JUSTINE HUNTER, Globe and Mail, Jun. 03 2012
VICTORIA — A 30-page technical report containing the B.C. government’s assessment of the proposed Northern Gateway project sits on Environment Minister Terry Lake’s desk. Still, his government remains silent on the plan to build a pipeline across northern B.C. to get Alberta oil to Asian markets.
Premier Christy Clark said Sunday it is still to soon to determine if the pipeline risks are too high to bear. “We should recognize those concerns as legitimate but let’s see what comes out of the process,” she told reporters. She promised to ask “quite pointedly” over the coming months about the benefits to B.C.
The Enbridge proposal has ensured energy policy remains a volatile political issue in British Columbia, and Mr. Lake is guarding the contents of his ministry’s internal report.
The pipeline controversy could be a classic wedge issue that shapes the next provincial election campaign.
Both the Opposition NDP and the governing Liberals have observed that the project leaves the province with few benefits while assuming much of the risk. But the New Democrats have actively opposed the project, while the government has publicly straddled the fence on whether it should go ahead. The parties take a similar stand on a second pipeline plan, the $5-billion expansion of Kinder Morgan’s oil pipeline across B.C.
Last week, NDP Leader Adrian Dix challenged the Premier in the legislature over the government’s reluctance to take a stand on Enbridge. But Ms. Clark’s government has several opportunities yet to formally intervene at the hearings, and it could wait until the eve of the next provincial election to make a political splash.
On other key energy policies, however, there is remarkable unanimity between the B.C. Liberals and their chief rivals.
The biggest driver of the future of energy policy in the province is linked to a third pipeline, one that would bring natural gas from the northeast corner of the province to the coast, where both parties hope to see it processed into liquefied natural gas.
The embryonic LNG industry could generate $20-billion worth of investment, thousands of construction jobs and more than $1-billion a year in government revenues. Those figures are based on three plants being in operation by 2020, which is the target of the Premier’s jobs plan.
But getting that gas out of the ground, squeezing it along a pipeline and then freezing it into liquid form is an energy-intensive business. It is a prime reason that B.C. faces a growing gap between its electricity supply and demand in the coming decade.
The LNG industry, if it gets off the ground, will likely force the government to water down its ambitious climate-change targets.
By law, British Columbia must cut its greenhouse-gas emissions by at least 33 per cent below 2007 levels by 2020. It means total emissions are to be reduced to 45 million tonnes in 2020.
BC Hydro, in its recent draft integrated resource plan, is forecasting that peak energy demand will rise by 50 per cent over the next 20 years – and that is based on only the first two LNG plants going ahead. It proposes to meet some of that demand by leaving industrial customers to generate their own power by burning natural gas.
In part, that direction responds to the insistence by both the government and the Opposition that BC Hydro rein in spending to keep residential utility rates low.
NDP energy critic John Horgan says there is little opportunity for wedge politics on the LNG issue.
“Both parties see this as an opportunity for growth,” he said in an interview. “I don’t think there is much to delineate us from the Liberals.”
Ms. Clark said last month that the province’s climate-change targets could be amended to reflect the reduction of greenhouse-gas emissions outside of the province if LNG replaces dirtier sources of energy such as coal-fired generation in China.
“I’m willing to have that discussion,” Mr. Horgan said. “If we are reducing coal generation offshore, surely to goodness we can use gas for compression to get to that target.”
Mr. Horgan said he is comfortable with being in step with the B.C. Liberals on LNG.
“If we agree, that is good. But the next issue is how we manage energy supply,” he said. He thinks there should be a greater role for the utilities regulator to review BC Hydro’s rates and to examine the Crown corporation’s resource requirements. And he argues that the B.C. Liberals have relied too much on independent power producers to supply power.
“The Liberals’ actions have damaged the viability of the public utility,” Mr. Horgan said. “That is the wedge issue.”