Jun 22, 2012

Time for a Serious Conversation about Natural Gas


It is pretty clear that the government’s ill-conceived Energy Plan is falling apart. The near religious call for self-sufficiency has been moderated (though not sensibly changed) and the legislated requirement for insurance eliminated. The plan to develop run-of-river and wind IPPs for export has been abandoned. The problem of charging major new industrial customers less than half the cost of new supply has been partially recognized at least for the new LNG plants (though not for the only somewhat smaller mining and other electric-intensive loads driving the growth in BC Hydro’s requirements). The implementation of a generous feed-in tariff, another legislated way to subsidize new high cost, low value power production, has quietly been shelved.

And now the latest in the series of ad hoc measures to move away from the Energy Plan: the government has decided the combustion of natural gas to produce electricity will be deemed clean if done in Kitimat to liquefy gas, though still ‘dirty’ (or whatever the opposite of clean is these days) if done anywhere else.

It is all rather amusing. Obviously the government no longer supports the once much-touted Energy Plan, and is moving away from it as best it can without admitting the plan was flawed. But that is what it must do, not so much to gratify the critics (though who on this side of the debate could not enjoy that), but rather to recraft a comprehensive, sensible plan. And though all areas of electricity planning, pricing, use and new development require careful consideration, the issue of what to do with natural gas would be a good place to start.

Looking back on the last ten years, two of the worst decisions the government made (or forced BC Hydro to make) were:  cancelling the development of a new natural gas-fired thermal power plant at Duke Point to meet electricity requirements on Vancouver Island, and eliminating the back-up role the Burrard thermal plant could play to meet our electricity requirements in low water years.

Those two decisions alone cost BC Hydro and its ratepayers literally billions of dollars of needless expense. And they were no great benefit to the environment. Without the Duke Point power plant, a major new transmission line had to be developed (most controversially through Delta), and additional sources of supply on the Mainland were acquired (including run-of-river projects with all of the land and aquatic impacts they cause). Eliminating the back-up role of the Burrard plant forced BC Hydro to look for an additional 5000 to 6000 GWh of new supply (more than the output of Site C) to be able to meet requirements. Again, more run-of-river and other power projects were required, with all of the impacts and concerns they have raised.

There are, of course, those who would argue that we shouldn’t burn any natural gas to generate power (or heat homes, or for that matter to do anything else). But the fact is, we do burn natural gas, and what we don’t burn others do. It is completely inconsistent, not to mention illogical, to expand the production of natural gas in the province, and then severely restrict, one might say demonize, the use of it for domestic purposes. Once the gas is extracted from the ground, the carbon it contains will be released to the atmosphere. And from a climate change perspective it really doesn’t matter where that takes place — in B.C. or wherever else the gas that isn’t consumed in B.C. is sold.

A policy of rejecting natural gas use in the province (except now in Kitimat) all the while doing everything we can to increase production and ship it elsewhere is the exact opposite of what most would argue we should do with our resources, namely, make sure we make best use of them in the province before exporting the resources for others to use.

There may come a time when globally we have shifted entirely away from all fossil fuel use. But until we collectively get there, and most importantly have decided not to extract natural gas for export as well as domestic purposes, it makes no sense to restrict the use of natural gas in British Columbia, only so more natural gas can be shipped abroad.

A more responsible policy would be to do what environmental groups have long been arguing should be done for all fossil fuel use. Impose a significant carbon tax  and use the revenues not to make wealthy taxpayers disproportionately better off with income tax reductions, but rather to invest the carbon tax revenues in public transportation, reforestation, municipal storm sewer and dyking infrastructure and all of the other measures we can take to offset emissions and prepare for the climate change that is coming our way.

Designating natural gas clean in Kitimat and dirty elsewhere is not the answer. Nor is a policy of rejecting any use of natural gas when all that means is more of our gas will be shipped and burned elsewhere. Recognizing natural gas as an important provincial resource that should be used where it is efficient to do so, and that can and should contribute in a major way to fund offset and adaptation measures makes far more sense.