Canadians could be forgiven for being a bit confused about how Prime Minister Justin Trudeau is doing on climate change these days.

Last week he approved one of the largest sources of carbon pollution in the country — the Pacific Northwest LNG export terminal in B.C.

The week before that his government announced it would stick with Harper-era emissions targets.

Now Trudeau has announced the creation of a pan-Canadian carbon-pricing framework, which means our country will have a carbon tax nation-wide for the first time ever.

So are we hurtling toward overshooting our climate targets or are we finally getting on track?

Let’s look first at the carbon price announcement.

The carbon price will begin at $10 in 2018 and will scale up $10 per year until 2022.

The announcement “sends a clear signal that we’re all in this together and that we need a federal approach to regulate carbon pollution,” said Amin Asadollahi, lead for climate change mitigation at the International Institute of Sustainable Development.

The timing seems right as well, with a new Nanos poll showing 77 per cent of Canadians support or somewhat support Canada pursuing a national plan to meet international climate commitments. Additionally, 62 per cent of Canadians support or somewhat support a national carbon price.

Under the new framework, provinces will have the autonomy to choose a carbon pricing mechanism that works for them, whether carbon tax or cap and trade, and all revenues generated in province will stay in province.

Having a pan-Canadian framework for pricing carbon creates incentive for businesses, Assadollahi said, and “harmonizes the approach rather than having patchwork policies across the country.”

However, critics have already come out against the price as too weak to be useful.

“I was very disappointed we were starting with $10 per tonne,” said Elizabeth May, leader of the federal Green Party, “which is so low under British Columbia’s carbon tax of $30 per tonne. It was an obvious political calculation.”

And bringing the provinces together may be harder than Trudeau bargained for.

Already Premier Rachel Notley has announced Alberta will only support the plan in exchange for pipeline access to tidewater. Saskatchewan Premier Brad Wall, who has been a vocal opponent of carbon pricing for years, used the announcement to reiterate his position, saying the announcement wasn’t worth the carbon emissions it took to fly environment ministers to Ottawa.

May told DeSmog Canada the “recalcitrance of the provinces is very disconcerting.”

May said the environment ministers of Saskatchewan, Nova Scotia and Newfoundland, who were visiting a meeting of the ministers this morning, made a statement by walking out in response to Trudeau’s carbon price announcement.

“Ministers of provinces storming out of meetings is just childish,” May said, especially given the flexibility of the carbon price plan to suit individual provinces and territories.

Canada’s New Carbon Price: The Good, The Bad and The Ugly #carbontax #cdnpoli #climate https://t.co/g9nBo5m8d2

— DeSmog Canada (@DeSmogCanada) October 4, 2016

Matt Horne, senior policy analyst with the Pembina Institute, said the Prime Minister made a smart political move in considering differences among provinces in the plan.

“The feds were wise not to be too prescriptive here,” Horne told DeSmog Canada.

“The decision they made on the flexibility of the mechanism and revenue generated is interesting,” Horne said. “You have got to achieve this level of ambition but how you do it and how you use the revenue is up to you.”

“That gives maximum space to someone like Brad Wall to make this work in Saskatchewan.”

Province by province regulations will be necessary to meaningfully reduce emissions where they start.

A recent report by Mark Jaccard, climate policy analyst and professor at Simon Fraser University, found a carbon tax of $200 per tonne would be necessary to catalyze significant climate action and a transition to renewable energy systems.

Jaccard said an overreliance on carbon pricing can mask a suite of alternative options like sector-by-sector performance standards, renewable portfolio standards, mandatory market shares and zero-emission vehicles.

“Ninety per cent of the reductions in the last eight or nine years…in California are occurring because of the flexible regs, not because of that very low floor price in their cap-and-trade,” Jaccard told DeSmog Canada in a recent interview.

Whether or not this federal government will be a strong actor on climate change remains to be determined.

For Kai Nagata, communications director at the Dogwood Institute, Trudeau’s carbon price announcement should be viewed within the context of last week’s approval of the Pacific Northwest LNG export terminal.

“If you set a weak carbon pricing target, that means to hit your pollution reductions targets you have to reduce actual carbon infrastructure. Are we doing that? Not at all, in fact, quite the opposite.”

“This is the dilemma,” Nagata said, “no one believes carbon pricing alone, through whatever form, is going to reduce pollution enough to get at base pollution levels.”

“The only thing that would really take a bite out of Canada’s carbon pie is to stop adding fossil fuel infrastructure.”

Nagata added if Trudeau fails to put pressure on the energy sector to reduce emissions, that pressure will be placed on other less-polluting sectors and individual citizens.

“It’s fundamentally unfair and it will have the effect, if they continue to approve extraction and production, of subsidizing the fossil fuel industry at the expense of the ordinary citizen.”

Alex Doukas, senior campaigner at Oil Change International, also pointed to the issue of subsidies.

“Setting a strong national carbon price is potentially a very important step forward for Canadian climate action,” Doukas said. “But there’s a multi-billion-dollar elephant in the room: Canada still gives $3.3 billion in subsidies to oil and gas companies each year.”

