The LNG Canada facility in Kitimat, B.C., on Sept 23, 2023. The terminal is scheduled to begin loading tankers with fuel bound for Asia by 2025.Jesse Winter/The Globe and Mail
The Biden administration’s decision to pause approvals for new U.S. projects seeking to export liquefied natural gas has spurred hopes for British Columbia’s long-stalled LNG prospects, even as climate activists urge restraint.
The White House announced the move on Friday, saying there would be a temporary pause on pending decisions on LNG exports. President Joe Biden said in a statement that the U.S. Department of Energy will be taking “a hard look at the impacts of LNG exports on energy costs, America’s energy security and our environment.”
He added that the pause “sees the climate crisis for what it is: the existential threat of our time.”
Curbing the use of natural gas has long been a demand of environmental advocates worried about the fossil fuel’s contribution to climate change, though the LNG industry has often noted that its product generates fewer greenhouse-gas emissions than coal when burned. With the U.S. now in a holding pattern for new approvals, Canada’s producers have an opportunity to fill the supply gap. But the industry is concerned that B.C.’s infrastructure isn’t up to the task.
“B.C.’s natural gas travels nearly 5,000 kilometres across North America to get to export facilities on the Gulf Coast. It’s a ludicrously indirect route that sends our natural gas south of the border,” Karen Ogen, chief executive of the First Nations LNG Alliance, an association of Indigenous communities involved in LNG development in B.C., said in a statement.
“Canadians could be exporting our own natural gas at a fraction of the distance,” Ms. Ogen said. “Canadians – and in particular, Indigenous Canadians – should be the ones to receive the rewards of training, jobs and business opportunities that come with a thriving LNG industry.”
The U.S. has seven operational LNG export terminals. Another five appear likely to open by 2028 because they are already approved. Canada, by contrast, has no export terminals up and running. The first to enter service would be the Shell PLC-led LNG Canada project in Kitimat, B.C., which is scheduled to begin loading tankers with fuel bound for Asia by 2025.
Two Canada-based producers – Tourmaline Oil Corp. TOU-T and ARC Resources Ltd. ARX-T – have deals to supply natural gas to Cheniere Energy Inc.’s LNG-A Corpus Christi LNG export terminal in Texas, though their ability to transport the fuel is limited by Canada-U.S. pipeline capacity.
Over the past decade, Canadian natural-gas pipeline giants Enbridge Inc. ENB-T and TC Energy Corp. TRP-T have been on the defensive at home, but have been able to expand their pipeline networks into the U.S. Gulf Coast.
Ten years ago, there were more than 20 proposals in B.C. to export LNG. Today, despite much hype, LNG Canada is the only project that has progressed significantly, and only four other B.C. export projects are in early stages: Cedar LNG in Kitimat; Ksi Lisims LNG on Pearse Island; Woodfibre LNG near Squamish; and FortisBC’s planned expansion at its Tilbury LNG site in Delta.
“This isn’t just about building big projects, it’s about lifting our Indigenous communities out of poverty,” Ms. Ogen said.
Climate activists in Canada praised Mr. Biden’s decision and urged B.C. Premier David Eby to reject LNG expansion plans in the province. Mr. Eby’s NDP government will be seeking re-election in October.
“True climate leadership means saying no to fossil fuel infrastructure,” Peter McCartney, a climate campaigner at the Wilderness Committee, said in a statement.
The provincial government has been attempting with policy measures to reduce the LNG industry’s environmental impact. Last year, B.C. introduced environmental standards for LNG projects, as part of a bid to reduce the province’s emissions to net-zero.
At the BC Natural Resources Forum in Prince George earlier this month, Mr. Eby reiterated his view that LNG has a role to play in the energy transition. “Our partners in LNG Canada, for example, and other major projects are going to continue to be our partners,” he said.
Teresa Waddington, LNG Canada’s vice-president of corporate relations, said in an e-mail that the shipping distance to Asia from Kitimat is about 50 per cent shorter than the route to Asia from the U.S. Gulf Coast.
LNG Canada’s terminal will be supplied with natural gas by Coastal GasLink, a 670-kilometre pipeline from northeast B.C., to be operated by TC Energy. About 190 kilometres of the pipeline route cross the unceded traditional territory of the Wet’suwet’en Nation, whose hereditary chiefs oppose the project and say they have jurisdiction over the territory.
“The LNG Canada export facility is now more than 90 per cent complete overall,” Ms. Waddington said. “GHG emissions from LNG Canada’s Kitimat operation will be lower than any facility of a similar size operating in the world today: 35 per cent lower than the world’s best-performing facilities.”
The owners of LNG Canada are considering whether to pursue a proposed expansion, once the terminal’s initial phase of construction is complete.
B.C.’s other potential LNG export projects are at various early stages. Cedar LNG is led by the Haisla Nation, together with co-owner Pembina Pipeline Corp. They expect to make a final decision by the end of March on whether to forge ahead with their planned floating production facility, which would use hydroelectricity to help supercool natural gas into liquid form.
The elected Lax Kw’alaams Band opposes Ksi Lisims, and has cast doubt on the LNG project’s goal of net-zero emissions.
Brent Jang