Managing LNG expectations

Most people in B.C. are probably in favour of northern development, prosperity for Indigenous communities and revenue for the provincial treasury. At the same time, many are frustrated with the lack of an innovative and sustainable vision for our province’s economic development. Some are alarmed by the clear and consistent warnings of climate science and by summer smoke around their homes.

These people have difficulty celebrating the Kitimat liquefied-natural-gas approval wholeheartedly because it will be B.C.’s largest single source of greenhouse gas emissions. Issues raised by Marc Lee of the Canadian Centre for Policy Alternatives, B.C. Green Party Leader Andrew Weaver and others dampen the euphoria further.

Do the project’s talking points over-sell the benefits? Some questions that could be examined are these: How much of the reported $40-billion investment has received final approval? Is the approved Phase 1 investment (two gas-processing units out of four) more like $20 billion? How much of the investment will actually be in B.C.? Will the majority of it go to Asia, where the plant modules will be made before assembly in B.C.? What does “up to 950 permanent jobs” mean — will the real number be much lower?

If the talking points translate into reality, Kitimat’s LNG project would add $23 billion to B.C.’s treasury over 40 years. How does escalation factor into these numbers? An optimistic interpretation suggests that this revenue (based on operation of four gas processing units) represents one per cent of the B.C. budget.

Does a closer look at the math drop this to a small fraction of one per cent? Will it shrink further due to the aggressive tax avoidance and creative accounting that Australia and other parts of the world have seen from the LNG industry? Can we count on the LNG market lasting for 40 years?

Is the upstream fracking a concern? Fracking has caused large earthquakes, industrializes our forests, and consumes and toxifies huge volumes of water. What is the impact on ecosystems and on safe drinking water for First Nations and rural communities? Methane, which is leaked in the process, has 84 times the global-warming impact of carbon dioxide over 20 years, and is exempt from the carbon tax.

This project comes at a time when the world desperately needs to eliminate greenhouse-gas emissions. The plant is projected to operate until at least 2065. Does the fact that it will emit more than half of the entire province’s allowable emissions in 2050 ring any alarms?

Who’s to say that this LNG will displace coal in Asia? There are no rules or agreements in place to mandate this. The LNG could simply be used for growth (be added to existing coal use), or it could displace potential renewable and nuclear projects. Some experts claim that LNG’s full global-warming impact is no better than that of coal. If true, how could there be any climate benefit from LNG?

Our federal government has approved $275 million to support some of the world’s largest corporations. Our B.C. government has exempted the project from the carbon tax, deferred provincial sales tax, provided natural gas tax credits, put tariff exemptions in place and offered electricity at half the cost of production. Will the NDP’s new climate plan provide comparable support to local startups focusing on sustainable electrification, renewable energy, clean transport and building energy conservation?

I hope there is a real plan to offset LNG Canada’s environmental impact. I hope we hear more about project details and risks before getting too carried away with celebrations.