Doukas said the Trudeau government needs to complement its carbon price with an “ambitious timeline for phasing out all of its fossil fuel subsidies.”

“Otherwise, the Trudeau government’s incentives to polluters risks cancelling out the newly announced carbon price.”

So while some Canadians are celebrating the announcement of a national carbon tax as a victory, it will remain pyrrhic until Trudeau implements the types of regulation that will actually bring significant emissions reductions and starts to make the tough calls on building new fossil fuel infrastructure. Until then, we’re going to hold the applause.

Update: October 4, 2016. The provincial environment ministers walked out of a meeting of ministers in Montreal, not out of the House of Commons as was previously stated. Kai Nagata’s title has been updated from energy and democracy director to communications director. 

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While the B.C. government may like to claim it’s a “climate leader,” the province has quietly become a climate laggard compared to Canada’s other most populous provinces according to a new analysis released by the Pembina Institute on Tuesday.

The analysis indicates that eight years after B.C.’s Climate Action Plan was implemented, B.C.’s emissions are projected to continue increasing — standing in stark contrast to Ontario, Quebec and even Alberta.

Between 2011 and 2014, B.C.’s emissions increased by the equivalent of adding 380,000 cars to the road — putting B.C. on track to blow past its legislated 2020 emissions target.

If the province’s inaction on climate change continues, B.C.’s emissions will increase 39 per cent above 2014 levels by 2030, according to modelling.

Meantime, carbon pollution in Alberta, Ontario and Quebec is expected to decrease by 26 per cent, 22 per cent and 23 per cent, respectively, over the same period.

How is it possible that B.C. will perform worse than oilsands heavyweight Alberta? The predicted increase in B.C.’s emissions is largely due to projections for B.C.’s nascent liquefied natural gas (LNG) sector — which would account for more than 80 per cent of B.C.’s emissions increase between 2014 and 2030. And that calculation is based on the equivalent of just one LNG terminal getting up and running (roughly the size of the LNG Canada project in Kitimat, which would create 24 megatonnes of carbon dioxide equivalent per year).

Yup, despite whatever insane statements Premier Christy Clark might make about how the LNG industry is going to fight climate change the opposite is true due to its carbon intensity.

#LNG Could Make BC Canada’s Worst Actor on #Climate https://t.co/aznNQhPhv0 @christyclarkbc #bcpoli #cdnpoli pic.twitter.com/fgUX9tdF6v

— DeSmog Canada (@DeSmogCanada) June 14, 2016

Pembina is applying pressure on the B.C. government as it makes the final decisions on a new Climate Leadership Plan, expected to be released later this month. Last fall, Clark’s Climate Leadership Team (which included Matt Horne of the Pembina Institute) delivered 32 recommendations to the government to get B.C. on track to meet its 2050 climate target.

“In 2008, B.C. built a solid foundation with the Climate Action Plan. But when it came time to construct the proverbial house, Premier Clark balked at taking the next steps,” Horne said in a news release. “It’s time to quit stalling and finish the job.”

The Climate Leadership Team’s recommendations included reducing emissions from buildings by 50 per cent by 2030, establishing a new zero-emission vehicle standard, cutting methane emissions from the natural gas sector by 40 per cent in the next five years and increasing the carbon tax by $10 per tonne per year.

Image: Christy Clark attends an LNG rally in Fort St. John/Flickr

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Seven members of Christy Clark’s hand-picked, blue-ribbon Climate Leadership Team are going public with their disappointment in the province’s lack of climate action in an open letter released Monday.

Signatories include noted environmental leader Tzeporah Berman, hereditary chief of the Squamish Nation, Chief Ian Campbell, professor of oceanography at the University of Victoria, Tom Pederson, B.C. associate director of the Pembina Institute, Matt Horne, Cayoose Creek Band chief, Michelle Edwards, professor Nancy Olewiler and executive director of Clean Energy Canada, Merran Smith.

The letter, addressed to Clark, states B.C. is in no position to shrug off the 32 recommendations made by the team last November in advance of the UN Paris Climate Talks. At the talks, Clark used the Climate Leadership Team’s work to bolster the province’s environmental credibility.

But the team itself is saying the B.C. Liberals have failed to implement the recommendations made by the group of experts. B.C has consistently pushed back the release date of a provincial climate plan.

The province, once an international leader in carbon pricing, has stalled action on climate by imposing a restriction on carbon pricing, creating loopholes for large industrial emitters and agressively advancing the creation of an LNG export industry. Compared to provinces like Ontario, which just announced $7 billion in funding for an ambitious climate plan, and Alberta, which announced an ambitious plan to phase out all coal-fired power plants last fall, B.C. is quickly falling behind.

Between 2011 and 2013, B.C.'s emissions climbed by 1.7 megatonnes of carbon dioxide equivalent. That's the same as adding 440,000 cars to B.C. roads, according to Clean Energy Canada. According to Canada’s Ministry of Environment and Climate Change those emissions are forecast to grow by 32 per cent between 2013 and 2030.

“B.C. can’t be a climate leader if carbon pollution is rising,” the letter states.

