Emission limits set for B.C. LNG producers

Gas exporters will be able to buy carbon offsets or pay into "technology fund" if they go over greenhouse gas limits

LNG tanker carrying cooled and compressed natural gas.

VICTORIA – The B.C. government has set environmental rules aimed at making good on its promise to export the world’s “cleanest” liquefied natural gas.

Environment Minister Mary Polak introduced legislation Monday to set limits for greenhouse gas and conventional air pollution. It includes an option for LNG producers to buy carbon offsets or contribute to a “technology fund” if their operations exceed greenhouse gas limits.

Polak said the system will permit LNG development without exceeding the government’s greenhouse gas target of a 33 per cent reduction by 2020 and 80 per cent by 2050. New air quality rules are also being established for nitrogen dioxide and sulphur dioxide emissions, based on a review of air quality in the Kitimat area.

The “benchmark” for greenhouse gas emissions is an average 0.16 tonnes of carbon dioxide equivalent per tonne of LNG produced, which the government says is lower than the lowest-emitting LNG facilities in the U.S., Australia and Norway. Companies that exceed the benchmark will pay penalties on a sliding scale, and those that perform better will receive a carbon offset credit they can sell.

NDP environment critic Spencer Chandra Herbert said the technology fund idea appears to be borrowed from Alberta, where a similar fund hasn’t stopped greenhouse gas emissions from rising.

“I don’t know how we can meet our greenhouse gas reductions if we get five or seven LNG plants that the premier seems to suggest are coming, despite evidence to the contrary,” Chandra Herbert said.

Polak said the technology fund will be developed in consultation with industry. Carbon offsets will be used to pay for projects in B.C. such as lower-emission transportation and buildings, and there is no plan to count emissions reductions from Asian users who use LNG to reduce coal use, she said.

Green Party MLA Andrew Weaver said the sliding scale for excess emissions means that taxpayers will be paying part of the penalties. He predicts that B.C. will never compete in the LNG industry, given growing international production of conventional and shale gas. But if it does, the province will not achieve reductions in emissions.

“This isn’t going to fool anybody,” Weaver said. “It’s attempting to look like the government still has a plan for greenhouse gas reductions.”

The emission rules will apply to LNG processing only, not pollution and greenhouse gases from production and processing of natural gas in northeastern B.C.