Premier Christy Clark welcomed the news that the Woodfibre LNG project has received board authorization to proceed with the $1.6-billion project that will create 650 jobs during construction and 100 operational jobs over the 25-year lifespan of the project.
This project will be the cleanest LNG project in the world and one of the largest private-sector investments in the Lower Mainland’s history.
“This marks the beginning of a tremendous opportunity for British Columbia to play a significant role in the global fight against climate change, using the world’s cleanest LNG to help countries transition away from coal and oil,” said Premier Christy Clark. “At home, this project will create hundreds of jobs for First Nations and all British Columbians.”
Supporting the government’s commitment to building the cleanest LNG industry in the world, the Province has announced it is offering a new eDrive electricity rate to LNG proponents that chose to use electric drives for compression as part of their final investment decisions.
Making this new eDrive rate available to all LNG proponents reinforces the Province’s global leadership in reducing harmful greenhouse gas (GHG) emissions while continuing to grow the economy and create jobs for B.C. families.
“The new eDrive rate provides an incentive for LNG developers to use electricity instead of natural gas for their compression needs,” said Premier Clark. “We are hopeful other LNG proponents will take advantage of this option and make what will be the cleanest LNG industry in the world even cleaner,” she added.
The new rate was a key factor leading to the decision by Woodfibre LNG’s parent company to authorize the funds to proceed with the Woodfibre LNG project.
“We appreciate the government’s leadership in addressing climate change in its creation of a new eDrive electricity rate for eDrive LNG projects like ours”, said Byng Giraud, country manager and VP of Corporate Affairs, Woodfibre LNG Limited, “This is a significant step towards encouraging the use of technology that actually contributes to the reduction of greenhouse gases.”
The Woodfibre LNG project has undergone a rigorous, science-based assessment at both the provincial and federal levels. A substituted environmental assessment, designed to meet both federal and provincial requirements, led to provincial approval in October 2015, and federal approval on March 18, 2016. The provincial environmental assessment certificate includes 25 legally binding conditions.
The Squamish Nation’s Environmental Assessment Agreement and Environmental Certificate for the project were also announced in October 2015, and Woodfibre LNG continues to work with the Squamish First Nation and the local community to finalize benefits agreements.
Over the past three years, through extensive consultations with the local community and First Nations, the project has made some significant environmental innovations such as moving the plant from a floating facility to an existing, land-based brownfield and using air-cooling technology vs. seawater cooling as part of the liquefaction process.
The Woodfibre LNG project is a small- to medium-sized LNG processing and export facility to be constructed at the former Woodfibre pulp mill site, located about seven kilometres southwest of Squamish. Once in operation, the facility will export about 2.1 million tonnes of LNG per year over 25 years. This will amount to an LNG carrier travelling through well-established shipping lanes three to four times per month.
Stephen SmartPress Secretary
Office of the Premier
British Columbia has been a leader in safe, responsible natural gas development for more than 50 years and is an internationally recognized climate-action leader with one of the cleanest natural gas sectors in the world.
Climate change is a global issue. By supplying the cleanest-burning fossil fuel possible, B.C. can contribute to global development and the fight against climate change. Natural gas has already proven to reduce GHG emissions by displacing dirtier fossil fuels like coal. In fact, displacing thermal coal with natural gas in Ontario, the United States and China has already eliminated 322 million tons of GHGs per year.
By selecting electric drives for its compression and facility operation, the Woodfibre facility will avoid 338,100 tonnes per year of GHG emissions in B.C.
Exporting British Columbia’s natural gas to markets in Asia is an opportunity to significantly reduce higher-emitting greenhouse gas sources, like coal, with the world’s cleanest burning fossil fuel.
For example, if LNG produced from the Woodfibre operations is used to displace coal-fired electricity in China, another 2,436,000 tonnes of GHGs will be avoided annually.
Natural Gas is the world’s cleanest-burning fossil fuel:
Natural gas is made up of the lightest molecules. It is colourless, odourless and the cleanest-burning fossil fuel. It is a byproduct of decaying plant and animal matter left deep underground millions of years ago and it is trapped or isolated in rock formations which prevent it from surfacing.
Natural gas is primarily methane, which has a higher energy content relative to other fuels and, as a result, burns fewer emissions – about 30% less carbon dioxide than oil.
The natural gas sector currently contributes only 18% of British Columbia’s total emissions.
