Excerpt from the Official Report of


October 27, 2014

Remarks on Bill 2, the Greenhouse Gas Industrial Reporting and Control Act

S. Simpson: I’m pleased to get an opportunity to stand and speak to Bill 2, Greenhouse Gas Industrial Reporting and Control Act. What this legislation does…. It has been put in largely for the purposes of determining emission standards as they relate to the LNG industry that is expected to develop over the next coming years and decades.

What I want to do with my comments — because many of my colleagues have spoken, and they’ve talked about some of the detail of the bill, and they’ve talked about how the bill will unfold — is take the opportunity maybe to talk a little bit first about some of the areas where I think the legislation doesn’t meet the objectives of British Columbians and doesn’t meet the objectives of people who are looking for a sincere effort to deal with the issue of emissions.

Of course, the first thing we know is that much of the issue here will revolve around the scope of the industry. It will revolve around how many of these plants get developed. It will revolve around what kind of production we’re talking about in these plants.

Just to give a bit of an example of that, we know that the Premier has spoken many times about five, six, seven of these plants. She’s talked about $100 billion in a prosperity fund. She’s talked about 100,000 jobs. She’s made a number of these claims — all of them claims that those in the industry don’t seem to be quite as confident about as the Premier does.

Those in the industry often talk about one or two plants as being successful. One or two plants, I think, would be a good opportunity, and it may be something that we will see. We know that, as we hear comments from a number of ministers who have connections to the file, we’ve heard those ministers also tempering their comments in terms of the scope of what will get developed and what will get produced. We’ve seen and heard that as well. I expect that at the end of the day, the Premier will be tempering her comments more as well.

Part of the challenge here, in terms of what we see in terms of greenhouse gas emissions and the scope of emissions, will be: how big does the industry get? Is it the one or two plants that most people seem to think are a possibility, or is it the six or seven plants that the Premier has talked about pretty much continually since the last election? We’ll have to wait, and time will tell on how that will play itself out.

The other thing, of course, will be — and this becomes a critical question — how does the liquefaction process actually unfold? Clearly, if we use hydroelectric power to get us through that process, it then becomes much more realistic to be able to manage emissions in a way that reflects the commitments of government for emissions reductions by 2020. If, as we expect, in fact, almost all of that liquefaction process is going to be handled by burning gas, it changes that equation considerably. It makes a fundamental difference and change around how we will proceed.

That becomes the challenge as well. We don’t exactly know where this is going to go in terms of that. However, I think that, increasingly, there is the expectation that there’s going to be a lot of natural gas getting burned in order to process LNG for export and that that will be the reality of what we will deal with. So we’re not exactly sure what it is we’re dealing with here, and it may be a number of years before we determine that, and that’s a problem.

It’s a problem because, as I’ll talk about a little bit later, much of this bill, about a quarter of the decisions in the substance of this bill, will be determined through the regulatory regime, not through a legislative initiative. So we have a piece of legislation that leaves a whole lot of the questions that are in front of us unanswered, and they will be answered at the cabinet table.

The problem with that, as we know, is that those discussions are not open to public scrutiny. Those discussions don’t happen on the floor of this Legislature. Those aren’t discussions that people have the opportunity to scrutinize, to determine how they feel about it, to listen to the articulation on all sides of the debate about what should and shouldn’t occur — why certain actions are taken, why certain initiatives are taken and difficult choices, how those choices have been weighed and which of those choices have been embraced because it was deemed to be the best of the options available.

We’re not going to be able to be part of that debate, nor is the public going to be able to observe that discussion if they’re so inclined. The stakeholder groups, whichever side of this issue that they might be on — whether it be industry, whether it be First Nations, whether it be the environmental movement…. None of them are going to have the opportunity, nor are the general public, to really look at what’s in front of us and how they decide to deal with this.

That becomes problematic, that we’re not going to have that opportunity to truly be part of that discussion and to be engaged. That’s a serious flaw in this legislation. It’s a flaw that, on its own, probably draws into question why anybody should endorse the legislation, because it does keep so much behind closed doors.

One of the other things this does…. The commitment of government prior to this legislation coming out was that the whole life cycle of the LNG process would be captured around environmental considerations. The whole life cycle would be captured. But as we know from experts in the field, that’s not what this legislation does.

What this legislation does is it only captures about 30 percent of all the emissions that will occur in the LNG process — from getting the gas out of the ground, to shipping it, to liquefying it, to putting it on a boat and sending it away. Only about 30 percent will be captured.

According to the Pembina Institute, the upstream emissions account for about 70 percent of all GHG emissions in the life cycle. That includes things like extraction and the implications for extraction — and we all know there will be significant emissions, upstream combustion, flaring, fugitive emissions — any emissions that relate to the pipeline itself. None of that gets captured by Bill 2. None of that gets captured in any way, shape or form by the Greenhouse Gas Industrial Reporting and Control Act. That’s a problem.

