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While some fossil fuel-rich provinces have questioned the federal emissions cap on the oil and gas sector, British Columbia is bucking the trend.

The governments of Alberta and Saskatchewan launched a public battle against the federal proposal to put a limit on the oil and gas sector’s rising carbon pollution. This month, Newfoundland and Labrador raised its own concerns.

The three provinces accounted for 97 per cent of Canada’s crude oil production and almost two-thirds of natural gas production in 2023. The oilpatch has lobbied hard against the climate policy, which is meant to get a handle on emissions from the sector which threaten to undo environmental progress.

But B.C., home to over a third of Canada’s natural gas production and a burgeoning liquefied natural gas (LNG) export industry, appeared supportive of the federal climate policy in internal briefing documents obtained by The Narwhal.

The emissions cap’s target was “generally aligned” with the province’s own climate goals, stated a briefing note from the spring written for former environment and climate change minister George Heyman, released to The Narwhal under provincial freedom of information law.

“B.C. looks forward to continuing work with Canada to align the federal cap with B.C.’s goals and commitments,” the briefing note read.

The province’s LNG export industry will be powered by the use of hydraulic fracturing, or fracking, in the northeast to generate methane-heavy gas that will be sent down pipelines to the coast to be loaded onto tankers and shipped overseas.

The Coastal GasLink pipeline has recently begun to transport fracked gas to the LNG Canada plant in Kitimat, B.C., where it will be liquefied at extremely cold temperatures to make it easier for transport. As well, the Ksi Lisims LNG project, expected to produce almost as much liquefied gas as the LNG Canada plant, could be supplied by the Prince Rupert Gas Transmission (PRGT) pipeline if the government approves a request to change its route.

Calgary-based TC Energy, which built and operates Coastal GasLink, and which previously owned the Prince Rupert Gas Transmission pipeline, lobbied the federal government in 2023 not to include LNG facilities in the emissions cap.

The multinational pipeline giant also wanted to carve out an exemption for methane, a form of pollution that’s a major byproduct of oil and gas production and is a powerful heat-trapping greenhouse gas that is helping drive climate change.

But the briefing note shows the B.C. government considered LNG “a key element B.C. advocated the federal government include in the scope of their policy.”

And in March, B.C. announced it would establish its own cap on oil and gas emissions, meant to be a “backstop” that would only apply if the federal policy ended up being cancelled or was too weak to meet B.C.’s targets. The B.C. cap takes effect in 2026.

TC Energy did not respond to questions from The Narwhal about why it felt the B.C. government was advocating for a climate policy against the company’s interests.

BC says LNG in emissions cap signals ‘opportunity’ to ‘work together as a federation’

Heyman’s briefing note, crafted in advance of a meeting planned with Environment and Climate Change Minister Steven Guilbeault for May 13, suggested he thank Guilbeault for the federal minister’s public statement in support of B.C.’s “backstop.”

Canada’s draft rules for an emissions cap, unveiled in November, list LNG production as one of its applicable industrial activities. The federal program is what’s known as a cap-and-trade system, which means the government will distribute allowances to oil and gas operators that must then use them up to account for the operator’s emissions.

If they pollute too much, they need to buy allowances from another company. The idea is that financially penalizing high emissions will lead companies to reduce them.

B.C. said it would release more details about its provincial emissions cap plan in 2025. But it hinted that polluters would have other ways of complying than cutting emissions, for example by using “tradeable carbon credits.”

The inclusion of LNG in the federal cap signalled an “opportunity” for Ottawa and Victoria “to work together as a federation on effective and responsible climate action,” the briefing note stated.

It said a 2023 estimate for an emissions cap target was “generally aligned with B.C.’s sectoral target for the oil and gas sector,” which is 33 to 38 percent lower emissions by 2030.

Canada’s 2023 estimated target was 35 to 38 per cent below 2019 levels by 2030, and the draft rules in November said the government expects to cut oil and gas emissions by 35 per cent.

Heyman did not run in this fall’s provincial election, which saw the NDP win enough seats to form a slim majority government. “As there’s a new government and ministers they should comment unless they ask me to,” he told The Narwhal.

B.C.’s Ministry of Environment and Parks acknowledged the receipt of questions but did not provide a response before publication.

British Columbia versus Alberta, not for the first time

The amicable words in the briefing note stand in contrast to the whirlwind of opposition to the federal emissions cap proposal, notably criticism from Alberta Premier Danielle Smith.

The Alberta premier announced she would launch a constitutional challenge to the emissions cap, even though the details are still in draft form and a finalized version isn’t expected until next year.

Alberta also wants to ban access to federal employees or contractors to oil and gas facilities, seize the ownership of greenhouse gas data from companies and use provincial legislation to effectively intervene in the market to sell oil and gas itself.

If implemented, these rules may violate agreements Alberta has signed with the federal government, such as its deal with Ottawa cracking down on methane pollution, which has clauses requiring information-sharing and inspections.

Some federally-incorporated private companies may also be required to disclose information in the coming years about the environmental impacts of their business as a result of financial regulations under consideration. It’s unclear how that would work with any sort of provincial ban on the publication of emissions data.

This is the second area of disagreement of late between B.C. and Alberta, after the B.C. government announced this month it would exempt wind power projects from environmental assessments in an attempt to fast-track their construction.

That follows Alberta’s decision to create “buffer zones” to prevent wind farms from being created. Last year Alberta also announced a temporary pause on all renewables projects.

Eby highlighted the difference between the two province’s approaches to renewables during his announcement about wind power exemptions.

“We’re seeing major jurisdictions move away from clean energy,” Eby said. “Alberta, with new rules restricting wind energy, for example.”

Smith’s office did not respond to questions from The Narwhal about B.C.’s support of the emissions cap and whether the premier expected friction between the two provinces on this or other issues.

— With files from Shannon Waters

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