Read the full text of the letter here:

Dear Premier,

One year ago, you asked us to serve on the Climate Leadership Team and provide your government with advice on how to advance B.C.’s climate change plan. The motivation for the new plan was clear: while B.C. had been a leader on developing climate policy in Canada, and in fact around the world, the province’s carbon pollution was rising and stronger policy would be needed to get the province on track to meet our legislated emissions reduction targets.

You asked us for recommendations that would enable the province to meet its 2020 and 2050 climate targets, maintain a strong economy, and provide support to the British Columbians most in need. You asked us to reach consensus across a group that included leaders from First Nations, business, academia, local government, the provincial government and environmental organizations.

The process we worked through last year was difficult, but it was also successful. We managed to deliver in six months. Our work resulted in 32 recommendations that we provided to your government last November. The package of recommendations represents a mix of innovative thinking and compromise that fulfills our mandate and respects the different perspectives represented on the team. The recommendations provide a blueprint to help get the province back on track for our climate targets, stimulate innovation, create jobs, protect B.C. businesses and support rural communities.

We advised your government to commit to the package of recommendations this year so that British Columbians and B.C. businesses have time to plan. This is particularly true of our recommendations to strengthen the carbon tax, which were central to the overall package. Committing to a next schedule of increases, closing gaps in its coverage and explaining how the revenue will be used will help reduce uncertainty, ease the transition to a low-carbon economy for emissions-intensive and trade-exposed sectors and families, and support investments in clean energy across the province.

The reasons to move forward with this plan are stronger than ever. Climate change threatens our economy, our communities and our environment. To confront those threats, we need to increase our efforts to reduce fossil fuel use and better prepare ourselves for a changing climate. And as the world increasingly begins to act, the demand for clean energy is accelerating. The actions we take to increasingly shift to clean energy in the province will also help position B.C. businesses to provide the solutions the world needs.

We want to see the province reach its climate targets; delay only increases the costs and makes it harder to succeed. We are thus concerned about the shifts in deadlines. You initially committed to having a draft plan in advance of the Paris climate talks last December and a final plan by this March. The draft plan was cancelled and the deadline for the final plan was pushed to June.

B.C. is in no position to delay or scale back its efforts. The rest of Canada and the rest of the world have been taking action since B.C.’s initial climate plan in 2008, and B.C.’s increasing carbon pollution is taking us in the wrong direction.

B.C. can’t be a climate leader if its carbon pollution is rising. As the federal government places a renewed emphasis on climate action, now is the time for B.C. to be articulating its next steps. The new federal-provincial relationship on climate change will be defined by the jurisdictions taking actions to significantly reduce their carbon pollution and B.C. should be among them.

The Climate Leadership Team recommendations, implemented in their entirety, provide the blueprint for a B.C. climate plan to put the province back on track for the 2050 and interim 2030 targets.

Anything less is not climate leadership.

Sincerely,

Chief Ian Campbell, hereditary chief, Squamish Nation Chief Michelle Edwards, Cayoose Creek Band Tom Pedersen, professor of oceanography, University of Victoria Matt Horne, B.C. associate director, Pembina Institute Merran Smith, executive director, Clean Energy Canada Tzeporah Berman, adjunct professor, Faculty of Environmental Studies, York University Nancy Olewiler, professor, School of Public Policy, Simon Fraser University

CC:

Honourable Catherine McKenna, Minister of Environment and Climate Change Honourable James Carr, Minister of Natural Resources Mr. Jonathan Wilkinson, Parliamentary Secretary Honourable Mary Polak, Minister of Environment Honourable Bill Bennett, Minister of Energy and Mines Honourable Shirley Bond, Minister of Jobs, Tourism and Skills Training Honourable Rich Coleman, Minister of Natural Gas Development Honourable Mike de Jong, Minister of Finance Honourable Peter Fassbender, Minister of Community, Sport and Cultural Development Honourable Todd Stone, Minister of Transportation and Infrastructure Mr. Jordan Sturdy, Parliamentary Secretary

Image: Province of B.C.

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The B.C. government plans to subsidize Malaysian gas giant Petronas to the tune of $16 million, in part due to a promise to exclude a significant chunk of the greenhouse gas emissions from the Pacific Northwest LNG project from compliance penalties, DeSmog Canada has learned.

British Columbia’s politicians are in a special summer sitting at the legislature right now to debate Bill 30, the Liquefied Natural Gas Project Agreements Act, which will allow the government to enter into a $36 billion agreement with Petronas and pave the way for B.C.’s first major liquefied natural gas export plant, located near Prince Rupert.

Under the terms of the 140-page deal, the province would compensate the LNG consortium if future governments raise income tax rates for LNG operations, add carbon taxes that specifically target the industry or make changes to rules on greenhouse gas emissions. That could result in the province paying out $25 million a year or more.

While the compensation clause has commanded the lion’s share of attention, DeSmog Canada has learned that the B.C. government has quietly excluded two sources of Petronas’ emissions from compliance standards, which will result in the province paying out millions of dollars in subsidies.

The Loophole that Will Let Petronas Off the Hook for Emissions

In promising the world’s “cleanest LNG facilities,” Premier Christy Clark set benchmark requirements for the facilities’ emissions. If a company fails to meet the benchmark, they must pay compliance penalties into a climate offset or green technology fund.

