GasLink helps get China off coal
By: Philip Cross and Pierre Poilievre
All the banging and clanging from protesters against the Coastal GasLink project might lead you to think they actually cared about the environment. Quite the opposite. The project they oppose is exactly what’s needed to reduce global emissions and protect our planet. It will deliver natural gas to a liquefaction facility in northern British Columbia for export to Asia, where it will replace dirty coal- powered plants with cleaner, lower-emitting natural gas facilities.
The atmosphere knows no borders, so cutting Canada’s greenhouse gas emissions does little good if larger countries go on increasing theirs. The latest UN data show that China now accounts for 26.8 per cent of global emissions, double those of the next highest emitter, the United States, at 13.1 per cent, and far more than Canada’s 1.6 per cent. GHG emissions from China have soared 66.2 per cent since 2005. Coal is a major reason why. Coal-fired power generation is the single largest source of emissions in the world at 30 per cent, and China accounts for nearly half the world’s coal consumption.
Natural gas, on the other hand, produces about half the carbon emissions coal does. Shifting power plants from coal to natural gas has helped reduce emissions in the United States—dramatically. Without any government planning or direction, the sharp fall in the price of natural gas following the fracking revolution has led firms to voluntarily switch plants from coal to natural gas. As a result, energy-related carbon dioxide emissions fell by 14 per cent between 2005 and 2017 even as the US economy grew by 20 per cent.
Increasing natural gas exports from Canada to China—as the Coastal GasLink will do—would allow a similar switch from coal to natural gas and a similar reduction in emissions. Getting natural gas to China does itself generate emissions. But, according to Rob Seeley of E3 Merge, “for every unit of GHGs that British Columbia produces to get that LNG to market, the overseas production of GHGs goes down by a factor of 10.” He estimates that shipping LNG from Kitimat to China could reduce global GHG emissions by 60 to 90 million tonnes annually, equivalent to all of BC’s GHG emissions in a year and 10 per cent of Canada’s. Look at it another way: it’s equivalent to the total reduction Ottawa claims for the federal carbon tax.
China’s need and potential are both mind-boggling. To replace coal-fired electricity in China would require 74 billion cubic feet a day of natural gas. That is the equivalent of 37 projects the size of LNG Canada. To reduce global emissions, we should be replicating the LNG Canada project over and over again.
To be fair, it would take time for China to transition from coal to gas, and other countries will supply some of that gas. But Canada would have major advantages as a supplier. First, according to Natural Resources Canada, we have 1220 trillion cubic feet of marketable, technically-accessible natural gas. Second, hydro-powered electricity makes LNG Canada the lowest-emitting liquefaction facility in the world, an advantage we can replicate in future plants. Third, shipping distances to China from Canada’s west coast are much shorter than from the Gulf of Mexico.
Some have doubted whether Canada can claim credit under the Paris Accord for greenhouse gas reductions that our exports make possible. But Article 6 of the Accord stipulates that “The use of internationally transferred mitigation outcomes to achieve nationally determined contributions under this Agreement shall be voluntary and authorized by participating Parties.”
The government can and should try to negotiate with importing countries to claim credit for emissions reductions that our exports make possible. But even if we don’t get credit, it is still worth doing. The atmosphere is global. Reductions achieved abroad help the planet as much as those achieved at home. So it is ironic that environmental taxes and laws stand in the way of these emissions-reducing projects. The government’s bill C-69 seriously complicates approval of all federally-regulated resource projects. That could be enough of a deterrent to keep investors from putting billions of dollars on the line in Canada. Luckily, the LNG Canada project now underway in BC was evaluated under the pre-C-69 regulatory regime.
Repealing C-69 and bringing in a fast-track review of proposed LNG projects would assure investors of a fast, fair and final response to their applications. Reducing taxes would also make such investments more attractive.
If the protestors truly cared about the environment, they would get behind simpler regulation and less taxation and would be demonstrating in favour of projects like LNG Canada and the Costal GasLink, not against them. But don’t hold your breath.
Philip Cross was Chief Economic Analyst at Statistics Canada. Pierre Poilievre is Conservative finance critic.