By Discourse Media with additional reporting from Carol Linnitt.

Members of the Lax Kw’alaams First Nation in northwest B.C. were given an extremely short amount of time to respond to an opinion poll that asked if they support energy development in their territory.

The polling followed a series of four information sessions held by the band council in June, focused on plans for liquified natural gas (LNG) development. At the information sessions, band members were presented with a proposed package of benefits that hinge on them voicing their support for the contentious Pacific NorthWest LNG (PNW LNG) project at the mouth of the Skeena River.

Community members are concerned because the polling question did not explicitly reference the PNW LNG proposal, which includes plans to develop the company’s LNG terminal on Lelu Island, near Prince Rupert. Other concerns about the poll that have been flagged by band members include missing forms in packages mailed to them and misinformation included in the proposed agreements package.

Biased Process

The poll question was framed and composed in a way that was likely to push respondents toward answering a particular way, says David Moscrop, a political scientist and PhD candidate at the University of British Columbia. “The implication is, ‘Don’t worry about the environmental impact; assume it will be fine . . . Are you okay with [development]?”

Moscrop says the structure of the question makes him suspicious of the intent behind the poll. “If you’re not going to do it properly, why are you doing it? Is it because you want to legitimize something you intend to do either way?” he asks.

The question itself, the timeline of the poll and location of the polling stations were all decided by the band council, according to Lawrence Lewis, an independent electoral officer hired by the Lax Kw’alaams band to oversee the process.

Ballots were mailed to all community members both within Lax Kw’alaams and living outside of the village, says Lewis. Members also had the chance to vote in person at polling stations in Lax Kw’alaams and Prince Rupert.

On August 25, The Lax Kw’alaams band council said they received 812 responses (1 spoiled) with 65.5 per cent (or 532 people) voting YES and 279 voting NO.

The mayor of Lax Kw’alaams, John Helin, wrote a message that said: “This is just another step in a process that could lead to the proposed Petronas project becoming a reality. We will have meetings with the appropriate parties (Petronas, Province, Federal Government) to see what the next steps are for this proposed project.”

Helin’s comments have led some to wonder if the poll, which didn’t mention PNW LNG by name, may be used as a de facto referendum for the project despite not being presented to the community as a binding vote.

Which may be how the B.C. government views the poll’s results.

The province released a statement thanking the community for the “positive vote” and Rich Coleman, B.C.’s Minister of Natural Gas Development, congratulated the community for voting to continue talks with government.  

Lax Kw’alaams Pacific Northwest #LNG Poll Raises Questions About #FirstNations Consultation https://t.co/Io16H27zAT #bcpoli

— DeSmog Canada (@DeSmogCanada) September 1, 2016

Misleading Information

Discourse Media obtained the proposed benefits package that was presented at four community information sessions in June. It includes misinformation about the nature of an infrastructure project granted to the community last year, as previously reported.

The $22-million paving of Tuck Inlet Road, the only road into Lax Kw’alaams, is presented as an incentive for the community to support LNG on Lelu Island. But the project was negotiated by the band’s previous mayor, Garry Reece, who says paving Tuck Inlet Road was never tied to any LNG proposal. In the proposed benefits package it is referred to as “work started by Provincial Government as an inducement for good faith negotiations on LNG.”

While Moscrop calls into question the intent of the poll, community member and activist Christine Smith-Martin says the question is too vague and should simply ask members to say yes or no to development on Lelu Island. “It’s like writing a blank cheque. They want us to sign a blank cheque that allows them to do whatever it is they want to do,” she said.

Smith-Martin also raised concerns about the execution of the poll. She said members of her family received their ballots without the necessary First Nation Declaration Form.

In order for a ballot to be counted, they had to be  returned with a signed First Nation Declaration Form which stated: “I solemnly affirm that I am an eligible Elector of the Lax Kw’alaams Nation at the address listed below and that I am at least 18 years of age.”

Lewis acknowledges the initial mistake but says all members have now received the declaration form. When asked about concerns regarding the short timeframe of the poll, the framing of the question and the lack of polling stations in Vancouver or Terrace — where many Lax Kw’alaams members reside — Lewis deferred to the band council, saying he could only speak to the process, not how these decisions were made by the Lax Kw’alaams band.

Community Left Feeling Confused, Angry

Other concerns include the information sessions that preceded the polling. The main point of contention relayed by people who attended those meetings was the highly technical nature of the presentation, which many saw as one-sided and biased in favour of supporting Pacific Northwest LNG.

Community member Sandra Dudoward says the current poll was not handled as well as a previous canvassing of community views about the project. Dudoward was referring to a series of votes that drew international headlines in May 2015. Lax Kw’alaams voted against supporting PNW LNG in exchange for a $1.2-billion benefits agreement offered by Petronas, the Malaysian-based energy company behind the project.

Dudoward says she was given a month’s notice to prepare for that vote. This time around, she was given about a week. She found out about the vote on Aug. 16, and had to call to request an emailed ballot. The poll required that all ballots be received by mail before Aug. 24 or delivered in person at one of the polling stations in Lax Kw’alaams or Prince Rupert.

