Efficiency and Renewables? LNG and Coal Exports? B.C. Should Be Able to Pick a Lane

British Columbia has spent too many years travelling parallel paths in the shift off carbon. In 2024, an “all of the above” energy strategy is so last-decade.

Photos via wikimedia commons (l), Sam Forson/Pexels (r)

It’s decision time for British Columbia, as the provincial government barrels ahead with an ambitious menu of climate and energy transition measures while holding onto its reliance on coal and liquefied natural gas (LNG) exports.

For years, the province has tried to have it both ways. B.C. governments have earned praise for their investments in energy efficiency, pretty much inevitably placing first in Efficiency Canada’s annual provincial scorecard and earning imitators for a provincial step code meant to drive efficiency gains in new buildings. Earlier this year, Premier David Eby announced a 10-year, $36-billion plan to expand the province’s electricity system, including new wind and solar procurements by provincial utility BC Hydro and high-voltage transmission lines for industrial users.

Yet this is the same province that “remains heavily dependent on exporting fossil fuels,” The Tyee reported in mid-December.

The news story cites the province’s CleanBC plan, which calls for a 40% emissions cut from 2007 by 2030 and factors domestic but not downstream emissions from LNG processing into the target. It also sets an oil and gas emissions cap (hello, Ottawa?) to enforce a 33 to 38% reduction in the sector’s emissions.

But the fossil fuel exports don’t sit well with independent MLA Adam Walker (Parksville-Qualicum), who was kicked out of the NDP caucus last September over a personnel issue. He’s now concerned that projects like the Trans Mountain pipeline expansion, the LNG Canada megaproject in Kitimat, and the deeply contested Coastal GasLink pipeline will add to the province’s climate footprint.

“What are the emissions that we will see in British Columbia from these projects, for the pipeline, for the compressor stations, and for the fuel that we use to transfer this energy across the world?” he asked. He might also have mentioned potential health impacts and chronically under-reported methane emissions from the gas fracking fields in the province’s northeast.

Eby’s response tied up the province’s Jekyll-and-Hyde climate persona in a single sentence. “This province needs real leadership on climate change,” he said, “and that includes recognizing that the oil and gas sector is a real sector with actual jobs in our community and it will be for the foreseeable future.”

Beyond ‘All of the Above’

British Columbia’s continuing reliance on jobs and export revenue from both coal and LNG doesn’t negate its embrace of efficiency, renewables, and electrification. But Eby, like his predecessors, is pursuing an energy transition strategy that was old when it was new. And that was a long time ago.

The first time I can remember anyone pitching an “all of the above” energy plan was when then-U.S. president Barack Obama declared one in March, 2012. “We can’t have an energy strategy for the last century that traps us in the past,” he said. “We need an energy strategy for the future—an all-of-the-above strategy for the 21st century that develops every source of American-made energy.”

Obama’s plan was questionable then, and the world has changed just a bit in the dozen years since. With the impacts of climate change cascading and the cost of energy transition options plummeting, B.C. (along with many other jurisdictions) really needs to pick a lane. And pick wisely.

Because if the province’s political and investment leaders don’t make a definitive choice, shifting global energy markets will choose for them. As one high-profile and knowledgeable Canadian energy and climate expert put it in mid-February:

Increasingly, there is a lot of skepticism about how many more LNG facilities are going to be required, and the risk of stranded assets is a real one.

Waiting for the Music to Stop

“Stranded assets”, if you’re relatively new to this conversation, refers to investments that lose their value and turn into liabilities before the end of their expected useful life. And if you’re really keeping score, with bonus points if you saw this one coming, the quote comes from another B.C. politician—former cleantech CEO and now North Vancouver MP Jonathan Wilkinson, more widely known as Canada’s energy and natural resources minister.

Wilkinson was talking to BNN Bloomberg about U.S. President Joe Biden’s landmark decision in January to apply a climate test to new LNG export proposals—a test that it’s hard to imagine those projects passing, as long as it’s administered honestly. But his assessment applies just as well to his own province’s own longstanding, misguided, cross-partisan push to make LNG the cornerstone of a sustained economic boom.

The push and pull that followed Wilkinson’s remarks was inevitable and instant.

First, the push: “Is Minister Wilkinson trying to scare investors away from LNG? Where is the line between risk exaggeration and wilful misinformation?” asked an IT consultant whose online profile indicates 40 years working for the petroleum industry. “Every LNG demand forecast for the next decade or more shows significant growth. Shell just issued an LNG forecast with a vast increase. The USA is a large producer with multiple major LNG projects under construction. Qatar and Australia are expanding their LNG capacity. Canada stands before a significant LNG sales opportunity in Asia. We should grab it.”

Then, the pushback: “Yet the International Energy Agency, an independent body set up 50 years ago specifically to report on, analyse, and project fossil fuel demand, says this decade is peak for all fossil fuels,” countered veteran energy transition strategist and writer Michael Barnard. “LNG will be stranded assets. Wilkinson is being optimistic about their chances.”

