B.C. unveils tax rebates, conditions for LNG projects
Alberta energy minister slams plan, calls province ‘environmental hypocrites’
British Columbia is offering new conditions and rebates for liquefied natural gas projects in the province and Alberta’s energy minister is not pleased.
Premier John Horgan made the announcement Thursday ahead of a final investment decision on LNG Canada’s $40-billion project, which would include building a natural gas pipeline from northeast B.C. to a new terminal in Kitimat, B.C.
“Potential opportunity is extraordinary. Potential risks are significant,” Horgan said. “I believe LNG Canada is working diligently to address those risks and I believe it’s the responsibility of the government to make sure we’re working to develop those opportunities for all British Columbians.”
Alberta Energy Minister Margaret McCuaig-Boyd slammed the B.C. announcement Thursday, calling the province “environmental hypocrites.”
“On one hand, they’re willing to increase emissions in their own backyard, yet on the other, they ’re trying to stop our efforts here in Alberta to diversify our markets by building a pipeline under an emissions cap,” she said.
“B.C. is, frankly, speaking out of both sides of their mouth.”
McCuaig-Boyd said B.C.’s move shreds any credibility it had around the environment and the economy.
“No Canadian should take British Columbia’s opposition to the Trans Mountain pipeline seriously,” she said.
“B.C. cannot have it both ways. You can’t build your own energy industry yet block your neighbours — us, here in Alberta. It’s not fair, it’s not Canadian, and it needs to stop.”
Under the new fiscal agreement, LNG projects in B.C. will see relief from provincial sales taxes, subject to repayment in the form of an equivalent operational payment. They will be subject to new greenhouse gas emission standards and general industrial electricity rates consistent with other industrial users in B.C.
Horgan said the province will review LNG projects using four conditions. All LNG projects should guarantee a fair return for B.C.’s natural resources, guarantee jobs and training opportunities for British Columbians, respect and partner with First Nations, and meet the province’s climate commitments, he said.
In January, Green party Leader Andrew Weaver threatened to bring down the minority NDP government if it continued to pursue what he described as the “LNG folly,” saying the province couldn’t meet its greenhouse gas emission targets if it pursues the LNG industry.
On Thursday, he said the threemember Green caucus will wait to see if the NDP’s new climate plan finds a way to meet those targets of 40 per cent below 2007 levels by 2030 and 80 per cent below those levels by 2050. He dismissed suggestions the caucus is waiting for a referendum on proportional representation before pulling his party ’s support for the NDP in the legislature.
“We want to see what their plan is. And frankly, we’re very, very skeptical that you can even have such a plan that includes adding eight megatonnes of greenhouse gas emissions,” Weaver said.
He said the Greens won’t vote in favour of any legislative measures that support the new LNG framework.
In the past year, companies have pulled the plug on three LNG projects proposed in B.C., including the $36-billion Pacific Northwest LNG pipeline project.
LNG Canada, which includes partners Shell, PetroChina, Korea Gas and Mitsubishi, said in 2016 that its final investment decision for the Kitimat facility would be delayed because of poor global markets.
Those markets are turning around, says Shell’s 2018 LNG outlook. It found the market has defied expectations, growing by 29 million tonnes in 2017.
“Based on current demand projections, Shell sees potential for a supply shortage developing in the mid-2020s, unless new LNG production project commitments are made soon,” it said.
In a statement, LNG Canada said it welcomes British Columbia’s new measures.
“LNG Canada has designed our facility to have the lowest carbon intensity of any large LNG export facility in the world. We have done so to live up to the promise of ‘cleanest LNG’ and we are committed to working with local, provincial and federal governments and industry to meet our greenhouse gas reduction commitments under Paris COP.”
The Wilderness Committee disputed the idea of clean LNG, pointing to estimates from the Pacific Institute for Climate Solutions and the Pembina Institute showing the annual carbon dioxide emissions from the LNG project would exceed 9.6 megatonnes by 2050. That’s 80 per cent of British Columbia’s total emissions target of 12 megatonnes annually by 2050.
“From escaped methane at the drill sites to the massive carbon emissions required to cool the gas, to more escaped methane on the long trip across the ocean to Asia and then the emissions from burning the gas: It all adds up to a big bad climate change. How would B.C. ever meet our climate commitments with this LNG plant chugging along?” the environmental organization said in a news release.
The Business Council of British Columbia said the framework will provide more regulatory certainty and important fiscal incentives for potential investors across industries.