Dudoward worries that the timeframe of the poll was too short and might have affected voter turnout. She also wondered why the band hired an electoral officer to oversee the process given that the polling seemed informal and the question vague.

Despite the question not being explicitly about PNW LNG, the local Prince Rupert newspaper, The Northern View,  seemed to confirm suspicions that the poll be seen as just that. “Lax Kw'alaams members vote 'Yes' to ongoing talks with PNW LNG,” said The Northern View’s August 25 on-line headline.

Against Autonomy

For political scientist David Moscrop, the issue is bigger than just the poll and its outcome. He sees it as a larger affront to the democratic process that works against the movement towards Indigenous autonomy.

“If we’re saying that there is a legacy of colonialism and exploitation and stripping people of their power and their right to self-determination, then we should be even more sensitive that there are groups that might be doing that again,” he said.

Image: Ash Kelly

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The spectre of a massive, floating LNG plant in environmentally fragile Saanich Inlet may seem unlikely to gain environmental approval, but the proposal must be defeated before liquefied natural gas prices increase to the point that the project becomes too tempting, worried southern Vancouver Island residents are being warned.   “It is best not to let your guard down and say the economy is not good right now,” said Eoin Finn, founder of My Sea to Sky and a retired partner in KPMG, who holds a PhD in physical chemistry.   Proposals by Steelhead LNG Corp. for a floating plant anchored adjacent to Malahat First Nation land at Bamberton, fed by gas pipelines criss-crossing the Salish Sea and then snaking across Vancouver Island to Sarita Bay near Bamfield, where the company wants to build a larger LNG plant on Huu-ay-aht First Nation land, were initially greeted with incredulity.   However, last October, the National Energy Board approved export licences for Steelhead to export up to 30 million tonnes of LNG per year for 25 years, with six million tonnes from Malahat and the remaining 24 million tonnes from Sarita Bay.

There are currently 20 proposed LNG projects in B.C. although none have received final investment decisions. Three projects, including LNG Canada in Kitimat, Pacific Northwest LNG near Prince Rupert and Woodfibre LNG near Squamish, have advanced beyond the proposal stage but a combination of low prices, First Nations opposition and federal permitting have prevented the industry from gaining a major foothold in the province.

“The NEB seems to hand out export permits like confetti at a wedding,” Finn told capacity crowds at meetings in Esquimalt and Mill Bay.   It is not only the Steelhead plant itself — which would be the first floating LNG terminal in the world — that should worry southern Vancouver Island residents, they should also consider the massive ships, about the length of three football fields, that would pick up LNG, Finn said.   The ships suck in vast amounts of seawater to cool the frozen gas, which means phytoplankton and small fish are also sucked in, making “the biggest bouillabaisse engine of all time,” Finn said.   “Then they blow it out again and, because they don’t want anything fouling the pipes of their very expensive ship they add a little biocide into it,” he said.

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“That means 50,000 tonnes of hypochlorited hot water poured into the Inlet every year, making it into a marine desert.”   Or, think about the greenhouse gas emissions, Finn suggested.   “It would be like adding 400,000 cars a year to the Malahat.”   Saanich Inlet, a glacially-carved fjord with deep water that is oxygen-depleted for much of the year, has been studied by scientists for 80 years because of the rare ecosystem that produces phytoplankton blooms. It is home to shellfish, herring, salmon and many other species and currently houses the Ocean Networks Canada VENUS (Victoria Experimental Network Under the Sea) cabled undersea laboratory.

VENUS Laboratory in the Saanich Inlet. Photo: Ocean Networks Canada.   It is flanked on one side by the winding Malahat highway, dotted with numerous small communities, and on the other side by Saanich Peninsula, with villages such as Brentwood Bay, tourist attractions such as Butchart Gardens and Victoria International Airport. At the tip of Saanich Peninsula is the busy Swartz Bay Ferry Terminal.

Steelhead CEO Nigel Kuzemko said one of his priorities is ensuring that there will be no detrimental effects on Saanich Inlet, so the company has commissioned a study that will model the effect of one LNG ship a week picking up gas from the floating plant.   Using seawater for cooling the giant LNG thermos tanks is more efficient than air and will produce less greenhouse gas emissions, he said.   “But the water comes out warmer which is what we are concerned about and we want to know what the effect will be on Saanich Inlet,” Kuzemko said.   A chemical will be used to stop bacteria growing in the pipes, he said.   “We are looking at different ones, but they will all be biodegradable so they don’t have any long-term impact,” he said.   Saanich Inlet is a unique area, but has had its share of industrial activity over the last 100 years, Kuzemko said, pointing out that the area where the plant would be situated is beside the old Bamberton concrete plant, where the bottom of the Inlet is covered in concrete dust.   Information compiled in the study would be needed for the environmental assessment process, but Steelhead wanted to get out in front and ensure all the questions were answered and that the community had been consulted from the start, Kuzemko said.   “We hope to do it the right way, but, some people think any energy project is wrong,” he said.   “What we are trying to do is something that we think is great for the world. There’s no reason industry and Saanich Inlet can’t co-exist.”   The aim of reducing the environmental footprint is the reason Steelhead has chosen to use existing pipeline routes, meaning the route wends from B.C., across the Strait of Georgia to Washington and then back to Saanich Inlet, rather than cutting across an untouched landscape over the Coast Range mountains, Kuzemko said.

