2. Background: British Columbia’s Liquefied Natural Gas Ambitions

In 2007 and 2008, the Province of British Columbia landed on the world stage as a climate and clean energy champion when the government introduced a revenue-neutral carbon tax, a ban on coal-fired electricity without carbon capture and storage, and other measures. In 2010, it introduced a Clean Energy Act that mandated the province to source at least 93 percent of its electricity from clean and renewable sources.

The province earned widespread praise for this early leadership, a reputation it is still enjoying to this day. For example, a recent study confirming the carbon tax’s effectiveness in reducing fossil fuel consumption (Elgie, 2013) attracted international media attention, including accolades from The Economist.

A March 2011 leadership change brought a corresponding shift in British Columbia’s policy priorities, and the government began placing a stronger focus on fossil fuel extraction and export. The following year, the province released its Liquefied Natural Gas Strategy. The strategy outlined its intent to access new overseas markets for the province’s extensive natural gas resources, via a series of proposed liquefied natural gas (LNG) facilities and export terminals.

The proposed new industry would extract, process, transport, and chill natural gas to minus 161 degrees Celsius—the point at which it becomes liquid and transportable. The liquefied fuel would then be shipped to Pacific Rim customers aboard specialized tankers.

Assuming industry proponents secure First Nations support, social licence, and the necessary environmental approvals, the Government of British Columbia has set itself a goal of having at least three LNG facilities in operation on the B.C. coast by 2020.

The strategy promises significant short and medium term economic benefits for British Columbia. The government expects these three news plants will drive more than $20 billion in direct investment and yield more than $1 billion a year in public revenue (Ministry of Energy and Mines, 2013) At full build-out, the province anticipates the industry will support as many as 75,000 permanent jobs (Ministry of Energy, Mines, and Natural Gas, 2013). These projections have not been independently verified and may be overstated, but undeniably the industry promises significant new investment and employment.

It is also important to consider and mitigate the costs and risks of development to current and future generations of British Columbians and the province’s well-earned reputation for climate leadership. Even before it is regasified into natural gas overseas and burned, LNG produces significant carbon pollution. When one totals up the carbon pollution associated with all links in the LNG production chain up until shipment, a tonne of LNG manufactured in the “off the shelf” B.C. plant we describe below will generate roughly a tonne of carbon pollution.

Climate disruption is already costing British Columbia citizens and communities real money. Without strengthened leadership and policy reform from all levels of government, their burden will only grow.

According to a 2011 report by the National Round Table on the Environment and Economy, by the middle of this century, climate change could cost British Columbia between $500 million and $3 billion per year, mostly through flooding and lost revenue from forestry. (National Round Table, 2011). Further, new jobs created in the energy sector may well undermine others. As one example, climate disruption is already pushing many of British Columbia’s agricultural producers to the limit of viability. (Pacific Institute for Climate Solutions, 2013).

To be clear, even if natural gas is the cleanest burning of all fossil fuels, and even if LNG is produced with a relatively smaller carbon footprint, LNG remains a fossil fuel. In its recent World Energy Outlook, the International Energy Agency made it clear that if humanity is to escape truly dangerous climate disruption, we must leave two-thirds of all remaining fossil fuels—including gas—in the ground. (International Energy Agency, 2012).

The proposed LNG industry would increase the province’s overall emissions, not reduce them. Under the Greenhouse Gas Reduction Targets Act, the Government of British Columbia is required to reduce carbon pollution 33 percent below 2007 levels by the year 2020. However, recent assessments conclude that the proposed new industry would push this goal out of reach. (Bryant, 2013; Lee, 2012).

Perhaps anticipating these concerns, government has at various points over the past 18 months assured British Columbians that made-in-B.C. LNG industry will be “the cleanest LNG in the world”—that is to say, it will boast the world’s lowest life cycle greenhouse gas emissions. (See “For the Record,” opposite.)

This report represents an effort to define what it will take to deliver on British Columbia’s promise to produce the cleanest available LNG with respect to life cycle greenhouse gas emissions. It outlines where, and under what circumstances, the LNG with the world’s smallest carbon footprint is currently produced. It also outlines various strategies and technologies that British Columbia’s nascent LNG industry would need to adopt if it is to meet or beat the current global best-in-class standard.

It is our hope that this document will inform ongoing public and policy discussions such that any new LNG industry and associated infrastructure will present the smallest possible impact—not only to the climate, British Columbia’s water and world-class ecosystems, and the people who live in them, but also to the province’s hard-fought international reputation for climate leadership.