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Changes to LNG Plan Pull Plug on Jobs Say First Nations

BC Libs' decision to power project with fossil fuels undercuts FN green energy providers say critics.

By Geoff Dembicki, 4 Apr 2013, TheTyee.ca

Christy Clark at natural gas conference

Premier Clark addressing liquified natural gas conference in February. Photo: BC Government.

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When Premier Christy Clark unveiled her liquefied natural gas (LNG) strategy just over a year ago, it had the look and feel of a grand compromise.

The Liberal government's plans included at least three new LNG terminals on the North Coast (one of them producing enough liquefied gas to fill seven B.C. Place Stadiums each day) and hundreds, perhaps even thousands, of tankers navigating its pristine waters.

But the premier assured British Columbians her strategy would in no way reverse the province's transition to a green economy. Quite the opposite: LNG development, her government argued, could actually make that transition faster.

It was an unusual gambit. Most other LNG facilities around the world burn natural gas to power their operations. "British Columbia will be home to the world's first LNG export facilities that use clean energy," the government promised.

This was no small promise. The industrial process of cooling natural gas to minus 162 degrees Celsius (which allows it to be liquefied and transported in tankers) requires massive amounts of energy. So much, that currently proposed LNG facilities in B.C. could consume as much power as 1.6 million households.

If all that power was to truly come from "clean" sources, the province would need to achieve a massive scale-up of B.C.'s clean energy industry.

First Nations -- more than 125 of which are helping develop run-of-river, bio-energy, wind power and other low-carbon projects -- could benefit hugely. They might win greater financial control over their resources, build more sustainable communities, and gain much-needed jobs and revenues.

Over the last year though, some First Nations have begun to doubt whether that clean energy scale-up will happen at all -- and how committed to it the Liberals ever were.

First, Clark's government changed B.C.'s definition of "clean energy" to include fossil fuels. Then, it announced that renewable power wouldn't be mandatory for LNG producers. And last month, BC Hydro scaled back a program helping support green First Nations jobs.

With a provincial election less than two months away, the Liberal government seems to have forgotten its promise "that LNG plants would be powered by clean energy," said Judith Sayers, a University of Victoria professor and former Hupacasath First Nation chief. Now, she added, "there's a lot of uncertainty."

'Flabbergasted'

On July 11, 2012, representatives from BC Hydro met with more than a dozen First Nations delegates at the Best Western Inn in Terrace, B.C. It was the sixth of eight aboriginal consultation sessions held across the province last summer.

First Nations feedback was to be incorporated into BC Hydro's Integrated Resource Plan, a major document that will guide the province through its next 20 years of electricity production. (A final version is expected this August).

Mark Starlund appeared on behalf of the Gitanyow First Nation. Its traditional territories are a few hours' drive northeast from Kitimat, the proposed coastal heartland of B.C.'s liquefied natural gas industry.

Starlund, the Gitanyow's elected chief, feared that a recent decision by premier Clark's government "would kill all development on current and future green energy projects" for First Nations. Starlund was referring to changes made last June to B.C.'s Clean Energy Act.

The Act stipulates that 93 per cent of the province's electricity must come from "clean or renewable resources" such as "biomass, biogas, geothermal heat, hydro, solar, ocean [and] wind."

But Liberal policymakers last June created a major exception: In cases where natural gas, a climate-harming fossil fuel, was burned to meet the power demands of new LNG facilities, it too would effectively be considered "clean."

"This update was important," an energy ministry spokesperson wrote in an email to The Tyee. "LNG plants require firm power and a high level of reliability."

Yet the changes left Ecojustice staff lawyer Karen Campbell feeling "incredulous and flabbergasted." It was a blatant case of green-washing, she reportedly said, "like calling an apple an orange."

The natural gas exception would also hurt aboriginal communities, Gitanyow chief Starlund argued at the BC Hydro meeting in Terrace. "[First Nations] rely on green energy opportunities," he said.

Clean energy, after all, means jobs. Run-of-river, bio-energy and other low carbon projects are potential lifelines for groups such as the Gitanyow, whose unemployment rate is as high as 80 per cent.