However, the province has also created the “LNG Environmental Incentive Program,” which promises to pay a significant portion — between 50 and 100 per cent — of those compliance fees if companies come close to meeting the benchmark.

As if that wasn’t bad enough, now — as part of the agreement between the B.C. government and Petronas — the government has quietly excluded two types of emissions from the equation, which means Petronas will edge closer to the emissions benchmark, qualifying them for more money from the province.

According to Matt Horne, the Pembina Institute’s associate regional director for B.C., the altered environmental incentive agreement with Petronas —currently being considered in the B.C. legislature — “flew totally under the radar.”

Last-Minute Deal a Subsidy to Pollute

The altered environmental incentive agreement essentially acts as a subsidy that gives Petronas the right to pollute for free.

Chris Tollefson, lawyer with the University of Victoria Environmental Law Centre, said the tweaked environmental incentive program doesn’t hold the LNG industry accountable for its emissions and reduces the incentive to have cleaner operations.

“Under this subsidy regime, if you are an LNG operator, why bother investing in state-of-the-art GHG reductions technology to meet the LNG benchmark target, when government must reimburse you each year for up to 100 per cent of the cost of buying ‘compliance units’ that bring you into deemed compliance with the target?” Tollefson said.

“I’m highly skeptical about subsidizing private companies so that it can be said they comply with government’s environmental targets.”

The Emissions the B.C. Government is Willing to Ignore

The issue centres around two types of emissions — “entrained” emissions and “emergency” emissions.

Horne said the exclusion of these emissions under the environmental incentive program is “inconsistent” with the province’s emissions reporting rules and “represents a big disconnect” from regulations.

Entrained emissions usually refer to the carbon dioxide that must be removed from natural gas before it can be transported by pipeline or liquefied for transport via tanker. These emissions are usually flared or vented directly into the atmosphere. Horne estimates the entrained emissions for the Pacific Northwest LNG project will count for just over six per cent of total emissions, based on information submitted in the project’s environment assessment.

Similarly, emergency emissions must be vented or flared as the result of an accident or to avoid one, and tend to be high in the first few years of a plant’s life as operations are stabilized.  

Emergency emissions are much more difficult to estimate as they vary from plant to plant and over time, but can add up to a huge portion of emissions in a project’s early years.

“What you definitely have with this arrangement is that, at a minimum, because of that exclusion of entrained emissions, Petronas and others would qualify for a bigger subsidy under the program than they would have initially,” Horne said.

“Essentially what they’re doing is saying Petronas gets a free pass on this entrained portion of their emissions. That moves them closer to the benchmark right off the bat and because of that, the closer they get, the bigger the proportional subsidy, the bigger the share of the compliance cost the province kicks in.”

For the Pacific Northwest LNG project, Petronas could pay as much as $12 million in penalties while receiving a subsidy of $16 million from the province, Horne said.

The weakened incentive program is likely to act as a template for future LNG projects in B.C., he added.

“I’m surprised the environmental incentive program is one of the features locked in to the [project agreement].”

The B.C. Ministry of Environment told DeSmog Canada both entrained and emergency emissions must still be reported under the Greenhouse Gas Industrial Reporting and Control Act but were excluded from the environmental incentive program because they fell outside of a LNG facility operator's control.

"Entrained CO2 and emergency events may be outside of the ability of the facility to control or anticipate and it was felt a facility should not be excluded from the program…because of an infrequent event that is out of their control," a spokesperson with the Ministry of Environment said.

NDP environment critic Spencer Chandra Herbert said the change alters the agreement substantially “so that effectively Petronas can pollute scot-free and in the future if any government wants to stop them from polluting our climate and air we have to pay them.”

“It really shows the lie of the B.C. government’s clean LNG promise.”

Chandra Herbert said Petronas fought for emission exemptions, but that B.C. went above and beyond when locking in the exemptions for the long term.

“The government didn’t just give Petronas two or three years to release emergency emissions — they gave it to them for 25 years plus. They can pollute pedal to the metal and they don’t have to pay any penalties or any carbon tax,” he said.

B.C.’s LNG Climate Inconsistency

According to the project application, based on 2011 data, Pacific Northwest LNG will account for nearly a tenth (8.5 per cent) of all of B.C.’s annual emissions.

The project is expected to emit 5.28 megatonnes of carbon dioxide equivalent each year. The target for the entire province’s carbon pollution by 2050 is 13 megatonnes per year.

In an analysis recently performed for the Pembina Institute, Horne estimated the carbon pollution from Pacific Northwest LNG could increase to up to 10.7 megatonnes of carbon dioxide by 2030 due to the climate impact of fracking for natural gas.

Chandra Herbert said it makes little sense to approve a project that will pollute at such dramatically high levels it will come close to blowing the province’s entire 2050 carbon budget.

“When you have a law that says we have to reduce emissions by 30 per cent by 2020 and 80 per cent by 2050, but one plant comes close to polluting as much as we’ve allotted for the entire province, that’s a huge problem,” he said. “This is all spin. From the beginning, the government promised to deliver clean LNG, the cleanest in the world, but they can’t and they won’t.”

