LNG Canada is a joint venture consortium—made up of Shell, PETRONAS, PetroChina, Mitsubishi and Korea Gas Corporation (KOGAS)—that plans to build a liquified natural gas (LNG) terminal in the town of Kitimat, British Columbia (BC). The facility will liquefy fracked gas from BC and Alberta so it can be shipped internationally by tanker. LNG is primarily destined for the markets of consortium partners (China, Japan, Korea and Malaysia). In 2018, the joint partners made a final investment decision to proceed with construction of Phase One,26 with plans to produce 14 million tonnes of LNG per year,27 and potential to double that capacity through a future Phase Two.
LNG Canada was lauded by the federal government as making the “single largest private investment in Canadian history.”28 If incremental to current production levels, the project would require an unprecedented increase in fracking activity in the northeast of the province. While the company and government promote LNG Canada’s project as a climate solution, research suggests that LNG may be as emissions intensive as coal, and perhaps worse.29 LNG Canada’s 40-year export licence represents a lock-in of fossil fuel energy that is contrary to the spirit of the Paris Agreement and the climate targets set by provincial and federal governments, making it one of our Top 50 emitters.
Production: Phase One: 13 million tonnes of LNG per year (Mtpa). Phase Two: 26 Mtpa 30
|Shareholder||Country||Ownership Share (%)|
|Royal Dutch Shell||NL||40|
Ownership information from the BC Oil and Gas Commission1
The LNG Canada project—which will extend over 250 hectares outside the town of Kitimat, BC, will consist of up to four “trains” that act like giant refrigerators, liquefying fracked gas by cooling it to –162 degrees Celsius.3 The engineering and construction contractors hired by LNG Canada are the American-based Fluor Corporation from Irving, Texas, and JGC Corporation based in Yokohama, Japan—their joint contract comes to $18.5 billion.4
The project also requires substantial infrastructure to transport fuel to and from the facility. TransCanada Corporation is the owner of the C$6.2 billion Coastal GasLink pipeline, which would pipe fracked gas from the Montney region of northeastern BC and northwestern Alberta to the facility in Kitimat.5 TransCanada holds a 25-year service agreement with LNG Canada to send fracked gas to the project by pipeline.6
LNG Canada markets itself as a relatively ethical project, showing that “industrial development can co-exist with environmental stewardship and Indigenous reconciliation,” according to LNG Canada’s CEO, Andy Calitz.7 Unfortunately, evidence to the contrary suggests that these claims may be significantly overstated.
On climate, LNG Canada is emphatic that the facility can play a role in the reduction of global emissions: they reason that since the liquefied gas produced at the facility will be exported to coal-consuming countries in Asia, an increase in natural gas export in BC will lead to reduced emissions worldwide, helping “to address global climate change and air pollution.”8 This logic has yet to be substantiated. First, research debunked the assumption that a greater supply of one source of fuel automatically leads to a decrease in another.9
Second, LNG may not be any cleaner than the coal it purports to replace: the fracking process necessary to supply the facility with natural gas has been found to release significant amounts of methane gas—86 times more emissions intensive than carbon dioxide.10 When methane emissions are counted, research shows that natural gas can be more emissions intensive than coal. Research on BC fracking operations showed that methane emissions are likely to be at least three times higher than those reported by government and industry.11
When it comes to BC’s climate targets, LNG Canada could single-handedly render them unachievable. LNG Canada estimates that the domestic emissions from fracking, transportation and liquefaction processes would total 3.5 megatonnes of carbon dioxide per year, while other estimates are more like 9–12 megatonnes.12 Considering that BC’s climate targets promise to limit the entire province’s emissions to 13 megatonnes in 2050, the LNG Canada project could eat up most of the province’s carbon budget (which should be close to zero by 2050 to comply with the Paris Agreement). Considering that BC’s climate targets promise to limit the entire province’s emissions to 13 megatonnes in 2050, the LNG Canada project could eat up most of the province’s carbon budget (which should be close to zero by 2050 to comply with the Paris Agreement).
These numbers do not consider the amount of emissions produced when the fuel is actually used. Some 32 million tonnes of carbon dioxide per year would be produced in the importing countries.13 When government and industry tout the emissions profile of the LNG Canada project, they leave out consumption-related emissions once the LNG reaches its destination in overseas markets. If the full scope of LNG Canada’s emissions were included, the LNG Canada project alone would blow past the province’s climate targets.
LNG Canada claims that the project “has support from First Nations.” 14 However, this support is not unanimous. The project’s construction contravenes the hereditary leadership of the Wet’suwet’en First Nation, whose territory covers 23 per cent, or about 190 km, of Coastal GasLink’s route across the province.15
In December 2018, TransCanada was granted an injunction to force itself onto the Unist’ot’en Camp in Unist’ot’en territory—belonging to a House Clan of the Wet’suwet’en Nation—with reinforcement from militarized RCMP in order to carry out pre-construction work. In early 2019, this work destroyed multiple traplines and tents belonging to the Unist’ot’en, provoking a warning from the BC Oil and Gas Commission for carrying out work without an archaeological impact assessment.16 Historically, the Unist’ot’en Camp has been a formative site of land-based resistance to fossil fuel infrastructure, including the defunct Enbridge Northern Gateway pipeline.17
Tax breaks and other subsidies:
While LNG Canada will boost BC’s GDP, tax breaks and other subsidies suggest that its economic benefit may be overstated.18 Amid hesitation from LNG Canada’s joint partners on their eventual final investment decision, the BC government offered a bounty of various subsidies and exemptions—speculated to amount to around C$5.35 billion.19 This includes a break on the provincial carbon tax, the elimination of the LNG income tax previously supported by the NDP while the BC Liberals were in power, and dramatically reduced rates for electricity. LNG Canada is also exempt from paying provincial sales tax during the project’s five-year construction period.20 Royalty rates for the natural gas that will feed the project are also at record lows in BC—dropping over 90 per cent in the last 10 years: a period that saw a 72 per cent increase in fracking activity.21 Finally, the BC government’s claims that LNG Canada will create 10,000 temporary construction jobs is countered by research indicating that when it comes to employment in the province itself, the numbers fall substantially short—just over 1,000 jobs per year. Meanwhile, the LNG plant itself will only sustain about 350–450 permanent jobs.22
Spending on community services
As part of an extensive campaign to insert its message into affected communities in northern BC, LNG Canada has a notable history of funding schools, events and community organizations around the Kitimat area. Its website records a $22,000 donation to the Coast Mountains school board and $50,000 to the Terrace Community Foundation.23 It also made a $1,500 donation to Kitimat Understanding the Environment (KUTE),24 a community organization that advocates for personal waste-reduction efforts. KUTE-organized events such as the Kitimat River Cleanup feature LNG Canada’s logo on posters.25 While these donations are legally above ground, they suggest that LNG Canada may be using financial influence as a means of bolstering the project’s social licence.
Learn more about LNG Canada at LittleSis.org
The intent of the Corporate Mapping Project database is to engage Canadians in a conversation about the role of the fossil fuel sector in our democracy, by “mapping” how power and influence play out in the oil, gas and coal industries of BC, Alberta and Saskatchewan.