Global demand for B.C.’s nascent LNG industry is uncertain, with competition increasing and key markets reducing imports in favour of renewables and nuclear power. Betting the province’s economy on the fossil fuel may instead deliver rising electricity and natural gas prices for families while worsening climate change by locking out cleaner, cheaper energy sources.
Below is a summary of the risks of further LNG development to B.C.’s economy, ratepayers and taxpayers, and efforts to reduce global emissions. Read our full report, An Uncertain Future, for more information.
More supply than demand
- LNG forecasts vary greatly, and key markets like Japan show a trend of declining imports due to nuclear power restarts and renewable energy expansions.
- B.C. faces significant competition. Global LNG export capacity is expected to grow by 43% by the end of the decade, coinciding with B.C. projects coming online. Oversupply could be more pronounced in B.C.’s target markets, where competitors, offering lower-cost LNG, plan to increase export capacity by approximately 50% by 2030.
- Future LNG demand is highly uncertain. The International Energy Agency holds that there is no need for investment in new fossil fuel supply in a world that reaches net zero by 2050.
B.C. will pay a high price for LNG
- Expanding LNG comes with significant trade-offs, particularly in electricity usage.
- If all six of B.C.’s proposed LNG facilities were constructed, they would require approximately 43 TWh of electricity annually. This amount represents 69% of B.C.’s total electricity demand in 2022—or about eight Site C dams worth of power.
- B.C. is well-positioned to pursue other economic opportunities, such as critical minerals, metals, and clean hydrogen. Recent polls indicate these alternatives are increasingly favoured by British Columbians over LNG.
- Expanding LNG could lead to higher household energy costs, job impacts, and potential taxpayer burdens.
- Importing the electricity equivalent to just one Site C dam would cost B.C. ratepayers approximately $600 million annually.
- The U.S. government anticipates that LNG exports could cause domestic natural gas prices to increase by up to 28% over the next 25 years.
- Building LNG facilities could draw construction workers away from housing and clean energy projects, exacerbating labor shortages. There’s also a risk of stranded assets if LNG demand declines amid global energy shifts, potentially leaving taxpayers liable.
LNG undermines B.C.’s climate ambitions
- LNG production is heavily polluting with emissions occurring throughout its supply chain, from extraction to liquefaction and combustion.
- If all six proposed LNG projects proceed, their operational and upstream emissions alone would amount to 40% of B.C.’s 2030 emissions target, and that’s assuming most facilities use electricity. The combustion of exported LNG in importing countries would contribute emissions 10 times greater than those counted in B.C.
- The assumption that LNG reduces emissions by replacing coal is highly uncertain, and some studies suggest LNG could have a negative overall impact on emissions.
- LNG production and transportation cause methane leakage, a greenhouse gas that is more than 80 times more potent than carbon dioxide in its first 20 years.
- Expanding LNG risks competing with and diverting investment from renewable energy while entrenching fossil fuel infrastructure, hindering efforts to transition to cleaner energy sources.