Kathryn Harrison, professor of political science at the University of British Columbia, recently told the New York Times that the B.C. government’s push to develop LNG (there are presently 20 LNG projects proposed) “will make it virtually impossible for British Columbia to meet its greenhouse gas targets.”

She said for a province that considers itself a climate leader, significant LNG development is “a huge change of direction.”

Photo: Christy Clark poses with Petronas CEO and chairman, Tan Sri Dato’ Sahmsul Azhar Abbas via Flickr.

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It may come as a surprise to some that Alberta pioneered carbon pricing — not just in Canada, but for all of North America.

That’s right: the province with the fastest growing greenhouse gas emissions in Canada was the first place on the continent to put “polluter pays” legislation into place almost exactly eight years ago.

“Even back in 2007, Alberta was getting pressure over its environmental management, particularly of the oilsands. This may have been in response to that,” Matt Horne, associate B.C. director at the Pembina Institute, told DeSmog Canada.

Since then, three other provinces have joined the carbon pricing club: British Columbia with a carbon tax and Quebec and Ontario with cap and trade.

Each system is meant to, in theory, shrink provincial carbon footprints while allowing economies to remain strong and competitive. (If you want to totally geek out on the differences between Canada's carbon pricing systems, check this paper out).

With support for a national carbon pricing system growing, Canada need look no further than these provinces to learn some lessons. So, let's start with the first: Alberta.

Canada’s First Carbon Price: The Alberta Carbon Levy [view:in_this_series=block_1]

Although a pioneering system, Alberta’s carbon levy or Specified Gas Emitters Regulation (SGER) has not been effective in decreasing emissions in the province.

The carbon levy goes after the big emitters in the province — those producing more than 100,000 tonnes of GHG emissions. Mainly oilsands operations and coal-fired power plants — which make up roughly 50 per cent of the province’s total carbon footprint — fall into this category.

Rather than requiring emitters to make overall reductions in GHG emissions, the Alberta system requires a 12 per cent reduction in GHG-intensity of their product.

That means that as long as a project or facility produces 12 per cent less GHG emissions per dollar or barrel of bitumen than it did in the baseline year, the overall carbon footprint of that project is free to grow.

“Alberta’s system is an intensity-based system, which means you can potentially increase your total emissions as long as your intensity goes down,” Philip Gass, a senior researcher at the International Institute for Sustainable Development, said.

Companies unable to make the 12 per cent reduction in energy intensity pay a $15 levy per tonne of GHG emissions.

Source: Pembina Institute

The Alberta system also allows for carbon offsets — the option to purchase the right to emit from other large emitters that have met their reduction targets. 

However, the flexibility provided to polluters in Alberta is both the system’s strength and weakness.

“The short answer is Alberta’s carbon levy has not been effective,” Horne said.

“But that is not an indictment of the system itself. The problem stems from the relatively weak parameters they’ve used to populate it.”

Alberta’s carbon levy may need to toughen up as international pressure to limit emissions grows.  

As the world prepares for the upcoming UN climate summit in late 2015, some countries have turned their attention to the oilsands, asking how Canada plans to curtail the resource’s growing emissions. A recent report argues development of the oilsands stands at odds with Canada’s climate targets.  

For more on Alberta's carbon levy read How Carbon Pricing Currently Works in Alberta from the Pembina Institute. For a more detailed analysis of the levy read Andrew Leach's analysis in the Canadian Tax Journal (pdf).

Image Credit: Kris Krug

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The B.C. government’s claim that LNG exports offer the “greatest single step British Columbia can take to fight climate change” is inaccurate in the absence of stronger global climate policies according to a new report released today by the Pembina Institute and the Pacific Institute for Climate Solutions.

Natural gas does have a role to play in a world that avoids two degrees Celsius in global warming, but only if strong emissions reduction policies are put in place in the jurisdictions that produce and consume the gas, says the report, LNG and Climate Change: The Global Context authored by Matt Horne and Josha MacNab.

“Natural gas is often described as a bridge fuel. The question is, how long should that bridge be?” says MacNab, B.C. regional director for the Pembina Institute, a national non-profit focused on transitioning Canada to a clean energy future.

“Our research suggests it must be very short if we’re going to be able to get off the bridge in time to avoid the worst impacts of climate change.”

If strong climate policies were put in place to avoid reaching more than two degrees of warming, the burning of natural gas would peak by 2030 and drop below current levels by mid century, according to the report.

Under that scenario, energy efficiency, renewables and nuclear would increase significantly while the use of fossil fuels drops.

“It’s climate policy that will determine coal use, not the availability of natural gas,” MacNab says. “It’s not simply a question of LNG and coal swapping out for each other.”

The B.C. government’s claim, which was made during the February 2014 throne speech, is premised on two assumptions.

The first is that natural gas is cleaner than coal. On that point, MacNab said that in most cases natural gas is 10 to 40 per cent cleaner than coal assuming that methane is safely managed. However, the Pembina Institute report also notes that there “remains material uncertainty” about the life cycle emissions of natural gas that requires additional research.

The second assumption the B.C. government makes is that LNG will replace coal.

