Opinion: LNG in B.C. — A certain future

By: FNLNGA CEO Karen Ogen-Toews, and BCLNGA CEO David Keane

The question for the liquefied natural gas (LNG) industry in B.C. isn’t if, but when.

The industry is moving forward, even as global energy prices remain low. LNG companies are investing tens of millions of dollars each year into their projects and have already spent billions of dollars in B.C. because they see the long-term potential for LNG.

As countries look for cleaner, affordable sources of energy that help meet their climate goals, the International Energy Agency predicts demand for natural gas will soar 50 per cent by 2040. B.C. is well-positioned to help meet that demand and benefit from it with responsibly produced natural gas.

To date, more than 2,000 people have been employed directly and indirectly by the eight leading LNG projects in B.C. province-wide, with employees working on site preparation in northwest B.C., the Tilbury LNG expansion in Delta, and in project offices in cities and towns around the province, including Vancouver. The emerging B.C. LNG industry is training apprentices, contracting businesses and supporting families right now.

According to the Conference Board of Canada, if an LNG industry comprised of one small and two larger LNG facilities is built in B.C., it will grow Canada’s economy by $7.4 billion a year for the next 30 years. These three projects would also raise national employment by 65,000 jobs a year on average and provide $6 billion to the federal government and nearly $3 billion of new revenue to B.C.’s government and the rest of Canada annually. An additional $3 billion could fund: 60 new elementary schools ($1.5 billion), 1,400 teachers ($100 million), 20 MRI machines ($100 million), 900 family physicians ($200 million), 6,500 hip replacements ($100 million) and a new Pattullo Bridge ($1 billion).
The report also concludes the additional employment created by the industry would result in an increase in household disposable income in B.C. by an average of $860 per person.

The LNG industry and First Nations are working together to create a new resource industry in B.C. Precedent-setting agreements between industry and First Nations have been developed, including: First Nations-led environmental assessments; environmental monitoring agreements between project proponents and First Nations that include the appointment of an independent environmental monitor; signed partnership deals that include First Nations input into project planning, as well as contracting, employment and training benefits; and financial benefits throughout the lifetime of the projects. Working together, First Nations and LNG companies are forging a new way of doing business in B.C.

B.C.’s LNG industry is being developed under some of the most-stringent environmental and regulatory oversight in the world. In addition to needing both provincial and federal environmental reviews that require projects to outline the potential impacts of their project, projects must undergo audits during development to ensure they’re meeting their commitments. Hydraulic fracturing has been used to access natural gas in B.C. safely and responsibly for more than 50 years. Every aspect of the process is regulated by the B.C. Oil and Gas Commission, including air quality and water use and disposal. The result is safe, responsibly developed natural gas that is delivered 24/7 to homes and businesses in more than 130 B.C. communities.

The David Suzuki Foundation, in a recent report produced in collaboration with St. Xavier University in Chicago, claims methane emissions from B.C.’s natural-gas emissions are higher than reported. What the foundation’s news release didn’t share is that the study found that, of the newer well infrastructure in the Montney region, “relatively little of it emits — presumably because of improved modern practice, integrity, and better design of new valves, seals and flange gaskets etc.” The study also found that “in comparison to studies at select U.S. natural-gas sites (Peischl et al., 2016; Karion et al., 2015), our results suggest that natural-gas activity in the Montney formation may emit both less-frequently and less-severely than U.S. comparators.” Unlike the U.S. with a rapidly growing LNG industry, B.C. would be one of only two jurisdictions in the world, including Norway, with a carbon tax on LNG.

To keep moving forward, the B.C. LNG industry must be globally cost-competitive with other LNG jurisdictions and not experience unnecessary delays or additional costs. The B.C. government, LNG proponents, First Nations and local communities have a chance to work together to see an LNG industry that is environmentally responsible and benefits B.C.

Editor’s note: With such a high global demand and countless benefits to Canada’s economic infrastructure, it’s only a matter of time before the LNG industry in B.C. takes off. Whether this happens in the next several years or the next few decades, the world is shifting to cleaner energy sources, where LNG is the leading candidate.

This article originally appeared in the Vancouver Sun on May 8, 2017.

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