Consideration and influence of climate change in environmental assessment: an analysis of British Columbia’s liquid natural gas sector

ABSTRACT

This paper examines the consideration of climate change in environmental assessment (EA) in the liquefied natural gas (LNG) sector, British Columbia, Canada. Based on an analysis of recent EA applications, results show that climate change is considered, to some extent, in all phases of EA for most LNG projects. However, stakeholders indicate a dissatisfaction with practice – often based on expectations about EA that exceed what it can deliver as a project-based tool, and sometimes based on an incomplete understanding of existing climate change legislation and targets. Results also indicate inconsistent application of existing climate change requirements across project EAs. Notwithstanding proponents often addressing climate change in their EA applications, climate change tends to receive little attention in project decision and approval conditions. The paper concludes with recommendations for better practice climate change consideration in EA that is commensurate with the scope and scale of project-level issues, complemented by more strategic EA and economic instruments.

KEYWORDS:

• Greenhouse gas
• climate change
• energy
• impact assessment

1. Introduction

Canada’s energy sector remains largely dependent on non-renewable resources. Canada ranks third globally in proven oil reserves and is the world’s fifth largest producer and exporter of natural gas (NEB 2016). Based on the National Energy Board’s (2016) macroeconomic outlook, natural gas production, including liquefied natural gas (LNG), is expected to be an important driver of growth in the energy sector (NEB 2016). There is of course much uncertainty in this projection. The future of LNG markets is contingent, in part, on the development of new processing and export infrastructure, on market demand in the Asia Pacific region, on future energy policy and investments in alternative energy (Bang 2010; Kumar et al. 2011), and on the ability to develop the industry while still meeting commitments to climate change mitigation.

Climate mitigation in the energy sector requires strong government policies and programs, and tools for their implementation (IPCC 2014). One of the primary instruments in Canada and internationally for assessing and mitigating the effects of energy projects is environmental assessment (EA) – a project-focused impact management tool. EA has received much attention as a means to assess the potential climate impacts of development projects and to identify opportunities to either offset or reduce those impacts (Fischer and Sykes 2009; Byer et al. 2012; Brill 2014), and there is a growing volume of academic literature calling for increased integration of climate change in all facets of EA (Burdge 2008; Slotterback 2011; Ohsawa and Duinker 2014; Li and Zhao 2015).

The focus is often on climate mitigation (Larsen et al. 2012), especially emissions management when in the context of energy exploration, production, and transmission projects. Larsen (2014), for example, examined climate change integration in impact assessment practice in Denmark and showed that, when considered at all, the focus is on mitigation rather than adaptation. Jiricka-Pürrer et al. (2016) report similar findings in the Austrian and German EA contexts, reporting that significantly greater attention is paid to climate change mitigation, namely greenhouse gas (GHG) mitigation, than to adaptation to the effects of climate change. In large part, the focus on mitigation may be a function of the scope of emerging regulatory requirements to address climate change in EA (Bishop and Dachis 2016; Jiricka-Pürrer et al. 2016). In January 2016, for example, the Canadian government introduced a requirement for the assessment of upstream GHG emissions in energy pipeline EAs carried out under federal review and approval processes, as an interim measure to strengthen federal climate change action. More recently, in 2018, Canada introduced Bill C-69 to enact a new impact assessment process identifying the extent to which a project’s effects will hinder or contribute to the government’s ability to meet its commitments to climate change as one of the factors to be included in project reviews.

The International Association for Impact Assessment posits that EA has much to contribute in understanding and addressing climate change (Byer et al. 2012). Sok et al. (2011) and Agrawala et al. (2012) suggest that EA can and should play an instrumental role in addressing climate change, and several scholars have evaluated current practices and opportunities for improved climate change integration in EA in Spain (Enriquez-de-Salmoneca et al. 2016), England (Hands and Hudson 2016), and Austria and Germany (Jiricka-Pürrer et al. 2016). As nations strive to meet increasing energy demands, whilst also honouring obligations to climate change, there are increasing expectations for EA to consider the potential climate impacts of energy projects. However, there remains limited research that critically examines climate change in EA (Jiricka-Pürrer et al. 2016), especially in the Canadian context (Ohsawa and Duinker 2014). As a result, the efficacy of climate change considerations in EA, and the contributions to improved climate change impact mitigation and project decision outcomes are poorly understood.

