{"id":7497,"date":"2024-01-31T13:30:48","date_gmt":"2024-01-31T18:30:48","guid":{"rendered":"https:\/\/aboriginalbusinessmagazine.com\/?p=7497"},"modified":"2024-01-31T13:37:19","modified_gmt":"2024-01-31T18:37:19","slug":"the-door-to-b-c-s-liquefied-natural-gas-export-sector-is-about-to-open-heres-what-you-need-to-know","status":"publish","type":"post","link":"https:\/\/aboriginalbusinessmagazine.com\/?p=7497","title":{"rendered":"The door to B.C.&#8217;s liquefied natural gas export sector is about to open. Here&#8217;s what you need to know\u00a0"},"content":{"rendered":"<p><em>By Matt Simmons<\/em><\/p>\n<p><em>\u00a0Local Journalism Initiative Reporter<\/em><\/p>\n<p>As Teresa Waddington proudly proclaimed LNG Canada is on track to wrap up construction in Kitimat, B.C., this year, the\u00a0 room full of hundreds of attendees at the BC Natural Resources Forum\u00a0 erupted in cheers.<\/p>\n<p>&#8220;We are 90 per cent complete, bringing\u00a0 Canada&#8217;s first LNG export facility to life,&#8221; she said in mid-January, at\u00a0 the annual gathering of industry bigwigs and hopefuls, First Nations\u00a0 leaders, provincial and federal politicians and civil servants who had travelled from around the province to Prince George for the event.<\/p>\n<p>Waddington, a senior executive with the\u00a0 consortium of companies building the gas liquefaction and export plant,\u00a0 lauded the role of liquefied natural gas,\u00a0 a fossil fuel commonly known as LNG, in building B.C.&#8217;s economy,\u00a0 supporting First Nations and contributing to global climate\u00a0 initiatives.<\/p>\n<p>In November, Coastal GasLink\u00a0 announced it had finished building its 670-kilometre gas pipeline\u00a0 across the north of the province, the first to do so in 70 years. The\u00a0 pipeline connects underground shale formations in B.C.&#8217;s northeast to\u00a0 marine shipping routes on the Pacific coast.<\/p>\n<p>The pair of projects, touted as the\u00a0 single largest private investment in Canadian history, could, as\u00a0 Waddington put it, &#8220;open a gateway&#8221; that would enable numerous other\u00a0 projects to move forward.<\/p>\n<p>For some, this signals an era of economic\u00a0 prosperity the north hasn&#8217;t seen for decades and a long-overdue shift\u00a0 towards including First Nations in resource benefits. For others, it\u00a0 spells climate and ecological disaster and locks the north into a\u00a0 familiar boom-and-bust cycle.<\/p>\n<p>As British Columbia&#8217;s LNG export sector\u00a0 rounds the final corner of its long-promised boom, the stakes couldn&#8217;t\u00a0 be higher. Here&#8217;s what you need to know.<\/p>\n<p>Underground deposits in B.C.&#8217;s northeast are home to about 449 trillion cubic feet of gas, according to the Canada Energy Regulator. The area is known as the Montney Formation and lies underneath Treaty 8 First Nations&#8217; territories in both B.C. and Alberta.<\/p>\n<p>Natural gas, as it&#8217;s widely known, is mostly composed of methane.<\/p>\n<p>Over a 20-year period, methane is 80 times more powerful than carbon dioxide in terms of heating the planet.<\/p>\n<p>To get the gas out of the ground,\u00a0 companies drill either conventionally (straight down) or horizontally.\u00a0 If the gas is in porous rock formations, conventional drilling is used\u00a0 to tap into a reserve and pump up the fossil fuel. But most of B.C.&#8217;s\u00a0 remaining reserves are harder to get at, locked in ancient shale\u00a0 formations.<\/p>\n<p>Extracting gas from shale means companies\u00a0 typically drill down until they reach a desired depth, then bend\u00a0 horizontally through the rock formation. At that point, they inject\u00a0 millions of litres of fresh water mixed with a cocktail of chemicals to fracture seams in the rock, releasing the gas. This is called hydraulic fracturing or, more commonly, fracking.<\/p>\n<p>Once extracted and processed to remove impurities and water content, the gas is compressed and put into\u00a0 pipelines, typically burning some of the methane to power the\u00a0 compression process. When the end goal is export, the pipelines then\u00a0 transport the compressed gas to liquefaction facilities. There, it is\u00a0 cooled to roughly -160 C, reducing it to a liquid with a volume that is\u00a0 around 1\/600th of its gaseous state for transport.