B.C. has a role to play in curbing global emissions
LNG projects will reduce GHGs, writes Stewart Muir.
A new analysis from veteran economist Philip Cross starts to peel back the economic, environmental, and social impacts of the two liquefied natural gas projects on the books for B.C. We don’t yet know enough about LNG Canada’s Kitimat project or Woodfibre LNG’s Squamish projects to quantify all the impacts, but what we can glean already should cause all British Columbians to take notice.
Cross, a senior research fellow at Resource Works since we launched in 2014 and a 34-year veteran of Statistics Canada specializing in macroeconomics, crunched the numbers we do know in “From shale to open sea: How LNG is transforming British Columbia’s economy,” for Resource Works.
LNG Canada will necessitate a new pipeline from Dawson Creek to Kitimat to feed the new terminal on the coast — an investment of $6.2 billion in the pipeline alone. Once complete, that pipeline will have the capacity to carry enough gas to make some $5.9 billion worth of LNG annually (at 2014 gas prices).
Cross reasonably estimates Canada’s natural gas companies will not produce that much additional gas each year, but instead will divert much of the gas they’re currently shipping to the U.S. to this pipeline for export to Asia, because doing so will bring a higher price.
We estimate Canada’s LNG producers will actually increase production by a total of 10 per cent, worth $519 million annually at 2014 prices. If, however, the gas gets a price of $10 in Asia (current prices in that market) rather than the $5.02 price for sales to the U.S. in 2014, that $519 million becomes $5.8 billion — every year.
That clearly underscores how important it is we open up Asian markets to B.C. resources, which is only possible if we can transport them to the ports and terminals on the west coast.
Once completed, the planned Woodfibre LNG natural gas terminal near Squamish will generate an additional $44.5 million in income annually. Again, that’s assuming gas prices are $5. If the gas is sold at $10, that benefit becomes $498.6 million — every year.
These are conservative figures, as any forecast should be. They don’t include any benefit from the one-time construction of the pipelines, nor the operations of terminals.
The total benefit becomes a lot higher once you factor in new jobs, new tax revenues that conveniently pay for health care and education, and new prosperity in rural resource communities and Vancouver’s business core alike.
Innovation in British Columbia’s thriving energy industry has cut natural gas emissions 50 per cent since 2000, providing an edge that others, like Washington State, are noticing. A competing LNG proposal in Tacoma has been told not to bother moving forward if it can’t source gas from North East B.C.
By keeping our energy sector vibrant as opposed to stagnant, our ever-improving LNG can be used across the Pacific by nations seeking to escape energy poverty the smart way, investing in cutting-edge renewable power generation that is now cheaper to build when backed up by clean, reliable natural gas that overcomes the limitations of solar and wind.
LNG Canada alone will lead to a net annual global GHG reduction that is greater than B.C.’s total emissions, the equivalent of taking 13 to 19 million cars off the road. Lately this realization has been creating unity among diverse voices — workers, municipal leaders, First Nations, business groups, academics, rural people and urban people — unified around a global vision.
In the quarter century to 2040, as China increases its emissions by 47 times the amount of B.C.’s total GHG output today, British Columbia has a role in bending the global emissions curve.
We cannot do this from the sidelines, something the provincial government no doubt is weighing as it puts finishing touches to the Clean Growth Strategy due out soon.
LNG Canada alone will lead to a net annual global GHG reduction that is greater than B.C.’s total emissions, the equivalent of taking 13 to 19 million cars off the road.