BCs Shared Prosperity and Shared Potential Metro Vancouver and BCs - PowerPoint PPT Presentation

BC’s Shared Prosperity and Shared Potential Metro Vancouver and BC’s Natural Resource Potential February 13, 2014 Greg D’Avignon President and CEO

BC’s Integrated Natural Resource Potential Market Demand & Opportunity First Nations Common Fact Reconciliation Base Engagement Collaboration & Interdependence People Skills and Innovation Prosperity

Market Demand and Opportunity Market Demand & Opportunity First Nations Common Fact Reconciliation Base Engagement Collaboration & Interdependence People Skills and Innovation Prosperity

1999 Shanghai Population 12,030,000

2012 Shanghai Population 23,470,000

6 BC Exports to Pacific Rim Now Almost Equal to US BC Exports, millions $ 25,000 US 20,000 15,000 10,000 Pacific Rim 5,000 0 00 01 02 03 04 05 06 07 08 09 10 11 12 13* Source: BC Stats. * projection based on first 11 months

What’s Going to Drive Our Potential Prosperity Building the equivalent C hina will add of Metro Vancouver 133,974,285 people every 44 days for the to their cities in the next 7 Years rest of the decade I ndia had 9 million In 2012 Canada had 27.4 million new subscribers last month cell phone subscribers BC’s middle India & China’s middle class will grow class is 1.4 m with to 2 billion people by 2025 median income growth of 8% since 2006 spending $12 trillion Data ; McKinsey, OECD, World Bank, ITA, CRTC, Stats Can

2000 The global middle class – in 2000 EU 34% Others 29% India Japan US 1% 11% 24% China 1%

2010 The global middle class – in 2010 EU Others 29% 36% US 20% Japan India 8% 2% China 5%

2020 The global middle class – in 2020 Others EU 37% 21% US 12% India 11% Japan China 6% 13%

2030 The global middle class – in 2030 Others 34% EU 14% US 7% India 23% China Japan 18% 4%

2040 The global middle class – in 2040 Others 33% EU 10% US 4% India Japan 30% China 3% 20%

13 Projected Increase in Real Income Per Person 2010-2050 900% 800% 700% 600% Asian Economies 500% 400% 300% 200% 100% 0% Source: HSBC Global Research.

Incomes Rising in Developing Economies Faster, 14 and at a Greater Scale, Than Any Previous Time Population at start Years to double GDP per capita of growth period Million Country Year 1700 1800 1900 2000 9 United Kingdom 154 United States 10 53 Germany 28 65 Japan 48 33 South Korea 10 27 China 1,023 12 India 840 16 Sources: McKinsey & Company; Angus Maddison; University of Groningen; Resource Revolution: Meeting the world’s energy, materials, food, and water needs , McKinsey Global Institute, 2011.

15 BC Capital Spending Surges BC Capital Investment, billions $ 50 45 40 35 30 25 20 15 10 91 92 93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 08 09 10 11 12 13 Source: Statistics Canada, Public and Private Investment Intentions. 2013 is planned investment spending

$200 billion Inventory of Projects – $83.6 billion under construction Infrastructure Mines/Mining Hwy 37 Transmission • $3.3 billion Rio Tinto Alcan Smelter • Richardson and Neptune Expansions • New Afton Mine, near Kamloops • Evergreen Line • Mt Milligan Mine, near Prince George • Expansion of Terminal 2 • Red Chris Mine, near Dease Lake • Expansion of Port of Prince Rupert • Roman Mine, near Tumbler Ridge • South Perimeter Road • Quintette Mine, near Tumbler Ridge • $7.9 billion Site C • • Bonanza Ledge Mine, near Barkerville YVR expansion/upgrading • Energy*** 6 more in permitting Construction / Real-estate $750 m Sooke Wind • $6 billion Spectra • • 5 major downtown office towers $5.4 Trans mountain pipeline • • Retail complexes $5.8 billion Kitimat LNG • • Evergreen line $12.3 billion LNG Canada • • Various Hospitals across the province $11 billion PNW LNG • • Seaspan Non combat Vessel Program $10 billion BG Group • Does not include 5 times multiple of upstream • gas

Solutions Through a Common Fact Base Market Demand & Opportunity First Nations Common Fact Reconciliation Base Engagement Collaboration & Interdependence People Skills and Innovation Prosperity

