LNG is incompatible with BC’s climate obligations

Now that we are in a sunny lull between the end of flooding season and the start of fire season, it’s time we had a talk about fossil fuels and climate change in BC.

The BC government deserves praise for standing up to Alberta and the federal government over the Trans Mountain Pipeline Expansion (TMX), soon to be owned by us all due to the Government of Canada’s offer to buy out Texas corporation Kinder Morgan. Technically, Kinder Morgan shareholders must approve the purchase by the end of July, but they are unlikely to turn down such a sweet offer.

The BC government’s case against TMX has centred on addressing spills of diluted bitumen on land and at sea. However, conspicuously absent from the government’s arguments is the project’s massive climate impacts.

The Canadian Association of Petroleum Producers (CAPP) recently projected oil production in Canada would surge 33% by 2035. As a key infrastructure component of this expansion, the TMX would facilitate the release of about 84 million tonnes (Mt) of carbon dioxide into the atmosphere every year. By comparison, BC’s own total greenhouse gas (GHG) emissions were 63 Mt in 2015.

Given what we know about the state of climate change, and the commitments we have made to the Paris Agreement, entertaining such an increase in oil production is madness. Yet BC has its own aspirations to expand fossil fuel exports in the form of liquefied natural gas (LNG) exports.

There are two notable LNG projects in BC. First, Woodfibre LNG is a small facility (2.1 Mt of LNG exports per year) slated for just outside Squamish. A final investment decision has been made, although construction has yet to begin. Its emissions profile is diminished because it will use BC Hydro grid electricity to power the liquefaction process.

Second is the much larger and more emissions-intensive LNG Canada (a venture comprising Shell, PetroChina, Petronas, KOGAS and Mitsubishi Corporation), which is planning for a Fall 2018 final investment decision. LNG Canada proposes to export 12 million tonnes of LNG per year to start, with a plan to double that to 24 million tonnes, with a project lifetime of 40 years. These amounts are what would be exported and combusted in Asia, and by accounting convention they are not counted in BC’s GHG emission totals.

A new LNG terminal would also increase BC’s domestic GHG emissions. The emissions from LNG Canada are from the gas supply chain (fracking, processing and transportation) and the liquefaction facility itself. LNG Canada claims its planned facility would be twice as efficient in terms of GHG emissions per tonne of LNG produced, but such a bold claim should be treated with skepticism. The proposed facility would use some BC Hydro grid electricity, but only to keep the lights on; the liquefaction process itself would burn gas—a lot of it.

All told, BC emissions from the facility plus those from further up the gas supply chain would be in the range of 9–12 Mt of CO2 per year. At the high end, these new committed emissions from LNG Canada would double the province’s emissions from the oil and gas sector. The smaller Woodfibre LNG plant would produce another 1–1.5 Mt in committed BC emissions (for more detail, please see Table 2 in Extracted Carbon).

The problem for BC is that the province needs to be on a pathway of reducing its emissions. The new BC government has recognized this with new legislated GHG targets. They would permit BC economy-wide emissions of 39 Mt in 2030, falling to 26 Mt in 2040 and 13 Mt in 2050.

This means the LNG Canada supply chain from wellhead to loaded ship would consume 23–31% of BC’s allowable emissions in 2030, 35–46% of 2040 emissions, and 69–92% of 2050 emissions. And don’t forget that this is intended to be new production above that of the existing natural gas industry, which was responsible for 12 Mt of emissions in 2015.

Any way you slice it the rest of BC’s economy would have to fully decarbonize very quickly in order to accommodate emissions from LNG Canada while staying within the new legislated targets.

LNG Canada claims that this gas could displace coal, and thus be a net positive for emissions globally. But this is dangerous wishful thinking. While it’s possible that shift could take place as described in China, it could also represent incremental energy supplies or could displace renewables in China’s evolving energy mix. If LNG exports go to Japan or Korea, the two biggest buyers globally, they would be guaranteed to displace cleaner energy sources and therefore increase global GHG emissions.

When we include all carbon that would end up in the atmosphere, at full size LNG Canada would have a bigger climate impact than the TMX. Converted to CO2 emissions, some 93 Mt per year would end up in the atmosphere.

It gets worse because those LNG Canada numbers are not counting leakages of methane, the principal component of natural gas, which would spike emissions much higher. Methane is short lived, breaking down in about 12 years into carbon dioxide and water, but while it is in the atmosphere it is 100 times more heat-trapping than carbon dioxide.

The BC government has tasked its Climate Solutions and Clean Growth Advisory Council to develop an updated Climate Action Plan for Fall 2018. This will land about the same time as a final investment decision by LNG Canada. While the smaller Woodfibre LNG plant could be integrated into a new climate plan, the math simply does not work for LNG Canada: a carbon bomb if there ever was one.
 

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This piece was published as part of the Corporate Mapping Project (CMP). The CMP is a six-year research and public engagement initiative jointly led by the University of Victoria, the Canadian Centre for Policy Alternatives’ BC and Saskatchewan Offices, and the Alberta-based Parkland Institute. This research was supported by the Social Science and Humanities Research Council of Canada (SSHRC).