British Columbia’s natural gas industry:
Natural gas activities have taken place in British Columbia since the 1950s. The industry has played an important role in the province’s economy, especially in the Northeast, where thousands of jobs are linked to the industry and local businesses are supported.
Over the past decade, the industry has shown dramatic growth with the emergence of new unconventional gas (mostly shale) supplies and technological breakthroughs (hydraulic fracturing and horizontal drilling) to extract this clean resource.
British Columbia is focused on growth and diversification through the prospects of a LNG export industry. Building this new industry creates market access for B.C.’s vast supply of natural gas, supporting jobs in the province and creating an opportunity to reduce emissions by gaining access to the world’s cleanest-burning fossil fuel – B.C.’s natural gas.
The BC Oil and Gas Commission (OGC) is the provincial regulator with responsibilities for overseeing all natural gas operations, including exploration, development, pipeline transportation, and reclamation.
Hydraulic fracturing and drinking water:
British Columbia’s natural gas industry is strictly regulated with oversight conducted by the BC Oil and Gas Commission.
Drinking water has never been contaminated by hydraulic fracturing in British Columbia. This is because natural gas is found deep underground, far below drinking water. As well, layers of rock and soil underground create natural, impermeable protection for drinking water sources, which are closer to the Earth’s surface. These layers of rock and soil, together with cement- and steel-lined wells used in fracturing, isolate hydraulic fracturing fluids from drinking water.
Cement well casings are tested regularly to ensure they remain safe and hydraulic fracturing is rigorously monitored by the BC Oil and Gas Commission, which review all engineering, environmental and safety measures before and after hydraulic fracturing occurs.
Hydraulic fracturing and water use:
Strict laws are in place to protect the quality and quantity of water in British Columbia. All water-use applications must go through a rigorous environmental review before they can be approved by the BC Oil and Gas Commission, British Columbia’s independent regulator. Hydraulic fracturing fluids do not come into contact with water or the environment. Fluids are safely pumped underground and returned to the surface in a closed loop.
LNG – Gas properties:
In the extremely rare circumstance that liquefied natural gas escapes the controlled environment, it will immediately evaporate into the atmosphere, leaving no residue on either soil or water. There is no environmental impact or cleanup required.
Natural gas and LNG are very different from oil or gasoline. Natural gas is non-toxic, odourless and non-corrosive. All equipment pipelines, plants and ships are stringently maintained and inspected. B.C. has a long history of building, inspecting and maintaining natural gas infrastructure safely and effectively.
Hydraulic fracturing and potential risk of seismic activity:
Oil and gas activities are strictly regulated, and the industry is one of the most closely monitored in British Columbia. As with any industry that involves drilling or underground boring, seismic activity is possible.
Extensive research done by the BC Oil and Gas Commission and the University of British Columbia has shown that small, localized earthquake events potentially caused by hydraulic fracturing have not resulted in any damage to surface structures or risks to the safe operation of wells. Despite this, we continue to enhance regulatory and safety oversight of this activity. B.C. has tightened its requirements for monitoring and reporting to ensure the industry continues to operate safely.
Federal, provincial and local governments all have the regulatory power to monitor air quality. There are approximately 150 air-monitoring stations throughout the province where data is used to ensure air quality in B.C. is safe. To illustrate this, an independent science-based study has shown airsheds can safely accommodate new industrial growth.
Lindsay ByersMinistry of Natural Gas Development
The Government of British Columbia and BC Hydro have announced a new eDrive electricity rate, which will be provided to LNG proponents that connect to the BC Hydro integrated grid and use clean, renewable electricity for the liquefaction process (using compressors to chill and liquefy natural gas) at their facilities.
The new eDrive rate will be available only to proponents once they have announced their final decision to proceed with their LNG projects and use electricity to power their liquefaction process. LNG proponents who use grid power for liquefaction will also receive the new eDrive rate, which is the same rate as the standard industrial electricity rate, for their ancillary power needs.
This announcement creates an incentive for LNG developers to use electricity instead of natural gas for their compression needs, and supports actions under the Province’s Climate Leadership Plan to encourage electrification, reduce emissions, and enable the development of a new, low-carbon economy.
Using electricity instead of natural gas to power LNG facilities will limit greenhouse gas emissions, helping the Province achieve its reduction targets.
LNG customers also will be required to contribute the full cost of connecting to the BC Hydro system and transmission upgrades required to serve their facilities, as set out in electricity supply and load interconnection agreements with BC Hydro.
