As B.C.’s first Green MLA, Andrew Weaver likens his job to that of an “honest broker”.
The world-renowned climate scientist says so because he believes that British Columbians are being sold a bill of goods. It’s in the form of a wealthy future founded on natural gas.
It’s a vision being pitched by the B.C. Liberal government, and according to the recently sworn-in Oak Bay–Gordon Head representative, even opposition New Democrats have bought into it.
“My role will be to raise issues with respect to this that I think would otherwise not see the light of day,” Weaver told the Georgia Straight in a phone interview on June 11.
On the same day, Malaysian state-owned energy company Petronas indicated that it may spend up to $16 billion on a planned project to export liquefied natural gas (LNG) from Prince Rupert in northwestern B.C. The announcement was hailed by Premier Christy Clark and newly minted Minister of Natural Gas Development Rich Coleman as a validation of the B.C. Liberal vision.
However, the Wall Street Journal reported that according to Spencer Sproule, spokesperson for the Petronas project, called Pacific Northwest LNG, a final investment decision isn’t due until late 2014. Pacific Northwest LNG president Greg Kist said the same thing to the Globe and Mail last month, a fact that Weaver cited during the interview.
“So we hear this hoopla, hurrah-hurrah with re-announcements of the potential investments, but the reality is that they have not made the final investment decisions,” Weaver said.
A Fraser Institute study released last fall builds a case for marketing B.C.’s gas to Asia, where prices are indexed to Japan’s oil imports, making them significantly higher than those in North America.
In “Laying the Groundwork for BC LNG Exports to Asia”, authors Gerry Angevine and Vanadis Oviedo note that Japanese buyers are paying at least $15.45 per thousand cubic feet of LNG. Western Canadian suppliers are getting the equivalent of only about $3.38 from U.S. clients.
But Canadian producers will not get the entire price differential of more than $12 because exporting to Asia will involve costs like cooling natural gas into a liquid form that can be transported by tankers. The authors cite one industry estimate of additional earnings of $3.85 per thousand cubic feet if LNG goes to Asian markets.
Weaver pointed out that prices in the region should be at least $10 for Canadian exports to be viable. “So the assumption here is that that natural-gas price will stay in Asia above that cost,” he said. “Now the question to me is, is that really going to be the case?”
The Green MLA also said that he’s not buying the provincial government’s suggestion that B.C. will somehow play a dominant role in a “very competitive market” that it has yet to break in to.
According to the Oslo-based International Gas Union representing industry players worldwide, 18 countries were exporting their gas resources as LNG as of the end of 2011. Qatar is the largest supplier, accounting for 31 percent of the 241.5 million tonnes of global LNG exports during that year.
A leading expert on global warming, Weaver is likewise concerned that the government’s LNG aspirations will obliterate its legislated goal of reducing the province’s greenhouse gas emissions by 33 percent by 2020.
“If British Columbia moves down this path, it has no hope of meeting its regulated targets,” he said. “It would need to repeal the 2007 Greenhouse Gas Reduction Targets Act.”
The legislation calls for a reduction of greenhouse gas emissions to 43.5 million tonnes by 2020. In a study released in October 2012 titled “BC’s Legislated Greenhouse Gas Targets vs Natural Gas Development: The Good, the Bad and the Ugly”, author and economist Marc Lee of the Canadian Centre for Policy Alternatives outlines three scenarios demonstrating that the expansion of natural-gas production and the development of an LNG industry aren’t compatible with B.C.’s climate-action program.
The “low” scenario assumes that the natural-gas industry is going to double its 2010 emissions to at least 26 million tonnes. That would take up more than 60 percent of the province’s targeted emissions for 2020. Lee notes that this increase leaves little room for growth in all other sectors of the economy.
Weaver can only hope that “clean” electricity from hydro, wind, and geothermal sources will power up LNG plants.
That was the original plan laid out in February 2012, when the government unveiled its natural-gas strategy to set up three LNG plants by 2020. Five months later, it amended B.C.’s Clean Energy Act, classifying natural gas as a form of clean energy that can be used in generating electricity for LNG facilities.
Weaver noted that although burning natural gas produces fewer emissions than burning oil or coal, it is “not clean energy”.
As Weaver settles into his new job following his election on May 14 as B.C.’s only Green MLA, he promises to continue challenging the fundamental assumptions being made about natural gas as the stuff of prosperity for decades to come.