<\/p>\n<p>The cooling process is extremely energy\u00a0 intensive. To power the turbines that cool the gas, liquefaction\u00a0 facilities either burn some of the gas itself, use electricity from\u00a0 other energy sources such as hydroelectric dams or use some combination\u00a0 of both.<\/p>\n<p>After it&#8217;s cooled and in its liquid form,\u00a0 the fossil fuel is transferred into ships, about as long as five hockey\u00a0 rinks laid end to end. At the receiving end, the process is reversed:\u00a0 the LNG is regasified, put into pipelines and transported to power\u00a0 plants, where it&#8217;s finally burned to generate electricity and heat.<\/p>\n<p>Each step in the process, from extraction to power generation, produces greenhouse gas emissions.<\/p>\n<p>Methane leaks along the way, called fugitive emissions, are among the most insidious contributors to climate change.\u00a0 The gas is colourless and odourless and infamously hard to track. But\u00a0 plugging those leaks represents one of humanity&#8217;s best short-term opportunities to buy some time to tackle the bigger issues of restructuring the ways we produce and consume energy.<\/p>\n<p>Reducing methane emissions is widely seen\u00a0 by policymakers, climate analysts and energy experts as a win-win for\u00a0 climate and industry. Less gas lost to the atmosphere means more gas to\u00a0 sell.<\/p>\n<p>But installing technologies that address fugitive emissions comes with an upfront cost. To address any corporate reluctance associated\u00a0 with those costs, provincial and federal agencies are working on implementing stronger regulations.<\/p>\n<p>Countries around the world are accelerating actions to reduce global dependence on fossil fuels. As\u00a0 policies, regulations and laws are adapted to meet the challenges of a\u00a0 rapidly changing natural world, investors are shifting their spending\u00a0 accordingly.<\/p>\n<p>If you add up all greenhouse gases\u00a0 associated with LNG Canada and Cedar LNG, the two currently approved\u00a0 projects in northwest B.C., the province will see its emissions increase\u00a0 by more than 14 megatonnes of equivalent carbon dioxide annually,\u00a0 according to energy analyst David Hughes. That&#8217;s about a quarter of the province&#8217;s current total.<\/p>\n<p>Emissions aren&#8217;t the only environmental impact.<\/p>\n<p>At the extraction point, fracking has been linked to earthquakes, water contamination and health impacts associated with both water and air pollution. Fracking and other sector-related activities are also contributing to precipitous declines in endangered species like caribou.\u00a0 Companies maintain the activities are approved and regulated by the\u00a0 government and do not pose risks to animal or human health.<\/p>\n<p>But the cumulative impacts\u00a0 of extensive industrial development have been found to severely impede\u00a0 First Nations&#8217; ability to hunt, trap and fish _ activities protected\u00a0 under federal law. The B.C.\u00a0government, which heavily subsidizes the oil and gas sector,\u00a0 was recently found guilty of encouraging and permitting so much industrial development, including oil and gas activities, on Treaty\u00a08\u00a0 territories that it infringed on nations&#8217; Treaty Rights.<\/p>\n<p>Following a precedent-setting B.C. Supreme\u00a0 Court decision, the province and Blueberry River First Nations reached\u00a0 an agreement early last year that included a limit to where and how much companies can conduct activities like fracking on the territory.<\/p>\n<p>Pipelines also impact ecosystems. Since starting construction in 2019, the Coastal GasLink project has repeatedly failed to meet environmental regulations, earning the company more than $800,000 in fines levied by the B.C.\u00a0 government to date. Those failures resulted in impacts to wild salmon\u00a0 habitat, endangered whitebark pine and sensitive wetlands that support\u00a0 innumerable species.<\/p>\n<p>Supporters of the sector say getting B.C.