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Vaughn Palmer: LNG hopefuls falling in line with net zero, if B.C. Hydro can deliver

Vancouver Sun logo Vancouver Sun 2023-03-23 Vaughn Palmer
LNG Canada CEO Jason Klein stands atop a receiving platform overlooking LNG processing units called trains that are used to convert natural gas into liquefied natural gas at the LNG Canada export terminal under construction, in Kitimat. © Provided by Vancouver Sun LNG Canada CEO Jason Klein stands atop a receiving platform overlooking LNG processing units called trains that are used to convert natural gas into liquefied natural gas at the LNG Canada export terminal under construction, in Kitimat.

VICTORIA — A dozen years after premier Christy Clark touted the promise of developing LNG for export in B.C., Premier David Eby is fielding a half dozen serious proposals.

The latest move came Thursday from Woodfibre LNG, which announced a revised plan to achieve net zero emissions of greenhouse gases when production begins at a site near Squamish in 2027.

Woodfibre relies on a combination of electricity, carbon offsets, and technological innovation to reach that goal. There’s a commitment to offset emissions during construction, slated to begin this fall.

“We are proud to have a credible strategy in place that will make us the world’s first net zero facility,” said Woodfibre LNG President Christine Kennedy.

She predicted the project will achieve net zero three years before the B.C. government’s target of 2030, as set out in Eby’s new energy framework announced March 14.

On March 16, the province’s independent environmental assessment office gave the go ahead for a full-blown review of Ksi Lisims LNG, backed by the Nisga’a First Nation and its partners in Canada and the U.S.

Central to the decision was the project delivering a plan on how it would reach net zero by 2030, as required in Eby’s framework.

Also on the 14th, Eby announced the cabinet had accepted a recommendation from the assessment office to approve Cedar LNG, majority owned by the Haisla First Nation.

Though Cedar LNG is not strictly bound by the net zero requirement announced later in the day, it will nevertheless achieve “near net zero” according to Eby.

Then there’s the LNG Canada project, already well under construction at a site in Kitimat and scheduled to open in 2025. The company was back in the news earlier this year regarding construction of a second phase, which would double output.

A fifth major LNG project entails a major expansion of the Fortis facility at Tilbury Island.

Together the foregoing, including the two phases of LNG Canada, would produce almost 50 million tonnes of LNG for export a year if and when they are operational. That would still be only a fraction of the combined output of the terminals in Louisiana, which started LNG development at about the same time as Christy Clark began talking about the prospects in 2011.

LNG Canada was well advanced when the New Democrats took office in 2017.

However, Shell and its partners only greenlighted the first phase after the John Horgan NDP government approved significant tax and regulatory relief.

The Eby government’s latest moves on LNG have so far met with significant support, foremost because of the “net zero” commitment, but also owing to the Indigenous partnerships.

Woodfibre also has a long-standing Indigenous relationship, having years ago submitted to environmental review by the Squamish Nation.

Among the conditions in the Squamish-led approval process “was the commitment for electric compressors using renewable hydroelectricity from B.C. Hydro, resulting in 14 times fewer emissions than a conventional LNG facility,” the company noted.

Electric drive from hydro power is the key to reducing emissions in an LNG facility. Conventional production consumes natural gas to produce LNG.

“We have a firm commitment from B.C. Hydro to provide hydroelectricity for the project,” Woodfibre President Kennedy said Thursday.

Cedar LNG and Ksi Lisims LNG also rely on plugging into the B.C. Hydro grid to achieve net zero.

LNG Canada’s first phase is direct drive, using natural gas. The second phase already has provincial approval, predating the NDP time in office.

Eby added a wrinkle last week when he announced that the second phase would nevertheless be captured by a new cap on oil and natural gas emissions, now under development by the province.

Depending on the cap, LNG Canada may well need to adopt electric drive for the second phase at some point.

“We continue to evaluate electric power requirements for a phased electrification approach to Phase 2,” Teresa Waddington, the company vice-president of corporate relations, confirmed Thursday.

She indicated electric drive would necessitate construction of a new transmission line.

“Advancing electrification and having the reliable transmission infrastructure will require significant capital investment,” she added.

“We’re working collaboratively with governments, B.C. Hydro and others to assess the cost and the investments required for putting that infrastructure in place in a timely manner. This approach also needs to be integrated with broader challenges such as LNG Canada’s overall cost competitiveness.”

Those concerns about cost, reliability, competitiveness and the availability of a sufficient supply of electricity, apply across the LNG sector.

Plus there’s the challenge of timelines for building transmission lines and generating capacity, as Eby himself admitted last week.

“The current timelines that are often given to proponents is eight to nine years from initiation to connections,” he told reporters. “Obviously, that is not consistent with where we need to be to build a clean energy future.”

Eby promised to light a fire under both B.C. Hydro and the B.C. Utilities Commission — and he needs to do so.

Without the guarantee of the necessary supply of electricity, not likely will investors greenlight construction of a net zero LNG terminal.


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