The B.C. government has quietly slipped subsidies for the natural gas sector into its climate plan, which has been panned as "cynical" by leading experts.

B.C.’s so-called Climate Leadership Plan, quietly released on August 19, includes a vague pledge to subsidize the electrification of upstream natural gas facilities in the northeast of the province, using “renewable” power from BC Hydro projects.

“I just could not believe the audacity of it when I was reading the plan,” Alex Doukas, senior campaigner at Oil Change International, told DeSmog Canada.“We’re using public dollars to help them reduce their emissions, when that should be the responsibility of the natural gas producers.”

“That’s why B.C. ostensibly has a carbon tax: there’s a principle called the ‘polluters pay principle.’ Taxpayers shouldn’t be picking up the tab for big polluters.”

The hidden subsidies come on top of B.C. Premier Christy Clark’s many concessions to the natural gas industry, including more than a billion dollars in royalty breaks, a freeze on the provincial carbon tax and taxpayer-subsidized promotion and marketing.

B.C. to Pay for Natural Gas Infrastructure and Subsidize Power Costs

Natural gas production and processing, which requires a great deal of energy, has historically been powered by natural gas or diesel.

“Full electrification” — which would include building new transmission lines, compressors and pumps to move gas through the system — would cut carbon emissions by an additional 2.4 million tonnes, according to the B.C. government.

Maximilian Kniewasser, analyst at the Pembina Institute, describes such reduction numbers as “fairly significant,” requiring a bit more than 6,000 gigawatt hours of energy (20 per cent more electricity than the Site C Dam will produce).

The climate plan, which failed to implement the recommendations made by B.C.’s climate advisory team, also mentioned that programs are in development to “close the gap between electricity and natural gas costs.”

Doukas says this suggests that public dollars will be spent not only to subsidize construction of the infrastructure but to “ratchet down the cost of electricity delivered to these natural gas producers so they’re not taking any kind of financial hit.”

“None of this gas expansion is compatible with acting on climate change in line with science,” he said.

“On the one hand, they’re trying to greenwash that gas expansion. On the other hand, they’re promoting it actively by giving a handout to natural gas producers by offering to invest public money into new infrastructure to electrify their operations,” he says.

“It’s a double whammy.”

BC #Climate Plan Subsidizes #FossilFuels (Yes, You Read That Correctly) https://t.co/joWylQLghP @christyclarkbc @maryforbc #bcpoli

— DeSmog Canada (@DeSmogCanada) August 31, 2016

Clark Promised LNG Would Create 100,000 Jobs

Kniewasser notes there are no real details on what is being proposed, and that there is a big difference between a direct subsidy that pays for the entire cost of electrification compared to a program that provides upfront costs and eventually gets recouped.

But Clark has set quite the precedent for making intensely generous offerings to kickstart her LNG dreams (which she once promised would create 100,000 jobs and $1 trillion in GDP).

These commitments accompanied federal subsidies from former prime minister Stephen Harper, which Prime Minister Justin Trudeau cemented until 2025 in his government’s first federal budget.

Martyn Brown, former premier Gordon Campbell’s chief of staff, wrote about her 2015 legislation that locked in tax breaks and subsidies for 25 years: “We will all pay for the government’s failings on this file forever. We will one day live to regret them for all they will cost us in lost revenue, in lost sovereignty and in their lack of any guarantees for Canadian workers, skills training or local suppliers.”

While B.C. is seeing renewable energy alternatives struggling or even abandoning the province, other places are benefitting from the emerging clean energy economy. Ontario has created more than 5,000 full-time jobs from the solar industry alone and California, which has aggressively pursued its emissions reduction plan, has seen $48 billion flood the economy while creating an estimated 500,000 jobs over the last decade.

In the meantime Clark has effectively pinned her entire political career on the LNG industry, which, up to this point, has yet to see a single project get past the initial investment stage. Despite bleak economic prospects for B.C.’s LNG industry, Clark is clearly doubling down on her LNG dream.

At this stage it wouldn’t come as a surprise if B.C. taxpayers found themselves fully on the hook for the transmission infrastructure to electrify future natural gas production.

Huge Emissions Associated With LNG, Including Methane Leakages and Liquefaction

A key component of the government’s push for LNG is the idea that the product is “the cleanest burning fossil fuel.”

Clark once said that developing the LNG sector would be the “greatest single step British Columbia can take to fight climate change.”

That’s a seriously contested point.

Natural gas is essentially methane, a greenhouse gas that has 25 times the global warming potential over a century than carbon dioxide, meaning you really, really don’t want it released into the atmosphere.

That’s not a contested point.

In fact, both Canada and the U.S. have committed to reducing upstream methane emissions from the oil and gas industry by 45 per cent in large part by cleaning up oil and gas operations that routinely vent and leak methane into the atmosphere.

That venting and leaking is a part of the reason why the natural gas industry in B.C. is estimated to have such a significant climate impact.

A 2013 DeSmog Canada investigation revealed B.C.’s methane emissions are likely seven times greater than reported, meaning the CO2 equivalent of the natural gas industry is around 25 per cent higher than estimated.

In May, an open letter signed by 90 scientists concluded that constructing the Pacific Northwest LNG export terminal — one of twenty proposed terminals — would increase B.C.’s total emissions by between 18 and 22.5 per cent, spouting upwards of 11.5 million tonnes of carbon per year (most of the emissions are related to the liquefaction process, which involves burning gas to run compressors to liquefy gas).

Government Agreed to Pay Exporters If It Raises Carbon Tax

Kniewasser stresses that emissions reductions don’t even require public investments, just a predictably increased carbon tax.