As changes are made to this rate, which is the same rate as the standard industrial electricity rate, LNG proponents will be subject to those changes, just like all other industrial customers – under the 10-Year Rates Plan, rate increases are capped at 4% this year, 3.5% next year and 3% the year after – and then forecast to increase by 2.6% per year for the final five years of the plan.
Suntanu DalalMedia Relations
Ministry of Energy and Mines
Over the past three years, Woodfibre LNG has been consulting with the local community on environmental and safety standards for the project. As a result of this process, valuable feedback was given by various stakeholder groups and local First Nations. This has led to substantial and meaningful changes to project scope for Woodfibre LNG.
Floating facility vs. land based:
Originally, the project plan was to have both the liquefaction processing facilities and LNG storage tanks on floating barges. Taking community consultation into consideration with respect to potential noise and environmental concerns, plans changed to a land-based liquefaction processing facility and floating LNG storage tanks. The land site, from which the project takes its name, is a brownfield site and formerly the location of the Woodfibre Pulp and Paper Mill.
Woodfibre LNG chose the site because it has most of the key elements of infrastructure already in place including:
- A site with an existing pipeline and an existing electricity transmission line.
- A deepwater port.
- A history of industrial use and is already zoned industrial by the Municipality of the District of Squamish and is considered as a location for “industry and employment” under the Official Community Plan.
Electric power vs. LNG:
Community concerns about the project’s potential impact on air quality resulted in Woodfibre LNG’s decision to power the liquefaction facility with clean, renewable electricity from BC Hydro. Using electricity vs. natural gas reduces greenhouse gas (GHGs) emissions by approximately 80%.
Air cooling vs. seawater cooling:
In October 2016, the Woodfibre LNG project announced that it will use air cooling technology instead of the initially planned seawater cooling technology during the liquefaction process. This was a result of the Squamish Nation Environmental Assessment Agreement and Environmental Certificate, which determined that air cooling was found to have the least amount of environmental impact to the project site.
Thousands of truckloads of contaminated sediment and wood chips from the former Woodfibre Pulp and Paper Mill have already been removed from the foreshore of the site. Woodfibre LNG is committed to removing about 3,000 creosote coated piles, and creating a “green zone” around Mill Creek, which will help improve habitat for freshwater and marine fish and contribute to the revitalization of Howe Sound.
Lindsay ByersMinistry of Natural Gas Development
British Columbia’s Climate Leadership Plan reinforces the Province’s global leadership in reducing harmful GHG emissions, while continuing to grow the economy and create jobs for B.C. families.
B.C.’s climate leadership guides the development of its LNG industry, and the GHG emissions benchmark government has placed on LNG facilities will already make B.C.’s LNG the cleanest in the world.
Now B.C. is making electric-powered LNG operations more viable by offering a new eDrive electricity rate for LNG proponents who chose to use electric drives for compression as part of their final investment decision, something Woodfibre LNG will do. The Woodfibre LNG facility will emit 80% fewer emissions by using clean, renewable electricity from the BC Hydro grid.
Global trade of LNG has increased exponentially in recent years and is poised to continue as energy demands escalate and the global market improves. Countries that are expected to lead global economic growth, such as China and India, are interested in securing new supplies of the world’s cleanest-burning fossil fuel. Other countries, such as Japan and South Korea, which have been the world’s largest importers of LNG, are looking for opportunities to diversify their energy supply options.
British Columbia’s vision for LNG exports began in September 2011 with the release of Canada Starts Here: The BC Jobs Plan – a plan to strengthen local economies by getting B.C.’s products to new markets.
As part of the BC Jobs Plan, the provincial government set a goal of diversifying the province’s natural gas sector and developing a means to export to other markets. To achieve this goal, an LNG strategy was developed that set in motion a plan to build the industry. The strategy captured the attention of large companies and global investors, which have since come forward with numerous LNG proposals, now at various stages of development.
There are approximately 20 LNG proposals looking to export British Columbia’s clean natural gas to markets in Asia at this time. Pacific Northwest LNG has already announced a conditional final investment decision and is in the process of reviewing every element of their proposal to determine the best path forward now that the federal government has granted environmental approval.
Collectively, the LNG industry holds the potential for tens of thousands of jobs and new economic opportunities for British Columbia.
A full list of projects can be found online: http://lnginbc.gov.bc.ca/tile/bc-lng-projects/
Woodfibre LNG Limited is a privately held Canadian company based in Vancouver. The company is a subsidiary of Pacific Oil & Gas Limited, which is part of the Singapore-based Royal Golden Eagle Group (RGE group) of companies. The company intends to invest $1.6 billon to building a medium-sized LNG facility about seven kilometres southwest of Squamish.
