The Alberta and British Columbia (BC) governments have set out to gain formal, international greenhouse gas (GHG) reduction credits for exporting LNG as a replacement for coal and oil in other countries.
Alberta Premier Danielle Smith last week told attendees of the International Gas Union’s LNG2023 conference in Vancouver that she has begun talks with her BC counterpart, David Eby, on the plan.
Canada does not yet export liquefied natural gas in significant quantities. However, the Shell plc-led LNG Canada export terminal in Kitimat, BC, is on track to begin operations in 2025. In addition, more than a dozen similar projects have been proposed or are under development.
Alberta and BC are exploring the possibility of seeking an interpretation of Article 6 in the United Nations climate accord on counting GHGs. That would let the sources of LNG to obtain global credits for emissions cuts achieved by customers buying the super-chilled fuel.
Smith described the credit-sharing proposal as an “integral part of a global strategy for emissions reduction. Alberta has an obligation as the owner of the resource in our province to take a lead making sure we build that consensus.”
Meanwhile, the BC Environmental Assessment Office (BCEAO) has invited the KSI Lisims LNG project to include global GHG savings in its request for provincial approval of a terminal near Prince Rupert.
The BCEAO has asked for “an assessment of whether the project is likely to displace emissions internationally,” in a review of its suitability under declared federal and provincial GHG reductions policies.
Claimed credits are likely to be large. KSI Lisims is proposing to export about 2 Bcf/d. The project has been forecast to be a C$55 billion ($41 billion) investment over its 40-year lifespan.
KSI Lisims would be the second big BC terminal after LNG Canada in Kitimat. GHG credit-sharing would also help Woodfibre LNG, now entering construction near Vancouver, and the recently approved Cedar LNG, to hit environmental goals.
Smith’s push for Canadian claims on international emissions is a thorny topic for an environment and energy affairs committee that she and Prime Minister Justin Trudeau have agreed to appoint.
Smith and Eby lead administrations have pledged to cut GHG emissions. However, they do not want to erode the Alberta and BC economies or give up royalty revenues received by their governments as owners of oil and gas resources.
The Canadian government stands at another side of environmental politics, vowing sharp cuts in national GHGs countered by “transitional” job aid for unemployed fossil fuel energy personnel.
National refusal to credit the Energie Saguenay LNG export project for forecast global GHG cuts was part of its rejection. The denial contributed to a C$20 billion-plus ($15 billion) international damage claim against the Canadian government by the Quebec project’s owners in the United States.
Export project supporters have long sought credit for international GHG reductions, including BC native partners in Cedar, Ksi Lisims and the Coastal GasLink supply pipeline for LNG Canada.
Across Canada, environmental activists have opposed global GHG reduction sharing. The critics said credit for LNG exports would cause “double counting” of GHG cuts and gas production increases.
Smith repeated Canadian energy supplier hopes, by saying that “with the right infrastructure in place, Western Canada would become a sought-after supplier for both Asia and Europe.”
