Federal Government approves Pacific NorthWest LNG project in B.C.

Is there a pattern  emerging in the federal government’s leanings regarding controversial energy projects?  After its approval of the Site C dam in B.C. in August 2016,  the Minister of Environment and Climate Change announced, late on the evening of September 27, approval with 190 conditions  for the Pacific North West LNG project, to be built near Lelu Island, north of Prince Rupert, B.C. . See the Government of Canada press release and the full text of the Decision Statement, including conditions, released by Canada Environment Assessment Agency.  For summaries, read the the Globe and Mail (Sept. 28)  or  the Vancouver Province (Sept. 28) or the National Observer   .  CBC offers a brief analysis at “Trudeau government at pains to explain Pacific West LNG” at the CBC.

More reaction is sure to pour in as environmentalists analyse the Decision and conditions, but an article in The Tyee (Sept. 28) summarizes initial reactions by major environmental groups.  The Pembina Institute’s Matt Horne been writing about the climate change implications for a long time, as recently September 27  in IRPP’s Policy Options,  “Cabinet should not allow BC’s and Petronas’ mistakes in Pacific NorthWest to be locked in for the next 30-plus years”. For Pembina’s initial reaction, plus links to many earlier critiques, see “Pacific NorthWest LNG approval is step backward for climate action in Canada” .

B.C. also awaits a federal decision about the proposed expansion of the Trans Mountain pipeline from Alberta to Burnaby, B.C., due in mid-December.

ECONOMIC IMPACTS OF B.C. LNG DEVELOPMENT

A May 2015 report from the Canadian Centre for Policy Alternatives considers six possible scenarios for liquefied natural gas export development in B.C., ranging in the number of export terminals from zero to five (the current government estimate). A Clear Look at BC LNG: Energy Security, Environmental Implications and Economic Potential  states that government claims of available gas supplies for export are greatly exaggerated, and that production would involved massive disruption, given that most wells would be fracked wells. Further, author David Hughes argues that is unlikely that anything close to the revenue projected by the BC government will ever be realized. And beyond the environmental dangers to the citizens of B.C., LNG will not reduce global GHG emissions: “From wellhead to final combustion, there are substantial leakages of methane, a much more potent greenhouse gas than CO2. Given this, liquefied fracked gas from BC actually has GHG emission rates similar to coal.”   Researchers who wish to pursue these concerns will welcome a new interactive planning tool, called the B.C. Shale Scenario Tool , available online at the Pembina Institute website. It allows users “ to quantify the potential impacts of shale gas and liquefied natural gas (LNG) development in northeast B.C. in terms of carbon pollution, land disturbance, water use and wastewater.”

B.C. LNG Setor: New Legislation and a New Report

In the week of October 20, British Columbia introduced the Greenhouse Gas Industrial Reporting and Control Act and the Liquefied Natural Gas Income Tax Act. The former requires liquefied natural gas plants to purchase carbon offsets and punishes those who fail to limit their carbon emissions to 0.16 tonnes per tonne of LNG – the strictest standards in the world, according to B.C. Environment Minister Mary Polak.

However, Merran Smith of Clean Energy Canada criticized the Act for focussing exclusively on port facilities, at the end of the supply chain. Matt Horne of the Pembina Institute asserted that 70% of the industry’s emissions would be released before reaching the ports. See “B.C.’s New LNG Emissions Regulations A Good Start, But Not Enough” from Desmog Canada at: http://www.desmog.ca/2014/10/22/bc-new-lng-emissions-regulations-good-start-but-not-enough, and Pembina’s comments at: http://www.pembina.org/media-release/pembina-reacts-to-tabling-of-bc-lng-carbon-pollution-legislation.

The new tax legislation imposes a 3.5% rate on operating income, half the amount B.C. had initially planned. Read the government press release at: http://www.newsroom.gov.bc.ca/2014/10/bc-to-have-worlds-cleanest-lng-facilities.html, and for details on the Act, see the government’s website at: http://www2.gov.bc.ca/gov/topic.page?id=75BD4BF2B6B5493FB8A36DB05EBA764D. Jack Mintz, from the University of Calgary, states: “the B.C. shale gas royalty is one of the most distortionary systems developed in industrialized countries”.

For his financial and policy critique, see “Jack M. Mintz: Why B.C.’s LNG tax policy sets a bad precedent” in the Financial Post at: http://business.financialpost.com/2014/10/22/jack-m-mintz-why-b-c-s-lng-tax-policy-helps-neither-the-province-nor-the-industry/. For a broader view, see Marc Lee’s reaction in “A B.C. Framework for LNG, part 2: The LNG income tax” at Rabble.ca at: http://rabble.ca/blogs/bloggers/policynote/2014/10/bc-framework-lng-part-2-lng-income-tax.

And the last word: Pembina will release a new report on October 27th, LNG and Climate Change: The Global Context.

British Columbia Tripartite Working Group Makes Workforce Recommendations for LNG Development in the Face of Environmental Controversy and Public Opinion

Since September 2013, the Premier’s Liquefied Natural Gas Working Group has met to discuss workforce planning, skills training, and the use of temporary workers in LNG projects. Described by the government as “unprecedented”, the working group included representatives from government, industry, the Haisla Nation, and organized labour, specifically: United Association of Plumbers and Pipefitters Local 170; B.C. Federation of Labour; B.C. and Yukon Building and Construction Trades Council; B.C. Government and Service Employees Union; Construction and Specialized Workers Union Local 1611; and Sheet Metal Workers International Association Local 280. The Working Group released their final report on March 31st and all fifteen recommendations were accepted by the Premier on April 3rd. Next step: a 10-year skills-training plan. The Terms of Reference did not include the environmental impact of the proposed LNG development and the contention that the LNG production will make it impossible for B.C. to meet its legislated carbon emissions targets.