Adam Olsen, B.C. Green Party deputy leader, who lives 100 metres from Saanich Inlet and grew up on Saanich Peninsula, fears that the belief such a proposal will automatically be rejected is resulting in apathy, which could allow Steelhead to slip through the approval process.   Even though the project is unlikely to be viable at the current price of LNG, many options open up once the company is given a certificate, he said.   It could be sold or put on stand-by for the future, so the focus has to be stopping it at this stage, said Olsen, who believes the provincial government is likely to be in favour.   “This government has basically bet everything they have on LNG and they are also the regulator,” he said.   “I don’t think we can have any confidence that, just because the project appears to be outrageous, that this government won’t look at it seriously.”   Olsen is a member of Saanich Inlet Network, a group formed to fight the LNG proposal, which, during the last week, has collected almost 500 signatures on a petition asking provincial Environment Minister Mary Polak and federal Minister of Natural Resources Jim Carr to reject the Malahat proposal.   Investigative energy reporter and author Andrew Nikiforuk, who has written extensively on LNG, worries that, if Steelhead builds the plants, there will be a push to extract methane from the many coal seams around Vancouver Island.   “A company which has spent billions on LNG terminals will want to keep those facilities full and there’s a lot of methane in old coal seams on the Island,” he said.   “It could mean fracking in watersheds full of salmon.”   However, Finn believes that using methane from coal seams would not be tolerated even if the company is given approval for the plants.   “The coal seams are very close to the surface and any government that gave a company the right to frack so close to people’s drinking water would be hung, drawn and probably quartered,” he said.   It is not yet known whether the 300-member Malahat First Nation will continue to support the project following the election of a new chief and dismissal of three top economic development officials as part of a review initiated by new Chief Caroline Harry.   The agreement-in-principle was signed while former chief Michael Harry was in power and has raised the ire of some of the other four First Nations with land surrounding Saanich Inlet, who say they were not consulted.   Caroline Harry, who could not be reached before publication, said shortly after her election in November that she would reach out to Tsartlip, Tseycum, Pauquachin and Tsawout. Without Malahat support it is doubtful whether the project could proceed.

Steelhead has been talking to Malahat First Nation for 18 months, said Kuzemko, who does not believe there is any reason to think the relationship has changed with the election of a new chief and council.   “It’s going great actually. There are different concerns and a different environment with a new chief and council, but we will work with them,” he said.   Steelhead’s timeline calls for a final investment decision to be made in 2018 and, as with other companies looking at investing in LNG export plants in B.C., economics are likely to be a major factor.   Currently the LNG Asian spot price per million British thermal units is $5.72 and studies indicate that LNG prices are likely to remain low into the 2020s.   That means building LNG plants in B.C. makes no sense as the cost of fracking, transportation, capital costs, liquefying the gas and then shipping it to Asia would be about $12 per million British thermal units, Finn concluded after crunching the numbers.   However, Natural Gas Development Minister Rich Coleman said studies being used by the B.C government show that there will be a worldwide shortage of LNG within four or five years and, as it takes about four years to build an LNG plant, B.C. is well-positioned for developing a thriving LNG industry.   “If the demand is larger than the supply, the price will start to creep back to an economic level,” he said.   Kuzemko knows there are many hurdles before the project can start.   “B.C. is the most arduous location in the world to get approval,” he said.   “We know this project has to be community-based from the start. We are trying to do things in a different way.”

Image: Saanich Inlet by Lotus Johnson

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The Canadian Association of Petroleum Producers (CAPP) is asking the Harper government to consider reclassifying liquid natural gas (LNG) terminals as ‘manufacturing assets’ to provide tax breaks to companies struggling to develop costly facilities in the current oil market.

The oil and gas industry requested similar measures for both previous federal budgets but has so far been unsuccessful. The upcoming budget, however, is under the control of finance minister Joe Oliver, know for his strong support of the oil and gas sector during his time as the former minister of Natural Resources Canada.

In a budget submission to the House of Commons Standing Committee on Finance, CAPP requested “improving Canada’s taxation and regulatory regimes” and noted the federal government can assist industry “by establishing a competitive tax climate to attract investment [and] maintain an effective and efficient energy regulatory regime,”

If granted, the tax breaks – which would allow companies to forego paying 30 to 50 per cent of capital costs per year – could cost the federal government hundreds of millions of dollars.

A Natural Resources Canada memo released to Reuters through Access to Information legislation says the department “understands the need for clarity on the fiscal environment for LNG facilities to support final investment decisions.”

