How will the B.C. government square a liquefied natural gas industry with its carbon reduction targets?
The Pembina Institute on Friday (October 3) threw out some ideas in anticipation of the fall sitting of the B.C. Legislature, when the B.C. government will be introducing legislation for taxing the nascent industry and managing carbon emissions from it.
The Pembina Institute expects new rules on carbon emissions from an LNG industry will apply to the LNG terminals themselves.
“A big question for us is going to be what, if any, other approaches are there for the pipelines and the upstream shale gas development” said Matt Horne, the Pembina Institute’s associate director for B.C.
There are three principal sources of greenhouse gases in the LNG industry, from wellhead to terminal. There are the LNG terminals themselves, and the B.C. government has already signaled it will allow companies to burn natural gas to drive the liquefaction process. But there are also emissions from pipelines and the gas wells. Methane can escape from gas wells, for example. CO2 stripped from natural gas is also flared.
B.C. already has a carbon tax, but it only applies to fossil fuels that are burned. The Pembina Institute anticipates that new rules specific to the LNG industry will apply to the LNG terminals themselves, which account for only 30% of the total carbon pollution from wellhead to terminal. What's not clear is whether the government also plans to address emissions from other parts of the LNG process, such as the gas fields.
“The upstream methane and the upstream formation CO2 essentially doesn’t have any climate policy applying to it,” Horne said.