“In a world with weak climate policy, natural gas will not reduce coal use,” says Horne, B.C. associate regional director for the Pembina Institute. “Without a global push for low carbon energy sources and efficiency, LNG will likely worsen rather than ease global warming.”

The institute’s findings are in line with a report published last week in Nature, which found that cheap abundant natural gas will actually delay any efforts to reduce carbon emissions.

B.C. Needs to Put Emissions Reduction Policies Before LNG Strategy

To draw its conclusions, the Pembina Institute report compares the role of natural gas under two different scenarios: one in which global warming is limited to two degrees Celsius and one that stays on the business as usual path. The comparison yields two very different roles for natural gas — either as part of an energy mix that helps avoid dangerous climate change or as part of an energy mix that accelerates the world down the path to dangerous climate change.

“Instead of leading with LNG and natural gas strategies, jurisdictions — B.C. included — need to lead with emissions reduction policies,” the report says.

To avoid more than two degrees of warming and keep atmospheric concentrations of greenhouse gases below 450 parts per million, the International Energy Agency says policies need to include economy-wide carbon pricing, the phase out of fossil fuel subsidies, emissions standards on power plants and a renewable transportation fuel standard.

The Pembina Institute makes three recommendations to the B.C. government to increase the chances that B.C.’s LNG industry can be part of the solution, rather than part of the problem, including applying an evidence-based approach in assessing energy exports, strengthening domestic efforts to reduce emissions from natural gas and LNG development and playing a more proactive role on climate change and methane management globally.

If strong climate change policy was enacted on a global level, natural gas use would peak by 2030 — just 15 years from now. What does that mean in terms of B.C.’s plans to build an LNG industry?

“We would encourage the B.C. government to be thinking about that in terms of the long-term sustainability of the industry,” MacNab says. “B.C. ought to be careful in hitching its economic wagon to a resource that will decline in a carbon-constrained world."

Photo: Christy Clark at LNG Canada announcement via Province of British Columbia on Flickr

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One of British Columbia’s most effective climate regulations is at risk.

Even though fuel providers make more profit off drivers in B.C. than anywhere else in Canada, industry is requesting the province review low-carbon fuel standards, which require vehicle fuels to become cleaner.

As energy experts recently wrote in an op-ed for the Vancouver Sun, B.C.’s policy has been effective at cutting greenhouse gas (GHG) emissions from vehicles without people even noticing a change in their lifestyle.

Most British Columbians don’t even realize their fuel is becoming cleaner. By all accounts, the clean fuel rules have been a quiet success story.

And yet, those rules have come under threat.

Fuel providers in B.C. are asking the provincial government to review its ‘renewable and low-carbon fuel regulations.’

According to John Axsen, professor of sustainable energy at Simon Fraser University, some fuel providers “want the B.C. government to weaken [the policy].”

But fully one-quarter of B.C.’s recent success at reducing climate pollution is due to ramping up the use of low-carbon fuels.

In fact, each year low carbon fuels have kept roughly 900 kilotonnes of carbon emissions from entering the atmosphere. This has reduced the province’s GHG impact by the equivalent of 190,499 passenger vehicles or all passenger vehicles in the city of Vancouver.

Yet, certain fuel providers claim the rules are uneconomic and are requesting the provincial government review the low-carbon policy.

B.C. pays more for fuel than anywhere else in Canada

Critics have been quick to point out the oil and gas industry is especially profitable in British Columbia:

As the chart above demonstrates, the petroleum industry makes more profit from Vancouver drivers than drivers in any other city in Canada — almost double the national average.

B.C. consumers would have saved $905 million since 2010 if oil companies in B.C. had made the Canadian average profit (for both refining and selling gasoline and diesel) according to data gathered from Statistics Canada.

Despite gaining nearly a billion dollars since 2010 in “extra” profit in B.C., industry is still lobbying against B.C.’s clean fuel rules.

According to Matt Horne, B.C. associate regional director with the Pembina Institute, a clean energy consulting and advocacy group, the province held a workshop with industry representatives around one year ago to discuss the fuel regulations.

“There were lots of concerns expressed that companies weren’t able to comply with the policy,” he said.

“To the extent I’ve looked at it, the concern as I understand it is that it’s not economic to comply with the policy.”

Horne says representatives with the province and with low-carbon fuel providers have argued the policy is in fact economic and works well as it’s intended: as a long-term strategy.

“This policy gives B.C. the ability to plan going forward. It’s a long-term policy, it has a ten-year time stamp and it has a lot of flexibility,” Horne said.

“There are lots of ways to comply with the policy as long as companies get their carbon down.”

He added B.C. has committed to the Pacific Coast Action Plan on Climate and Energy.

“The province made a pretty clear commitment to Washington, Oregon and California that it’s going to stay committed to its low-carbon commitment and I think it will stick to that.”

“I think Washington, Oregon and California are expecting the same,” he said.

Industry pushback

According to B.C.’s Ministry of Energy and Mines spokesperson David Haslam, “petroleum suppliers have expressed concerns regarding their ability to comply with existing standards given options currently available.”

Haslam told DeSmog Canada the review is intended to “identify how to best enable and support compliance.”

