Unfortunate approval of Fortune Creek gas processing plant highlights flaws in B.C.’s LNG plan

Blog - Oct. 11, 2013 - By Matt Horne

The B.C. government has approved the construction of a new gas processing plant north of Fort Nelson. The news release heralding its approval doesn’t mention liquefied natural gas (LNG) but — make no mistake — this plant is being proposed to feed the demand for additional natural gas from any liquefaction facilities in northwest B.C., if they are constructed.

Unfortunately, this approval is a perfect example of two of the major shortcomings of the government’s aspirations to develop a LNG industry: the bigger picture of what LNG will mean for the province is missing, and proposals are being given the go-ahead with inadequate environmental standards. At 16.9 million cubic metres of gas production every day, this facility would produce more carbon pollution than any of B.C.’s current largest emitters. That said, it represents less than one-tenth of the gas that the province plans to be ship to northwest B.C. by the next decade, in its base capacity scenario.

Here’s the first problem with this approval. Last week, Premier Clark attempted to back out of her original promise to have high environmental standards for the entire LNG industry by saying the commitment only applies to liquefaction facilities themselves. In response, we argue that the impacts from any plants in Prince Rupert and Kitimat would be just the tip of the iceberg. The full picture of impacts from LNG includes the pipelines, processing plants and gas wells needed to feed those liquefaction facilities.

If the province succeeds in drawing an artificial boundary around Kitimat and Prince Rupert, then projects like the Fortune Creek gas plant conveniently don’t get counted. And the omission would be significant. At full build-out (in 2021), Fortune Creek would emit 2.4 million tonnes of greenhouse gas (GHG) emissions per year.

Pipes at natural gas plant. Photo credit: Province of British Columbia on Flickr.To put that in context, one plant would be responsible for six per cent of the GHG emissions limit the province has legislated for itself in 2020. It would also undermine the hard work being done by some of the province’s local governments. Take Vancouver as an example: the City is rightly proud of its efforts to reduce GHGs in an effort to be the greenest city in the world by 2020. The Fortune Creek project would undo Vancouver’s efforts between now and the end of the decade — three times over!

Although it approved the project, the B.C. Environment Assessment Office was blunt in its summary of GHGs:

“…[A]ssessed against the provincial GHG emission reduction targets, and having regard for the Proponent’s commitments, the proposed Project would likely constitute a significant increase to provincial GHG emissions, and contribute to a significant adverse environmental residual effect from GHG emissions.”

The second problem is that the approved project is much dirtier than it needs to be. As part of the environmental assessment process, a variety of scenarios were explored to see if the plant’s contribution to climate change could be limited. They looked at technologies like carbon capture and storage and using electricity from renewable energy instead of gas turbines to power the plant’s compressors.

In the best-case scenario explored, the plant’s emissions could be limited to 0.6 million tonnes compared to the 2.4 in the base case. That would essentially cut the impacts to one quarter of the size. The province decided that none of those technologies would be required as part of the approval conditions and the base case is being allowed to proceed.

The decision not to require carbon capture and storage merits specific attention. This was the biggest single opportunity to limit emissions, with the potential to reduce the impact from 2.4 million tonnes to one million tonnes. It’s also a technology that’s used in the development of LNG in Norway and Australia. So, while it isn’t cheap, it’s being demonstrated on a large scale around the world.

If Norway and Australia are finding ways to make these better environmental controls happen, why can’t B.C.? The province could just require the technology, which would probably be the simplest approach. It could also close a loophole in the carbon tax that means the proponent, Quicksilver Resources, had no economic incentive to implement a carbon capture and storage system. While most of the province’s GHG emissions are subject to the carbon tax, the emissions from gas processing plants that could be captured and stored are not. In the case of this project, this loophole in the carbon tax amounts to a $42 million per year handout to Quicksilver.

So, now you see why the Fortune Creek project provides such an unfortunate example of the failings of B.C.’s LNG strategy. The province has just approved a major cog in the LNG industry it wants to develop, without taking the time to adequately protect the environment. Premier Clark has already tried to tell British Columbians that her government’s promise for high standards in LNG development doesn’t apply to this particular cog. Whether it’s Fortune Creek, or the next cog, or the one after that — British Columbians should not accept an artificial boundary and sub-standard technologies when it comes to safeguarding the threat that this LNG strategy currently poses to our environment.

Matt Horne

Matt Horne is the Pembina Institute's associate regional director for British Columbia. He is based in Vancouver.


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