18 Fossil Fuels Dominate Global Energy Consumption Global Energy Consumption by Fuel, millions tonnes oil equivalent 18,000 Renewables, 2% 16,000 Hydro, 6% 14,000 Nuclear, 5% 12,000 10,000 Coal, 30% 8,000 6,000 Natural Gas, 24% 4,000 2,000 Liquids, 33% 0 1990 1995 2000 2005 2010 2011 2015 2020 2025 2030 Source: BP Energy Outlook 2030, shares are for 2011 consumption, shares may not sum to 100 due to rounding

19 Growing Energy Consumption in Asia Energy Consumption by Region, millions tonnes oil equivalent 18,000 16,000 14,000 Africa 12,000 Asia Pacific 10,000 8,000 Middle East 6,000 Europe & Eurasia 4,000 S & C America 2,000 North America 0 1990 1995 2000 2005 2010 2011 2015 2020 2025 2030 Source: BP Energy Outlook 2030, shares are for 2011 consumption.

Rising US oil and gas production

Major shale basins around the world

BC Energy Realities BC is a Global Energy Player as is Alberta and Canada, » BC has over 175 years of natural gas supply we know of » Leader globally in use of renewable power (94% hydro) » Refiner, transporter and shipper of oil for up to 75 years BC has 36,311 kms of active pipelines in the province Up to 1,400 tankers per year travel our coast to Cherry Point 4 th largest refining centre on the West Coast across from Victoria Vancouver Island would shut down in a week, if not for the barge from Burnaby several times per week *US Energy Information Administration BC Oil and Gas Commission

BC Environmental and Global GHG Leaders BC leadership position on GHG with Clean Energy Act and carbon pricing, but started from a base of renewable energy and lower per capita emissions than most provinces/states We have been hydraulic fracturing with different geology and world leading technical/regulatory/operational transparency for over 60 years Carbon dioxide emissions from global energy projected to rise by 29% to 2035 BC poised to be a leader in that global GHG reductions through LNG supported fuel switching and technology

Environmental Protection, Pride and Export of Canadian Regulatory, Process Expertise and Values BC and Canada have a reputation for sustainable development and movement of energy and natural resources Among the best in the world at project review, regulatory management, operating process for extraction and movement supported by the rule of law  800 Mining HQ In Vancouver – 4,300 Canadian projects globally –  Exporting BC and Canadian sustainability practices and expertise  Opportunity to more vigorously promote Canada’s sustainable development practices, regulatory oversight and values

Our Environmental Stewardship and Competition Iran , Russia, Qatar, Turkmenistan » 50 percent of proven gas reserves » Environmental, Regulatory and political stability vs Canada? While environmental protection is not a priority in Russian society, this may change as the country becomes more acutely affected by instability stemming from environmental degradation. Recent reactions to the public management of floods and wildfires, and historical precedents in a range of countries, indicate that environmental decline may fundamentally affect social cohesion . World Economic Forum January 2013

Canadian and BC Natural Resource Innovation Market Demand & Opportunity First Nations Common Fact Reconciliation Base Engagement Collaboration & Interdependence People Skills and Innovation Prosperity

Canadian Energy Innovation in our DNA Source Peter Tertzakian ARC Financial

Canadian Energy Innovation Abraham Pineo Gesner 1846-1854 Bitumimous Coal and Shale Oil

Natural Resource Innovation

People Skills and Prosperity Market Demand & Opportunity First Nations Common Fact Reconciliation Base Engagement Collaboration & Interdependence People Skills and Innovation Prosperity

Share of Canadian population aged 15-64 By 2021, one in four Canadian workers will be 55 or older 31

Productivity GDP per person hour of work in $US 2012 90 83 80 70 60.2 60 53.3 50 46.3 44.6 40 30 20 10 0

Why BC’s Resource Industries Carry 33 Disproportionate Weight Strong export-orientation with direct investment attraction -NEW $$$ Relatively high wages (mining is #1 in BC; oil and gas, forestry, also pay well above average wage ) Head offices drive IP, Innovation, Services, Exports and Higher Wages Most business inputs used in resource extraction and processing are sourced domestically rather than imported (raw materials, energy, labour, transportation, business services) » import content of BC resource products is quite low » machinery/equipment is the main imported input

34 Resources Dominate BC’s Exports BC Exports by Commodity, billions $ 8 7 2007 2009 2012 6 5 4 3 2 1 0 Wood Prod Pulp & Metallic Natural Coal Mach. & Agriculture other Paper Mineral Gas Equip. Prod Source: BC Stats.