wall Street Journal has outlined the unintended consequences of exporting LNG from Australia, where the export push has caused Australia’s domestic natural gas prices to triple over the last several years. The average household in New South Wales, Australia’s most populous state, could see its gas bill spike by US$200 this year. And one study suggests that the bills could keep adding up as more natural gas is diverted for exports.

Essentially, natural gas producers can fetch a higher price by exporting their product rather than selling it domestically. As a result, there is a corresponding increase in domestic prices as supplies tighten. In other words, natural gas goes to the highest bidder, which makes it more expensive for consumers at home.

SOURCES:

Wall Street Journal: Australians' gas bills soar amid export boom

OilPrice: Why U.S. should be cautious about LNG exports

Reuters: Who took my gas? Australia's LNG boom hurts locals

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