Canada’s biggest-ever white elephant may never produce one gram of LNG—if we’re lucky.
ON OCTOBER 2, Prime Minister Justin Trudeau, Premier John Horgan and LNG Canada CEO Andy Calitz announced the joint venture foreign partnership would go ahead with its “green” greenhouse gas (GHG)-spewing facility in Kitimat. In the days leading up to that announcement, several government news releases provided hints of what was to come in the effort to make it somehow compatible with realizing climate action targets. This is an old trick: When a government is planning to announce a significant project certain to be unpopular with a substantial portion of the population, not to mention climate scientists, chuck a few popular, green crumbs out the door beforehand.
Sure enough, on September 24, a mere eight days before LNG-Day, a news release told of a $10 million top-up for the existing Clean Energy Vehicle (CEV) Program. If the government will chip in $5,000 to help buy a Tesla Model 3 or a Nissan Leaf, what’s not to like? The additional 2,400 CEVs expected under the top-up should avoid a total of 144,000 tonnes of GHG emissions over the vehicles’ lifespans, which government documents typically estimate as 15 years. In other words, 9,600 tonnes annually.
Four days later, the government told us of another green-oriented taxpayer handout. On September 28, barely making it under the wire before the announcement, came the EfficiencyBC program, a revamp of an earlier version. In its present incarnation, each homeowner can collect up to $14,000 in incentives to upgrade heating systems, windows and doors. Commercial businesses can receive up to $200,000. The $24-million federal-BC program is expected to result in GHG reductions totalling 490,000 tonnes, accumulated through 2030. Over 12 years, that averages to approximately 40,800 tonnes annually.
Increasing home and business energy efficiency is a praiseworthy, job-intensive move. And like the CEV program, even voters who are not especially green love getting subsidies for upgrades that will save them money.
So will the CEV and energy efficiency programs make up for the extra 8.14 megatonnes (Mt) of GHGs emitted annually by the Kitimat plant when fully operational? Hardly. Together, the CEV program and energy efficiency program add up to a total of 50,400 tonnes of annual avoided emissions. This is less than two-thirds of one percent of LNG Canada’s annual BC emissions once fully operational. To look on the bright side, that leaves a mere 99.33 percent to go.
And while the $34 million in federal and BC funds for the two programs may not be peanuts, they amount to just one-half of one percent of the $7 billion cost of the federal-BC tax and hydro giveaways to LNG Canada. But one really, really important goal will have been reached: Increasing the chances that the NDP will be re-elected in 2021. Maybe.
The BC government’s promised climate action strategy, purportedly aimed at reducing the province’s GHG emissions targets as laid down in last spring’s Greenhouse Gas Reduction Targets Act, is expected in late November or early December. I would be surprised if the CEV and building efficiency programs were not part of the strategy. In 2015—the last year for which figures are available—BC’s emissions totalled 61.6 Mt. Under the Act, these would need to drop to 38.8 Mt by 2030, 25.9 Mt by 2040, and 12.9 Mt by 2050. So the rest of the strategy is going to have to make a much bigger dent in emissions than encouraging a few more electric vehicles and heat pumps. And even those targets in the Act may not be nearly sufficient to keep the planet liveable, as we shall see below.
The Province’s account of BC’s emissions in 2015. Total emissions were 63.3 megatonnes. The Province estimated offsets at 1.7 megatonnes, reducing the official count to 61.6 megatonnes.
Under the accounting rules for GHGs, emissions from burning fossil fuels are counted in the country where they are ignited. As mentioned, LNG Canada will release 8.14 Mt annually in BC once operational. However, the global result of LNG Canada proceeding to full operation is 76 Mt, when the 68 Mt of GHGs produced by burning the natural gas in Asia are counted. After all, the BC government has insisted that a prime reason for approving the Kitimat plant is to help reduce global emissions. The reasoning, if it can be called that, is that since natural gas burns cleaner than coal when used in aging plants to generate electricity, displacing the coal with natural gas will reduce emissions worldwide. It’s a convenient argument, made by virtually all supporters of LNG. The only difficulty with the argument is that it’s complete hogwash.
In its October 2 statement, LNG Canada said the following: “LNG Canada will provide natural gas to countries where imported gas could displace more carbon intensive energy sources and help to address global climate change and air pollution.” [Emphasis added.]
