As a pragmatic environmentalist , I am often asked how I could support the BC LNG export industry? I prepared a Twitter thread on the topic but have since been asked to show my work. This blog post builds on a couple previous posts on the topic and will explain how someone who is serious about fighting climate change can simultaneously support exporting BC LNG to Asia.

Let’s start this with some basic assumptions. I believe anthropogenic climate change is real and represents a fundamental threat. I agreed with Canada signing the Paris Agreement and believe that Canada should work to reduce our carbon emissions. That being said I believe the Paris Agreement is deeply flawed. It treats each country like a silo and ignores how trade affects carbon emissions. This is a problem because the Paris Agreement allows developing countries to set less stringent targets for reducing their carbon emissions. As a result many highly-developed countries have off-shored their carbon emissions. As presented in this graphic from Davis and Caldeira, the US (and Canada) have free-loaded on China’s carbon emissions for years by importing manufactured goods (and their embedded carbon) which are not counted against our totals. It is like saying you are on a diet, but only counting the calories you eat at home and then eating most of your meals at restaurants.

As Canadians we can do something to help off-set our freeloading by exporting lower-carbon energy to Asia. Unfortunately, this will increase our domestic carbon emissions but in doing so it should lower global emissions (as I will show below). A lot of Canadian politicians have staked their reputations on meeting our Paris Agreement commitments. They worry that emissions associated with exporting fossil fuels will drive our domestic emissions over our Paris Agreement commitments. I see that argument as myopic. Greenhouse gases (GHGs) don’t respect borders and if we can reduce total global emissions by increasing domestic emissions (even at the expense of our Paris Agreement commitments) then we have made the right choice. So let’s get into the numbers.

Using life-cycle analyses, Canadian LNG, when burned in Chinese electricity plants, is better for the globe than the Chinese burning coal

The most recent research on this topic is the peer-reviewed article: Country-Level Life Cycle Assessment of Greenhouse Gas Emissions from Liquefied Natural Gas Trade for Electricity Generation by Kasumu et al. This article demonstrates conclusively that when replacing coal in Chinese energy facilities, BC LNG produces lower total, life-cycle emissions. Others can make alternative claims until they are blue in the face, but until they provide numbers to compare to Kasumu et al. then they are simply blowing smoke. Good science trumps rhetoric.

But what about the Canadian Center for Policy Alternatives (CCPA) that says otherwise?

It was a load of hogwash. I prepared a detailed blog post on the topic: On the Canadian Centre for Policy Alternatives’ bad science about BC LNG emissions where I explain in detail all the tricks the CCPA authors used to generate their number. Using every trick in the book, and comparing BC LNG against the best-in-class Chinese coal, BC LNG was still 20% lower in CO₂/MWh, except when they used the “Bridge to Nowhere” gambit.

What about the famous “Bridge to Nowhere” article we keep hearing about?

The Bridge to Nowhere is the legendary report by Robert Howarth with Santoro and Ingraffea in 2011 titled: Methane and the greenhouse-gas footprint of natural gas from shale formations where they estimated fugitive emissions from natural gas production. This study was universally panned. Howarth’s colleagues at Cornell published a scathing rebuttal of the Howarth paper then a follow-up. The Cornell group was not alone. Other commentators pointed out that paper incorrectly attributed to venting, gas that was actually burnt to run production equipment. While others had additional concerns. Here is a link to a well-written summary of the issues with the paper and the various information sources debunking most of its findings.

Howarth subsequently prepared another paper: A bridge to nowhere: methane emissions and the greenhouse gas footprint of natural gas. It acts as a sequel to his earlier work and like every horror sequel the original beast, once thought slain, is revived to attack again. The new Howarth study asserted that unconventional wells had a leakage rate of 3.3%. This is more than double the value used by the National Energy Technology Laboratory (NETL) in their analyses and is unsupported by the literature. I have written a lot about bad methodologies for estimating methane leakage and the emission numbers and here is my summary of the Howarth work in the context of the BC natural gas industry:

Howarth assumes that all unconventional well are vented and flared during installation and development. This would be a human health disaster in North-Eastern BC where venting those concentrations of sour gas would kill off drill crews. Rather, modern wells are generally “green-completed”, (they are connected to a pipeline in the pre-initial phase) and routine flaring and venting goes against BC Oil and Gas Commission Guidelines. While statistics for Canadian venting are not easily available, in the US only 3% of studied wells vented methane into the atmosphere. Just a reminder Howarth assumes 100% are vented. A study by the US Department of Energy showed very low methane leakage (roughly 0.4% of production) while other studies found unconventional wells with numbers up to 1.65% with the general numbers being closer to 1.4%. Coincidentally, the number used by NETL in their studies.

The missing consideration: coal-to-gas

The big argument that the activists keep making is that China is building newer high-performance coal facilities so BC natural gas only provides a marginal improvement in emissions (20% – 40%). To start let’s make it clear, China burns a LOT of coal (see graphic below) so reducing the emissions of their best facilities by 20% is no marginal gain.