But due to the aforementioned 2015 legislation, the government must compensate natural gas exporters if it increases its meagre $30/tonne carbon tax (in other words, it voluntarily signed up to pay corporations if it requires them to innovate and cut pollution).

In the plan, the government also expressed an interest in “developing regulations to enable carbon capture and storage,” a technology that has come at enormous public expense in Alberta and Saskatchewan; the Boundary Dam CCS project near Estevan has been riddled with design flaws and cost overruns.

All up, it’s abundantly clear that Clark has zero interest in meaningfully addressing emissions via an increased carbon tax and public investments in technologies like geothermal, solar and wind.

In the words of Mark Jaccard, one of the most respected climate policy experts in the country, the plan represented “Olympian heights of political cynicism.”

There’s a good chance that status will only be solidified as more information about the natural gas electrification plan comes out.

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Clean energy investment surged to $497 billion worldwide in 2015 while in Canada investment in renewables experienced a massive 46 per cent plunge to around $5.4 billion, according to a new report released Monday by Clean Energy Canada.

Global investment is up from a total of $420 billion in 2014 with nearly one-third of of new investments occurring in China. Spending on renewables increased in the U.S. by seven per cent, in India by 23 per cent and in Mexico by 114 per cent.    “Canada’s performance was out of step with its peers in 2015,” Clare Demerse, senior policy adviser at Clean Energy Canada, told DeSmog Canada. "This should be a wakeup call, although we hope this is a one-off and not the start of a trend."

Cheaper technology can partially account for the drop in investments in Canada. In the U.S., for example, over the last six years the unsubsidized cost of wind energy went down 61 per cent and 82 per cent for utility-scale solar PV. 

The amount of money invested in Canadian clean energy may have been cut in half last year, but the construction of new renewable energy projects only slowed by 30 per cent, according to Clean Energy Canada.   “When you couple [clean energy's] declining costs with free fuel from the wind, sun, water, biomass and the earth’s heat, you have a formula for ever increasing competitiveness with fossil fuels,” the report states.

Source: Clean Energy Canada, 2016

Uncertain Clean Energy Policy in Canada Played a Role

Imprecise policies and a lack of clean energy regulation created uncertainty for investors in Canada, the report finds.   “Pipelines trumped power lines as a national priority,” it concludes.

Canada has no national climate framework or greenhouse gas regulations for the oil and gas sector. The bulk of Canada's climate action in recent years has emerged at the provincial level.   “In the longstanding absence of federal climate leadership, provinces led the charge," Demerse told DeSmog Canada. But, she added, "some of the provinces that are big players in clean energy were rethinking policies in 2015. Uncertainty is hard on investors.” 

British Columbia, a province praised in recent years for its world-class carbon tax, is investing heavily in a liquefied natural gas (LNG) export industry as well as the major Site C hydrodam. A recent review of B.C.'s Climate Action Plan found the province is unlikely to meet its climate targets. 

Ontario, Canada’s leader in wind power, confirmed it will spend over $25 billion on refurbishing aging nuclear reactors to clean up the province’s electrical grid instead of doubling down on domestic renewable energy or importing relatively cheap water power from Quebec.   However, some progress on provincial climate policies was made at the end of 2015.   Ontario and Manitoba both announced they are joining North America’s largest carbon market by linking up with the Quebec-California cap-and-trade system. A new Alberta government unveiled plans to phase out coal, cap oilsands emissions and introduce a carbon tax. Saskatchewan also set admirable renewable energy targets, which aim to have half of the province's electricity coming from renewable sources by 2050.

According to Clean Energy Canada these provincial targets need to be translated into clear policy to boost investment in the sector. 

Canada’s Clean Energy Potential Barely Scratched 

“Canada is incredibly well positioned for clean energy success,” Demerse told DeSmog. "Yes, we may have the third largest oil reserve in the world, but we are also the third biggest producer of hydroelectricity. And we have the potential to do so much more with our clean energy resources."

Demerse believes this week’s national climate strategy meeting between the federal government, Indigenous leaders and the premiers is the perfect opportunity to lay the foundation for a clean energy plan for Canada. 

“The new federal government can do a lot to change this. Adopting real, meaningful clean energy targets would provide more certainty for investors,” Demerse said.   According to a groundbreaking study led by Stanford Engineering Professor Mark Jacobson that examines how countries can run off of 100 per cent renewable energy by 2050 , Canada has only begun to scratch the surface of its ‘clean energy superpower’ potential.

  Canada's energy mix in 2050 according to Jacobson's analysis. Source: The Solutions Project.

“The main barriers to getting to 100 per cent clean energy are social and political, not technical or economic,” Jacobson said during a climate and energy forum in Washington, D.C., last November.   Canada already generates roughly 60 per cent of its electricity from renewable sources and this is nearly all from hydroelectricity or waterpower. By comparison, Germany produced just over 30 per cent of its electricity from renewable energy in 2015, which was mostly from wind, solar and biomass. Canada has one of the world’s cleanest electrical grids.   But currently, non-water based renewables like wind and solar make up a mere three per cent of the electricity Canada generates.   The Stanford study projects solar and wind could make up 21 per cent and 58 per cent respectively of all of Canada’s required energy by 2050. Waterpower in Jacobson's 2050 scenario becomes the junior partner to wind and solar at 16.5 per cent of the total Canadian energy mix. The study's authors conclude there is no need to build additional hydro dams like the Site C dam in B.C. or continue with nuclear power generation.

Image Credit: NAIT via Flickr 

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