The smoke and mirrors of B.C.'s energy use

WestPac faces the peril of having its entire operation counted as a net addition to the province's greenhouse gas tally, meaning that it would need to buy carbon credits in order to meet B.C.'s requirement that any new power project be emissions-neutral./

PATRICK BRETHOUR
pbrethour@globeandmail.com
Globe and Mail
January 4, 2008

VANCOUVER -- British Columbia's dirty little secret has just become a big problem for WestPac LNG Corp. and its hopes of building a clean new source of electricity.

On the face of it, the province should be sweeping barriers aside for WestPac, given Premier Gordon Campbell's dual promises to slash greenhouse gas emissions by a third by 2020 and to make B.C. self-sufficient in electrical power in just eight years.

WestPac's natural gas plant on Texana Island in the Strait of Georgia should be able to help on both fronts, boosting B.C.'s output by 1,200 megawatts and allowing the province to reduce imported electricity from Alberta and U.S. border states. Much of that electricity comes from coal-fired plants, the worst of the worst when it comes to greenhouse gas emissions. Replacing coal with much cleaner natural gas makes ample environmental sense.

There's just one catch. B.C. Hydro doesn't count those coal-fired imports in its official tally of greenhouse gases, a secret that makes a mockery of the government's boast that 90 per cent of the province's energy comes from clean sources. If that dirty power isn't counted against B.C. Hydro, it's as good as invisible when evaluating the environmental impact of projects such as the WestPac plant.

The result is that WestPac faces the peril of having its entire operation counted as a net addition to the province's greenhouse gas tally, meaning that it would need to buy carbon credits in order to meet B.C.'s requirement that any new power project be emissions-neutral. Or maybe not. Faced with that uncertainty, the company has justifiably hit the pause button, saying that it will wait until early next year to file a detailed project description that would trigger a full-scale environmental review. "Really, we've got no direction either way from the government, and that's why we've had to delay," WestPac president Stu Leson says.

The legislation kicking off B.C.'s greenhouse gas initiative is to be tabled in the spring session, but the Environment Ministry is not yet able to say when the regulations underpinning the law will be drafted. Those regulations will hold the detailed answers that WestPac needs before it can figure out whether its project, $2-billion for just the first phase, is economically feasible.

Mr. Leson makes the excellent point that British Columbia doesn't have its own atmosphere - those coal-burning plants have the same effect on global warming, even if they are a few hundred kilometres outside of the province's borders. Common sense says that point of view should carry the day, but the reality of B.C.'s growing addiction to dirty imported power says otherwise.

Without an official tally from B.C. Hydro, it's hard to measure the extent of the problem. But some rough estimates from the Suzuki Foundation found that the utility might be leaving two-thirds of its greenhouse gas tab unaccounted for. According to the foundation, those imports generated just over two million tonnes of greenhouse gases in 2005, substantially more than the official number of 954,000 tonnes. The Suzuki numbers indicate that greenhouse gases generated by British Columbia's electricity consumption jumped 60 per cent between 2002 and 2005, vastly more than the utility's numbers that state that emissions were essentially unchanged.

In the depths of B.C. Hydro's annual report, however, there is another set of numbers, measuring the proportion of clean energy used in the province, that backs up the Suzuki analysis. That proportion has been steadily falling over the past three years. In the fiscal year ended March 31, 2004, just over half of B.C.'s power came from clean sources, for the most part hydro projects. By fiscal 2007, just 17 per cent came from such sources. The figures only measure power generated inside the province, but the report points out that power imports have had to rise because of shortfalls in clean energy.

WestPac isn't able to say what kind of environmental liability it faces. But if B.C. Hydro were to pay for the cost of its imported power with carbon offsets costing, say, $20 a tonne, it would be on the hook for something on the order of $40-million a year.

All of those numbers add up to two inescapable facts. Some time, very soon, the B.C. government will have to decide whether B.C. Hydro or private industry will bear the cost of greening the province's power use. And private capital is not willing to gamble that it won't be stuck with the tab, Mr. Leson says. "It's just too much money to invest and take a risk."
Saturday, Jan. 5, 2008

CORRECTION

WestPac LNG Corp. plans to build a liquefied natural gas terminal and power plant on Texada Island in B.C.'s Strait of Georgia. The name of the island was incorrectly spelled in an article published yesterday.

CKNW: Chuck Childress and Stu Leson

Jill Bennett of CKNW interviews Chuck Childress of Texada Action Now and Stu Leson of WestPac LNG.
CKNW_JillBennett_ChuckChildress&StuLeson_20080105.mp3

This file may stream, but if you download it, or are on dial-up, be forwarned: it is nearly 12 mb.

Emissions concerns delay LNG project

A spokeswoman said WestPac has decided to put off filing its project description - which would have triggered the environmental assessment process - until the company has a better sense of new greenhouse gas (GHG) regulations that may come into effect. WestPac had planned to file its project description in the fall of 2007 but now plans to file it in early 2009./

WENDY STUECK
Globe and Mail
January 2, 2008

VANCOUVER -- A proposed $2-billion liquefied natural gas project in British Columbia has been delayed as a result of the province's greenhouse-gas-cutting ambitions.

