Chamber, Resource Municipalities Coalition ask govt to pause emissions cap
When the provincial government announced its Energy Action Framework back in March, Minister of Energy, Mines and Low Carbon Innovation Josie Osbourne said that it “will provide certainty for industry, create good jobs and build a clean economy that works better for people.” However, the Fort St. John and District Chamber of Commerce, and the Resource Municipalities Coalition (RMC) believe it will cause economic harm for the province and northeastern BC in particular.
The Energy Action Framework aims to cap emissions from the oil and gas industry at 33 to 38 per cent below 2007 levels, in the government’s purported efforts to build a clean economy. Since the announcement, the Climate Solutions Council has sought comment, which both organizations provided in recent letters.
Both organizations, in their letters, have asked the BC government to pause the emissions cap on oil and natural gas and work with community and industry to set an Output Based Price System (OBPS) that is competitive with other regions, and continue working to measure and manage methane.
“(The Ministry) has unveiled several policies that will each have a significant impact on the industry within the province and the communities of northeastern BC. We ask that you pause the implementation of these emissions caps on oil and natural gas and collaborate with communities to develop strategies to mitigate the impacts of these policies for achieving emissions reductions, so they do not cause a harmful loss of economic activity in our communities,” the RMC’s letter read.
Supporting BC’s LNG industry will help reduce global emissions by replacing the use of coal abroad. The current suite of climate policies released by the BC government fail to improve the global impact of greenhouse gas emissions (GHGs) which, according to the RMC, is the proper approach to reducing GHGs. The emissions cap of CleanBC will make natural gas production in BC uneconomic and drive companies to invest elsewhere, resulting in job losses.
Industries that invest in BC need a clear and concise plan for the development of the clean energy policies. In the FSJ Chamber’s letter to the Climate Council, Chamber CEO Kathleen Connolly that “the current path does not create a consistent and viable pathway for investment in resource development in British Columbia and leaves many communities uncertain of how these policies will affect them over the long-term.”
As it stands, a review by the Business Council of BC of the government’s own NAVIUS modelling shows that pursuing this path will shrink BC’s economy by $28 billion by 2030. Real per capita income is projected to drop by $4,600, which will take prosperity back ten years, approximately $11,000 per household, according to information provided by the FSJ Chamber. At the same time, carbon will still be produced in other jurisdictions while economic opportunities leave British Columbia.
The BCBC’s review didn’t include the OBPS. But the Bank of Montreal released a report showing that the OBPS could act as an indirect production cap on industry in BC; could create clear winners and losers based on geography given the lack of flexibility for methods of compliance; and challenge facilities in remote areas that do not have access to electrification.
Government and industry need realistic timelines to find ways of implementing electrification, which will be needed to meet the new emissions caps, Fort St. John Mayor Lilia Hansen said.
The inability to electrify the oil and gas industry would have a negative impact on current and future LNG projects. Reduced production in the sector would represent a significant impact to BC and to the Peace region by reducing future royalty revenues by an estimated $800 million annually. It would also reduce industry investment to municipalities and First Nations, which between 2018-2021 totaled $4.7 billion, and supported over 2400 BC based businesses.
“We share the goal of reducing global emissions to combat climate change,” said Hansen. “However, we must be a part of the global solution by supporting our LNG industry.”
“I strongly believe that Canada can leverage LNG exports to reduce global carbon emissions to meet climate targets.”
Connolly asked that the government "hit the pause button on these policies until they have completed a robust consultation with First Nations, industry, local governments and impacted communities to get a clear understanding of how these policies will affect the economic growth to both Indigenous and non-Indigenous communities.”
“We believe that it is irresponsible leadership to demand electrification to the oil and gas sector, when the government has not set out a clear pathway to get the infrastructure in place and operational before 2030,” Connolly wrote. “As we have seen, the consequences of not doing complete consultation have resulted in delayed permits, additional red tape, delays and even cancellations of projects.”
The RMC’s letter, which was signed by the mayors of Fort St. John, Taylor, Tumbler Ridge, Mackenzie and Northern Rockies Municipality concluded by saying that “communities in this region will feel the greatest impact of lost investment and lost economic opportunity, planning and attracting investment become more challenging and represents a loss in revenue not only to local government but, to the province, further burdening an already stretched social framework.”
Both organizations requested that the government work with communities in the North on the “long-term vision for industrial growth for our region to help enable the type of emissions reductions that we both intend to achieve.”