A Conference Board of Canada report, funded by the Canadian LNG Alliance, paints a glowing picture of the economic impact of a robust Canadian LNG (liquefied natural gas) industry. However, it says nothing about the impact it would have on Canada’s greenhouse gas emissions and its carbon reduction commitments.
Entitled “A Rising Tide: The Economic Impact of B.C.’s Liquified Natural Gas Industry”, the July 2020 report projects the economic impact of a 56-million-tonne per annum (mtpa) LNG industry in British Columbia. The report says that building that capacity between 2020 and 2064 would require an average annual investment of $11 billion, $8 billion per year of which would be spent in British Columbia.
But the economic benefits would spill over the provincial boundary. Alberta’s GDP would see an annual increase of $1.6 billion, or just over 0.5 per cent. For Ontario, the figure would be $1 billion, or just over 0.1 per cent of annual GDP. National employment would increase by 96,550 jobs annually over the life of the project, with British Columbia again gaining the lion’s share. LNG would also become one of the largest generators of tax revenue for British Columbia.
A 56-mtpa LNG industry represents a massive increase over the capacity of the 14-mtpa LNG Canada Phase 1 facility in Kitimat, which is the only LNG facility in British Columbia currently under construction. Construction of the much smaller Woodfibre LNG project in Squamish has been suspended because of supply issues arising from the COVID-19 pandemic.
LNG Canada’s proponents have said that a final investment decision on Phase 2, which would double the facility’s capacity, will be made before Phase 1 becomes operational, scheduled for 2025. The Conference Board report projects construction of Phase 2 and several other projects in British Columbia’s northwest and in the lower mainland, with all projects getting underway in the 2024-2029 period. Construction would also be needed for pipelines and electricity transmission lines.
However, a 2017 Pembina Institute analysis of the LNG Canada project (Phases 1 and 2) and the Woodfibre LNG project concluded that their greenhouse gas emissions alone would make meeting British Columbia’s 2050 emissions target virtually impossible.
The Conference Board report was quickly embraced by Alberta Associate Minister of Natural Gas and Electricity Dale Nally, saying “it is imperative that the federal government work with Alberta, British Columbia, and other provinces to advance LNG projects using a Team Canada approach.”
The Conference Board report says that global investment in LNG is very competitive. British Columbia has some natural advantages, such as abundant resources, clean electricity and proximity to Asian markets. But there is room for improvement in the tax and fiscal environment, regulatory approval timelines, and policy support.