1. Executive Summary

The Government of British Columbia can unlock multiple social, employment, and environmental benefits by directing and/or enabling liquefied natural gas (LNG) proponents to maximize the use of renewable energy in their planned facilities. A renewables-driven industry will create more permanent, secure jobs, produce less carbon pollution, and leave a lasting legacy of clean-power infrastructure for communities and companies in British Columbia’s North Coast region. It will do all of this while only minimally impacting competitiveness.

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Compared with a business-as-usual approach—which we characterize here as a “Fossil Energy scenario”—maximizing renewable energy use by LNG facilities will increase regional permanent employment related to LNG by 45 percent, decrease carbon pollution by 33 percent, reduce smog, and build the foundations of a renewable energy economy in Northwestern British Columbia.

Further, government and industry can capture all these benefits without sacrificing competitiveness. According to our conservative assessment, the necessary technical solutions will increase the selling price of LNG of two percent relative to the standard Fossil Energy scenario.

Provincial power utility B.C. Hydro expects that LNG proponents will use electricity for 15 percent of their energy needs—around 360 megawatts (MW) of capacity at peak demand—and turn to fossil fuels to supply the rest (B.C. Hydro, 2013). This report shows that this Fossil Energy scenario employs fewer people and sharply increases pollution. However, by directing or enabling proponents to maximize the use of renewable energy in their facilities—as this report recommends—the province can create many more permanent, secure jobs in the North Coast region.

A recent public opinion telephone survey conducted by NRG Research Group and commissioned by Clean Energy Canada suggests the public supports such a “maximum renewables” approach to LNG development. In the October 2012 survey of 600 British Columbians, respondents were advised that LNG plants could run on either pure natural gas, or a combination of natural gas and renewable energy. After learning this, 91 percent of respondents stated that it was important that the proposed plants maximize their use of renewable energy.

This public support aligns with past statements made by the Premier of British Columbia. Addressing the World Economic Forum in China in 2012, she said, “We want our LNG plants to be principally fuelled by renewables.”

The government now has a limited window within which to act. Industry proponents are already preparing sites in the coastal cities of Kitimatand Prince Rupert. Once a proponent specifies a given plant’s configuration, that developer will effectively lock in its choice for decades; a company cannot “bolt on” a cleaner power alternative at a later date. Proponents are unlikely to maximize the use of renewable energy in their plants unless provincial policy directs them to do so.

Time is therefore of the essence. We hope and expect our findings will not only inform critical ongoing negotiations between government and industry, but also inspire debate amongst British Columbians who may be concerned about the pace and scale of the proposed LNG industry and the best, most responsible path forward for the province.