Oct 11, 2012

BC government non-response to study on how Natural Gas Strategy breaks BC’s GHG law


Since my report on how BC’s legislated GHG targets are being compromised by the 2012 Natural Gas Strategy, I’ve been keenly interested to see how the government would respond. The report prompted a story in today’s Metro news, but the reporter was unable to get a response from the government by deadline. Then belatedly she got an email response from the Ministry of the Environment, which was shared with me for comment.

The response is a handful of bulleted talking points that do not address any of the substance of my report. I have included the response in its entirety below, with my counter-response to each.

Liquefied Natural Gas industry in B.C. represents an opportunity to create prosperity for future generations with a transition fuel that’s cleaner-burning than many other types of fuel.

While LNG development will create some jobs, most of them will be in construction of pipelines and the LNG terminal facilities. The Natural Gas Strategy estimates these at 9,000 jobs – this is probably person-years; I have asked for the source material on the government’s job numbers and have been refused. As for permanent jobs, the NGS estimates about 800 jobs, which seems awfully small for such a negative environmental impact. Some higher estimates, like 2,500 long-term jobs for five full LNG plants (again, claimed but not verified), seem very optimistic to me, but even at face value that latter number represents a mere 0.1% of BC’s current employment.

In addition, this week’s front-page story that Chinese temporary foreign workers will be brought in to mine coal in northern BC should give us pause.

The climate change impacts of moving ahead can also be estimated. Based on some recent estimates of “externalities” or costs imposed on third parties, a conservative figure is about $25 billion per year; perhaps as high as $150 billion per year if we take a higher estimate of damages and bigger production levels. By comparison, BC’s GDP is about $200 billion.

If anything, this plan causes misery not prosperity for future generations (unless they own Shell stock, I suppose).

B.C. is a clean energy leader and climate change is a global issue. By exporting Liquid Natural Gas, B.C. will help to avoid the use of higher GHG fuels such as coal.

Wishful thinking. It would be nice if some evidence was presented in support of this version of the “transition fuel” argument. Forecasts I looked at (and cite in the report) from the International Energy Agency suggest nothing of the sort for China, only ever-rising energy demand met by both coal and natural gas. Meanwhile, Japan wants LNG to displace its nuclear capacity, post-Fukushima, which will mean a major increase in their emissions.

Unless our trading partners have GHG targets at least as strong as our’s, we should not be selling them more fossil fuel.

In developing this industry our efforts to reduce emissions are reflected in our commitment to having the world’s first clean energy powered Liquid Natural Gas facility, our work on electrification of the northeast natural gas production and our work with industry on the potential to use carbon capture and storage.

The government is using its own definition of “clean energy”, which, conveniently, includes natural gas. While natural gas is the cleanest burning of fossil fuels, it is still a fossil fuel. Development of shale gas reserves through “fracking”, however, has generated widespread concern about contaminated water supplies, earthquakes, and leakages of methane (itself a potent greenhouse gas). In addition, pipelining it to the coast, compressing it into LNG (a very energy-intensive process) and shipping across an ocean do not make it “clean” by any stretch of the imagination.

In my report, I recommend BC require carbon capture and storage for new LNG plants, and would love to see a firm commitment by the BC government on this as a condition for any LNG plant (not “work with industry on the potential” which means it will never happen).

I also recommend that BC not subsidize fracking in the northeast through cheap BC Hydro rates. All of the new demand for electricity in BC is coming from mining and natural gas, BC’s dirtiest industries, but BC Hydro has been required to pay for clean electricity supply from private producers at up to three times the industrial rate they receive. This is a major driver of higher rates for residential and commercial customers (which John Calvert and I pointed out back in June).

In June, our report confirmed that B.C. doesn’t consider export emissions – as this approach would be different from accepted international practice which requires jurisdictions to take responsibility for emissions that happen in their area.

It is convention to count only emissions within a jurisdiction’s borders for GHG accounting. In my report I looked at the implications for emissions within BC of increased fracking and LNG development, and find (in the middle scenario) that allowing for increased emissions for gas extraction and processing means the rest of the economy would have to reduce emissions by 81%. It is on this basis that BC is breaking its own GHG law.

In another section, the report also counts all emissions from carbon below ground that make it into the atmosphere to show the global impact of this exercise. And it is huge — like 24 million cars being added to the roads of the world. So accounting conventions aside, we have to take responsibility for what we take out of the ground.

B.C. is a climate action leader for a reason. We are the first government in North America to become carbon neutral and our Revenue Neutral Carbon Tax will also motivate the natural gas industry to innovate and find ways to reduce their GHG emissions.

B.C.’s experience so far is exceptional in Canada. B.C.’s climate action policies are working and prove that economic growth can happen in concert with environmental responsibility.

In fact, I give credit to BC for bringing in its GHG law five years ago and implementing climate actions. My report makes clear that BC has made progress, up to 2010 anyway. But the real issue is what the Natural Gas Strategy means for those targets, and the news is not good. Note that no counter-numbers are presented by the government, just platitudes patting itself on the back for actions undertaken in 2007 and 2008. No plan has been tabled that would show a path to the 2020 targets, and initiatives like participation in the Western Climate Initiative cap-and-trade system have been quietly shelved.

Oh, and most of the emissions from the natural gas industry are NOT subject to the carbon tax. Indeed, applying the carbon tax to upstream fugitive emissions is a recommendation I make.

There are challenges in meeting targets, but with an abundance of clean energy and our world-leading climate action policies we will continue to move towards our 2020 and 2050 targets.

Indeed. The challenge to the targets is the Natural Gas Strategy, which will dwarf any climate actions. For example, modelling undertaken by the government showed that the carbon tax would reduce BC’s emissions by 3 million tonnes in 2020 relative to a business as usual scenario. The Natural Gas Strategy will add between 13 and 48 million tonnes to BC’s inventory in 2020 (not counting any exported emissions).

Later, Vancouver Sun columnist Craig McInnis was able to get Minister Terry Lake on the phone. More of the same bafflegab and double-talk on this file, I’m afraid. But you can read McInnis’s account here.

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