Province also plans to unveil two-tiered LNG tax; finance minister said government wants to ensure industry is competitive
VICTORIA—New legislation introduced in British Columbia requires liquefied natural gas (LNG) plants to meet emission standards or face penalties and makes the industry the cleanest in the world, Environment Minister Mary Polak said.
Polak tabled the Greenhouse Gas Industrial Reporting and Control Act this week, and said it will set the province’s emission benchmark at 0.16 tonnes of carbon dioxide for each tonne of LNG produced, which is lower than any other LNG facility in the world.
She said it will test legislated GHG emission targets, which have been set at one-third below 2007 levels by 2020, and the province will also consider cutting emissions in other sectors, such as transportation and construction.
“It is going to be a challenge, no question,” Polak said. “Sure, it’s going to be really difficult but it means we’re going to have to be drilling down more and more on the everyday things that we can do to reduce GHG emissions.”
Reaction to the legislation from industry and environmental groups was lukewarm, and opposition politicians labelled the proposed law an attempt to hoodwink British Columbians about the amount of pollution the plants will emit.
“Saying one thing and doing another, where they claim that day is night and night is day, where they claim that brown is green and that standing up for the environment is what they’re doing,” said NDP environment critic Chandra Herbert.
Green Party MLA Andrew Weaver called the legislation a wild west law that will be a laughing stock in environmental circles worldwide because the numbers don’t add up.
“It’s like playing World Cup soccer and B.C. has a qualifying process that actually doesn’t listen to FIFA rules,” he said.
Polak said the government estimates five B.C. LNG plants will create 13 million tonnes of greenhouse gas (GHG) emissions, adding to B.C.’s current annual GHG emissions of 62 million tonnes.
B.C. LNG Alliance spokesperson David Keane said the benchmarks bring clarity to environmental questions companies may have, but many are still not ready to make final investment decisions.
He said the industry is waiting for the introduction of the government’s LNG income tax legislation, expected Oct. 21.
“In terms of looking at all of the costs that we incur, our industry is going to be paying the LNG tax, the carbon tax, purchasing carbon offsets, paying royalties, PST, GST, payroll taxes, municipal taxes and corporate income taxes at both the federal and provincial levels,” Keane said.
Merran Smith, director of Clean Energy Canada, said the B.C. legislation is a good start but won’t, on its own, lead to the “cleanest LNG in the world” as promised by the Liberals.
Polak said LNG facilities with emissions below the set benchmark will receive credits they can sell.
Companies can purchase carbon offsets or invest in a technology fund to meet their target.
Those that don’t meet their targets could face fines of as much as $1.5 million and up to two years in jail.
The B.C. benchmark includes all GHG emissions from the time gas is extracted from the ground until it is exported and is lower than any comparable marker in Norway, Australia and the United States.
“The 0.16 benchmark sets a new, recognized global standard for LNG facilities,” said an Environment Ministry statement.
Premier Christy Clark calls the proposed LNG industry a worldwide pollution fighter because it will replace dirty coal with cleaner-burning natural gas in Asian countries, especially China.
Finance Minister Mike de Jong will introduce legislation that outlines the government’s plans to tax the LNG industry.
While he can’t disclose much about the proposed law, de Jong did say it will be a two-tiered tax recognizing the significant capital investments the industry is making.
He said the government wants to ensure the industry is competitive, while British Columbians are receiving a fair return on the resources they own.
Earlier this month, the B.C. LNG Alliance warned the window is closing on the province’s trillion-dollar gas dream and it is worried about the industry’s global competitiveness.