Although there will remain people in the world that will continue to deny the existence of climate change, the evidence is plentiful. Not only did the oceans warming faster than expected and set a temperature record in 2018 but the year was also the 4th warmest year ever. Even more alarming is the fact that the 3 years that were hotter than 2018 are the previous 3 years. With tremendous forest fires across the West Coast of North America and extraordinary hurricanes constantly hitting the East Coast, climate change will continue to become a hotter topic. So with the LNG Canada project expected to generate over 3.5 million tonnes of CO₂ equivalent annually just in the first phase alone, how is this project being approved in a country and province making so much noise about climate change?

Transition Fuel

Liquified Natural Gas (LNG) is marketed as a transition fuel that could drive countries like India and China to displace coal and actually reduce global greenhouse gas emissions. With coal consumption accounting for approximately half of the world’s CO₂ emissions and just these two countries alone accounting for over 60% of global coal consumption the impact could be vast. Not including the drilling and extracting, natural gas produces 50% to 60% fewer emissions than coal. However, the drilling and extracting of natural gas can result in leakage of methane, a gas much worse than CO₂ for climate change. In order to deliver true benefits compared to coal, the leakage of methane must be kept below 3.2%. If the LNG Canada project is able to succeed in this, the benefits for carbon emissions are obvious.

Coal and the BC Economy

While being the first province in Canada to introduce a carbon tax and the BC government always being a large voice in arguing climate change is an important issue, BC exported more coal in 2017 than all of Mexico produced in the same year. In fact, Vancouver is the largest exporter of coal in all of North America, the majority of which is produced in BC. Using an emissions formula by Sierra Club, National Post estimates that 99.8 million tonnes of CO₂ emissions will be produced by coal exported from BC in 2017. However, coal is very important to the BC economy as it stands today. Coal is the province’s number one export commodity and generates billions for the economy and thousands of jobs.

The Net Benefit

If LNG truly is the transition fuel from coal to a greener future for Asia then BC has no choice but to be heavily involved. The LNG industry in BC would have to be able to replace the jobs and economic impact the coal industry currently has in BC. Especially since global demand for coal continues to decline every year while LNG demand rises. In 2013 it was estimated that the coal mining industry was directly responsible for 26,000 jobs. After construction on the LNG Canada project is completed, it is expected to generate over 10,000 jobs for just BC. The LNG Canada project at $40 billion is the largest in BC’s history. The economic impact will be significant and will go a long way to start supplanting the coal industry.

Although the coal that is mined in BC or exported from BC does not have a large impact on BC’s CO₂ emissions, it does have a large impact on global emissions. Shell, a major player in the LNG Canada project has set multiple goals for methane leakage. By 2025, the company is aiming to have the amount of methane emitted compared to the total volume of natural gas produced to be less than 0.2% and by 2050 less than 0.1%. If Shell is able to meet these numbers in the LNG Canada project, LNG can truly serve as a transition fuel. Thus, although this project may raise BC’s share of carbon emissions, it will actually help reduce global carbon emissions. The net economic impact for BC and net carbon emission impact globally will both be significantly positive.

LNG Pipeline

There has been a lot of national controversy surrounding the pipeline being built that will carry LNG to the Pacific Coast. There are 2 major reasons why this pipeline is very important.

  1. Although it is possible to move natural gas by truck or rail, these methods have a significantly higher cost. Unless you are moving the gas only for a short distance, pipelines are the most cost-effective way to move oil and gas.
  2. As is the case with oil and gas moving from Alberta, pipelines remain the safest method of transportation for moving natural gas. In addition to the fact it is more convenient, this is the same reason why natural gas is delivered to our homes by pipeline and not delivered by truck.

Of course, nobody wants a pipeline going near their homes but when you think about the largest picture, you will realize it is the best option. Although the damage caused by the recent train derailment in Trail, BC was minimal, the same cannot be said for the subsequent derailment in St. Lazare, Manitoba where you can still smell oil in the air.

 

Sources: The Globe and Mail; The Globe and Mail; LNG Canada; Forbes; National Post; USCUSA; Vancouver Sun; BOE Report; CBC; Global News; BIV; Reuters; The Globe and Mail; The Globe and Mail; The Globe and Mail; JWN Energy; CBC; Research Gate;