On her Asian trade mission this week, Premier Christy Clark is marketing the liquefied natural gas she hopes will soon be produced in British Columbia as the cleanest in the world. At the same time, her government’s new 10-year energy plan projects that the LNG industry would be fuelled primarily by burning fossil fuels.
“I think this is the biggest opportunity British Columbia has ever had to clean up the world’s air, by exporting the cleanest natural gas in the world,” she said in an interview in Beijing, “and our plants are going to be some of the cleanest in the world.”
Some 8,500 kilometres away, her energy minister, Bill Bennett, announced in Victoria on Tuesday a resource plan for BC Hydro that provides hydroelectric power for only a fraction of the energy required for LNG production.
There are a dozen LNG facilities currently proposed for B.C.’s shores. The Crown utility expects most producers to use direct-drive natural gas turbines to run the cooling process to convert natural gas to liquid form. It is an energy-intensive process that could double the province’s total greenhouse-gas emissions.
Direct-drive turbines are commonly used in LNG plants around the world, but some facilities have a dramatically smaller GHG footprint by using electric-drive compressors that can run on renewable power. The province, still in negotiations with industry about taxation and regulation, does not appear ready to demand that level of clean-energy commitment as it competes with other jurisdictions for investment dollars.
The market for LNG in Asia is vast, and growing. But B.C. is competing with other jurisdictions to take advantage of the price gap between North America, where a shale-gas boom has driven down prices, and the more lucrative Asian markets.
It is not clear how many LNG plants might be built in B.C. – there are no final investment decisions yet. But a single LNG plant can require 7,000 gigawatt hours of energy to process natural gas into LNG. BC Hydro’s long-term plan, released Tuesday, offers up just 3,000 gigawatt hours of power for the entire LNG sector.
That’s the plan that Mr. Bennett approved, although Hydro says it will adapt if there is more demand for electricity than expected.
Meanwhile, Ms. Clark is doubling down on her proposal to claim greenhouse-gas reductions for her province by selling LNG to Asia. Her government is working on a strategy to claim credit for reducing greenhouse-gas emissions outside of B.C. borders – a policy in part driven by a provincial law that requires the province to dramatically reduce its GHG emissions. It’s unclear how the province could achieve this, as any formal emissions reductions would likely be claimed by the country that is purchasing LNG.
“We’re going to have a really clean product and we are going to help China wean itself off coal,” Ms. Clark said this week.
It is not clear how much coal would be displaced in China by LNG, given that country’s rapid expansion. However, the bigger markets for B.C. LNG would likely be in Japan and Korea. Japan is seeking to replace its idled nuclear power plants with alternative energy sources, therefore increasing emissions.
Ms. Clark said that’s still a good thing: “We can argue in Japan’s case that we are helping them avoid using coal. Because they are going to replace that nuclear power with something. If they don’t get our natural gas, the world’s air is going to be a lot worse.”
Critics have argued that B.C. can only meet its commitment to the cleanest LNG in the world if it imposes strict regulation from the wellhead to the waterline to contain the significant GHG emissions associated with extracting natural gas, squeezing it down a pipeline across the province, freezing it and then shipping it abroad. A recent report from Tides Canada warned that without clean energy requirements, each ton of LNG produced in B.C. could produce up to a ton of carbon dioxide – nearly triple the best projects in Norway and Australia.