On Oct. 26, 2015, Woodfibre LNG was granted a provincial environmental assessment certificate following a substituted environmental assessment that was designed to meet both federal and provincial requirements.
The federal government approved the project on March 18, 2016, and Woodfibre LNG Limited will be required to meet the conditions of the federal approval in addition to the conditions attached to the provincial environmental assessment certificate. There are 25 conditions that are part of the provincial EA certificate, each of which are legally binding on Woodfibre LNG.
The certificate conditions were developed following consultation and input from Aboriginal groups, government agencies, communities and the public. Key conditions are:
- mitigate and monitor impacts to marine mammals during construction;
- manage and monitor marine water quality to protect marine life and human health;
- manage and monitor marine fish and fish habitat during construction and operations;
- develop a traffic management plan to minimize disruptions during construction;
- develop a marine transport management and monitoring plan to monitor and minimize impacts to marine users;
- monitor to verify the assessment of the wake effects from LNG carriers; and
- continue consulting with the public and Aboriginal groups throughout all phases of the project.
Approved by the National Energy Board – 25 years, with an annual volume of 2.1 million tonnes of LNG.
The Eagle Mountain - Woodfibre Gas Pipeline Project -
This upgraded system, owned by FortisBC, involves adding 47 kilometres of new pipeline beginning in northern Coquitlam and ending at the existing Woodfibre industrial site southwest of Squamish. The pipeline was issued an Environmental Assessment Certificate from the B.C. government, with 30 conditions, on Aug. 9, 2016.
Woodfibre LNG is proposed on traditional territory of the Squamish First Nation (Skwxwú7mesh). The Squamish Nation Council’s environmental approval was reached in October 2015, following its independent assessment of the project.
Based on the proponent’s projections, Woodfibre LNG represents approximately 650 jobs per year during the two-year construction period. Once in operation, the facility will support 100 full-time jobs (in shifts) for more than 25 years.
Office administration positions in Squamish and Vancouver, as well as procurement opportunities for local businesses, will also be associated with the project.
Lindsay ByersMinistry of Natural Gas Development
The LNG industry has an excellent safety record, due to stringent regulations and diligent training, with an in-depth understanding of the physical and chemical properties of LNG.
Shipping safety is a priority for Woodfibre LNG Limited. LNG carriers travelling to and from the Woodfibre LNG terminal will take action to ensure safe LNG shipping in Howe Sound, and to/from international waters, including:
- Limited traffic, with only three to four LNG carriers per month.
- LNG carriers will travel cautiously at eight to 10 knots in Howe Sound.
- Each carrier will be escorted by at least three tugboats, with at least one tethered to the carrier.
- Tugboats will act as a dynamic safety awareness zone (up to 50 metres on either side of the vessel and up to 500 metres in front).
- Each LNG carrier will have two B.C. pilots on board. These pilots are the experts who know B.C.’s coastline best and have experience traversing vessels to and from the province.
In addition to the safety actions listed above, LNG vessels used to export LNG from B.C. must be:
- Modern with highly automated, precision navigation tools.
- Double-hulled, which means there is more than 1.8 metres (six feet) of space between the inner and outer hulls and the cargo tanks.
- Equipped with state-of-the-art radar, leak detection and emergency-shutdown technology to ensure safety and security during transportation.
It is mandatory that Woodfibre LNG operate in accordance with Canadian legislation, including the Canada Shipping Act and international best practices, including International Marine Organization (IMO) guidelines.
Woodfibre LNG Limited will also be a member of the Society of International Gas Tanker and Terminal Operators Ltd. (SIGTTO) – an international organization that shares experiences and develops best practices to ensure safe and environmentally responsible shipments around the world.
The BC Oil and Gas Commission (OGC) is the provincial regulator for all oil and gas activities in British Columbia. Once operational, the BC Oil and Gas Commission will regulate key aspects of Woodfibre LNG, including permitting, pre-construction requirements, engineering and design requirements, hazard/risk mitigation, site restoration, and emergency planning and response.
Natural gas operators must comply with OGC’s strict guidelines, regulations, permit requirements and legislation. Failure to comply can result in enforcement actions up to and including a complete shutdown of the operation.
Lindsay ByersMinistry of Natural Gas Development