Emissions cap lacking, Green groups say.
• Environmental groups lined up against Ottawa’s decision to approve the Pacific NorthWest LNG export terminal, saying some of the conditions imposed don’t go far enough to reduce carbon emissions in the province.
On Tuesday the Canadian Environmental Assessment Agency (CEAA) approved the project with 190 conditions, including a hard cap on total carbon emissions from the facility and a reduction in emissions intensity based on pertonne output of the terminal. However, critics say the stipulations still leave the project well above the carbon footprints of other LNG proposals, as the consortium does not plan to use off-site electricity to power the facility.
“I don’t see the conditions on carbon as being a particular challenge,” said Matt Horne of the Pembina Institute, an environmental organization. “They don’t seem particularly binding.”
The project was proposed in 2012 by a consortium led by Petronas, a Malaysian company. It aims to build the terminal near Prince Rupert, B.C., and would export up to 1.7 billion cubic feet of liquefied natural gas per day to overseas markets.
Various environmental groups have come out against Pacific NorthWest and other LNG facilities, arguing they leave too large an environmental footprint for the province to meet its climate goals.
As part of the approval of Pacific NorthWest, the CEAA capped total carbon emissions from the facility at 4.3 million tonnes, about 20 per cent below the level proposed by the consortium.
Emissions intensity on a per- tonne level must also be reduced to 0.21 tonnes of CO2 equivalent for every tonne of LNG produced for the third liquefaction unit, down from an earlier proposal of 0.22. Those limits for both emissions intensity and total emissions depend on whether the company decides to build a third liquefaction unit, sometimes called “trains” within the industry.
Reducing per-tonne emissions could potentially prove particularly onerous for the Pacific NorthWest, says Raymond James analyst Andrew Bradford, considering 0.22 was at the low end of the company’s earlier estimates.
“They’re asking for an improvement for the potential third train from what appears to be, to my eyes, the current state of the art,” he says.
Emissions intensity from the Pacific NorthWest facility is higher than other proposals largely because it will use natural gas- fired power turbines rather than electricity.
LNG Canada, an LNG export facility led by Royal Dutch Shell PLC, planned to draw electricity from B.C.’s clean electricity grid and would have achieved an emissions intensity of 0.15 tonnes of CO2 for every tonne of LNG produced, according to public filings. The project was put on hold in July of this year.
Pacific NorthWest has been pressured by environmental groups to electrify a portion of its operations, but the company has said is not feasible because it would require the company to build long- distance transmission lines to reach its remote location. The project would be located near Prince Rupert, B.C.
It also said in an application to provincial authorities that there was a “lack of available electricity to supply the plant in the Project’s timeline.”
David Austin, an associate counsel at Clark Wilson LLP in Vancouver, says BC Hydro’s latest load forecast appears to support that contention, as it doesn’t include nearly enough new capacity to power numerous LNG export facilities. The B. C. government has long touted electrification in both upstream and downstream operations as a way to limit the emissions linked to LNG development.
Environmental groups like Pembina and others say that without significant electrification of the facility, the project could set back British Columbia’s climate goals.
“We had argued that for the third train of production electrification should be part of the conversation,” Horne said. “That would give them time to figure out the transmission issues.”
The consortium did not respond to a phone call but said in an emailed statement it plans to “conduct a total project review over the coming months prior to announcing next steps for the project.”
The consortium’s other partners include Japan Petroleum Exploration Co., Indian Oil Corp., China Petroleum & Chemical Corp. and Brunei National Petroleum Co.