But the bigger problem is the coal-to-gas problem. While it is clear that BC LNG will be replacing marginal coal in some parts of the country, in most of the country it will be replacing Chinese natural gas. You might ask how replacing Chinese natural gas with BC LNG will produce any emissions savings? The answer is because China doesn’t have a significant domestic natural gas industry so has instead turned to synthetic natural gas (SNG). SNG is created by using a complex chemical process to turn coal into natural gas which can then be burned for electricity or used as an input in plastic manufacturing.

As you can imagine, the major problem with SNG is that the process of turning coal to natural gas is very energy intensive and produces a huge amounts of carbon. A comprehensive study of the industry was recently produced titled Air quality, health, and climate implications of China’s synthetic natural gas development by Qin et al. They note that Chinese facilities emit 4.25 kg of carbon dioxide per cubic meter of SNG produced. This adds up to a big problem because:

Through 2013, a total capacity of 37.1 bcm [billion cubic meters] per year of SNG production had been approved by the central government, with another 40 projects (∼200 bcm per year) proposed by the industry. Total planned SNG capacity is ∼1.25 times China’s 2014 total natural gas consumption. Also, the Chinese government set targets for annual SNG production of 15 bcm to 18 bcm by 2015 and 32 bcm by 2017, with a potential production of ∼57 bcm by 2020. Notably, government plans for SNG production are continuously changing, likely due to a mix of concerns about the coal industry, local economy, air pollution in eastern China, energy security, local water stress, and global climate change.

If China produced 32 billion cubic meters a year of SNG in 2017, at a emission rate of 4.25 kg CO2/cubic meter, that comes out to 136 billion kg of carbon dioxide equivalents just to generate that SNG (or 136 million tonnes [MT}). In 2016 Canada, as a country, emitted 704 MT of carbon dioxide equivalents. So just to produce the SNG they subsequently burned (or used in plastic manufacturing) China emitted the equivalent of 20% of all Canadian emissions.

Why not let Australia or the US supply that LNG to China?

I have heard some people suggest that even if LNG improves Chinese emissions, it doesn’t have to be Canadians supplying them with the LNG. Let the US and Australia do the heavy lifting. Well my response is that Canada is uniquely suited to provide low-carbon LNG to the world. As I describe in my blog post: On the global climate change math supporting BC LNG using the Pacific Northwest gas (PNG) project as an example:

doing the simple math the PNW LNG project has a 18% lower greenhouse gas intensity versus our average competitor. Moreover, according to life cycle analysis of LNG, the raw material acquisition energy cost for LNG is equivalent to 3% – 4% of the energy generated by the LNG. If the British Columbia government can electrify the process then the PNW LNG project can operate at an intensity equivalent to 80% of our competitors. What that means is that if consumers in Asia use British Columbia LNG the global emissions for the LNG will be 20% lower than existing LNG sources. If this LNG replaces coal as an energy source the global benefit of using BC LNG is even greater. So from a global perspective this is also a slam dunk, we sell our LNG to Asian clients and in doing so prevent the emissions of millions of tonnes of carbon dioxide that would otherwise have come from using coal or dirtier LNG sold by our competitors.

Conclusion

To conclude, I want to make a number of things clear. The figures I have presented above are not mine. They come from some of the most respected energy scientists on the planet after having gone through rigorous peer-review. This is not data from activists but from objective researchers who have been studying this topic for years (or even decades) and what they have to say is clear. When compared to coal, the life-cycle analyses are clear: BC LNG will lower global emissions for electricity production. BC LNG is not “dirtier than coal” as some activists falsely claim, rather it is much cleaner than coal.

But more importantly, in the current market, BC LNG would not be replacing coal when exported to China. Instead BC LNG would mostly be replacing Chinese SNG and the climate math is even more categorical on that topic. BC LNG is much, much cleaner than Chinese SNG. Replacing Chinese SNG with BC LNG will help the planet and even if exporting BC LNG causes Canada to miss our Paris Agreement targets then the sacrifice is worth it. We have to keep reminding ourselves GHGs are global and it is more important to address global emissions than local ones. If a minor increase in Canada emissions can result in a major decrease globally then that is well worth our missing our Paris Agreement commitments.

Addendum

A reader has directed me to newer research that suggests that Qin et al. may have overstated China’s current capacity to produce SNG. According to this new source, in 2018 China had six SNG plants with a capacity of 6 bcm with a new goal of 17 bcm in 2020. This means that China currently emits 25.5 MT (or one third of the entire oil sands in 2017) just to create the SNG they will later burn. To put this into perspective the LNGCanada project in total is estimated to emit 10 MT/yr while Woodfibre would generate about 1 MT/yr .

Given the opaque nature of China’s energy business, I am not in a position to guess which of the two sources better represents current Chinese production, but both cases make a strong argument for exporting lower-GHG Canadian LNG to China.