US pause on LNG exports raises pressure on Canada, BC to do same
29/01/2024 17:50
By Rod Nickel
WINNIPEG, Manitoba, Jan 29 (Reuters) - U.S. President
Joe Biden's decision to pause expansion of American liquefied
natural gas (LNG) exports has raised pressure from environmental
groups on the British Columbia and Canadian governments to do
the same, although following suit may be politically difficult.
British Columbia (B.C.) will hold an election in October,
and its left-leaning New Democrat government is expected to
decide late this year whether to approve Ksi Lisims' 12
million-metric ton export facility. It would become Canada's
second-largest LNG terminal and also requires federal approval.
Canada's first significant LNG exports may begin this year
with the Shell-led SHEL.L LNG Canada facility more than 90%
built. A second phase under consideration by LNG Canada that
already has government approval, and several other projects, may
follow, allowing Canadian gas to reach lucrative Asian markets.
Both the provincial government in B.C., where the projects
are located, and Prime Minister Justin Trudeau's federal
government have set targets to cut greenhouse gas emissions by
2030, and the LNG facilities could complicate those goals.
Biden on Friday said the U.S. Department of Energy will
review whether LNG exports are undermining domestic energy
security, raising consumer costs and damaging the environment.
A coalition of environmental groups urged B.C. to do the
same.
"This is certainly going to be an issue in an election
year," said Julia Levin, associate director of national climate
at Environmental Defence. "While it's true that most of the big
LNG projects have been approved, there are lots of ways to still
get projects killed even after they've been approved."
B.C.'s three leading provincial parties support LNG
development, making environmentalists' call for a moratorium "an
uphill battle," said Kathryn Harrison, a political science
professor at University of British Columbia.
Like the U.S., Canada produces more gas than it needs
domestically.
B.C.'s newest LNG proposals call for the facilities to run
on hydropower, not natural gas, reducing their environmental
footprint compared with most in the U.S. Hydropower, however, is
in short supply.
Asked whether B.C. may pause LNG development, the province's
Environment Minister George Heyman said its assessment process
includes examination of climate impacts and the provincial Clean
BC plan requires new LNG proposals to be net-zero emissions by
2030.
B.C.'s net-zero requirement, however, does not account for
downstream emissions, Harrison said.
Ksi Lisims' floating LNG facility north of Prince Rupert,
B.C., proposed by the Nisga'a Nation, Western LNG and a gas
producers consortium, has its export licence in hand and is
seeking a B.C. environment certificate. It expects a B.C.
decision around November and a decision from the federal
government around the same time.
The project plans to run on hydropower from the start in
late 2028, said Western CEO Davis Thames. He added that Canada
already has a strong system to regulate methane emissions, one
of environmentalists' main LNG concerns.
"It's just a totally different set of circumstances," Thames
said in an interview.
But Levin said methane leaks in LNG's supply chain are
poorly accounted for and she rejects industry's argument that
LNG will reduce global emissions by displacing higher-emitting
coal in Asian electricity plants.
The International Energy Agency warned in October that
increasing global LNG production capacity risks creating a glut
after 2025, but a U.S. pause that reduces competition would be
bullish for Ksi Lisims, Thames said.
FortisBC's FTS.TO smaller Tilbury LNG expansion project is
also seeking an environment certificate.
A spokesperson for federal Natural Resources Minister
Jonathan Wilkinson said all LNG projects will be required to
comply with a planned oil and gas emissions cap.
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(Reporting by Rod Nickel in Winnipeg, Manitoba; editing by
Jonathan Oatis)
((rod.nickel@tr.com; X: @RodNickel_Rtrs;))