BC LNG

What's Up with LNG in B.C.? Three Things You Need to Know

BC LNG Christy Clark

By Maximilian Kniewasser and Stephen Hui.

Under Premier John Horgan and the NDP, British Columbia’s government is no longer promoting liquefied natural gas exports as a once-in-a-generation opportunity to snag 100,000 jobs, a $100-billion Prosperity Fund, and more than $1 trillion in economic activity. Nevertheless, proposed LNG development remains a thorny issue to be tackled by the new provincial government.

This week, the Pembina Institute and the Pacific Institute for Climate Solutions published Liquefied Natural Gas, Carbon Pollution, and British Columbia in 2017, an update on the state of the B.C. LNG industry in the context of climate change.

Here are three highlights from our report.

On LNG, B.C. Manages to Out-Trump Even Donald Trump

By Andrew Nikiforuk for The Tyee.

Every day, methane promoters in British Columbia’s government manage to out-trump Donald Trump.

The hoopla over the $1.6-billion Woodfibre LNG terminal, which will industrialize Howe Sound and the city of Squamish,
Tweet: ‘The hoopla over #WoodfibreLNG illustrates how far the @ChristyClarkBC gov’t will go to subvert the truth’ http://bit.ly/2eOzjgi #bcpoliillustrates just how far the Christy Clark-led BC Liberal government will go to subvert the truth.

The government billed the event as maker of economic prosperity and the beginning of a winning fight against climate change.

Both claims read like Trump balderdash with no basis in reality.

New Carbon Tracker Report Calls $82 Billion of B.C.’s LNG Ambitions into Question

A new report released by the London-based Carbon Tracker Initiative finds more than $283 billion in potential liquefied natural gas (LNG) projects worldwide are likely unfeasible in a carbon-constrained world. The report identifies $82 billion in potential Canadian LNG projects — almost entirely in B.C. — potentially headed for the rubbish bin.

If the world is to limit global warming to an increase of 2 degrees Celsius, “energy companies will need to be selective over which gas projects they develop,” the Carbon Tracker Initiative stated in a press release. Many high carbon, high cost LNG projects will simply need to be abandoned. LNG is natural gas cooled and compressed to a liquid form for transportation via tanker.

Investors should scrutinize the true potential for growth of LNG businesses over the next decade,” James Leaton, Carbon Tracker’s head of research, said. “The current oversupply of LNG means there is already a pipeline of projects waiting to come on stream. It is not clear whether these will be needed and generate value for shareholders.”

The size of the gas industry in North America could fall short of industry projections — especially those expecting new LNG industries in the U.S. and Canada,” Andrew Grant, lead analyst at Carbon Tracker and co-author of the report, said.

B.C.’s Natural Gas Hypocrisy Leaves Consumers Paying the Price

One of the thorniest issues raised in the joint review panel’s report on BC Hydro’s Site C dam proposal is that of the B.C. government’s hypocritical policy on the burning of natural gas for electricity. 

The LNG developers have been promised a free hand to burn their gas here for their own purposes, but BC Hydro has been denied the same privilege,” the panel wrote in its report on the $7.9 proposed dam.

The controversy revolves around the 2010 Clean Energy Act — and who it applies to and, perhaps more importantly, who it does not.

The act limits BC Hydro’s options for generating electricity by demanding that 93 per cent of the province’s energy needs be met by “clean or renewable resources” — eliminating the use of gas turbines and sending the gas-fired Burrard Thermal generating station into early retirement.

It’s a reasonable policy from a climate change perspective — but there’s a catch.

In June 2012, the province exempted the liquefied natural gas (LNG) industry from the Clean Energy Act, enabling plants to burn as much natural gas as they’d like to power their giant compressors — despite originally promising they'd be powered by clean electricity — and, as of now, that’s exactly what they intend to do.

If it is acceptable to burn natural gas to provide power to compress, cool, and transport B.C. natural gas for Asian markets, where its fate is combustion anyway, why not save transport and environmental costs and take care of domestic needs?” the Site C panel wrote.

BC Coast LNG Terminals 'Difficult to Justify,' Says New Report

LNG BC coast

Major oil and gas companies like Chevron Corp., Apache, and ExxonMobil Corp., are eyeing British Columbia’s northwest coast as a potential export hub for the continent’s ample natural gas. The proposed export terminals are slated to transform natural gas, much of it from frack fields in both Canada and the US, into liqueified natural gas or LNG for sale in Asia.

But according to a new report from the Norwegian-based International Gas Union (IGU) “project costs in Canada far exceed counterpart projects in the United States where the natural gas market is much more liquid.” The IGU has more than 120 members that collectively make up 95 percent of the world’s gas market.

The high costs associated with transporting gas up to BC’s remote coast makes the benefits of fetching a higher price overseas “difficult to financially justify,” according to the IGU.

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