LNG project approval is environmentally sound

  • 29 Sep 2016
  • Calgary Herald
  • DEBORAH YEDLIN

LNG project approval is environmentally sound

 

The federal government’s approval of the Pacific NorthWest LNG project shone a ray of hope on Canada’s energy future Tuesday.

Predictably, protests from First Nations groups and nongovernmental organizations such as the Pembina Institute immediately followed.

They can protest all they want. The project was approved after extensive consultation and research.

It’s now up to Petronas and its four partners to move ahead on meeting the 190 legally binding conditions attached to the approval while deciding whether to risk the estimated $11.4 billion cost to build the terminal.

Unlike what the Federal Court of Appeal said about the Harper government’s role in the Northern Gateway pipeline project, it will be difficult to make a case that the duty to consult was not adequately carried out this time around. It was, in spades. The project, as approved, includes an innovative structure that provides for First Nations’ involvement in the environmental oversight.

This should be the first of many such approaches to developments that involve First Nations lands.

In setting an emissions cap for the project, the Trudeau government appears to have taken a page from Alberta’s climate leadership plan, which established an emissions cap of 100 megatonnes on the oilsands. In the case of Pacific NorthWest, emissions must come in 20 per cent below the threshold first proposed, or 4.3 million tonnes of equivalent carbon emissions per year.

That’s in addition to B.C.’s revenue-neutral carbon tax and the fact the federal government is close to announcing a national price on carbon.

For this reason, the shrill news release issued by the Pembina Institute following Tuesday’s announcement was surprising. Yes, there will be emissions associated with this project, but there are others factors to consider.

The first is that Canada makes up just 1.6 per cent of global emissions.

Emissions from the approved project cannot be considered catastrophic.

Second, the export of LNG to Asian countries can displace other fuel sources, such as coal, whose carbon emissions are much higher.

In the global context, more LNG is better for the planet.

While the current LNG supply glut has depressed the price of the commodity, continued growth in Asia and the developing world, is expected to rebalance the market after 2020, when this project could be operational.

There are other important take-aways from Tuesday’s decision, including a precedent for the approvals of future projects. Companies and investors now have a greater measure of certainty when it comes to committing investment dollars and know what the expectations are in terms of structure, oversight and consultations.

Another important marker is the federal government following through on its promise to get Canada’s resources to global markets, even though with only the LNG piece being approved at this juncture, one could argue they are halfway to meeting that promise. Oil pipelines east and west also need approvals.

Yet a glass half full is better than one half empty.

It’s encouraging to see this government willing to spend political capital to do what’s best for the country, despite the opposition.

In today’s world, there is no such thing as unanimous approval for these kinds of mega projects — and that’s doubly so in the disparate First Nations communities whose governance is marked by a lack of cohesion and continuity.

Governments are elected to lead — and sometimes it’s not so easy. Winston Churchill was known to have said, “You have enemies? Good. That means you’ve stood up for something, sometime in your life.”

The Pacific Northwest project will add $2.9 billion per year in GDP growth and $2.5 billion in annual royalties and taxes to all levels of government over its 40-year lifespan.

In a world that appears to be entering a phase of slower growth, the certainty of investment for one project is sure to have other companies and consortia revisiting their proposals, which is good for Canada’s economic prospects.

To those who saw the opportunity to leapfrog ahead of the United States a few years ago because it had yet to decide whether to enter the LNG export market only to see it slip away due to to the regulatory quagmire, getting approvals has taken too long.

Tuesday’s announcement sent a long overdue message that Canada is once again open for business.

 

 

 

 

About prosperitysaskatchewan

Consultant on Saskatchewan's natural resources.

Posted on September 29, 2016, in economic impact, miscellaneous, oil, other minerals, political. Bookmark the permalink. Leave a comment.

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