“Could displace”? If the foreign-owned partners are so sure, why didn’t they say “will displace”? Will there be clauses in every gas sale from the Kitimat plant demanding that an equivalent coal plant be shut down when a new natural gas-fired one starts up? LNG Canada had yet to respond by Focus’ deadline to an emailed request as to whether sales contracts would contain such clauses. Nor did they return a phone message in time.
Sierra Club BC senior forest and climate campaigner Jens Wieting agreed there is no requirement that coal plants will shut down to be replaced by gas ones. “There is no such mechanism,” he said in an interview, adding that LNG’s relatively low cost when used for purposes such as generating electricity may have a secondary negative effect on the planet. “The real risk is that LNG will compete with renewable energy,” said Wieting.
Construction having begun at the Kitimat plant, LNG Canada projects finishing the plant in around six years. Does that make it a done deal? Not quite. For all the hoopla, for all the tens of billions of dollars in private and public funds poured into it, the Kitimat plant may never produce one gram of LNG, making it, to paraphrase Trudeau and Horgan, Canada’s largest-ever white elephant.
First, the projected completion date for the plant leaves plenty of time for the appeal by Smithers environmentalist Mike Sawyer—now before the National Energy Board—to force a review by the energy board of TransCanada Pipelines Ltd’s proposed 675-kilometre Coastal GasLink pipeline, designed to ship gas from Dawson Creek to Kitimat. A decision is expected by the end of the year. If the board rejects his application, he plans to take it to the Federal Court of Appeal. “There’s a real possibility they’ll have to shut the whole bloody thing down,” Sawyer said in an interview with Focus. In case anyone suggests Sawyer is tilting at windmills, let’s not forget that in 2017, Sawyer surprised experts by winning a similar case concerning a different pipeline, when the appeal court ruled that TransCanada’s since-abandoned Prince Rupert Gas Transmission pipeline required federal approval.
The second threat to LNG Canada ever operating is admittedly more speculative: It is that our government, industry and societal leaders—at last awakened perhaps by the October 8 release of an Intergovernmental Panel on Climate Change (IPCC) report—take the radical actions urgently required to decarbonize the economy. The report summary for policy makers, Global Warming of 1.5°C, makes for some disturbing reading. For instance, the goal of limiting global warming in 2050 to 2° Celsius above pre-industrial levels is too high if we are to avoid a range of catastrophes. Since those 1850-1900 levels, the globe has already warmed by 1° Celsius, and on current trends will probably pass 1.5° some time between 2030 and 2052. If we do reach 2° Celsius, it is very likely that there will be at least one ice-free Arctic summer each decade, that much more permafrost will thaw, coral reefs will all but disappear, food production will drop significantly, and heat waves, flooding and droughts will all become worse.
Based on an earlier draft of the IPCC report, Hannah Askew, an environmental lawyer and now the executive director of Sierra Club BC, wrote to Horgan, Environment and Climate Change Strategy Minister George Heyman, and Energy, Mines and Petroleum Resources Minister Michelle Mungall. In her September 20 letter, Askew called for sharp cuts in BC emissions, warning that “2°C would be a nightmare; and 3°C or more would likely precipitate a breakdown in the global economy and human civilization as we have known it.”
If we cut net global emissions to zero by 2050, however, it is possible to avoid the 2° increase. The needed actions will be drastic: Nothing less than a U-turn is called for. As of last year, global carbon dioxide emissions were going the wrong way. Energy-use emissions of carbon dioxide hit an all-time high in 2017, according to a June 13, 2018 Bloomberg News report, supported by data from the International Energy Agency.
Despite this, worldwide at least, there are some signs of hope. On October 10, two days after the IPCC report summary’s release, Members of the European Parliament voted to boost the European Union’s emission cuts by 2030 from 40 to 55 percent.
At the Vancouver October 2 announcement, a cargo-cult atmosphere prevailed in the room, the carefully-chosen rah-rah crowd repeatedly applauding as untold goodies were promised. As with the original Melanesian cargo cults, the anticipated bringers of incredible gifts from afar are all foreign entities.
The other defining characteristic of cargo cults may also be present in the case of LNG Canada: Those life-changing goodies, bringing eternal joy and happiness for all, may never show up. If things go well, the $40 billion plant will become a giant dust-catcher, a stranded asset, a tribute to the present government’s vision-free attitude toward the planet’s future.
That would be the best outcome of all.
Russ Francis formerly taught energy policy at the University of Western Ontario, and has toured Fortis BC’s largest LNG plant, at Mount Hayes, northwest of Ladysmith. He has been published widely.