In response to the invasion of Ukraine, organizations, corporations and legislators around the globe and in British Columbia have been divesting from Russian companies. It has led us to re-evaluate what it means to invest in ways that are healthy for the economy, the environment and society.
In the past few weeks, this debate has played out in the provincial legislature. Both government and the official Opposition have been arguing that we need to ramp up liquefied natural gas (LNG) investment in response to a shift in oil and gas sources in Europe.
The proposal by MLAs in the B.C. legislature that the invasion of Ukraine is an opportunity for B.C. LNG is misinformed and misguided: there is no efficient way to export to Europe, and, most importantly, betting our investment returns on unpredictable geopolitics is morally questionable and reckless. And it builds on myths that have been perpetuated by the BC NDP and the BC Liberals.
Consider the financial promise of LNG. When the BC NDP approved LNG Canada in 2018 (without the support of the BC Greens), it provided four concessions to encourage the company to invest here: discounted electricity prices, exemptions from increases in the provincial carbon tax, a corporate income tax break and a deferral of the provincial sales tax on construction. This benefits package promised to provide the company with an estimated $6 billion in subsidies.
In the 2022 provincial budget, however, natural gas prices are projected to decline year over year, while B.C. is forecasted to increase production. More fracking and more greenhouse emissions for a lower financial return does not make sense in today’s world. Recent studies from the Canadian Energy Research Institute and the Oxford Institute for Energy Studies have also projected that the LNG export projects in B.C. are not economically viable given current LNG prices in Asia, our primary and necessary export market. Betting on economic returns from this industry is an increasingly risky proposition.
Contrary to what its proponents profess, LNG is not a transition fuel; LNG Canada will continue to drive up B.C.’s already significant greenhouse gas emissions. J. David Hughes authored a study published by the Canadian Centre for Policy Alternatives calculating that over the course of 20 years, emissions from LNG projects are 18.5 per cent greater than the emissions from the best coal technology available. Those emissions also fail to take into account the damaging impacts of hydraulic fracturing, which imperils B.C.’s water sources, causes earthquakes and is associated with increased rates of rare cancers.
The provincial budget has committed billions to respond to the destruction across the province from last year’s climate events: the heat dome, the wildfires and the November floods. It makes no sense to on the one hand give public money to prop up the LNG industry at the same time as having to spend billions in response to worsening and more frequent climate-related disasters. The updated report from the Intergovernmental Panel on Climate Change (IPCC) stated that we have a “brief and rapidly closing window of opportunity to secure a livable future.” This is not a time for a weak response to the threat of climate change.
Still, elected representatives from both the BC NDP and the BC Liberals position LNG as a part of our climate plan, branding B.C.’s largest single point source of emissions as something that will help us fight climate change. This is greenwashing at its worst.
Finally, LNG Canada – a joint venture by Shell, Petronas, Petrochina Co. Ltd., Mitsubishi and Korea Gas – can hardly be described as a B.C. company and is not without connection to Russia. The steel that built Coastal Gaslink, the pipeline that will transport the natural gas resources for LNG Canada, was sourced from Evraz PLC, a company owned and operated by notable Russian oligarchs, including majority shareholder, Roman Abramovich.
Instead of relying on energy sources that are harmful to our environment and our communities, and that require taxpayer-funded subsidies, B.C. should be investing in distributed, clean energy projects in communities across the province. This would create long-term sustainable employment and move us away from the volatile boom and bust cycle of oil and gas. •
Sonia Furstenau is leader of the BC Green Party.