Asia's increasing energy appetite has made its fuel stock a source of great interest to those working on climate change issues. Because conventional natural gas emits fewer greenhouse gases than other fossil fuels, some see it as a bridging fuel, an interim solution that will displace coal before we move on to cleaner technology. A number of countries are vying to provide Asia with liquefied natural gas (LNG), a cooled and condensed form of gas that is more efficiently transported by ship. Earlier this year, the B.C. government released its natural gas strategy, which touts LNG as an opportunity to significantly reduce global greenhouse gas emissions. The establishment of LNG plants for export on the B.C. coast would enable the scale-up of natural gas extraction in the province and will significantly increase emissions. We are very concerned that the province is foregoing climate leadership in the chase for fossil fuel extraction royalties, higher emissions and local environmental damage.
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B.C.'s reserves of conventional natural gas are steadily diminishing. This decline is being offset by a rapid increase in extraction of unconventional gas in the Horn River and Montney basins. Shale gas in the Horn has a significantly higher carbon footprint than conventional natural gas. And as we've outlined in our Natural Gas report, unconventional gas development comes with a host of other problems including significantly more land use for development, increased water and chemical use in remote locations.
There are three proposed sites for LNG plants, including Kitimat LNG, which has already undergone federal and provincial environmental assessments. The government is optimistic that these three facilities can produce an additional 1.9 trillion cubic feet annually for export by 2020. To achieve this level of output, the production of shale gas would need to increase considerably. Assuming that B.C. needs to produce enough gas to satisfy its own demand, we'd need to increase production to more than two-trillion cubic feet. The problem is that much of this new supply will need to be made up of more emissions-intensive shale gas.
So what would be the impact of this type of production on emissions from the natural gas sector? We ran these production levels through the CanESS energy system simulator developed by WhatIf technologies, and the model projected the emissions in the chart below. The dark blue line shows emissions from extracting more gas from carbon-intensive gas basins tripling from 2009 levels. The increase in emissions attributed to LNG production would be greater than the current carbon footprint of B.C.'s oil and gas industry.
Adding further strain, Premier Christy Clark recently announced that natural gas would be considered a "clean" fuel to power the three proposed LNG export terminals. Even if we ignore the absurd claim that burning a fossil fuel, along with the local environmental damage from well-pad development and use of fracking fluid, is "clean", the impact of self-powered LNG termimals to chill the gas to a liquid would add another five megatonnes (20 per cent) of emissions, as shown in the chart below.
To achieve the provincial target to reduce emissions by 33 per cent, emissions associated with energy consumption and production would have to be reduced by at least 17 megatonnes from current levels. However, the expanded LNG production scenario would increase emissions compared to a business as usual scenario by 17 megatonnes, essentially doubling the effort it would take to achieve the target. B.C.'s climate policies, such as the carbon tax, will drive business-as-usual emissions down; however, most emissions coming from the production of natural gas from shale are not taxed (55 per cent for processing and venting) and therefore will not be subject to the tax to reduce emissions. We cannot rely on the carbon tax at its current levels to help reduce emissions from sector because, most of its emissions are not even subject to the tax.
If the province's emission-reduction efforts were successful in other sectors, LNG production would return emissions to 2005's record high level. In its Climate Action Plan, the government does not acknowledge the growing share of emissions that shale gas production and LNG exports would represent. The policies designed to drive down B.C.'s emissions over the next eight years will be insufficient in a future where natural gas expansion has overwhelmed the province's emissions allowance.
Important to note that the "business as usual" scenario is just a projection of trends in the use of fossil fuels. The impact of policies like the carbon tax are not captured in an energy model like Caness meaning that we are not committed to the business as usual scenario. We can and are reducing emissions in many sectors like transport and residential buildings through policy. What the business as usual scenario illustrates is the relative jump in emissions between a non-export scenario and an LNG export scenario. Further, the jump in business as usual emissions in 2020 outlines the effect of declining conventional gas reserves. Expanded shale production is likely to occur regardless of whether we are exporting LNG or not. Unless there is provincial leadership to address these emissions both by making industry reduce emissions from production and reduce the reliance on natural gas in other sectors like electricity generation and commercial buildings we'll still have upward pressure on total provincial emissions.
There are further issues with development of the natural gas industry. Marc Lee at the Canadian Centre for Policy Alternatives has demonstrated the sheer volume of emissions embodied in the natural gas for export and combustion, which is between 80 and 100 megatonnes, more than B.C.'s total annual emissions. Although the province has stated that natural gas would go to offset coal-fired power production, which is twice as emissions intensive, there's reason to be skeptical. If B.C. LNG ends up in Japan it will likely lead to a net global rise in emissions, as LNG would replace emissions-free nuclear capacity. Another point to consider is whether natural gas is an appropriate bridging fuel at all. By investing heavily in LNG infrastructure, shale gas expansion and natural gas power plants we may be locking ourselves in fossil fuel use and emissions levels above targets to keep global warming below 2 degrees Celsius.
As we've shown, there's considerable reason to be concerned with the province's LNG development plans. Developing LNG for export at this pace and scale would make B.C.'s GHG targets impossible to meet without ambitious side actions to reduce the sector's emissions intensity, as well as further actions to reduce emissions in other parts of the province. In an upcoming blog, we'll evaluate how much slack there is to reduce the emissions intensity of natural gas production and what levels of NG development, technological solutions and policy options exist to ensure we meet our targets.
For more information, check out the Pembina Institute's take on the impact of shale development and recommendations. We'll touch on these in the next blog and assess what they could accomplish in an LNG-export-driven B.C. economy.