”This past spring, the province conducted a thorough consultation process to review the ability of fuel suppliers to comply with existing standards,” Haslam said, “given the options currently available for generating low-carbon fuel credits.”

He said the province will release a report and recommendations based on consultation “shortly.”

Industry can’t afford clean fuels?

The oil and gas industry in B.C. is suggesting it cannot afford low-carbon fuel rules or that such rules are unrealistic, following a pattern of pushback already seen in both Oregon and California.

In fact both the American Petroleum Institute (API) and the American Fuel and Petrochemical Manufacturers (AFPM) launched legal challenges against the U.S. Renewable Fuel Standard in 2012, calling renewables “phantom fuels.”

The API even sued the U.S. Environmental Protection Agency over a minimum renewable fuel requirement in the U.S. transportation fuel supply.

Canadian oil industry groups have also pushed back against mandatory low-carbon and renewable fuel requirements. In 2011, the Canadian Petroleum Products Institute (CPPI) criticized the federal government’s biodiesel requirements as ‘unfeasible.’

The Canadian Fuels Association maintains “new fuel standards and specifications should be based on sound science and credible cost-benefit analyses,” indicating a strong concern with profitability for industry. When it comes to renewable fuels such as biodiesel, they state “wishful thinking will not get us there.”

It’s worth noting a full 75 per cent of the emissions avoided in B.C. due to the fuel standards resulted from the use of biofuels.

Member companies of the Canadian Fuels Association, which include Husky Energy, Imperial Oil, Shell and Chevron, overlap with both the API and AFPM, which are active in fighting low carbon and renewable fuel standards in the U.S.

Oil industry controls access to markets

Only five companies control 85 per cent of crude refining capacity in Canada. Those companies include Suncor, Imperial Oil, Irving and Shell.

University of Alberta economist Andrew Leach summarizes the ways to deal with this “oil-igopoly:”

“If you want to decrease refinery margins, the only guaranteed ways to do it are by increasing the elasticity of gasoline demand through more public transit, denser communities, more flexible work environments, or by deploying alternative energy sources for means of transportation.”

This last point, “deploying alternative energy sources for … transportation,” is exactly the purpose of the clean fuel rules that are now under threat.

This summer, the B.C. government announced the province met its 2012 climate targets, reducing greenhouse gas pollution even as the economy grew — challenging claims that putting a price on carbon weakens the economy.

Overwhelming public support for clean fuels, climate action in B.C.

Luckily in B.C., good economic management and public opinion agree.

Fully 88 per cent of British Columbians support the clean fuel rule and in a succession of recent polls, a strong majority of British Columbians think hitting the province’s GHG targets is a priority and we should transition off fossil fuels to clean sources of energy.

As for the provincial government itself, not only has B.C. brought in a number of regulations to reduce the province’s contribution to climate change since 2007, it also remains committed to the western states to align carbon pricing efforts and deepen actions to address climate change, including low-carbon fuel standards.

The oil and gas industry has successfully requested the province review the low-carbon fuel standards and elected officials are scheduled to consider the review and recommendations this fall.

Industry is often successful at forcing quiet ‘technical’ changes to important regulations that weaken strong policy.

If B.C. wants to stand behind its climate commitments, it will also have to stand behind its clean fuel regulations.

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Thirty-one years ago, when the Site C dam in B.C.’s Peace Valley was rejected for the first time, BC Hydro was told to investigate alternatives sources of energy, specifically geothermal energy, by the B.C. Utilities Commission.

But the Crown corporation has utterly failed to do so, according to the report of the joint review panel on the Site C project, released last month.

Ken Boon, a Peace Valley farmer whose land would be flooded by the dam, pointed this out to the panel, noting that somehow “we’re back here now 30 years later and still talking about the dam.”

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The panel doesn’t mince words on the province’s failure to investigate alternatives.

“The low level of effort is surprising, especially if it results in a plan that involves large and possibly avoidable environmental and social costs,” it writes.

The $7.9-billion dam would flood 107 kilometres of the Peace River and its tributaries, threatening endangered wildlife and putting farmland under water.

Why haven’t alternatives been researched? The panel points the finger at the government’s lack of funding for geological exploration, while outlining a culture of complacency fuelled by plentiful, low-cost electricity.

But times have changed, the panel says, and failure to ramp up exploration of alternative renewable sources a decade ago is hurting the province now: “The panel concludes that a failure to pursue research over the last 30 years into B.C.’s geothermal resources has left BC Hydro without information about a resource that BC Hydro thinks may offer up to 700 megawatts of firm, economic power with low environmental costs.”

With the largest public expenditure of the next 20 years on the table and a lack of clear demand for the Site C project, a serious look at the alternatives is in order.

Someday, a growing B.C. population will need more energy. “The question is when,” the panel writes. “A second question is what alternatives may be available when that day comes.”

Geothermal offers alternative reliable source of power

Even with next to no research, BC Hydro has estimated geothermal energy could replace two-thirds of Site C’s power.

Canada is currently the only major country located along the Pacific Rim’s Ring of Fire not producing geothermal energy. A Geological Survey of Canada report recently noted that northeast B.C. has the “highest potential for immediate development of geothermal energy” anywhere in the country.

