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B.C.'s Climate Plan Subsidizes Fossil Fuels (Yes, You Read That Correctly)

The hidden subsidies come on top of B.C. Premier Christy Clark's many concessions to the natural gas industry, including more than a billion dollars in royalty breaks, a freeze on the provincial carbon tax and taxpayer-subsidized promotion and marketing.

The B.C. government has quietly slipped subsidies for the natural gas sector into its climate plan, which has been panned as "cynical" by leading experts.

B.C.’s so-called Climate Leadership Plan, quietly released on August 19, includes a vague pledge to subsidize the electrification of upstream natural gas facilities in the northeast of the province, using “renewable” power from BC Hydro projects.

“I just could not believe the audacity of it when I was reading the plan,” Alex Doukas, senior campaigner at Oil Change International, told DeSmog Canada.“We’re using public dollars to help them reduce their emissions, when that should be the responsibility of the natural gas producers.”

“That’s why B.C. ostensibly has a carbon tax: there’s a principle called the ‘polluters pay principle.’ Taxpayers shouldn’t be picking up the tab for big polluters.”

The hidden subsidies come on top of B.C. Premier Christy Clark’s many concessions to the natural gas industry, including more than a billion dollars in royalty breaks, a freeze on the provincial carbon tax and taxpayer-subsidized promotion and marketing.

B.C. to Pay for Natural Gas Infrastructure and Subsidize Power Costs

Natural gas production and processing, which requires a great deal of energy, has historically been powered by natural gas or diesel.

“Full electrification” — which would include building new transmission lines, compressors and pumps to move gas through the system — would cut carbon emissions by an additional 2.4 million tonnes, according to the B.C. government.

Maximilian Kniewasser, analyst at the Pembina Institute, describes such reduction numbers as “fairly significant,” requiring a bit more than 6,000 gigawatt hours of energy (20 per cent more electricity than the Site C Dam will produce).

The climate plan, which failed to implement the recommendations made by B.C.’s climate advisory team, also mentioned that programs are in development to “close the gap between electricity and natural gas costs.”

Doukas says this suggests that public dollars will be spent not only to subsidize construction of the infrastructure but to “ratchet down the cost of electricity delivered to these natural gas producers so they’re not taking any kind of financial hit.”

“None of this gas expansion is compatible with acting on climate change in line with science,” he said.

“On the one hand, they’re trying to greenwash that gas expansion. On the other hand, they’re promoting it actively by giving a handout to natural gas producers by offering to invest public money into new infrastructure to electrify their operations,” he says.

“It’s a double whammy.”

Clark Promised LNG Would Create 100,000 Jobs

Kniewasser notes there are no real details on what is being proposed, and that there is a big difference between a direct subsidy that pays for the entire cost of electrification compared to a program that provides upfront costs and eventually gets recouped.

But Clark has set quite the precedent for making intensely generous offerings to kickstart her LNG dreams (which she once promised would create 100,000 jobs and $1 trillion in GDP).

These commitments accompanied federal subsidies from former prime minister Stephen Harper, which Prime Minister Justin Trudeau cemented until 2025 in his government’s first federal budget.

Martyn Brown, former premier Gordon Campbell’s chief of staff, wrote about her 2015 legislation that locked in tax breaks and subsidies for 25 years: “We will all pay for the government’s failings on this file forever. We will one day live to regret them for all they will cost us in lost revenue, in lost sovereignty and in their lack of any guarantees for Canadian workers, skills training or local suppliers.”

While B.C. is seeing renewable energy alternatives struggling or even abandoning the province, other places are benefitting from the emerging clean energy economy. Ontario has created more than 5,000 full-time jobs from the solar industry alone and California, which has aggressively pursued its emissions reduction plan, has seen $48 billion flood the economy while creating an estimated 500,000 jobs over the last decade.

In the meantime Clark has effectively pinned her entire political career on the LNG industry, which, up to this point, has yet to see a single project get past the initial investment stage. Despite bleak economic prospects for B.C.’s LNG industry, Clark is clearly doubling down on her LNG dream.

At this stage it wouldn’t come as a surprise if B.C. taxpayers found themselves fully on the hook for the transmission infrastructure to electrify future natural gas production.

Huge Emissions Associated With LNG, Including Methane Leakages and Liquefaction

A key component of the government’s push for LNG is the idea that the product is “the cleanest burning fossil fuel.”

Clark once said that developing the LNG sector would be the “greatest single step British Columbia can take to fight climate change.”

That’s a seriously contested point.

Natural gas is essentially methane, a greenhouse gas that has 25 times the global warming potential over a century than carbon dioxide, meaning you really, really don’t want it released into the atmosphere.

That’s not a contested point.

In fact, both Canada and the U.S. have committed to reducing upstream methane emissions from the oil and gas industry by 45 per cent in large part by cleaning up oil and gas operations that routinely vent and leak methane into the atmosphere.

That venting and leaking is a part of the reason why the natural gas industry in B.C. is estimated to have such a significant climate impact.

A 2013 DeSmog Canada investigation revealed B.C.’s methane emissions are likely seven times greater than reported, meaning the CO2 equivalent of the natural gas industry is around 25 per cent higher than estimated.

In May, an open letter signed by 90 scientists concluded that constructing the Pacific Northwest LNG export terminal — one of twenty proposed terminals — would increase B.C.’s total emissions by between 18 and 22.5 per cent, spouting upwards of 11.5 million tonnes of carbon per year (most of the emissions are related to the liquefaction process, which involves burning gas to run compressors to liquefy gas).

Government Agreed to Pay Exporters If It Raises Carbon Tax

Kniewasser stresses that emissions reductions don’t even require public investments, just a predictably increased carbon tax.

But due to the aforementioned 2015 legislation, the government must compensate natural gas exporters if it increases its meagre $30/tonne carbon tax (in other words, it voluntarily signed up to pay corporations if it requires them to innovate and cut pollution).

In the plan, the government also expressed an interest in “developing regulations to enable carbon capture and storage,” a technology that has come at enormous public expense in Alberta and Saskatchewan; the Boundary Dam CCS project near Estevan has been riddled with design flaws and cost overruns.

All up, it’s abundantly clear that Clark has zero interest in meaningfully addressing emissions via an increased carbon tax and public investments in technologies like geothermal, solar and wind.

In the words of Mark Jaccard, one of the most respected climate policy experts in the country, the plan represented “Olympian heights of political cynicism.”

There’s a good chance that status will only be solidified as more information about the natural gas electrification plan comes out.

- James Wilt, DeSmog Canada

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