Following the ups and downs of global gas markets is a full-time job in its own right. (And, sorry, everyone here at The Energy Mix has already got one.) But when you separate the economic data and the mounting urgency of the climate crisis from the mandatory industry spin, it’s clear that a last burst of short-term demand for gas won’t translate into the secure, long-term contracts that would justify multi-billion-dollar investments in new LNG infrastructure.

That reality has at least one finance industry publication suggesting it’s time for investors to kick the gas habit. But it’s certainly not what you’ll hear from the industry voices anxiously claiming that Canada will be one of the last producers standing as oil and gas markets decline. What they’re trying hard not to say—what they surely don’t want their financial backers to understand—is that there are too many players in this game of musical chairs. They’ll all be scrambling for a seat when the music stops, and that moment of truth is coming soon.

How Lucky Do You Feel?

About 3½ years ago, I took on one of my all-time favourite writing assignments when the amazing and relentless Delores Broten at Comox-based Watershed Sentinel asked for a book chapter on the costs of LNG in British Columbia. Even then, it was clear that B.C.’s gamble on LNG depended on a long list of rosy assumptions:

…from economic growth in Asian countries driving ever-higher demand for gas, to limited competition from sources of supply that are closer by or more convenient, to investors willing to tune out their mounting concerns about the risks of climate disruption and stranded assets. All of those unpredictable, uncontrollable assumptions would have to go close enough to plan, often enough, for the bet to pay off.

Then, as now, it would not have been impossible for then-premier John Horgan or his apparently like-minded predecessor, Christy Clark, to find a projection of future LNG demand that matched up with their overheated export ambitions. It was more that the available numbers ranged widely enough to support almost any set of conclusions. Which meant that, by cherry-picking the analysis, and working hard not to notice the overall trends, it would be easy enough for any government of any stripe to make a deep, long-term commitment based on data that was wafer-thin.

So many of the influences on international gas markets and prices have shifted since the summer of 2020. But here’s the question that LNG boosters couldn’t answer then, and can’t answer now: If experience in North America shows increasingly that solar and wind with battery storage are cheaper than gas, and energy efficiency is often the most affordable choice of all…and if other regions of the world are reorienting their energy and climate strategies along those lines…why would anyone expect energy planners in Asia to weigh the same options and come to a different conclusion?

And now, after the 195 countries attending last year’s COP28 climate summit in Dubai reached a hard-fought consensus calling for a transition out of fossil fuels, why should investors assume those national leaders were just kidding when they’re asked to buy into a long-term LNG infrastructure project?

The Will of the People

B.C.’s latest budget includes a series of smart climate investments, including $405 million over three years for climate emergency preparedness, $318 million for cleaner transportation, $474 million for transport and community infrastructure (which is a solid decision or not so much, depending on what that budget covers), and $70 million for heat pump rebates and electric vehicle charging upgrades. It all adds up to solid momentum in the right direction, and polling commissioned by Clean Energy Canada shows that its exactly what British Columbians want and expect:

• 73% support BC Hydro’s 10-year, $36-billion capital plan, with 33% telling pollsters it’s overdue.

• 83% agree that B.C. needs a coordinated strategy to meet its future energy needs, with nearly half—47%—saying it’s very important.

• Hydropower, solar, wind, energy storage, and rooftop solar were respondents’ top five choices for meeting B.C.’s future energy needs, with 75 to 84% describing them as important or very important. Natural gas, geothermal, nuclear, oil, and biomass fell to the bottom of the list.

• The same preferences showed up in respondents’ economic development choices. Support for more or much more investment stood at 85% for renewable electricity, 80% for cleantech manufacturing, 75% for clean hydrogen, and 67% for “sustainably produced” metals and minerals, compared to 47% for natural gas production and just 39% for LNG exports.

• Given an either-or choice between renewable energy and LNG development, 69% of respondents said the province should focus more on developing renewables, compared to 15% for LNG. Since 2020, the gap between those choices has widened by 15 percentage points—public support for renewables is up by 8%, while LNG has fallen by 7%.

It all adds up to a call for the Eby government to cut with both arms of the scissors and favour renewable energy development over LNG. And, ultimately, a choice between taking control of the transition or being steamrolled as it passes through town.

For as long as I can remember, climate and energy advocates have been urging governments and investors to plan a gradual, organized phasedown of fossil fuels and the climate pollution they emit, rather than being forced into a sharp shift in a moment of crisis. Now, that crisis is well and truly upon us. But B.C. has enough of a head start to seize the opportunity in the transition, and it seems abundantly clear that B.C. voters expect nothing less.

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Mitchell Beer traces his background in renewable energy and energy efficiency back to 1977, in climate change to 1997. Now he and the rest of the Energy Mix team scan 1,200 news headlines a week to pull together The Energy Mix, The Energy Mix Weekender, and our weekly feature digests, Cities & Communities and Heat & Power.

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