\u00a0 gas out of the ground and to buyers overseas will provide a much-needed\u00a0 influx of revenue to the provincial economy, through jobs, taxes and\u00a0 royalties earned on the production, transport and export of the fossil\u00a0 fuel.<\/p>\n<p>According to B.C.&#8217;s labour market statistics,\u00a0 the oil and gas sector, including support jobs, employed around 13,000\u00a0 people in 2023. Around half of those workers are directly involved in extraction.<\/p>\n<p>With the addition of construction jobs\u00a0 associated with the sector&#8217;s recent uptick, that number has nearly\u00a0 doubled. Last spring, around 7,000 workers were in Kitimat building the liquefaction facility. Coastal GasLink employed more than 6,000 construction workers as it built its pipeline across the province.<\/p>\n<p>When\u00a0 construction in Kitimat wraps up and the plant&#8217;s first phase starts, the\u00a0 number of jobs will drop to around 250 to 350 full-time positions,\u00a0 according to LNG Canada. The pipeline will require 16 to\u00a035 people to handle operations and maintenance after reclamation activities are completed.<\/p>\n<p>The projects will also contribute to the provincial economy through a suite of taxes, tariffs, royalties and\u00a0 hydro payments. In 2019, B.C. estimated it would receive around $23 billion in government revenues over the 40-year lifespan of the pipeline and export facility.<\/p>\n<p>`British Columbians are counting on us to\u00a0 attract LNG investment that meets strict conditions: delivering jobs and financial benefits to B.C., creating economic partnerships with Indigenous Peoples and protecting our clean air, land and water,&#8217; former\u00a0 minister of finance Carole James said at the time.<\/p>\n<p>LNG Canada says its project is also\u00a0 responsible for significant economic growth throughout the province,\u00a0 through contracts provided to local businesses, including opportunities\u00a0 for First Nations. A spokesperson with the project pointed to a\u00a0 $500-million contract signed with HaiSea Marine,\u00a0 a joint venture of the Haisla Nation and Seaspan, to &#8220;build and operate\u00a0 escort tugs and harbour tugs required for our export facility in\u00a0 Kitimat.&#8221;<\/p>\n<p>Predicted government revenues need to be\u00a0 held against government subsidies doled out in support of the project.\u00a0 Those subsidies add up to more than $6 billion.<\/p>\n<p>This doesn&#8217;t mean B.C. wrote LNG Canada a\u00a0 cheque. The subsidies come in a variety of forms, such as tax reprieves\u00a0 and exemptions, cheaper electricity rates, loans, incentives and payouts\u00a0 to First\u00a0Nations for support of the industry. There&#8217;s also the\u00a0 $16-billion Site C hydroelectric dam under construction on the Peace River, which many critics say is being built to power the sector, and a recent $36-billion investment to expand electrification and emissions-reduction infrastructure across the province.<\/p>\n<p>While Kitimat has been undeniably busier since construction of the massive industrial complex started, and the\u00a0 community is earning direct revenues from the project through industrial\u00a0 taxes, the rapid increase in population and construction activity has\u00a0 also taken a toll on the likes of roads and other municipal infrastructure.<\/p>\n<p>&#8220;Having that industrial tax base is\u00a0 clearly much more of a benefit than it is a burden, but it does give you\u00a0 unique challenges that nobody else has,&#8221; Kitimat Mayor Phil Germuth\u00a0 told The Narwhal in a previous interview.<\/p>\n<p>Employment opportunities connected to LNG Canada and the pipeline aren&#8217;t all filled by locals. The promise of high\u00a0 paying jobs saw an influx of workers flood the north, both to cordoned\u00a0 off camps throughout the region and to municipalities. The projects have driven up housing prices and the cost of living across the northwest.<\/p>\n<p>More than 70 per cent of Coastal GasLink&#8217;s workforce don&#8217;t live in B.C., according to the project&#8217;s annual reports.