Victoria – Few governments can resist the allure of a simple, big solution for their all their economic needs – a major windfall that can create jobs, generate wealth and bankroll public spending, all thanks to the success of a single industrial strategy.
That such a quick fix can be elusive doesn’t keep governments from looking enviously at other regions (Norway, Alberta) where a solitary industry – i.e., oil – has paid the bills.
Such optimism seems to inform the B.C. government’s plans to turn the province into a new kind of energy powerhouse – one relying on liquefied natural gas (LNG). Keen advocates, including Premier Christy Clark, say such a development could boost the economy by as much as $1-trillion in coming years, thanks to the apparently insatiable appetite for energy in Asian markets.
That the B.C. government is committed to boosting LNG is clear from the budget it released last month, in which a $38-million commitment to developing the nascent industry was one of the few spending items actually included. Finance Minister Mike de Jong made clear that LNG is where his government is staking hopes for future revenues. “After 10 years of production, estimates are that one single LNG plant could generate up to $1.4 billion in LNG tax alone,” he said. “Those are the numbers for just one plant. I expect the skeptics are going to find it harder and harder over the coming years to deny that this is happening.”
De Jong’s current fiscal plan is careful not to count on significant monies from LNG just yet, but his B.C. Liberals have already introduced a Prosperity Fund based on projected revenues from the industry, something Premier Clark has said can pay of the province’s debt.
Whether or not LNG really represents B.C.’s bounteous future remains to be seen. The economics are unclear — energy companies, for example, are already complaining that provincial taxes are snuffing out the industry before it even starts.
More significantly, the environmental costs of scaling up an energy industry to such an extent have yet to be properly assessed, let alone addressed. So what are the concerns about B.C.’s LNG push when it comes to the environment? Herewith, a selection of some key points:
When it passed the Greenhouse Gas Reduction Targets Act in 2007, B.C. began an emissions-reduction process that by as recently as two years ago allowed the government to boast it was on the way to becoming Canada’s greenest province. If the full scale of B.C.’s LNG plans is realized, however, the province’s carbon pollution levels could take a stratospheric leap – more than doubling by the year 2020 to nearly 73 million tonnes, according to the Pembina institute. This would be well off B.C.’s emissions reduction targets, and would place the province in the same emissions vicinity as neighbouring Alberta, with its oil sands industry.
It’s not just overall emissions that play a part in B.C.’s climate change commitments; the province’s 2010 Clean Energy Act requires it to generate 93% of its power from clean or renewable resources. Given the emission levels cited above, the creation of natural gas plants throughout the province would make this a very difficult goal to meet. So far the government has relied on some interesting semantics to evade that bind – by redefining, for instance, natural gas emissions as “clean” in 2012 – but even that will probably not be enough to allow the province to meet its pollution reduction targets.
Hydraulic fracturing, or “fracking,” is the process by which previously inaccessible natural gas can be released, and it has led to a natural gas bonanza in North America. It involves large amounts of water, which are used to break up rock formations where the gas is trapped. Not only is a copious amount of water required, but local water sources are often contaminated by the resulting runoff.
If B.C.’s LNG plans go ahead, this sudden increase in natural gas harvesting is bound to have significant impact on the province’s water resources. As researchers Ben Parfitt and David Hughes ask in a recent op-ed for Postmedia News, the scale of current plans could do damage to B.C.’s water supply:
“With combined investments of $70 billion, [LNG investors] will need years to recoup investments and generate profits. So let’s assume they build the plants by 2020 and operate them through 2040. How many new gas wells would need to be drilled between now and then and how much water would have to be sucked out of our rivers, lakes or from wells and rendered toxic?”
It’s not simply the LNG extraction process that creates environmental worries – the entire infrastructure associated with the development of the LNG industry is rife with points of concern. As summarized by Kevin Sauvé of the Pembina Institute in a recent op-ed, the process of getting natural gas out of the ground and to potential buyers overseas requires everything from wellpads and compressors to pipelines and processors, each of which carries a risk of leaks, emissions and high energy costs.
Pembina has actually collected these various components into a single, handy infographic outlining not only the risks, but what policy tools might be possible to mitigate them.
Just some of the items mentioned above should give British Columbians pause before mentally cashing future revenue cheques from an LNG windfall. Given the attention that has been paid thus far to the potential environmental impacts of the proposed Northern Gateway pipeline that would carry oil from Alberta across B.C. to its pristine northern coastline – including concerns raised by Premier Clark herself – it is also surprising that the government’s LNG plans have not yet met with similar widespread debate.
That, however, may be changing. The government’s recent budget announcement saw the launch of a political war of words over the LNG plans, and there is growing concern that staking the province’s economic future on a single industry might be problematic – especially if it comes at the cost of the environmental future at the same time.
Gwen Barlee, a policy director with the Wilderness Committee, indicated how those twin arguments will play into opposition efforts against the government’s LNG plans in a recent press release: “The B.C. government is betting the farm on the development of a massive LNG industry in B.C.,” she said. “It is clear from [the] budget, however, that there will not be corresponding protection of our environment. The budget contains nothing that will ensure ‘world-class’ environmental protection. Wishful thinking won’t make this industry green, and neither will running pipelines through parks.”
If Clark and de Jong really do intend to bet the farm on an LNG future, they had better hope they at least have their financial forecasts right – because the environmental predictions certainly don’t look promising.