The pledge has come from the highest levels of a province determined to see a giant new industry ship away natural gas and leave billions of new dollars in its wake. British Columbia, its Premier and her lieutenants have repeatedly said, will build the cleanest liquefied natural gas industry on the face of the earth.
But if B.C. is to keep that pledge it will need to impose a series of strict, and likely costly, rules to reshape how powerful oil and gas companies proceed in the province. Without those measures, a sober new assessment warns, each tonne of LNG produced in Canada could produce up to a tonne of carbon dioxide, nearly triple the best projects in Norway and Australia.
With most project designs still far from finished, the actual carbon emissions remain far from certain – and provincial leaders are still attempting to write rules to shape construction plans. But a worst-case scenario sketched by environmental groups suggests a modestly sized LNG industry with three large operations would produce more than a third of the emissions now generated by Canada’s entire electrical sector. If the industry grows as large as the B.C. government envisions, its carbon footprint could nearly double that from the entire oil sands in 2010.
“The carbon emissions from it is pretty staggering,” said Merran Smith, director of the Clean Energy Program at Tides Canada, the environmental organization that will release the report Monday.
Whether and how B.C. chooses to temper that output comes as the latest in a series of difficult decisions facing the province. Critics warn that without action, LNG could become an oil-sands-like carbon pariah, while political leaders want to work with an industry already nervous about a new tax regime intended to boost government revenues by $30-billion over 30 years. That threat has prompted warnings from several important LNG players that the province risks scaring away investment dollars – warnings likely to intensify if costly environmental regulations are imposed.
Indeed, some skeptics already worry that huge costs will scuttle most plans, although at least two companies recently lifted Canada on their list of global priorities.
Part of B.C.’s selling pitch to its own people has been establishment of an industry that will be the cleanest on earth. But that may be tough to actually achieve, the Tides report suggests. The gold standard for carbon emissions has been set by Australia’s Gorgon project and Norway’s Snohvit, which emit 0.36 and 0.35 tonnes of carbon per tonne of LNG. If companies opt for older technology in B.C., Tides calculates their likely emissions at 0.96 tonnes per tonne of LNG. It’s a high estimate: other green groups have used numbers like 0.75 and 0.88 – and with no firm industry plans, each of those figures is at best a projection.
Adding to the complexity: much of the excess carbon output comes by virtue of the natural gas itself; gas from the massive Horn River field contains roughly 12 per cent carbon dioxide – a very high level relative to other sources. Industry typically removes the carbon dioxide and vents it.
Tides believes it’s possible to match Gorgon and Snohvit by burying the embedded carbon dioxide, and using electricity – instead of natural gas – to power both field facilities that process the gas and the multibillion-dollar coastal plants to liquefy it.
Those steps aren’t impossible: Spectra Energy has for years studied the possibility of sequestering carbon dioxide, although it has run into trouble finding a suitable location. And the gains from electric drive can be dramatic: Zoher Meratla, a B.C.-based LNG consultant, says that in a liquefaction plant, traditional gas-powered “direct-drive” facilities operate at 30-per-cent efficiency; newer “electric drive” plants can hit 55 per cent.
For its part, the B.C. government cautions that nursing a new industry to life will require difficult decisions. In fact, the province has yet to settle on what “clean” means for LNG.
“For example, one could also say it’s not just greenhouse-gas emissions. You could think about impact on water,” said B.C. Minister of Environment Mary Polak in an interview. She did not dispute the Tides Canada findings, saying “Tides has done some very good work with government over the years on any number of files.” She said a new environmental policy is likely to be revealed in conjunction with the province’s long-promised new LNG tax regime, and acknowledged the pressure on B.C. to work fast, so companies can decide whether to move forward.
“Certainly we recognize that there is a time issue,” she said.