<\/p>\n<p>The economic case for exporting LNG is also subject to volatile markets. According to the International Energy\u00a0 Agency, global demand for the fossil fuel is declining and the rapid\u00a0 increase in projects in response to Russia&#8217;s invasion of Ukraine is\u00a0 flooding the market, which could lower prices, making new investments in\u00a0 the sector increasingly risky.<\/p>\n<p>&#8220;After their heyday between 2011 and 2021,\u00a0 the world&#8217;s gas markets have entered a new and more uncertain period\u00a0 that is likely to be characterized by slower growth and higher\u00a0 volatility, and could lead to a peak in global demand by the end of\u00a0 this decade,&#8221;<\/p>\n<p>Keisuke Sadamori, director of energy markets and security\u00a0 with the agency, said in a press release last fall.<\/p>\n<p>Expansion of domestic LNG exports could\u00a0 also result in increased costs to British Columbians. In the United\u00a0 States, exporters reacting to the energy crisis in Europe led to an\u00a0 increased cost of more than $100 billion (USD) over a 16-month period,\u00a0 according to a new report\u00a0 from the Institute for Energy Economics and Financial Analysis. B.C.\u00a0 consumers could see similar effects over the next few years as the\u00a0 sector gets underway.<\/p>\n<p>B.C. has been pushing to get the gas\u00a0 export industry off the ground for more than a decade. LNG Canada and\u00a0 Coastal GasLink are just two of more than a dozen projects proposed\u00a0 during former premier Christy Clark&#8217;s government. In the north, many of\u00a0 those have been shelved or scrapped, but several are still on the books.<\/p>\n<p>When Premier David Eby took office in 2022, his stance on the oil and gas sector was clear.<\/p>\n<p>&#8220;We cannot continue to expand fossil-fuel\u00a0 infrastructure and hit our climate goals,&#8221; he said, as he outlined his\u00a0 leadership plans.<\/p>\n<p>That hard stance appeared to soften in the ensuing months, when his government approved Cedar LNG\u00a0 last March. The project is a partnership between the Haisla Nation and\u00a0 Pembina Pipeline Corporation. Touted as the first Indigenous\u00a0 majority-owned LNG facility, the floating liquefaction and export\u00a0 terminal would be built on the Douglas Channel across from the Haisla\u00a0 village of Kitamaat, a few kilometres from LNG Canada.<\/p>\n<p>Just hours after approving the export facility, Eby&#8217;s government announced an energy framework that included a cap on emissions from the oil and gas sector.<\/p>\n<p>&#8220;Our work on the climate crisis and our\u00a0 commitment to the next generation requires everyone, including the oil\u00a0 and gas sector, to do their part to reduce emissions,&#8221; Eby said. &#8220;It\u00a0 also requires us to forge a new path forward with clean-energy projects\u00a0 that people and communities can count on. We can and must do both.&#8221;<\/p>\n<p>Like its larger neighbour, Cedar LNG will receive gas from Coastal GasLink and plans to export three million\u00a0 tonnes annually, about 30 per cent of what LNG Canada plans to ship\u00a0 during its first phase.<\/p>\n<p>B.C. approved LNG Canada&#8217;s plans to burn gas to power its plant and the project holds a 40-year export licence\u00a0 issued by the Canada Energy Regulator. After construction is complete,\u00a0 the liquefaction facility will start receiving gas from Coastal\u00a0 GasLink.<\/p>\n<p>The controversial pipeline project, built\u00a0 by Calgary-based TC Energy, has faced strong opposition from\u00a0 Wet&#8217;suwet&#8217;en Hereditary Chiefs and their supporters since its approval\u00a0 in 2014. Despite the province and the pipeline company signing deals\u00a0 with five of six elected band councils, neither received consent from the Hereditary Chiefs, whose authority and jurisdiction over the 22,000 square-kilometre territory was affirmed in a landmark Supreme Court of Canada ruling in 1997. Conflicts between land defenders and the pipeline builder led to more than 80 arrests, allegations of RCMP misconduct and international scrutiny. Court proceedings are ongoing.