The economic benefits from a liquefied natural gas (LNG) industry could be immense, and British Columbia is well-positioned geographically to take advantage of growing LNG demand in the Asia-Pacific.

A recent Fraser Institute study found that B.C.’s LNG industry has the potential to supply 11 to 20 per cent of the Asia-Pacific LNG market by 2020. The study went on to find the cost of delay imposed upon LNG investments in B.C., defined as export revenues forgone, is substantial at C$22.5 billion per year in 2020, rising to C$24.8 billion per year in 2025. The export revenues lost in 2020 would be equal to 9.5 per cent of B.C. GDP in 2014. Even if assumed sales are cut in half, B.C. still stands to lose export revenues comparable to five per cent of 2014 GDP.

We’ve noted a few of the insights provided by the National Energy Board’s Canada’s Energy Future 2016 report recently (here and here). The report also sheds some light on what Canada’s LNG export potential could be.

The chart below shows the NEB’s projections of LNG export volumes under two scenarios—a high LNG case that assumes faster growth in exports and a reference case. Both scenarios assume that exports begin in 2019 from the B.C. coast.

In the reference scenario, exports grow sharply, peaking and remaining steady in 2023 at 70.8 million cubic metres a day. Under a scenario where LNG exports grow at a faster rate, the NEB estimates that exports could peak and remain steady in 2030 at 170 million cubic feet a day.

Perhaps the most important insight that can be gained from the NEB report is the necessity of LNG for natural gas production to grow (see second chart below). In a scenario where no LNG exports occur over the projection period, Canadian natural gas production will only reach 437 million cubic metres per day, only a two per cent growth over 2015. In the reference scenario, natural gas production grows by 19 per cent from 2015 to 2040. The high LNG scenario sees the most growth in natural gas production, which would be projected to move from 427 million cubic metres per day in 2015 to 614 million cubic metres per day in 2040, a growth of 44 per cent.

Ironically, given all the hype surrounding LNG in B.C., Canada’s pacific province might not be the first to have an LNG export facility built. That distinction might go to Nova Scotia (which also in a bit of irony bans the hydraulic fracturing that would allow the province to develop its own natural gas resources). A company seeking to export LNG to Germany from Nova Scotia plans to make a final investment decision in the third-quarter of 2016.

The longer LNG remains idle, the less likely it will be that natural gas production and LNG exports will yield the potential projected in the NEB report. This is unfortunate given the economic opportunities at stake.