Mike de Jong, the government House Leader, says the focus of the provincial fall legislative session that begins Monday will be on the economy. The centrepiece of the Liberal agenda is a new tax for liquefied natural gas that will help determine whether investors will finally move ahead with their multibillion-dollar plans and break ground in B.C.
The more controversial item, however, is likely to be the environmental regulation of this prospective industry. The government needs to square its legislated climate-change commitments with its desire to allow LNG proponents to burn natural gas to meet their massive energy needs. This fall, we will see just what Premier Christy Clark's promise to produce the world's cleanest LNG really means.
Late last year, an internal government document surfaced showing the Liberals expect a new LNG industry could double the province's greenhouse-gas emissions. Clean-energy advocates have advanced a solution – e-drive technology that would greatly reduce the significant carbon output generated by most LNG plants by using electricity instead of all gas in the production process (which includes cooling the gas to a liquid form so that it is a small fraction of the volume, making it easier to transport to market where it is warmed again and sold as a natural gas).
The province, which has spent many months in secretive negotiations with prospective investors, doesn't like that solution. Rather than forcing an unwelcome restriction on an industry that can easily walk away and build elsewhere, the government has signalled that it will let each company make its own decision. More than that, the province has declared that natural gas burned to make LNG will be exempt from the Clean Energy Act, treating these emissions as somehow benign.
Because nothing has been built, the government can sidestep, for now, the need to amend its law that stipulates the province must cut its GHG emissions by at least 33 per cent below 2007 levels by 2020.
The challenge that LNG presents to the province's climate-change targets will be illuminated, however, when the new environmental rules for LNG are introduced. "I expect there will be a conversation about that," Mr. de Jong told reporters, "because we will be tabling legislation that relates to emissions and the manner in which emissions are accounted for.
The legislation this fall will define how B.C.'s industry will create the "cleanest LNG in the world." The Premier already reduced expectations when she said B.C. won't count the upstream extraction of natural gas, which forms a hefty part of LNG's carbon footprint. The government has already said it will only look at the output at the facilities themselves. But if the legislation only changes the definition of how emissions are accounted for, it risks making B.C.'s claims to be a leader in tackling climate change a joke.
Even if the government had demanded that renewable energy and electric-drive motors be used to power LNG plants, there would still be a pollution challenge. Clean Energy Canada says that e-drive technology in LNG manufacturing, when compared with all-gas direct drive motors, would reduce greenhouse gas emissions by 45 per cent.
"Even if government follows through on its commitment to produce the cleanest LNG in the world, the proposed industry will sharply increase B.C.'s greenhouse-gas emissions. There's just no getting around it," said Merran Smith, director of Clean Energy Canada. To build an LNG industry and still reduce the province's GHG emissions, something else will have to give, she said. "The province is going to have to make deep pollution cuts in other sectors, like vehicles and buildings."
The B.C. government, facing down this challenge, has tried to redefine the problem. It started last November when Ms. Clark said the province's climate-change objectives ought to be viewed in a more global way.
"My view is very much that when we export our natural gas to places like China and we help them reduce their need for dirtier forms of energy like thermal coal, we are doing the world a favour," she said then.
LNG is a cleaner fuel than coal, but no matter how you dress it up on the accounting books, it remains a carbon-producing fossil fuel, from the wellhead to the terminal. Do us a favour, and let's have a straight conversation about it.