Calgary-based WestPac LNG Corp., which unveiled its plans for the project last summer, has pushed back the scheduled start date for the project to 2014 from 2013, according to company statements.

The project, slated for Texada Island in the Strait of Georgia, is one of 10 proposed LNG projects in Canada, which have generated interest as domestic natural gas supplies are drying up. There are about 60 proposed LNG projects in North America.

A spokeswoman said WestPac has decided to put off filing its project description - which would have triggered the environmental assessment process - until the company has a better sense of new greenhouse gas (GHG) regulations that may come into effect.

WestPac had planned to file its project description in the fall of 2007 but now plans to file it in early 2009.

WestPac's proposal is for a combined LNG terminal and natural-gas-fired electricity plant with a capacity of up to 1,200 megawatts, which would make the site one of the biggest electricity generators in the province.

But a natural-gas-fired plant of that size would also generate significant GHG emissions, making it unclear how it would fit into the province's energy plan, which requires all new electricity projects to have zero net GHG emissions.

In addition, B.C. announced plans in the February, 2007, Throne Speech to reduce GHG emissions by 33 per cent by 2020. In November, Liberal Premier Gordon Campbell named a Climate Action Team, a 22-member squad charged with exploring ways of bridging the gap between reductions expected from existing policies and the 2020 target.

The team is expected to make its recommendations by July 31.

WestPac had been working on a proposal for an LNG terminal near the northern port city of Prince Rupert, where a new container terminal began operating last fall, but shelved that plan after cost estimates soared.

The company is now focused on its Texada project.

Last month, environmental groups including the Georgia Strait Alliance, Texada Action Now and West Coast Environmental Law banded together to fight the project, saying increased tanker traffic would disrupt existing commercial and recreational traffic, and that the proposal runs counter to the province's energy plan and GHG reduction targets.

"We're looking at this as a litmus test for the provincial government's plans around greenhouse gas emissions," Chuck Childress, spokesperson for Texada Action Now, said yesterday.

"This project is going to show the world whether the province is serious about reducing greenhouse gas emissions."

WestPac says expected traffic to the terminal - about 36 LNG carriers a year, or one every 10 days or so - would amount to an increase of less than 1 per cent over existing vessel traffic.

About 1,200 people live on Texada Island.

LNG Terminal for Texada?

For many, the island’s environment is their first worry, and the project will create over two million tonnes of greenhouse gas emissions per year, estimates Chuck Childress of Texada Action Now/

Written by Darren Altmayer Pacific Yachting January 2007

A site map (top) of the proposed LNG terminal A $2-billion, 600-megawatt liquefied natural gas (LNG) import terminal is planned for the north coast of Texada Island. Many of the island’s 1,100-plus residents are opposed to the ambitious energy plans, citing environmental and safety concerns. “For many, the island’s environment is their first worry, and the project will create over two million tonnes of greenhouse gas emissions per year,” estimates Chuck Childress of Texada Action Now. “The environmental concern is that they will be importing fossil fuel and burning it for energy. Emissions will be over four times the amount from all Strait of Georgia pulp mills combined, and 150-metre-wide transmission lines would cut through the island.” In summer, visitors flock to the island, and visiting boaters take advantage of the more than 500 feet of dock space in Sturt Bay, operated by the Texada Boat Club. At specific concern for boaters are restrictions on how close boats could travel to the tankers transporting the natural gas, said Dig Pednault, president of the Texada Boat Club. But boaters and the company are at odds on how significantly the plant will affect boat traffic. “We don’t expect a huge disruption in marine traffic,” said Stu Leson, vice president of business development at WestPac LNG, the Calgary-based company behind the proposal. Leson said tankers transporting LNG through the strait could be expected, on average, once every 10 days, with more in the winter and less in the summer. Other boats will likely be prohibited from travelling within one to two kilometres of the tankers. Local boaters are troubled by the numbers. “It would definitely affect the boating public,” said longtime boater and Texada resident Gary Grieco. The exclusion zones around the transporting tankers travelling through the strait will disrupt too many boats, he said. “It’s going to be a serious problem for all boaters in the basin.” Tankers won’t be hitting the water anytime soon though. WestPac expects to formally propose the project for provincial and federal approval in the fall of 2009, and construction would take at least another two years. The company said they are in communication with BC Ferries, which uses Blubber Bay near the proposed 115-acre site at Kiddie Point. It is still too early to say how BC Ferries and their routes will be affected, Leson said. The company’s proposal was recently delayed one year, but Leson said the company is optimistic about the project. For the province, the new terminal could allow the closing of the Burrard Thermal plant near Vancouver, WestPac representatives said. Even opponents of the proposal agree; there’s will be an up-water fight.