Now, the government says, and the Minister of Environment says, that those matters will get addressed at some point. The minister has said that. Well, maybe we’ll be able to draw this out in the committee stage. I’m not sure, but maybe we will. I think the minister has to be a little more explicit about what she’s talking about. I think the minister has to tell us how that other 70 percent of emissions that don’t get captured by Bill 2 will be addressed. How do they get addressed? What’s the process? How do we deal with this?

If the minister is just going to say, “We’re not going to be dealing with that stuff,” then let the minister say that. But it’s time on this issue, around LNG, to get facts on the table and to start to listen and talk to British Columbians about the real choices and the real challenges that are in front of us related to this. Unfortunately, we don’t see that.

One of the other areas is problematic as well. Folks will know that the government made the decision, when it put this legislation forward….

One of the things that this legislation will absolutely do is repeal a significant piece of legislation that the government adopted in 2008. That was the Greenhouse Gas Reduction (Cap and Trade) Act. We know now that there is some momentum around the cap-and-trade model, largely driven by California, joined by Quebec. We understand that there are some other states and maybe provinces looking at the cap-and-trade model.

Now, of course, what the cap-and-trade model does is that it puts a real cap…. The devil is always in the details with these things, but at least broadly, the principle is that it caps the amount of emissions. It doesn’t say that we’re going to give you a way to buy out of emissions. It says: “We’re going to cap emissions, and you need to stay within those parameters.”

Well, this piece of legislation gets rid of that 2008 bill, that 2008 law, which was taking us to looking at a cap-and-trade model — a law that was passed. I don’t think it was ever enacted, but it was passed. It says: “That’s not where we’re going now. Now we’re opening doors for other ways to approach this.” I understand why that is. The government knows absolutely that there just is not a way to be able to cap these emissions at a level that would be acceptable to anyone. So there have got to be other alternatives other than cap-and-trade. I understand that.

You have a situation where the government has said, “We’re not capping, but we’re going to say that there are offset models here potentially, where you can have offsets, provide offsets, that will allow you to deal with your emissions if, in fact, you breach the standards that we have set in the legislation. Or you can support a technology fund through contributions to a technology fund” — both interesting ideas. The problem with it, though, is that, again, there’s not a whole lot here that tells us much about those things.

The legislation lays out a framework, a pretty basic one, for offsets and how they’ll be accounted for. It does talk about registering with government, about receiving certification and about some third-party validation — all good things. It doesn’t provide much substance about what those offsets look like. As my colleague who spoke previously said, the experience with offsets in this province has been a bit of a challenge.

The Pacific Carbon Trust. The government obviously recognized that problem when they essentially put the Pacific Carbon Trust out of its misery after having put it in place and having then Premier Campbell embrace it and the B.C. Liberals embrace the carbon trust as the route to go. Well, it got put out of its misery because it clearly wasn’t achieving the objectives and wasn’t being particularly well managed. That was a problem.

There’s not a ton of confidence about what this offset model looks like. The government hasn’t provided much in the way of substance to tell us about how the offsets will work.

The problem, as well, is that the other side of this…. We talked about the technology fund, and it’s vague, to say the least, about what happens with the technology fund. We have no sense, really, of where that goes. It’s something that we’re told…. It’s my understanding that the minister in the briefings with the media about the fund essentially wasn’t able to provide much in the way of details on how the fund would operate. I think they called it a backstop and suggested that, in fact, the fund is quite a long way off from having any shape or form.

I get that, because we’re a number of years away from anybody putting any natural gas in a pipe and sending it anywhere. We’re a ways away from that. But it does raise questions when the government can’t tell us what this technology fund is, how it’s going to work and how it’s going to help achieve objectives related to emissions that makes it a valuable alternative to reducing the levels of emissions. That becomes a problem as well. Again, it’s vague. It’s vague, to say the least, as to how that will work and how we begin to achieve these objectives.

Now, all of this…. I’m starting to get the eye from the Speaker there. I’ll maybe just make a couple of comments and then adjourn for a bit till we come back tomorrow.

One of the things the Environment Minister, when she was questioned about whether in fact the emission targets that have been set by the government for 2020…. Those emission targets are to be 33 percent below 2007 GHG levels by 2020. The minister said that she thought it would be tough but maybe those objectives could be met.

Well, they might be met for 2020. They might, because I’m not entirely certain how much, if any, LNG will actually be pumping by 2020. If there’s an industry here, by 2025 it might be an entirely different story. We might be talking about something quite different, come 2025.

It’s going to be good to get a chance to ask the minister about what her expectations are as we move out past 2020. If we don’t have production or we have a limited amount of production happening by that time, maybe we’ll get close to meeting those standards. It depends on a lot of other factors that we’ll have to see.

If a couple of these plants get built or if more than a couple of plants get built or if the Premier’s dream about how this will all work starts to get even vaguely close to reality, it’s going to be really interesting to see what we’ve got going on in 2025 or 2026. So we’ll be looking at that.



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