British Columbia’s environmental regulator will be reviewing the risks posed by climate change and flooding on FortisBC’s plans to expand production of liquefied natural gas in the Vancouver suburb of Delta.
So far, Delta’s system of dikes has guarded FortisBC’s Tilbury LNG project on Tilbury Island and prevented flooding. But flooding and mudslides in mid-November in the Fraser Valley and southern Interior severed or slowed transport routes along rail lines and highways in and out of Vancouver for nine weeks, with bottlenecks in the supply chain still lingering.
As part of its wide-ranging review, the B.C. Environmental Assessment Office, or BCEAO, will look at flood-defence systems designed to protect the Delta industrial site from damage during extreme rainstorms.
Last week, federal Environment Minister Steven Guilbeault approved a request from the B.C. government for the BCEAO to take the lead role in the environmental assessment process for FortisBC’s $3-billion expansion proposal on Tilbury Island, which is located on a floodplain along the south arm of the Fraser River
The provincial regulator recently decided to accept Tilbury LNG’s 575-page document – titled, the Phase 2 detailed project description – for expanding LNG production. That decision clears the way for the proposal to undergo a review by the BCEAO, focusing on FortisBC’s plans to increase capacity at its Tilbury LNG site by 2.5 million tonnes a year by 2028.
The possibility of a breach of the dike system has worried Delta for years, with increasingly extreme storms owing to climate change. The municipality has a wish list of long-term upgrades that would cost hundreds of millions of dollars, but a breach could result in billions of dollars in property damage.
“Delta administers an extensive system of dikes and drainage structures built to protect the delta from flooding,” according to Tilbury LNG’s document filed with the provincial regulator. “The system has been rebuilt a number of times over the years and is currently engineered to withstand a 200-year flood event.”
Compared with other parts of B.C. during rainstorms in mid-November, Delta had less rainfall and better drainage. The community avoided the catastrophic flooding that swamped large swaths of the Fraser Valley and southern Interior.
As part of a previous expansion completed in 2018, FortisBC upgraded a portion of the dike system along the Fraser River. “The project location is behind Delta’s flood-defence infrastructure and the likelihood of flooding is very low,” Tilbury LNG said in its filing. “FortisBC raised and reinforced the existing dike in 2018 to increase flood protection of the site.”
The Tilbury LNG plant began as a small-scale operation in 1971, producing about 22,000 tonnes a year of LNG for domestic storage. Its current production capacity is more than 250,000 tonnes a year.
The regulatory document shows that some First Nations, including the Tsleil-Waututh, have expressed concerns about the potential for flooding on Tilbury Island, which is located on the traditional territory of the Coast Salish nations.
“During early engagement, concerns were raised by Indigenous nations, local governments, and regulatory agencies regarding potential effects of the environment on the proposed project such as fire, floods, extreme weather events, increased precipitation and higher water levels due to climate change,” Tilbury LNG said in its document.
The task of assessing whether Tilbury LNG’s Phase 2 expansion project meets environmental standards falls under provincial and federal jurisdiction.
Tilbury LNG’s final detailed project description, filed to the BCEAO this month, is a document that contains a small number of revisions to a submission from September. The Impact Assessment Agency of Canada also received a copy of the final version this month, under a B.C.-led process in which both regulators are scrutinizing the expansion proposal.
“There’s going to be a pretty robust review of the themes that were identified in the detailed project description,” FortisBC spokesman Scott Neufeld said in an interview on Friday.
The city of Delta has not held a vote on whether to support Tilbury LNG, but five nearby municipalities have passed non-binding motions to oppose the expansion plans. City councillors in Richmond, Burnaby, Port Moody, New Westminster and Vancouver have cited environmental concerns in opposing Phase 2, saying the additional LNG production would run counter to climate goals on the civic, regional and provincial levels.
Groups such as My Sea to Sky, the Wilderness Committee and the Canadian Association of Physicians for the Environment have also criticized Phase 2 because of the impact of what would be increases in greenhouse gas, or GHG, emissions.
Since 2016, environmental assessments of energy projects have included reviews of their impact on GHG emissions. Tilbury LNG’s filing said its existing operation already uses electric technology powered by hydroelectricity to super-cool natural gas into liquid form, helping to reduce its carbon footprint. Phase 2 would also rely on electric technology for liquefaction.
FortisBC is the largest distributor of natural gas to homes in British Columbia. One of the affiliates of its parent, Fortis Inc., jointly owns Tilbury Jetty LP with a business partner, Seaspan ULC. The proposed jetty for Tilbury Island is undergoing a separate regulatory review.
Under a $400-million expansion completed in 2018, the plant added LNG production capacity of 250,000 tonnes a year. Another 650,000 tonnes a year of capacity is scheduled to be added by 2026 under the previously approved Phase 1 expansion, followed by 2.5 million tonnes a year under the Phase 2 proposal.
Eight years ago, there were more than 20 LNG proposals in B.C. touted by the provincial government and industry players. Today, only one export-focused LNG project is under construction in British Columbia – the $18-billion terminal being built in Kitimat in northwest B.C. by LNG Canada, which is aiming to begin exporting natural gas in liquid form to Asia in 2025.
Tilbury LNG is vying to become the second project in the province to have a significant amount of exports shipped to Asia in LNG tankers. Construction on Phase 2 could start in 2023, if FortisBC receives regulatory approval and forges ahead.
The vast majority of Tilbury LNG’s annual production has been for domestic purposes so far, including storage for peak demand during winters. Besides targeting exports, the facility wants to be a key supplier of marine fuel, also known as bunkering, for ships powered by LNG in the Port of Vancouver.
“Vancouver could actually be developed into a major bunkering hub for the world,” David Bennett, FortisBC’s director of renewable gas and low-carbon fuels, said during the BC Natural Resources Forum’s webcast last week.
Only three other projects remain in the hunt to begin construction and deploy ocean-bound LNG vessels from B.C.: Cedar LNG and Ksi Lisims LNG in northwest B.C., and Woodfibre LNG near Squamish, located 65 kilometres north of Vancouver.
Woodfibre LNG selected McDermott International Ltd. as its preferred construction partner in 2019. McDermott went through bankruptcy protection in the United States in 2020, further delaying the project, but Woodfibre LNG has stuck with McDermott in hopes of starting construction in earnest in 2023.
Cedar LNG is going through the environmental assessment process while Ksi Lisims LNG submitted its initial plans last July to regulators.
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