B.C. premier's natural gas plans include power supply change, but no hydro hikes

VICTORIA - Premier Christy Clark is trimming her government's prized green agenda to support growth in the natural gas industry, including development of three liquefied natural gas plants by 2020 in northwest B.C.

Clark billed her natural gas strategy Friday as a potential clean-energy juggernaut that will create thousands of jobs, bring in billions in revenues and help combat global warming in Asia.

But environmental groups and the Opposition New Democrats said the Liberals are on their way to missing their greenhouse gas reduction targets because burning natural gas causes greenhouse gas pollution.

In 2007, the B.C. Liberals passed their groundbreaking Greenhouse Gas Reductions Targets Act, which calls for a 33-per-cent reduction in greenhouse gas emissions.

Clark, who has previously said she doesn't want to be known as the premier who gave up leadership on the environment, said natural gas development and the LNG plants are an opportunity British Columbia must pursue.

"Together, these policies will create 1,000 to 2,000 job openings," she said at an announcement at the Burnaby, B.C. campus of the B.C. Institute of Technology.

"They will support thousands of permanent spinoff jobs across the province," she said. "They will create 9,000 construction jobs over the next eight years. It represents $20 billion in direct investment."

Clark said the natural gas operations can contribute $2 billion annually to provincial revenues.

The premier said her government is banking on plans to pipe natural gas from northeast B.C. to the north coast at Kitimat, where it will be frozen and placed on tankers bound for Asia.

She said the LNG export plans are major components of her B.C. Jobs Plan, but the province has to move quickly because it faces competition from Australia and Qatar for the Asian markets.

"The spot price today in North America (for natural gas) is $2.38," said Clark. "In Asia, it's $14.78. That's why it's so important that we seize this opportunity to be able to export our natural gas resources."

But Clark said the government will change provincial energy self-sufficiency policies to make room for the LNG plants, which require enormous amounts of energy to operate.

She also said the third LNG plant, projected to be in operation by 2020, will be partially powered by natural gas, which emits greenhouse gases.

Clark has often said the LNG developments offer the province a generational opportunity to create jobs and revenues, and it is up to the government to find green solutions, which will include exploring storing the emissions underground.

Opposition New Democrat energy critic John Horgan said the NDP supports natural gas development and the LNG plants, but has concerns about how the Liberals will use energy to power the operations.

"We see no evidence that we have a secure source of supply of electricity to meet the needs of these massive energy hogs," he said. "There's no direct link between the plant and where that power is coming from, other than a commitment that ratepayers won't be totally on the hook."

The government said the current hydro-electric grid will supply energy for the two LNG plants the third plant will receive power from hydroelectric and natural gas sources and possibly wind power.

Pembina Institute spokesman Matt Horne said in a statement that the government must seriously address carbon reduction or carbon storage options, because using natural gas to help power one of the LNG plants threatens legal emission-reduction goals.

"Until the province takes these necessary steps, this strategy will result in B.C. missing its greenhouse gas reduction targets," said Horne's statement.

Horgan said he supports small uses of natural gas to power the LNG plants, but that means the Liberals will likely have to change their climate policy that won former premier Gordon Campbell international accolades.

"This is counter to policies the B.C. Liberals put in place three or four years ago," he said.

Clark said the natural gas strategy will force the government to change its energy self-sufficiency policy with regards to the available water supply on hand to ensure the province's dams produce enough electricity.

She said the government will move to a policy of average water supply as opposed to the current policy that includes a critical water threshold.

The critical water policy ensures that B.C. has enough water supply in its dams in the case of a 100-year drought. Average water supply keeps enough water in storage to handle most drought years.

Government officials said earlier the government would import power if it is caught in an historic drought situation.