“We have examined CAPP’s proposal…and continue our discussions with the department of finance on the matter,” the memo reads.

The department of finance is expected to release the next federal budget this spring. Major budgetary decisions are made in consultation with the Prime Minister’s Office.

According to Reuters CAPP estimates the tax breaks would add roughly $3 billion to Canada’s gross domestic product from 2015-2035.

B.C.’s fight to fulfill LNG promises

The B.C. Liberal government and premier Christy Clark have made the development of natural gas and the export of LNG a key part of the province’s clean energy platform and economic strategy.

In 2010 the province committed to having one LNG terminal on line by 2015 with three more to follow by 2020. The province eventually updated that commitment to three LNG facilities in operation by 2020.

There are at least 18 LNG terminals proposed for the B.C. coast although a new report recently speculated only two plants will be built due to an “anxiety attack” resulting from plummeting oil prices.

None of the proposed projects has secured full and final investment from sponsors leading firms to predict B.C. may only manage to bring one project on line by 2021, followed by a second in 2023.

Despite the challenges, the B.C. government says they are still on target to meet their current 2020 goal.

B.C.’s minister of natural gas and development, Rich Coleman, admitted in October that his office, along with officials in Alberta, is pushing the federal government to approve the LNG tax breaks. “We’re cooperating with Alberta to try and get this issue raised,” Coleman told Bloomberg.

Colman indicated that B.C. has been vying for a more favourable tax regime for LNG since 2012, but has increased its efforts in the lead up to the 2015 budget because of an increasingly open federal environment.

“There’s nothing concrete, although there is more interest in having the conversation around this tax than there’s ever been,” he said.

B.C. has already introduced two provincial tax breaks for LNG companies. In October the B.C. Liberals announced an LNG income tax rate of 2.5 per cent, down from the former 7 per cent. In addition the province also introduced a new program that will allow companies to drop their corporate income tax rates to 8 per cent, down from 11.

In December Malaysia’s Petronas and its Asian partners, backed away from a proposed LNG terminal, citing low oil prices and high building costs.

The company is part of the B.C. LNG Developers Alliance along with Royal Dutch Shell, BG Groups and Chevron. The Alliance recently petitioned the federal government to support the tax break.

According to federal lobby records, Petronas has been actively lobbying a number of federal departments to solicit support for the new tax regime. Records show Petronas lobbyists engaged in discussions related to the “competitiveness of Canadian LNG projects” and “the appropriate tax policies to support LNG development in Canada.”

Petronas has been pushing the federal government to relax LNG taxes for months.

Given the poor economic environment and B.C. late entry to the LNG market, companies like Petronas – and their main investors – appear to be waiting for a friendlier financial environment.

In a recent report the risk-management consultancy firm Eurasia Group said, “monitoring both oil prices and cost mitigation in coming months will be crucial to determine whether Petronas could still take its investment decision in 2015.”

“If not, it will be unlikely that B.C. would see major LNG production from a mega project before 2020.”

Cuts will cost taxpayers

According to Kin Lo, associate professor at the UBC Sauder School of Business, the change in tax law will ultimately end up costing taxpayers.

“The significance from the federal budget and the taxpayers’ point of view is that [these tax breaks] really can lead up to a lot of money coming, really, out of taxpayers’ pockets.”

“I think companies are pushing for this because they are in a way obligated to in terms of maximizing value for their owners and shareholders,” Lo said. “From their point of view they should try to get this beneficial change in the tax law that would favour them.”

“As to whether it’s justified – that’s a completely different question,” he added.

Reg Plummer, a senior economist recently retired from Natural Resources Canada, told Reuters the tax breaks would mean major losses for the federal treasury. He added the push for LNG development may also raise questions about Canada’s commitment to phase out fossil fuels.

“Finance (department officials) would be looking hard at that because these are serious bucks we’re talking about,” Plummer told Reuters. “It’s sort of helping out (companies) a little bit with some risk, but it’s not going to be a make or break for them.” 

Image Credit: Province of B.C. via Flickr

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Last year B.C. joined Washington State, Oregon and California in an effort to limit the causes and effects of climate change. A new poll released today shows British Columbians are eager to see the government keep its commitments under the Pacific Coast Action Plan on Climate and Energy.

The climate plan was designed to respond to “the clear and convincing scientific evidence of climate change, ocean acidification and other impacts from increasing carbon dioxide in the atmosphere, which threaten our people, our economy and our natural resources.”

The plan was signed in 2013, with little fanfare. Yet, residents of B.C. strongly support the initiative, and the government’s commitments to limit carbon pollution.

But with the B.C. government’s big ambitions to develop and export liquefied natural gas (LNG), there appears to be a conflict brewing within the province’s own objectives.

Today’s poll, commissioned by the Pembina Institute, Clean Energy Canada and the Pacific Institute for Climate Solutions (PICS) was conducted by Strategic Communications and shows British Columbians want to prioritize five things:

1.     Transition to energy efficient buildings (91%)

2.     Hit our climate targets (89%)

3.     Maintain low-carbon fuel standard (88%)

4.     Increase electric vehicles in government and company fleets (82%), and

5.     Continue the carbon tax (69%)

So far B.C. has been successful at limiting its carbon emissions. The province has a commitment to limit emissions 33 per cent below 2007 levels by 2020 and 80 per cent below by 2050.