But Starlund wondered what demand, if any, now exists for renewable energy produced by First Nations. The Liberal government had promised that LNG producers would be major customers, and then changed provincial law so they could burn cheaper natural gas instead.

"If you allow [natural gas] to be labeled a quote unquote, 'clean energy,'" Starlund told The Tyee in an interview, "does that stop true clean energy projects from going forward?"

Industry chooses

The Tyee posed a variant of that question to BC Hydro and did not receive a response. Energy minister Rich Coleman, however, said last November that LNG producers are under no obligation to use renewable energy.

"They will make the decision as to which way they want to go," he reportedly said. It was a marked change of tone from nine months earlier, when the Liberals had first announced their liquefied natural gas strategy.

Then, Environment Minister Terry Lake had bragged that "B.C. is demonstrating climate leadership" by supporting "the world's first clean-energy-fuelled liquid natural gas plants."

A Tyee interview request to Coleman was denied. But an energy ministry spokesperson informed The Tyee that, "at this time there are no renewable energy requirements for LNG producers."

Given the choice, those producers seem to prefer cheap natural gas.

Progress Energy, a Malaysian-owned firm proposing an $11 billion liquefied natural gas project near Prince Rupert, is open to using renewable energy. But only for powering "ancillary" infrastructure – stuff like wastewater treatment, or fire protection.

The bulk of its electricity needs, up to 700-megawatts for actually cooling and liquefying natural gas, will be generated by gas-fired power, Progress has decided. That's the energy equivalent of building a new coal-fired power station.

If B.C.'s entire LNG industry is developed this way, it could release 17 million tons of greenhouse gases into the atmosphere each year, the Pembina Institute's Matt Horne has calculated. "This will make it impossible for the province to meet its climate change commitments," he wrote.

The provincial NDP appears to share Horne's concerns about emissions. But the party's energy critic, John Horgan, is reportedly not opposed to an LNG industry powered by natural gas, instead of renewable energy. He wasn't available for an interview to clarify the NDP position.

B.C.'s Green Party, meanwhile, "argues that we should not be exporting LNG" at all, a spokesperson wrote in an email. (The Conservatives did not respond to The Tyee's interview request.)

'Cutting back'

The Liberal government still insists it's committed to creating "the cleanest LNG industry in the world." At the same time, recent policy changes may limit First Nations involvement in that effort.

That was the conclusion of Sayers, the UVic professor and former Hupacasath chief, after reviewing updates last month to a BC Hydro program helping support green First Nations jobs.

The Standing Offer Program makes it easier for small developers to sell low-carbon electricity to BC Hydro. It's enabled First Nations to pursue renewable energy on their traditional territories. (Non-aboriginal projects have also benefitted).

But recent changes to the program limit how much renewable energy BC Hydro is willing to buy, and allow it to delay projects by as much as two years.

"So they are cutting back," Sayers said. "This is not going to help First Nations." Still, she acknowledged B.C. has recently made some positive strides.

Last month, Clark's Liberal government signed a hydro deal providing at least $2.5 million in annual revenues to the Tahltan Nation over the next 60 years. And it also just announced nearly $300,000 in funding to help 11 First Nations develop clean energy projects.

In scaling back the Standing Offer Program, BC Hydro argues it simply doesn't need that much more renewable electricity. The province, it says, already has enough power "to meet its energy needs over the next five to 10 years."

Yet BC Hydro's own draft planning documents appear to contradict that claim.

By 2017, they show, the province could face an energy shortage equivalent to the power needs of 80,000 homes, largely the result of new LNG projects. That supply gap could grow a further 15 times larger by 2031.

Natural gas right now is cheap and widely available. But it should only be one of many energy sources supplying LNG producers, said Paul Kariya, executive director of Clean Energy BC.

"Premier Clark said we'll have the cleanest liquefied natural gas industry in the world," he told The Tyee. "If that's going to be true, we need to think about alternatives."

In Kariya's opinion, B.C. is more than capable of supplying LNG producers with renewable energy. This would help provide jobs, revenues and autonomy for First Nations communities.

After all, he points out, the market for liquefied natural gas is notoriously volatile. There's no telling how long the province's LNG plants will even be in operation, Kariya said. "So let's make sure there's a positive legacy left for B.C."  [Tyee]

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