<\/p>\n<p>Meanwhile, TC Energy could be gearing up to start pushing another gas pipeline across northern B.C. Approved by\u00a0 the B.C. government around the same time as Coastal GasLink, the Prince Rupert Gas Transmission pipeline would span around 900 kilometres and cross the Kispiox and Skeena rivers and traverse Nilkitkwa Lake at the headwaters of the Babine River.\u00a0 The pipeline would connect Montney gas reserves to Ksi Lisims, a\u00a0 proposed liquefaction and export facility on Nisga&#8217;a territory. The\u00a0 Nisga&#8217;a-led liquefaction and export project is currently undergoing\u00a0 environmental assessment.<\/p>\n<p>As B.C. enters a provincial election year,\u00a0 the LNG export sector could be at the forefront of political debate.\u00a0 With projects like Ksi Lisims pending approval, pipelines at the ready\u00a0 and LNG Canada firing up its smokestacks, voters across the province\u00a0 will be paying attention to what politicians have to say on the\u00a0 subject.<\/p>\n<p>South of the border, LNG has already become an election issue. As the New York Times recently reported,\u00a0 U.S. President Joe Biden&#8217;s administration is delaying a decision on all\u00a0 LNG proposals to assess the sector&#8217;s true impact on climate.<\/p>\n<p>&#8220;This pause on new LNG approvals sees the climate crisis for what it is: the existential threat of our time,&#8221; Biden said in a statement.\u00a0 &#8220;We will heed the calls of young people and frontline communities who\u00a0 are using their voices to demand action from those with the power to\u00a0 act.&#8221;<\/p>\n<p>B.C. environmental groups applauded the president&#8217;s decision, calling on the province&#8217;s politicians to do the same.<\/p>\n<p>Proponents say gas extracted in northeast\u00a0 B.C. and exported via Pacific ports will support Asia&#8217;s transition off\u00a0 of more emissions-intensive energy sources like coal. LNG supporters are fond of saying the gas is &#8220;cleaner&#8221; than coal and key to global climate\u00a0 action.<\/p>\n<p>&#8220;Our project represents an LNG facility\u00a0 that produces LNG at one of the lowest greenhouse gas\u00a0 1\/8intensities 3\/8 in\u00a0 the world today,&#8221; Waddington said. &#8220;It really demonstrates how Canada is\u00a0 at the forefront of delivering climate solutions and less intense greenhouse gas energy ? that we&#8217;re going to need as energy demand triples by 2050 across the globe.&#8221;<\/p>\n<p>Former federal minister of natural resources Amarjeet Sohi said the LNG export sector aligned with the country&#8217;s goals when Canada announced a $275-million investment in support of LNG Canada in 2019.<\/p>\n<p>&#8220;Well-planned projects have the potential\u00a0 to strengthen regional, local, Indigenous and national economic\u00a0 development objectives,&#8221; Sohi said at the time. &#8220;The LNG development has\u00a0 the potential to help the world build a low carbon energy future.&#8221;<\/p>\n<p>Waddington said the opportunity to meet\u00a0 demand for the fossil fuel _ which she says isn&#8217;t going away anytime\u00a0 soon _ with gas extracted and liquefied in B.C. sets an example to the\u00a0 rest of the world. She said the public needs to think about it from a\u00a0 global perspective, not just in terms of provincial or even national climate targets.<\/p>\n<p>Supporters of the sector maintain that LNG\u00a0 produced in Canada is subject to tighter environmental and emissions\u00a0 regulations than other gas-producing jurisdictions around the world.\u00a0 Both B.C. and the federal government are working on strengthening methane regulations,\u00a0 and the province&#8217;s access to hydroelectricity could reduce the overall\u00a0 carbon footprint of getting the gas to markets, if projects are\u00a0 electrified.<\/p>\n<p>Proponents say all this makes B.C.&#8217;s gas a\u00a0 hot commodity to buyers in countries like Japan and South Korea, both\u00a0 of which are heavily dependent on imports and working towards ambitious\u00a0 climate targets.<\/p>\n<p>When Waddington says the Kitimat facility\u00a0 will produce LNG that is cleaner than other liquefaction plants, that&#8217;s\u00a0 comparing it to operating facilities in places like Australia and the\u00a0 United States. Which is to say, it&#8217;s a lesser of evils _ not a field of roses.