In 2012 the province met its interim goal of being 6 per cent below 2007 levels. The next interim goal comes up in 2016, when the province plans to be 18 per cent below 2007 levels.

But, given the province’s massive push to develop its natural gas resources and build several LNG facilities to liquefy and export the gas to Asia, experts are concerned B.C. may be in danger of failing to meet those targets.

B.C.’s failed ‘clean’ LNG promise

The B.C. Liberal government has made the development of the province’s natural gas deposits and the export of LNG a strong part of its clean energy platform.

In 2010 the province committed to having one LNG plant in operation by 2015 and three more to follow by 2020. Initially the government pledged to have these plants run on clean energy, but has since exempted LNG plants from this requirement, confusing exactly what ‘clean’ LNG might mean.

In 2012 Premier Christy Clark promised to deliver “the cleanest LNG in the world” at the World Economic Forum in China. Within a year she clarified that her “cleanest” standards would only apply to LNG facilities, and not the extraction of gas via fracking or transmission of the resource to production plants.

Then recently Rich Coleman, the provincial minister responsible for natural gas development, told the Globe and Mail the B.C. government would now only be measuring B.C.’s LNG facilities against other facilities, meaning the “cleanest” LNG in the world only has to out-perform previously existing plants to meet the province’s standards.

Coleman also dismissed the previous goal of running LNG plants on clean energy, saying “the cost to deliver the power would be so expensive that it would be ridiculous to make the investment.”

Clean Energy Canada, however, would disagree. The group recently commissioned a feasibility study to determine the reliability and affordability of regionally sourced renewable power for B.C.’s LNG development.

They found “any LNG facility on the North Coast could primarily power its production facilities with renewable energy and do so reliably, affordably and on schedule – using established commercial technologies.”

Further, they found “doing so reduces that plant’s carbon pollution by 45 per cent, and increases local permanent jobs by 40 per cent.”

Kevin Sauvé from the Pembina Institute confirmed that B.C.’s LNG ambitions stand in conflict with its own climate targets: “Multiple analyses have shown that B.C. targets are not achievable if three LNG terminals are developed by 2020, as the government intends.”

“This highlights a tension between public opinion and current government priorities, and is something that government should address as it develops its LNG regulations and the next phase of the Climate Action Plan,” Sauvé told DeSmog Canada.

There are a total of 14 proposed LNG facilities for the central coast of B.C.

As DeSmog Canada previously reported, the gas industry is seriously underreporting fugitive methane emissions – a reporting error that threatens B.C.’s ability to meet its own targets under the Climate Action Plan.

Using standard industry fugitive emissions rates, B.C. natural gas production emissions are likely 25 per cent higher than reported.

Another poll, commissioned by the same three groups and released in April of this year, found 78 per cent of British Columbians want the province to shift away from producing, using and exporting fossil fuels and to make the transition to using cleaner sources of energy.

“Given British Columbians desire to see the province transition away from both using and exporting fossil fuels, a wholesale push for LNG does not make sense for B.C.,” Sauvé said.

“Particularly given that the government’s current plans for developing LNG will make it impossible for the province to hit its climate targets.” 

Climate action and a strong economy

An analysis from the group Sustainable Prosperity shows B.C.’s carbon tax is both an “environmental and economic success story.”

The carbon tax, according to Sustainable Prosperity, has been remarkably good at limiting fuel use since it was introduced in 2008. And there have been no adverse impacts on the B.C. economy to speak of.

While B.C. reduced its fuel consumption by 17.4 per cent, its GDP kept pace with the rest of Canada.

Stewart Elgie, professor of law and economics at the University of Ottawa and the report’s lead author said, “B.C.’s experience shows that it is possible to have both a healthier environment and a strong economy – by taxing pollution and lowering income taxes.”

Another new report from PICS shows that, despite the government’s decision to exempt the agricultural sector from the carbon tax, there is “little evidence that the carbon tax was associated with any statistically significant effects on agricultural trade or competitiveness.”

Even in areas where the carbon tax was assumed to have negative impacts, there appears to be little damage done.

“The first phase of BC’s climate action plan has been an environmental and economic success,” Sauvé said, “and now is the time to build on it.”

“Government needs to lay out a road map for how we will meet our 2020 climate target as part of the second phase of its Climate Action Plan. Following through on the commitments it’s made in the Pacific Coast Action Plan would be a good start, particularly as those commitments appear to be popular with British Columbians.” 

Image Credit: Rich Coleman speaks at the B.C. LNG Conference. Photo by the Province of B.C. via Flickr.

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Woodfibre LNG in Squamish has announced it will run its proposed liquefied natural gas (LNG) plant off electricity from the B.C. grid, rather than using natural gas  — making it the province’s first LNG producer to commit to do so.