The Final Report provides an inventory of existing and proposed LNG development in B.C. as of March 2014, as well as analysis of the workforce data and issues as identified by the B.C. Natural Gas Workforce Strategy and Action Plan, released in July 2013 and since updated by the government. Fifteen recommendations include the use of best practices relating to apprenticeship, mobility of labour within B.C. and Canada, and most contentiously, the use of temporary foreign workers. The report calls for the formation no later than July 2014, of an ongoing body which would include government, labour unions, industry and contractors, and First Nations, to participate in workforce planning, skills training, and to develop a protocol for the use of temporary foreign workers, “to limit their use, but also to plan accordingly for their use if and when needed”.

Many First Nations groups oppose LNG development, and a new public opinion survey released on April 24 shows that 78% of British Columbians agree that “B.C. should transition away from using fossil fuels to cleaner sources of energy to prevent climate change from getting worse. More than two thirds (67%) agree the province should decrease its reliance on fossil fuel exports to avoid future boom and bust economic cycles”. The survey was commissioned by the Pembina Institute, Clean Energy Canada and the Pacific Institute for Climate Solutions, and conducted by Strategic Communications Inc. in April of 2014.

LINKS

Premier’s Liquefied Natural Gas Working Group: Final Report is available at: http://www.labour.gov.bc.ca/pubs/pdf/lng_final_report.pdf, with a press release and backgrounder from B.C. Premier’s Office at: http://www.newsroom.gov.bc.ca/2014/04/premiers-lng-working-group-recommendation-road-map.html

“Key Native Group in Northern B.C. threatens to Stop Talks on Pipelines” in the Globe and Mail (April 21) at: http://www.theglobeandmail.com/news/british-columbia/native-group-threatens-to-stop-talks-on-pipelines/article18088799/, but also see “B.C. and First Nations sign first LNG revenue-sharing Agreement, and Backgrounder” at: https://www.newsroom.gov.bc.ca/2014/04/bc-and-first-nations-sign-first-lng-revenue-sharing-agreements.html

Public Opinion Survey is available from the Pembina Institute website at: http://www.pembina.org/pub/2539

See also the BC LNG Info website, maintained by the Northwest Institute, SkeenaWild Conservation Trust, and Headwaters Initiative, with the stated goal of providing impartial, up to date information about the LNG industry in B.C. for the benefit of the community. See http://bclnginfo.com/newsroom for news and updates.

LNG Production Powered by Renewables would Create More Jobs, Less Pollution, without Sacrificing Competitiveness

lock in jobsOn January 15, CleanEnergy Canada released the latest in its reports regarding the production of Liquefied Natural Gas (LNG) in British Columbia. Lock in Jobs, Not Pollution urges the government of British Columbia to use renewable electricity to power the LNG facilities. The report explains that the heart of LNG facilities are their compressors, which can be powered by the traditional technology of gas turbine drives (also called direct drives or D-drives), or by the more innovative electric motor drives (E-drives), now in use in Norway. The report contends that, in comparison to the use of fossil fuels, the use of renewable energy to power e-drives would “increase regional permanent employment by 45 percent, decrease carbon pollution by 33 percent, reduce smog, and build the foundations of a renewable energy economy in Northwestern British Columbia.” The report contains detailed appendices of the methodology by which job projections and estimates of cost and competitiveness were calculated.

The report quotes numerous government statements that claim that the LNG initiatives will be the “cleanest in the world”; notably, Premier Clark stated at the World Economic Forum in China in 2012, “We want our LNG plants to be principally fuelled by renewables.” Yet in a radio interview in response to the report’s release, the B.C. Minister of Energy stated, “If we were to introduce a brand new condition, at this stage of our discussions with these LNG proponents, it would first of all be foolhardy, it would be unprofessional.” Two government-industry agreements for LNG development were announced in January, one for Kitimat and one for Prince Rupert.

For a broader discussion of the many potential sources of carbon emissions from LNG production (including the extraction of shale oil gas and transportation to the LNG processing facilities), see a recent OpEd by Alison Bailie. According to Pembina Institute estimates, if LNG development is to achieve the revenue claims made by the B.C. government, B.C.’s LNG sector would produce three-quarters as much carbon pollution as the oil sands, by 2020. The author contends that the government could reduce the carbon footprint by limiting the growth of the LNG sector, prioritizing low-carbon job creation, and setting high standards for emissions reductions technology for any projects that are allowed to proceed.

LINKS:

Lock in Jobs, Not Pollution is at CleanEnergy Canada at: http://cleanenergycanada.org/wp-content/uploads/2014/01/Lock-in-Jobs-Not-Pollution.pdf, with links to previous CleanEnergy Canada reports about LNG at: http://cleanenergycanada.org/category/news-coverage/

Carbon Footprint of B.C. LNG Boom Could Rival Alberta’s Oilsands, OpEd by Alison Bailie, from Pembina Institute, originally posted at The Tyee, (Jan. 13), at: http://www.pembina.org/op-ed/2515

B.C. Government press releases re industry agreements for LNG facilities are at: http://www.newsroom.gov.bc.ca/2014/01/major-lng-contract-awarded.html (Jan. 13, Kitimat) and http://www.newsroom.gov.bc.ca/2014/01/second-lng-agreement-reached-for-grassy-point-with-woodside.html (Jan. 16, Grassy Narrows, Prince Rupert).

Radio interview with Energy Minister Bennett in response to the CleanEnergy report is at: http://www.cknw.com/2014/01/16/energy-minister-says-no-to-electricity-powered-lng-plants/, with response from CleanEnergy Canada at: http://cleanenergycanada.org/2014/01/16/media-statement-re-minister-bennett-remarks-powering-lng-plants/