The advantage of geothermal power over other types of renewable energy is that it’s considered a “firm” source of base load power, comparable to a hydro dam. The United States has about 3,400 MW of installed geothermal capacity.

“The wind doesn’t always blow and the sun doesn’t always shine, but the earth is providing heat at a constant rate,” explains Grant Van Hal, a senior policy advisor for the Canadian Geothermal Energy Association (CanGEA).

During the Site C hearings, the association argued geothermal energy offers more jobs spread through B.C. and First Nations, less transmission upgrade costs, fewer environmental impacts and the planning flexibility to follow the actual demand growth in the provincial system.

Despite this potential, the panel noted that BC Hydro reported its current investment in geothermal research as under $100,000 a year.

“We don’t really have funding to do R&D… In fact we’re expected not to do that,” BC Hydro said at the hearings.

However, the Clean Energy Act states it is a provincial objective “to use and foster the development in British Columbia of innovative technologies that support energy conservation and efficiency and the use of clean or renewable resources.”

The panel doesn’t overlook this contradiction and raises several issues with it — chiefly that “if BC Hydro is to continually scan the resource and technology horizon for future supply and conservation possibilities, it must have a budget and a mandate to do so. Without these, long-term planning is seriously uninformed.”

In an effort to prevent future decision-makers from also being “seriously uninformed,” the panel re-iterates what was said in 1983:

The Panel recommends, regardless of the decision taken on Site C, that BC Hydro establish a research and development budget for the resource and engineering characterization of geographically diverse renewable resources.

Next, in one of the panel’s more pointed remarks, the report reads: “If the senior governments were doing their job, there would be no need for this recommendation.”

Building new supply bit by bit reduces costs

Despite the lack of detailed information for B.C., based on costs in other jurisdiction, the panel is able to say that geothermal power is available at a similar cost to Site C — and is more flexible.

“These sources, being individually smaller than Site C, would allow supply to better follow demand, obviating most of the early-year losses of Site C,” the report says.

That’s a point re-iterated by Paul Kariya, the executive director of trade association Clean Energy BC.

“Times have changed. We’ve been through an era of building big dams,” he told DeSmog Canada. “When you build a dam, you get this one massive lump of power and that’s not the way that energy is planned for anymore.”

This part of the Peace Valley would be flooded if the Site C dam is built. Credit: Graham Osborne.

While much has changed, some things haven’t.

“One of the things that hasn’t changed is governments of all stripes like mega projects,” Kariya says. “Site C is potentially the last mega hydro dam project in B.C. They’ll want it there as a potential.”

Matt Horne of the Pembina Institute, a sustainable energy think tank, says predicting future power demand is an uncertain game.

“One of the uncomfortable parts of Site C, is that you’re saying, ‘This is where demand is going to be at in 15 years,’ whereas other options … are much more scalable and can be matched to demand over time,” he says.

“That way, if we end up in a scenario where demand doesn’t increase as fast as BC Hydro is predicting, we don’t have to overbuild, whereas with Site C it’s one big block.”

A study commissioned by the Treaty 8 First Nations, “Need for, Purpose of and Alternatives to the Site C Hydroelectric Project,” found Site C is not a cost-effective solution to meeting BC Hydro’s forecast needs for additional energy and capacity. Study author Philip Raphals of the Helios Centre found that when compared to alternative portfolios built as needed to meet demand, the dam comes out as the most expensive of alternatives.

But what about natural gas plans?

Some of the bigger uncertainties in terms of electricity demand are around the scale of resource development, particularly the liquefied natural gas (LNG) industry. That’s because each large LNG terminal, if run entirely by electricity, would require an entire Site C dam to power it.

However, the panel found large LNG plants are likely to be powered by natural gas directly (because they’ve been given an exemption from the Clean Energy Act) and, even if they did use electricity, the power would be required before Site C became operational.

The panel seemed unimpressed by B.C.’s double-standard on the topic of burning natural gas for electricity (much more on that coming later in this series).

“LNG developers have been promised a free hand to burn their gas here for their own purposes, but BC Hydro has been denied the same privilege,” the panel wrote.

Cost of renewables dropping rapidly, cost of dams increasing

Merran Smith, executive director of Clean Energy Canada, says the cost of renewables has gone down rapidly in the past five years, with solar costs dropping 80 per cent and wind costs dropping 35 per cent.

“And we only see those lines continuing down, so a decade from now, the cost one will assume will be lower,” Smith told DeSmog Canada. “Whereas the cost for building large dams is only going up.”

After conserving as much as possible, it makes most sense to build new electricity supply where it’s needed, Smith says.

“There’s renewable potential all over this province, so rather than having one large dam in the north with a huge transmission line, we can create renewable energy in the regions where it’s needed,” she says.

Given this, Smith questions whether Site C is the best path forward for British Columbians.

“Why would we lock ourselves into a very expensive large dam when we could build units in clean, efficient renewable energy as we need it and where we need it?”

Photo: “Geothermal borehole house” by Lydur Skulason via Flickr

The Narwhal’s reporters are telling environment stories you won’t read about anywhere else. Stay in the loop by signing up for our free weekly dose of independent journalism.