Using electricity to power its cooling compressors will reduce greenhouse gas emissions by about 80 per cent and decrease local air pollution, according to the company.   “We sought input from the community at an early stage and ‘air quality’ was a top concern,” said Byng Giraud, vice president of corporate affairs for Woodfibre LNG. “Our engineers have now confirmed that going electric is indeed feasible, so the choice is a clear one.”

Woodfibre is a small-scale project about one-tenth of the size of the large projects proposed on B.C.’s north coast.

“It’s setting a great standard for the others to follow,” said Merran Smith, executive director of Clean Energy Canada. “If B.C. is going to develop an LNG industry then the carbon footprint of the industry has got to be as small as possible.”

Liquefying natural gas involves cooling gas to -162 degrees Celsius, at which point it turns into a liquid and shrinks in volume by 600 times, making it possible to transport on ships. However, this process takes enormous amounts of electricity.

Power company TransAlta estimates electricity demand from LNG facilities in B.C. could total 4,000 MW by 2018 — that’s about four times the power that would be produced by BC Hydro’s proposed Site C dam on the Peace River.

"Cleanest LNG in the world:" What does it mean?

In 2012, Premier Christy Clark told a World Economic Forum in China that B.C. has “set a goal to have the cleanest LNG in the world. We want our LNG plants to be principally fueled by renewables."

Rich Coleman, the minister responsible for LNG development, also said in 2012: “We’re trying to stay away as much as possible from having to use gas for power.”

This week, Coleman changed his tune, telling the Globe and Mail: “The cleanest means to me that we will beat any other gas-fired plant in the world.”

“That is Rich Coleman lowering the bar from what Premier Christy Clark and in fact Rich Coleman has said in the past,” Smith said.

She noted that if three of the larger LNG plants up north were to commit to using renewable energy instead of gas, it would reduce carbon pollution by the equivalent of taking three million cars off the road each year.

LNG can be powered by renewables: new study

Clean Energy Canada has argued that B.C. could create 400 more permanent regional jobs (a 45 per cent increase) and cut carbon pollution by a third without undermining competitiveness if it required LNG producers to primarily power their facilities with renewable energy instead of fossil fuels.

Coleman dismissed that idea this week, saying: “The cost to deliver the power [to a large LNG plant] would be so expensive that it would be ridiculous to make the investment.”

Clean Energy Canada disagrees. The group recently commissioned a feasibility study by Navius Research, a consulting company that has worked with the B.C. government, and Steve Davis & Associates, a firm providing British Columbia power developers with advice.

The study found that any LNG facility on B.C.’s North Coast could reliably power its production facilities with renewable energy — affordably and on schedule using established commercial technologies.

The study, to be released next week, also found powering an LNG plant via renewables would reduce carbon pollution by 45 per cent and increase local permanent jobs by 40 per cent.

“What we have modeled is using new renewables from the north coast,” Smith said. “It’s economically feasible and technically feasible. It will add a two per cent cost to the sale of gas, which in the world of gas is negligible."

A poll conducted by NRG Research Group in October 2013 found 91 per cent of British Columbians polled stated it was either “very important” or “somewhat important” that proposed LNG plants maximize their use of renewable energy.

Next week, 1,200 delegates from around the world will be in B.C. for the province’s second annual International LNG in B.C. conference. There are 14 LNG projects proposed for B.C., although only a handful are expected to be built.

Photo: Rich Coleman at revenue-sharing agreements announcement between the province and First Nations by Province of British Columbia

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Liquefied Natural Gas (LNG) development in British Columbia could produce 73 million tonnes of carbon pollution per year by 2020, according to the Pembina Institute. This would bring the carbon footprint of LNG development in B.C. to three-quarters as much as that of the oilsands, currently Canada's fastest growing source of climate pollution.

Alison Bailie of the Pembina Institute writes in The Tyee, that the estimate is at the "lower end" of the development scenario required to realize the B.C. government's hopes for annual revenue from LNG exceeding $4 billion. The province would need to produce four to six trillion cubic feet of shale gas per year by 2020 to reach that number.

The scale of that kind of natural gas production would require five to seven LNG facilities and over 10,000 wells with an accompanying network of roads, pipelines, compressors and gas processing plants.

Pembina's estimate for the industry's carbon pollution refers just to LNG production in B.C. This includes pollution from extraction and processing of the gas from shale gas fields, transportation of the gas to LNG facilities on the coast, and liquefaction and storage of the LNG until it is loaded onto carriers (tankers).

The figure doesn't take into account carbon pollution released from burning the natural gas in Asia, which could produce additional carbon pollution exceeding 200 million tonnes a year.

Image: From Pembina Institute infographic titled "British Columbia's LNG Boom."

B.C. has a legally binding target for carbon reduction which requires the province's annual carbon pollution from transportation, buildings, agriculture, forestry and other industry to be below 43 million tonnes by 2020, and below 13 million tonnes by 2050.

