B.C. Premier Christy Clark is prepared to alter her government's strict climate-change targets to pave the way for her plan to create a liquefied natural gas industry in the province.
Ms. Clark is in Japan this week seeking investors and buyers for a string of proposed LNG plants on British Columbia's north coast. In an interview before her departure, she said she expects legislated targets to reduce the province's emissions will have to change.
The Premier's jobs plan rests on three LNG plants being up and running by 2020. Creating LNG from natural gas is an energy-intensive process, and while Ms. Clark hopes those plants would run primarily on renewable energy, she acknowledged they will have to burn some natural gas.
Access to hydroelectric power is still the subject of talks between the province and various proponents. Ms. Clark suggested B.C. may amend its climate-change policy to take credit for greenhouse-gas reductions in other countries due to the use of B.C. energy products. "How that [policy]has to change will depend partly on the outcome of these negotiations," she said. "So we'll have to see what happens with some of those targets. We may start thinking more globally about this as a result of it."
By law, British Columbia must cut its greenhouse-gas emissions by at least 33- per-cent below 2007 levels by the year 2020. It means total emissions are to be reduced to 45 million tonnes in 2020. A single LNG terminal and pipeline using fossil fuel for energy could put 3.4- million tonnes of carbon dioxide into the atmosphere annually.
Ms. Clark said she is not abandoning the climate-change agenda set in place by former premier Gordon Campbell, but looking at it from a broader perspective.
"If we can ship more LNG to China in particular, which is very dependent on coal, we are helping them wean themselves off dirty sources of energy. And that's good for the world," she said. "It's good for global climate change. This myth that our control or responsibility for climate change stops at our borders – that that is the only way we should measure it – I think it is wrong."
Earlier this year, Energy Minister Rich Coleman said the Crown utility BC Hydro did not have the capacity to serve three LNG plants. Now, Ms. Clark says there will be enough power for three – supplemented by natural gas. However, there are currently six proposals in the works.
Ms. Clark may face questions from potential Japanese investors about whether her government intends to provide equal access to clean, low-cost hydroelectric power. Right now, the government has made no commitment to provide energy to facilities beyond those first projects out of the gate.
This is the Premier's second trade mission since she took office a year ago. The first trip was to China and India. Until recently, those countries appear to have been the focus of the B.C. government on the trade file. In fact, the B.C. Jobs Plan, the government's economic blueprint released last fall, doesn't even mention Japan in a chart outlining the potential for LNG sales.
But economic growth in China is slowing, and B.C. is now acknowledging its long history of trade relations with Japan.
In the wake of the country's nuclear disaster after last year's tsunamis, Japan recently closed the last of its nuclear power plants Although the closings are for maintenance, it is not clear how many will come back online. The Japanese government is looking for alternate sources of power and is expected to help back investors who can secure new power.
British Columbia is not first in line to sell LNG, which is still on the drawing board, however.
Barry Penner, a former member of the Clark cabinet, said B.C. needs to move quickly if it wants to take advantage of Japan's energy needs.
"Japan has been a significant importer of energy products for a long time," said Mr. Penner, who is now a lawyer with Davis LLP, the only Canadian law firm with an office in Japan. "They are interested in diversifying their supplies and British Columbia has a good opportunity to assist Japan with supplies of LNG. But this opportunity is not guaranteed, because there are other international competitors eager to supply the Japanese market."
In fact, Japanese officials have already travelled to Australia to pursue more gas and coal contracts.
There is also a danger that the market could change by the time B.C. producers are ready to ship their product. Last week, Scotiabank's Commodity Price Index pegged Canadian natural-gas export prices at the lowest in a decade.