A forum on energy today kicked off with B.C. Environment Minister George Heyman recapping his governments commitments to strengthen its climate action plan and the opportunities that the energy transition presents, followed by a grilling on NDP government policies that threaten conventional resource industries, like forestry.
“The events of the summer and fall show with dramatic clarity that the climate crisis is a huge threat to public health, public safety, and of course, our economy,” Heyman said at today’s energy forum sponsored by the Greater Vancouver Board of Trade (GVBOT) and Bennett Jones. “This is a reset moment.
“We expect more climate fueled extreme weather over time, and we need to be prepared. That's why we developed the climate preparedness and adaptation strategy (with the) final phase to be released early next year, along with a B.C. flood strategy.”
He added B.C. is in a strong position, both in terms of the strength of its economy, and the strength of its climate plans, to build "a cleaner economy."
"We are, in many ways, ahead of the rest of the country."
When flooding shut down the Trans Mountain pipeline for three weeks, it underscored just how dependent society and the economy still is on fossil fuels.
“When it's interrupted, (it) creates a problem for transportation of commercial goods, as well as people getting to and from their homes and to work,” Heyman acknowledged.
But when asked if he supports the pipeline’s expansion – something the John Horgan government opposed -- Heyman said the expansion had little to do with local energy security, and more about oil exports.
“The expansion of the Trans Mountain pipeline... is not about ensuring the Lower Mainland or British Columbians have fuel,” he said. It's about fuel for export, and frankly it's a separate issue.”
B.C. is among the many national and sub-national governments that have committed to net zero greenhouse gas emissions by 2050. While that commitment poses challenges to conventional resource sectors, it also provides new business and investment opportunities.
Last week, Bennett Jones released a 2021 Economic Outlook and companion paper on accelerating the net zero energy transition. Canada’s net zero ambitions will require public and private investment equal to 1.5% of Canada’s total GDP before 2030, said Radha Curpen, a managing partner at Bennett Jones.
“This is a massive investment and will require the transformation of our energy infrastructure in Canada through electrification, the acceleration of renewables solutions for heavy industry and long haul transportation, new sources of energy, carbon capture and storage using our natural resources and other areas,” Curpen said.
During the COP26 conference in Glasgow, Heyman said Mark Carney, former Bank of Canada governor, has worked with major financial players to create a new $130 trillion capital investment fund for decarbonizing the global economy.
While B.C. is poised to benefit from that transition investment, it has also sent some negative signals that could deter investment in traditional resource sectors, like forestry. It has also set emissions caps for the natural gas and LNG sectors that could make if difficult for the nascent LNG industry to grow in B.C.
Heyman was asked to defend a number of forestry policy changes that will have a significant impact on B.C.’s forestry sector.
In addition to its plan to remove up to 2.6 million hecatres of old growth from the timber harvesting land base, the NDP government used closure to shut down debate on Forestry Act amendments that, among other things, will allow for redistribution of forestry tenure.
The changes are predicted to cost B.C. between 4,500 and 18,000 jobs -- depending on whose estimate you believe -- and result in more sawmill and pulp and paper mill closures. The measures have been roundly criticized by labour, industry, First Nations and forestry dependent communities for its lack of consultation.
Heyman said discussions around forestry modernization in B.C. has been going on for years.
“I think there's a difference between failing to consult and making a decision that not everybody likes,” Heyman said, in responding to those criticisms.
He also disagreed that the changes send a signal that will result in a flight of capital from the B.C. forestry sector.
“I don't believe capital is fleeing the province,” he said.
However, the fact that B.C. forestry majors announce some new investment in the U.S., Europe or Eastern Canada for every sawmill shut down in B.C. suggests, for the forestry sector at least, investment capital is indeed going elsewhere.
One sector the Horgan government has supported is the LNG industry, which is seen as a way to capitalize on B.C.’s vast natural gas resources by exporting in in liquefied form.
While the first phase of the LNG Canada project is well underway, there is some question whether it could ever be expanded, or whether a new large LNG plant could be built in B.C., given the restrictions B.C.’s CleanBC plan places on industrial emissions.
The natural gas industry could also face a new royalty and credit regime in B.C., as the subsidies the B.C. government provides for the industry, like deep well credits, are being reviewed and likely to be overhauled.
When Heyman was asked if he thought the LNG Canada project could fit within the constraints of B.C. emissions reduction targets for the oil and gas sector, Heyman said he thought it could, and the project was given the green light.
But whether that project can ever be expanded, or whether another large LNG plant can be built in B.C., is a another question.
Asked if he thought another large project like LNG Canada could fit within the limits the government has placed on the industry, Heyman said it depends on whether the sector can work within a one-third emissions reduction target.
“I don't know what measures the industry as a whole can take to work with us to show that they're going to fit within the sectoral emission reduction targets,” he said. “When we released the roadmap for 2030, we were very clear. We expect a minimum 33% reduction in emissions by 2030.”
As for electricity, the new Site C dam will initially produce a surplus of power. But given the projections for electric vehicle adoption, there’s now some question about how long it will be before that surplus turns deficit.
It’s estimated the current BC Hydro system could not sustain more than a 20% conversion to EVs. B.C. has already surpassed the 10% adoption rate it had set for 2025, and now has a target of 90% adoption by 2030 through its zero emissionm vehicle mandate.
That many electric cars onthe road in B.C. will necessarily mean an increased demand for clean power.
Heyman admitted that likely means the government needs to start thinking about additional investments in power above and beyond what the new Site C dam will provide -- something that could be music to the ears of independent power producers.
“We know that we need more power, so I think the over time, if we are going to meet our electrification targets for transportation, as well as for industry, we have a little bit of time -- not a lot of time,” Heyman said.
Stay tuned for more coverage of today's energy forum in BIV News.