If B.C. sticks to its plans for LNG and ends up producing 73 million tonnes of carbon pollution from a single industry, there's little doubt that the province will miss its reduction target. Bailie notes that even Minister of Energy and Mines Rich Coleman, responsible for the province's natural gas development, admitted on CBC's Early Edition that "meeting our [reduction] goals will be a challenge" in the face of LNG development plans.

The B.C. government could, like other governments, choose to simply ignore or alter the reduction targets, or add special accounting for LNG. But with evidence of of the real-world impacts of missing reduction targets building up, including declining fisheries, flooded coastal communities and increasingly vulnerable forests in B.C., ignoring the target seems particularly unwise.

Provincial MLAs will be debating rules for carbon pollution and taxes for LNG development in the upcoming legislative session this month.

As Bailie points out, when it comes to LNG development, there are still options the province could take that wouldn't involve abandoning its climate commitments.

For example, the government could prioritize creating jobs in lower-carbon sectors like clean, renewable energy — a sector that is growing globally. This would reduce the need to expand LNG production for economic growth, and "less LNG development means lower carbon pollution with jobs and GDP growth elsewhere," writes Bailie.

Restricting LNG projects so as to make a smaller carbon footprint, instead of making as many plants as possible, would also significantly reduce the projected carbon pollution levels.

The BC government would also be better equipped to make choices on how to balance LNG projects with climate concerns if it undertook a strategic environmental assessment on LNG development, instead of separate assessments for each proposed project.

Following the success of the provincial carbon tax and establishing an LNG tax could encourage the industry to minimize its carbon pollution. Standards and taxes set by the government could also encourage innovative technology to aid renewable energy goals, such as capturing and storing carbon pollution at shale gas processing plants, writes Bailie.

If LNG development proceeds according to the B.C. government's current plans, it could create a climate challenge on par with the oilsands. But the government still has the option to limit the growth of the natural gas sector and control its carbon emissions, while prioritizing low-carbon job creation in the clean energy sector.

"The implications for our climate must be an important part of those decisions," writes Bailie, because "British Columbians will live with the consequences — whether positive or negative — in the decades to come."

Image Credit: Province of British Columbia / Flickr

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That revolving door just keeps on turning.

As the Vancouver Observer recently reported, Canada’s spy watchdog and former Conservative cabinet minister Chuck Strahl registered in December to lobby the B.C. government on behalf of Enbridge subsidiary Northern Gateway Pipelines L.P.

B.C. lobby records show Chuck Strahl Consulting Inc. registered to lobby Rich Coleman, B.C. Minister of Natural Gas Development, arranging meetings with Northern Gateway representatives to discuss the issues of “energy.” The registration runs until June 2014.

“I do some contract work for Enbridge,” Strahl told the Vancouver Observer. “I’ve registered just in case I arrange a meeting, but no meetings to report.”

The story has gained particular traction in light of November revelations regarding CSIS involvement in spying on opponents of the Northern Gateway pipeline.

High-level collaboration and information sharing between Enbridge, industry representatives, the RCMP, federal government departments and CSIS were discovered through documents released through Access to Information legislation.

The records, which revealed closed-door meetings sponsored by Enbridge, raised questions about freedom of conscience, government transparency, and the democratic process regarding the pending Northern Gateway pipeline, unquestionably Canada’s most contentious energy infrastructure project.

Strahl’s move from the public sector to the private has raised further concerns about the effectiveness of the federally imposed ‘cooling-off’ period meant to bar holders of public office from using former government relationships to advance private sector interests. Federal rules prevent former public officials from lobbying for five years, although the loose ban allows for minimal amounts — 20 per cent or less of the lobbyist’s time — after two years.

As a former federal office holder, Strahl is not prevented from becoming a B.C. registered lobbyist.

The revelation comes after questions have already been raised concerning Strahl’s relationship with the B.C. Liberal party and Premier Christy Clark, a conditional proponent of the Enbridge Northern Gateway Pipeline. Clark publicly thanked Strahl for the role he played in securing a Liberal victory in the 2013 B.C. election, although she later revoked the comment, after Strahl and the B.C. Conservatives claimed he remained non-partisan and arms-length from any party.

In June 2012 Strahl was handed the reigns of Canada’s Security and Intelligence Review Committee (SIRC), the federal body overseeing the nation’s most powerful spy agency, the Canadian Security Intelligence Service (CSIS). As chair of SIRC Strahl has access to all intelligence handled by CSIS, excluding cabinet secrets.

The SIRC website states: “Parliament has given CSIS extraordinary powers to intrude on the privacy of individuals. SIRC ensures that these powers are used legally and appropriately, in order to protect Canadians’ rights and freedoms.”

“It has the absolute authority to examine all information concerning CSIS activities, no matter how sensitive and highly classified that information may be.”

Taking the position of disgraced former SIRC chairman Arthur Porter, who is now serving a jail sentence in Panama for unsavory business dealings including corporate conflicts of interest, the inexperienced Strahl was called an appointee of “pure patronage” at the time by reporter Brian Hutchinson.

