British Columbia's New Energy Plan
Today, the BC Government announced another in a series of many energy plans and strategies. The 2012 Natural Gas Strategy actually puts energy front and centre for economic development in the Province. The policy is big on ideas, but short on details.
According to the Government, liquefied natural gas (LNG) is to be the key driver for the provincial economy for decades to come. The global demand for liquefied natural gas is strong and BC's estimated natural gas reserves are substantial. Local First Nations have expressed support for LNG facilities and the pipelines that will bring the natural gas from the North. Nominating LNG as a pillar of the BC economy makes good sense. How the new energy plan is implemented is of course, critical.
For the BC renewable energy industry, growing the demand for electricity in the Province is a good thing. The important decision is how much of the new LNG development will be powered by renewable energy and how much will be from natural gas. The Gas Strategy seems to state that the first two LNG facilities in Kitimat, BC will be required to be fueled by renewable energy. The problem right now is the Province is short on renewable energy generation and even shorter on transmission. Much needs to happen on both fronts before the Government's LNG objectives can be met.
Not to be forgotten are the Province's climate change goals. Extracting and exporting more natural gas will put increased pressure on the Province's greenhouse gas emission objectives.
British Columbia is at a cross-road with respect to climate change policy and economic growth. The Province is blessed with an abundance of natural gas and buyers in Asia are willing to pay for it. At the same time, to its credit, the Province has laws which restrict GHG emissions. A clear and obvious hedge against GHG emissions is renewable energy. The challenge for the Province is to balance economic growth with a GHG intensive industry with its climate change laws.
Renewable energy will play an important role in the development of the Provincial economy. New electricity infrastructure, both generation and transmission, is critical to meet the opportunity presented to the Province. Both mining for minerals and turning natural gas into liquefied form (LNG) for export, require massive amounts of energy. Meeting this new demand with renewable electricity with natural gas as a possible backup is smart fiscal and environmental policy. GHG emissions are lower when electricity from renewable resources is used rather than natural gas to power the Province.
In the coming days or months, we expect to see further details on the following issues:
- The Province's definition of "clean". Does this mean renewables only?
- The BC Hydro grid. Is there sufficient electricity on the existing transmission grid for Apache Phase 1, Apache Phase 2 and Douglas Channel LNG facilities?
- Carbon capture and storage. Really? Where?
- Infrastructure Royalty Program Credits. Will this be available for electricity infrastructure (ie, new or upgraded transmission lines) ?
- Self-sufficiency changes. Drought insurance is gone. What now? Increase in imports?
Provided development of the natural gas fields and the mines in the North are in compliance with world class environmental practices, in cooperation and participation with First Nations and local communities, British Columbia is well positioned to be a major player in the new world economy. Some new thinking on old ideas is needed. But let's get it done while the opportunity is there.
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