<\/p>\n<p>At the smokestack, it is less\u00a0 emissions-intensive and cleaner to burn gas to produce electricity than\u00a0 coal, especially in terms of particulate matter it releases into the\u00a0 air. Using coal for energy production creates large amounts of carbon\u00a0 emissions and a nasty soup of pollutants. Picture a blanket of thick\u00a0 smog obscuring the skyline of a city in China and you get the idea. But\u00a0 the smokestack is just one small part of a long, complicated and emissions-intensive process.<\/p>\n<p>And while population increase does mean corresponding increases in energy demand, how that energy is produced depends on a lot of factors.<\/p>\n<p>Take Japan, for example. While the country is one of the world&#8217;s largest importers of gas, its demand for the\u00a0 fossil fuel has been steadily decreasing over the past decade, according to the U.S.<\/p>\n<p>Energy Information Administration.\u00a0 And China, a global leader in zero-emissions energy projects, is\u00a0 driving a massive change in renewables. According to Reuters, the\u00a0 Chinese central government recently said wind and solar will start to replace coal and gas as the country&#8217;s main source of power over the coming years, with fossil fuels being relegated to backup sources of energy.<\/p>\n<p>If Waddington&#8217;s claims that B.C. gas will\u00a0 displace coal in Asian countries, repeated widely by her peers in the\u00a0 oil and gas sector, are true, they haven&#8217;t offered any proof.<\/p>\n<p>As The Narwhal recently reported,\u00a0 the federal government is looking for evidence to back up claims that\u00a0 B.C. gas could help lower international emissions, but has yet to find\u00a0 any. Critics say that could be because no evidence exists.<\/p>\n<p>Jonathan Wilkinson, federal minister of\u00a0 energy and natural resources, noted Canada&#8217;s general support for LNG in\u00a0 the short-term but he wasn&#8217;t shy about where the sector is heading.<\/p>\n<p>&#8220;Climate change is altering our world&#8217;s\u00a0 environments in a myriad of harmful ways,&#8221; he said in Prince George.\u00a0 &#8220;The planet is increasingly, effectively burning up.&#8221;<\/p>\n<p>&#8220;At the end of the day, the most\u00a0 significant cause of climate change, as you know very well, is carbon\u00a0 emissions from the production and the combustion of fossil fuels,&#8221; he\u00a0 continued as the hundreds of attendees listened in silence. &#8220;We need to\u00a0 reduce and largely eliminate the unabated combustion of fossil fuels\u00a0 over the period between now and 2050.&#8221;<\/p>\n<p>Wilkinson cautiously said the LNG export\u00a0 sector has a role to play in the coming years but stressed the\u00a0 importance of making sure the gas is actually used to help countries\u00a0 eliminate the use of other fuel sources like coal.<\/p>\n<p>&#8220;To be clear, it can&#8217;t be displacing\u00a0 renewables,&#8221; he said.<\/p>\n<p>&#8220;It actually has to be displacing coal if it&#8217;s\u00a0 going to have the kinds of climate benefits that people think.&#8221;<\/p>\n<p><em>\u00a0Matt Simmons\/Local Journalism Initiative Reporter\/<\/em><em>THE NARWHAL\/LJI is a federally funded program.<\/em><\/p>\n<p>&nbsp;<\/p>\n","protected":false},"excerpt":{"rendered":"<p>By Matt Simmons \u00a0Local Journalism Initiative Reporter As Teresa Waddington proudly proclaimed LNG Canada is on track to wrap up construction in Kitimat, B.C., this year, the\u00a0 room full of hundreds of attendees at the BC Natural Resources Forum\u00a0 erupted in cheers. &#8220;We are 90 per cent complete, bringing\u00a0 Canada&#8217;s first LNG export facility to &#8230;<\/p>\n","protected":false},"author":4,"featured_media":0,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"pmpro_default_level":""},"categories":[32,31,39],"tags":[],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v21.1 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>The door to B.C.&#039;s liquefied natural gas export sector is about to open. 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