FortisBC touts contentious LNG marine fuel proposal in bid to win political approval

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FortisBC is doubling down on a proposal to use liquefied natural gas as a common marine fuel in British Columbia, gaining support from the shipping industry while upsetting climate activists.

Already facing a fight over its plans to export the fuel, FortisBC’s proposal to fill up LNG-powered ships is also proving to be controversial.

Fortis LNG Jetty LP, which is an affiliate of Fortis Inc. FTS-T, and Seaspan ULC are hoping for political approval to build their contentious two-berth dock for Tilbury Island in the Vancouver suburb of Delta.

One berth would be for marine fuelling, or bunkering, in which barges would pick up LNG at FortisBC’s Tilbury Island site and sail down the south arm of the Fraser River to fill up LNG-powered ships calling at the Port of Vancouver. The other berth would be set aside for exports of LNG aboard vessels departing from the Delta site to Asia.

FortisBC, a subsidiary of Fortis, is already producing LNG on a small scale at its Tilbury LNG plant, with annual production mainly for domestic purposes, including storage for peak demand during cold weather.

“There are a lot of environmental benefits associated with using LNG for marine transportation,” said Doug Slater, FortisBC’s vice-president of external and Indigenous relations. “LNG marine bunkering is a real valuable opportunity that we have to reduce emissions.”

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The Vancouver Fraser Port Authority said LNG marine fuelling will contribute to improved air quality and help with decarbonization of shipping.

“We know there is a complicated conversation to have around LNG as a marine fuel. However, it is currently the only commercially scalable alternative to oil-based marine fuels and the marine industry has adopted it as a transition fuel to help reduce air pollutants and greenhouse gas emissions,” said Duncan Wilson, vice-president of environment and external affairs at the port authority.

Other fuel options such as methanol, ammonia and hydrogen are seen by shipping experts as long-term bets, but are far from economically viable in the short term.

The proposal for the dock, also known as a jetty, has undergone a review by the B.C. Environmental Assessment Office in collaboration with the Impact Assessment Agency of Canada.

B.C. Environment Minister George Heyman, B.C. Transportation Minister Rob Fleming and their cabinet colleagues could rule by mid-2023 on the regulatory application to build the jetty facilities. The proposal also requires approval from federal Environment Minister Steven Guilbeault.

Chris Hall, president of the Shipping Federation of Canada, said his group supports LNG bunkering initiatives. “Given that many new ships are being built to specifically use LNG, and many others are being converted, it is important that specialized LNG fuelling facilities be available at ports, as this is a key component in this supply chain,” Mr. Hall said.

FortisBC is going through a separate regulatory process in a bid to spend at least $3-billion for a proposed expansion to add 2.5 million tonnes of annual LNG capacity by 2027 on Tilbury Island.

Five municipalities in Metro Vancouver have passed non-binding motions to oppose the expansion plans.

Climate activists say using LNG as a marine fuel is vastly overrated by the shipping industry.

“From a climate perspective, the math on replacing marine diesel with LNG is highly questionable,” said Peter McCartney, a climate campaigner at the Wilderness Committee.

Kiki Wood, senior oil and gas campaigner with Stand.earth, said FortisBC is playing down the export angle. “I believe they think they can more effectively pitch bunkering rather than exporting as climate-friendly, which it isn’t,” she said.

The First Nations LNG Alliance took over this week as the industry’s leading advocacy group to promote LNG exports, replacing the Canadian LNG Alliance. FortisBC and LNG Canada will be joining the First Nations LNG Alliance.

LNG Canada is the consortium led by Shell PLC that is building an LNG export terminal in Kitimat, B.C., which is scheduled to become Canada’s first such facility when shipments to Asia begin in 2025.

The Canadian Centre for Policy Alternatives believes that FortisBC’s ultimate prize is to eventually start exports on ocean-bound vessels. “Once that dock infrastructure is in place, FortisBC would be well-positioned to jump into the export market,” said Marc Lee, senior economist at the centre’s B.C. office.

The focus should be on renewable energy instead of perpetuating the use of fossil fuels such as LNG, said Mr. Lee, whose group released a report last week with Climate Action Network Canada to urge the federal government to dramatically increase spending to spur a transformational shift to clean energy.

Environmental scientist Rhiannon Fox, who is a member of climate activist group My Sea to Sky, said backers of LNG are selectively emphasizing the impact on air quality when they should factor in emissions over the full life cycle of natural gas, from the wellhead to the burner tip.

“That is essentially greenwashing because they’re only looking at a narrow slice of the picture,” Ms. Fox said.