B.C. Unveils Tax Incentives for $40-Billion LNG Export Terminal

British Columbia Premier John Horgan has unveiled a package of tax incentives to support a massive new liquefied natural gas (LNG) export terminal at Kitimat, B.C., just as Royal Dutch Shell and its partners approach a final investment decision on the C$40-billion LNG Canada project.

Horgan maintained the project would be consistent with his government’s promise to reduce B.C.’s greenhouse gas emissions 40% by 2030—a commitment that is a cornerstone of the New Democrats’ governing agreement with the Green Party of B.C. If it received regulatory approval, the project would be the biggest private sector investment in B.C. history, producing up to 10,000 jobs during construction and up to 950 permanent positions, Horgan’s office said in a release. The province also expects the project to bring in $22 billion in direct government revenue over 40 years, CBC reports.

Weeks before the announcement, the Canadian Association of Petroleum Producers secured the province’s assurance that its upcoming scientific inquiry into the natural gas fracking industry would not cover emissions or public health risk, according to documents obtained by DeSmog Canada.

“No premier or government can dismiss this kind of critical economic opportunity for the people of British Columbia,” Horgan said in the release. “But neither will we turn our back on our commitment to climate targets, or our path to reconciliation with Indigenous peoples.” The incentives B.C. is offering LNG Canada include provincial sales tax relief, new greenhouse gas emission standards, low industrial electricity rates, and elimination of the province’s LNG income tax.

“I’m standing before you today and speaking directly to the people of British Columbia and saying there may well be a final investment decision on an LNG facility in northern British Columbia, and should that happen, we will put in place a framework that will allow them to be competitive,” Horgan told media in Victoria yesterday.

“I don’t believe at all for a minute that this is going to be easy,” he said. “This is going to be very, very difficult, but we’re committed to making sure it works.”

The release from Horgan’s office said the new policy framework for this and any other future LNG projects would guarantee a fair return for B.C.’s natural resources, guarantee jobs and training for B.C. residents, respect and “make partners of” First Nations, protect the province’s air and water, and live up to its climate commitments. “Our new approach welcomes investment that puts our province’s people and future first, and rejects the old ways of resource development at any cost,” Horgan said. “Our obligation is to the people who call British Columbia home, and our job is to get the best deal for them and the generations that follow.”

Horgan acknowledged that Green Leader Andrew Weaver wasn’t onboard with all aspects of the new LNG framework. “Andrew’s very passionate about combating climate change,” he said. “It’s his reason for being in this legislature and he makes no apologies for that, nor should he.” But Weaver told media his caucus wouldn’t bring down the government over the plan—rather, the Greens’ support is “predicated on government developing a climate plan to meet our targets.”

“Our goal is not to throw down the government. Our goal is to get the government to deliver on the confidence and supply agreement,” he said. “We’re not making a threat…show us the climate plan that will deliver this target, and we will continue to have confidence in government.”

That may be easier said than done, according to the Pembina Institute, where Acting B.C. Director Karen Tam Wu said Horgan hadn’t shown how the LNG incentives and the climate plan would dovetail.

“The government is now promising LNG development can proceed and we can meet our 2030 and 2050 climate targets,” she said in a release. “Questions remain regarding how the carbon pollution associated with proposed LNG projects will fit within the province’s carbon budget. Major LNG development would require significant emissions reductions in the gas supply chain, and an increase in the scale of emissions reductions needed in other sectors of the economy.”

“Although the government has consistently reiterated its commitment to B.C.’s climate targets, the announcement did not explain how the gas sector will be required to reduce its carbon pollution,” Tam Wu added. “We look forward to seeing a new suite of measures introduced and implemented to reduce carbon pollution across all economic sectors—otherwise we risk missing our climate targets and passing up the benefits of clean growth.”

The week before the LNG Canada announcement, DeSmog Canada was out with the news that B.C.’s fracking inquiry will fail to address two of the most worrying impacts of natural gas development—and that Horgan’s government gave fossil lobbyists an advance heads-up on the decision. “You have the preeminent industry association in the country given six weeks’ advance notice not only about the inquiry itself, but a clear indication that key things are simply not going to be addressed,” Ben Parfitt, an investigative journalist with the Canadian Centre for Policy Alternatives, told DeSmog. “I am extremely worried, and all the groups that signed on to a call for an inquiry are extremely concerned about what we see here.”

Rather than addressing key concerns about emissions and public health, the focus of the inquiry will be limited to water use and induced earthquakes from fracking operations. It’ll be conducted in April and May by a panel of three academics. “None of the 17 organizations that made the call for a public inquiry into fracking were notified of government’s intentions to launch a scientific panel,” DeSmog notes.

The DeSmog story points to a recent compendium of 1,300 peer-reviewed studies, reports, and investigations, recently released by the Physicians for Social Responsibility and the Concerned Health Professionals of New York. The report found “no evidence that fracking can be practiced in a manner that does not threaten human health,” said co-author Barbara Gottlieb, PSR’s environment and health director.

“I’m so glad to hear there is going to be a government scientific review of fracking,” she told DeSmog. “I’m struck there are no health voices on the panel.”

“For a long time the information was largely anecdotal, largely at the level of symptoms, so we’d see people living near fracking sites had headaches or sudden and severe nosebleeds,” she added. But now, DeSmog writes, “recent research has demonstrated a real statistical correlation between those living close to fracking sites and an increase in hospitalization for numerous causes, including increased asthma, harm to fetuses, and premature birth, which is the leading cause of premature death in infants in the U.S.”

The inquiry will also sidestep questions about greenhouse gas emissions, despite recent research showing much higher rates of “fugitive” methane emissions than had previously been attributed to the province’s oil and gas infrastructure. “I think unfortunately that this is a very, very, very narrowly focused scientific review,” said David Suzuki Foundation scientist John Werring, adding that the methane itself comes along with a soup of other dangerous substances.

“When we’re talking, for example, about the issue of fugitive emissions, they contain potentially toxic components that have adverse impacts on human health. These are things like benzene, toluene, and hydrogen sulfide gas,” he said. But “there is nothing here in the government’s scientific review that they are going to look at the human health impacts. Nothing.”