Strahl’s position as chair of the board of the Manning Centre, a conservative political organization, led some to question his appropriateness as watchdog of an apolitical Parliamentary agency.

Strahl told Hutchinson he had a system of “double make-sure” for protecting the public from potential conflicts of interest or unethical moves. He claimed he wouldn’t lobby governments and that potential conflicts would be taken up with Canada’s ethics commissioner, Mary Dawson, whom he had already spoken with, he said.

The good news, Hutchinson remarked, was that “Mr. Strahl comes free of scandal.”

Yet Strahl seems to have brusquely wandered into questionable territory as lobbyist for a corporation at the centre of Canada’s dubious oil export race.

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Major oil and gas companies like Chevron Corp., Apache, and ExxonMobil Corp., are eyeing British Columbia’s northwest coast as a potential export hub for the continent’s ample natural gas. The proposed export terminals are slated to transform natural gas, much of it from frack fields in both Canada and the US, into liqueified natural gas or LNG for sale in Asia.

But according to a new report from the Norwegian-based International Gas Union (IGU) “project costs in Canada far exceed counterpart projects in the United States where the natural gas market is much more liquid.” The IGU has more than 120 members that collectively make up 95 percent of the world’s gas market.

The high costs associated with transporting gas up to BC’s remote coast makes the benefits of fetching a higher price overseas “difficult to financially justify,” according to the IGU.

“The distance between the proposed export facilities and the North American gas pipeline grid is large, and connections are small in both capacity and number,” the report states.

Connecting the current gas infrastructure to export facilities on BC’s rugged coast, along with costs associated with drilling programs would cost billions, the IGU said, preventing North American producers from meeting discount demands from Asian customers.

Chevron, the company behind the five-million-tonne-per-year LNG export facility, proposed for Kitimat, BC, says the massive costs associated with developing export facilities makes the prospect of discounted gas prices untenable.

As the Financial Times reports, “the disagreement [over prices] has prompted delays reaching a final investment decision, as the company seeks buyers willing to sign long-term contracts based on the price of oil.” But the US benchmark price is volatile, says the IGU.

“This is a problem because Western Canada shale gas will likely be more expensive than the marginal acreage that sets Henry-Hub [gas] prices,” IGU said in the report.

Projects in the US, says the IGU, are much better positioned to take advantage of preexisting gas infrastructure.

The IGU report demonstrates just how unattractive BC’s remote coast is for the burgeoning LNG export market. And British Columbia might do well to leave its high ambitions for becoming a world exporter of LNG behind.

As DeSmog Canada revealed in May, BC’s proposed strategy for LNG will make it impossible for the province to achieve its legislated goal of a 33 percent reduction in emissions by 2020 under the BC Climate Action Plan.

As Stephen Leahy reported,

There are as many as 17 LNG export terminal proposals floating around but only three are likely to be built by 2020… Those three would likely double BC's natural gas output, mainly from shale gas from hydraulic fracturing operations which have higher reported levels of methane leaks.

Although the Province reported only 2.2 million tonnes (Mt) of CO2e (carbon dioxide equivalent) of methane emissions in 2010, the actual amount was likely between 15.5 to 77.5 Mt of CO2e, depending the Global Warming Potential (GWP) used. Doubling gas production means that in 2020 these emissions would be 46.5 Mt (using GWP of 33) to 155 Mt (GWP of 105) a year.

In 2010 the entire province's carbon footprint was 62 Mt. By 2020 it is supposed to shrink to 45 Mt.

Setting aside methane leaks for a moment, fracking, processing and pumping natural gas over long distances consumes large amounts of energy. LNG facilities are also highly energy intensive. One LNG facility would emit 2 Mt of CO2e from burning natural gas to power the operation.

In BC's LNG Strategy then Minister of Energy and Mines Rich Coleman committed to having the province’s first LNG plant up and running by 2015, with a total of three by 2020. Growing dissatisfaction with BC's remoteness, however, may prevent the corporate investment necessary to realize such development.

On a provincial website advertising BC’s Liquid Natural Gas Strategy BC Premier Christy Clark wrote “the advantages of an LNG industry in BC are clear. We have lower shipping costs thanks to our proximity to growing markets with a demand for energy resources. We also have a vast supply of natural gas to meet these demands.”

“We are on the verge of making our province a world-leader in natural gas production and supply,” she said.

BC's LNG website lists 5 major LNG projects currently proposed or undergoing construction on BC’s coast:

1.     Prince Rupert LNG – (BG Group and Spectra Energy Natural Gas Transportation System)

2.     Pacific Northwest LNG (PETRONAS & Progress)

3.     Kitimat LNG (Apache Canada Ltd. & Chevron Canada)

4.     LNG Canada – (Shell Canada Ltd., PetroChina Company Limited, Korea Gas Corp, Mitsubishi Corporation (KOGAS))

5.     Douglas Channel Energy Project – (BC LNG Export Co-operative LLC: LNG Partners (Texas) and Haisla Nation)

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