Two B.C. Liberal cabinet ministers were forced to acknowledge an liquified natural gas (LNG) fact they’d rather not this week — the plants will have a “significant adverse effect” on provincial greenhouse-gas emissions.
Natural Gas Minister Rich Coleman and Environment Minister Mary Polak formally recognized that fact in their official declaration of reasons why they granted the environmental approval to LNG Canada for a big plant near Kitimat.
The provincial Environmental Assessment Office, which handled the review for both B.C. and Canada, imposed numerous conditions that the ministers said “give us confidence to conclude” that the project would be built, operated and eventually decommissioned so that no significant adverse effects are likely to occur, “except with respect to GHG emissions.”
But even with that acknowledged, the ministers concluded: “The benefits accruing to the public interest from the project outweigh the significant adverse effect to GHG emissions.”
That’s the same conclusion, for the same reason, that the ministers reached last November on the Pacific NorthWest LNG plant, sited near Prince Rupert. Proponents there have declared their intention to proceed, subject to a federal environmental approval and provincial legislative approval of the project development agreement — expected next month.
LNG Canada, a Royal Dutch Shell venture backed by Korea Gas, Mitsubishi Corp. and PetroChina, has plans of comparable size to Pacific Northwest’s venture.
The EAO said the emissions issue is significant because of the magnitude of emissions from the plant and the concern about global emissions.
LNG Canada’s project “would have a notable impact on B.C.’s emissions-reductions targets. At full build-out, the project would contribute a 6.6 per cent increase in provincial GHG emissions from 2011 levels.”
The emissions arise from the fact LNG Canada, as with other proponents, plans to power the freezing process that liquefies the gas for shipping by using a portion of the gas that is piped to the coast from northeast B.C.
B.C. legislated tough new limits on LNG plant emissions last fall, which officials have said would make B.C. LNG the “cleanest in the world.”
While the huge condensers would run on gas, electricity from B.C. Hydro would meet all other needs. The ministers said the carbon tax would be an additional incentive for reduction of GHG emissions.
Despite the acknowledged concern, the statement says: “We are satisfied that the environmental approval certificate condition and existing regulatory requirements will effectively manage GHG emissions.”
The Pacific NorthWest LNG plan would hike provincial emissions by 8.5 per cent by full build-out, according to a conservative estimate. The ministers’ statement on approving that certificate stated that because the GHG legislation sets benchmarks and there’s a defined approach to reduce emissions if the benchmarks aren’t met, the EAO did not propose conditions to address the problem.
The “defined approach” includes an offset scheme where proponents who can’t meet the limits can buy offsets in B.C. to make up the difference.
The wider issue is that just two big plants would hike provincial emission by about 15 per cent over 2012 levels, at a time when provincial law requires a one-third cut in emissions from 2007 levels by 2020, and 80 per cent by 2050. Premier Christy Clark has countered that problem by saying the gas will replace dirtier fuels in Asia.
So what are the benefits that outweigh that drawback?
The LNG Canada plant would involve up to $36 billion in capital costs, and create up to 7,500 jobs during construction, with 800 jobs during operation. It would pay $12 million a year in municipal taxes, $146 million a year in provincial taxes and up to $28 million a year federally. First Nations benefits aren’t quantified because they’re still being negotiated, but are substantial.
The PNW LNG project would generate comparable benefits — $104 million a year in carbon tax alone, and $408 million annually in corporate taxes.
The various conditions attached are all aimed at mitigating the dozens of other impacts. The one big one that they recognize can’t be avoided — GHG emissions — is also the longest-term problem. So work is underway on the cumulative impact as the projects march the long route to the finish line.