The next chapter of BC’s energy story
As the dust begins to settle over British Columbia’s hastily called provincial election, it’s a new world for energy – at least for me. Having transplanted to BC close to a decade ago, I’ve only lived in the province under NDP (and to an extent, Green) rule through successive administrations headlined by the late John Horgan (and the agreement at the time with former Green Party leader Andrew Weaver) and then David Eby. As a careful student of history, however, I’m quite aware as to meaningful developments especially relating to the energy sector both under Christy Clark and Gordon Campbell, going back to the early 2000s.
Last night, BC elected for the first time in 98 years a majority Conservative government. There’s a great many questions on energy and decarb policy that I have and a few salient points that should probably be taken into consideration. One key contextual note, especially for those not following provincial politics as closely as I do: the BC Conservative Party is not the same as the federal Conservative Party, nor is it the same as the United Conservative Party in Alberta. There are similarities in underlying ideas, to be sure, but I think the distinction is important.
The Conservative Platform
In contrast to the last provincial election, the BC Conservatives positioned themselves relatively moderately both in their campaign and platform – that is, still right-of-centre on the political spectrum, but (mostly) avoiding culture war issues. Lorne Doerskon, the Premier-elect, seems to be illustrative of that. My observation is that if we were to draw a federal comparison, Doerkson’s Conservatives fall somewhere between Poilievre Conservatives and Carney Liberals.
Of the key decarbonization- and energy-related pieces of their platform, these ones stand out:
“The Conservative Party of BC takes seriously the need to reduce global emissions. That is why every climate decision we make will pass three tests: Does it protect people from fires, floods, heat and drought? Does it cut emissions rather than just move them, and the jobs that go with them, overseas to somewhere dirtier? And what are the measurable results?”
“We will develop a provincial biomass and bioenergy strategy focused on converting […] biomass into renewable fuels and low-carbon energy products while creating new high-value jobs, starting with Clean Fuels Hubs in Prince George and Kamloops”
[We will] “Repeal CleanBC to remove barriers to investment and growth, keeping a carbon price on large industrial emitters and the revenue it raises.”
“We will make BC an energy superpower by expanding natural gas and LNG development, doubling natural gas production by 2032 and tripling it by 2035.”
Importantly, there’s some nuances to be extracted from their distinct BC Energy Superpower Plan, which includes:
[Replacing] the costly and confusing carbon tax framework, which is holding back new LNG development, with stable guidance that rewards operators without penalizing BC exports against US and Qatari competitors.
[Giving power] plants carbon-price certainty that rewards the cleanest operators without charging BC exporters costs their competitors don't pay.
[Working] with the federal government to ensure BC’s low carbon gas benefits from the global GHG reductions that come from reducing coal-fired and high GHG LNG power in other jurisdictions.
The Energy and Decarbonization Policy Forecast
So what can we expect?
The BC Low Carbon Fuel Standard, a pillar for decarbonizing the province’s fuel mix, remains in play;
The Output Based Pricing System (BC’s industrial carbon pricing system) may be modified, but most likely its foundational design remains with some added benefits specific to energy export projects;
In contrast to the last provincial government, tacit support for the expansion of Roberts Bank Terminal 2 and the Pacific Link coming from Alberta;
Added financial and/or regulatory support for BC LNG export projects, likely moving projects in wait closer to Final Investment Decision;
A reinforced industry narrative, now with a supportive provincial government, that BC LNG displaces higher-emitting LNG sourced from elsewhere;
Accelerated provincial support for BC energy creating Paris Agreement Article 6 credits for the use of BC LNG to (theoretically) displace coal, particularly in Asian countries;
A strong vocal provincial Green Party and activated environmentally-leaning network pushing back against many of the claims made in support of any added fossil fuel development.
The crux of it is that not unlike Eby’s government last year or so, Doerkson’s Conservatives will accelerate the repositioning of British Columbia as a significant energy exporting province, particularly looking to Asia. Part of this positioning will inevitably involve characterizing the province’s resources as low carbon (including low carbon intensity fossil fuels), with BC Hydro’s low-emissions grid key in that narrative.
A few considerations that I’ll be watching for:
Low carbon isn’t going away, and data that proves low carbon is growing in importance, especially in Europe and in Asia. Is BC going to consider interoperability with other jurisdictions as policy gets designed or changed?
Provincial officials have stated in the past that they don’t need to particularly care about what happens outside of the province (for example, with some of their OBPS policy decisions) – that it’s beyond their jurisdiction. In a world where energy exports are core to economic growth, does that rationale still make sense?
The BC Low Carbon Fuel Standard is a longstanding and effective policy tool to incentivize clean fuels development. What could it look like to align more closely with Washington and California’s similarly-designed programs?
Can BC demonstrably prove that any of its energy products are lowering global emissions?
Methodologically, does BC even have the technology and standards to demonstrate low emissions from natural gas when it comes to its life cycle emissions, including fugitive emissions upstream?
Will capital come pouring back into the province in light of this new government, some of it focused on energy exports? The Canada Investment Summit proved that Canadian (and foreign) capital is around and willing to be deployed – can this government support the development of clean fuels for domestic use and for export as much as it seems to be in support of natural gas and LNG? What is meant by “Clean Fuels Hubs”?
So many questions, and lots yet to come. David Eby calling an election a month ago may be looked upon as one of the worst political miscalculations in Canadian political history. Canadian energy producers, I’m sure, are feeling bright about their future. And on the clean fuels file – I’m working on a few things there myself, both in BC and beyond. Stay tuned.
