“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.”
As part of the new financial arrangement, LNG companies would receive relief from provincial sales taxes with repayment in the form of an equivalent operational payment. However, they will be subject to the same electricity rates as other industries in the province but will have to abide by new greenhouse gas emission standards.
Horgan said the LNG projects will be subject to provincial review under four provisions, with all LNG projects guaranteeing a fair return for B.C.’s natural resources, guaranteed jobs and training opportunities for British Columbians, respect, and partnering with First Nations, and must meet the province’s climate commitments.
LNG projects were in limbo last year
Because of low energy prices, three LNG projects slated for British Columbia pulled the plugs last year, with one being the $36 million Pacific NorthWest LNG project in northern B.C., backed by Malaysian energy giant Petronas.
And in 2016, LNG Canada, which includes partners Shell, PetroChina, Korea Gas and Mitsubishi, said that its final investment decision for the Kitimat facility would be delayed because of poor global markets. However, in Shell’s 2018 LNG Outlook, they found that market expectations had shown a rebound.
“Based on current demand projections, Shell sees the potential for a supply shortage developing in the mid-2020s, unless new LNG production project commitments are made soon,” says the report.
The LNG Canada project
Proponents of the $40 million LNG Canada project claim it will create 10,000 jobs and $22 million in income for the province, while the increased production would meet a “substantial demand” worldwide for a cleaner energy source.
It all sounds so good, especially coming from Susannah Pierce, a director at LNG Canada. Citing the need for natural gas in Asian countries like China and Japan, she said, “Canada was missing out. If we don’t produce it here it’ll get produced somewhere else,” she said. “And they’ll be doing it worse.”
And while Pierce may be right about the LNG market in Asia, many people are still worried about the procedures used to get that LNG out of the ground. And as the oilpatch companies have discovered, environmental regulations are a major sticking point for energy projects in today’s climate.
“When a well is drilled and fluids are injected into the well to release the gas, there’s a big blowback of a massive amount of natural gas and volatile organic compounds that come out of the well before it’s capped,” said John Werring, a policy advisor for the David Suzuki Foundation.
And as Werring points out, 100,000 tonnes of “fugitive methane” pouring into the atmosphere annually, is the “equivalent of putting over two million cars on the road.”
And if we were to add the recent studies done in the West Texas oilpatch that showed a significant movement of the ground, including subsidence and earthquakes. it may leave many people to wonder if increasing LNG production in the province is such a good idea, after all.