This paper examines the practice of climate change assessment in project-based EA. We do this within the context of the LNG industry in British Columbia, Canada, the second largest producer of natural gas in Canada and potentially the most significant for future energy export markets (CCA 2014). In doing so, our objective is to identify perceived benefits and implications of current and increased climate change considerations in EA, including implications for the LNG industry, and to identify opportunities for improved practice. Although focused on the LNG sector, the lessons are likely broadly applicable to the energy resource sector and improving EA practices globally.

2. Study area and methods

British Columbia is home to some of the largest shale gas deposits in the world. The Laird Basin in northeast British Columbia is the second largest gas deposit in Canada with the capacity to fuel Canada’s energy needs for nearly 70 years (NEB 2016). An Ernst & Young (2013) report estimated that annual revenue to the province from natural gas for 2013 to 2037 could be between $79 and $162 million, based on resource and market prospects the time. The IEA (2017) reports that global demand for natural gas will continue to increase by 1.6% per year over the next several years.

Since release of the province’s LNG Strategy (Ministry of Energy and Mines 2012) there have been 21 LNG facility and pipeline projects proposed, and nine EAs completed. EA in British Columbia is legislated under the province’s Environmental Assessment Act, with all LNG projects in the province, including small projects or exploratory works that may not trigger EA, regulated by the British Columbia Oil and Gas Commission. Exceptions include those projects that involve the export of natural gas, which are also subject to permitting by the National Energy Board.

LNG production requires high amounts of energy for the liquefaction process. Natural gas impurities, frequently CO₂, must be separated out, which means higher levels of GHG emissions than typical natural gas project operations (Murillo 2012). With increasingly efficient shale gas extraction technology, the province is poised to expand its natural gas industry. However, there is growing scepticism of the province’s ability to pursue LNG development and be effective in minimizing GHG emissions. The discordance between the development of the LNG industry and provincially-legislated GHG emissions reductions targets has been a recurring issue in the media and public policy debates (Lee 2012; Horne and MacNab 2014).

British Columbia has set out GHG emission reduction targets in its Greenhouse Gas Reduction Targets Act, which commits to reducing emissions by 33% below 2007 levels by 2020, and by 80% by 2050 (Government of British Columbia 2007). The Act also requires emissions reporting every two years by the provincial government to track and monitor progress towards these targets. The province has had a price on carbon since 2008 of $30 per tonne. In January 2016, the province provided new or updated legislation and regulations related to the LNG sector, including a production intensity target aimed at making British Columbia’s LNG sector the ‘cleanest in the world’. This included new emissions reporting requirements and the development of a provincial carbon registry where emission offsets and credits can be issued, transferred, and tracked (Government of British Columbia 2016). The province’s Climate Leadership Team also recommended that the Environmental Assessment Act be amended to include the social cost of carbon so that EA applications consider how carbon pricing may affect project feasibility 30 to 50 years into the future (Climate Leadership Team 2015).

2.1 Data collection and analysis

Data collection was comprised of a document analysis and semi-structured interviews. A document analysis was conducted of all LNG projects (pipelines and processing facilities) that have undergone, or are currently undergoing, a provincial EA review over approximately the last two decades (Table 1). Project documents were obtained from the Environmental Assessment Office online Project Information Centre (see https://projects.eao.gov.bc.ca). Project documents are publicly available and constitute the legal record of the EA process. They were obtained, where available, for each of the three main phases of the provincial EA process:

• Pre-application phase: establishes the scope and requirements of the EA (i.e. application information requirements), issued by the province; project description, prepared by the proponent; valued component selection report, provided by the proponent and based on provincial guidelines.

• Application review phase: project development application, submitted by the proponent for technical and public review; EA report based on the technical and public review.

• EA decision phase: EA certificate, issued by the province, and any terms or conditions of approval that create legally enforceable mitigation to address issues raised during the application review.

Table 1. LNG projects included in the study.

LNG Project	EA Commenced	EA Status
LNG pipeline
Pacific Trail Pipelines Project	2005	Certificate Issued 2008 – Certificate Extensions
Kingsvale to Oliver Natural Gas Pipeline Project	2011	Withdrawn 2015
Westcoast Connector Gas Transmission Project	2012	Certificate Issued 2014
Coastal GasLink Pipeline Project	2012	Certificate Issued 2014
Pacific Northern Gas Looping Project	2013	Pre-Application
Eagle Mountain – Woodfibre Gas Pipeline Project	2013	Under Review
Prince Rupert Gas Transmission Project	2013	Certificate Issued 2014 – Amendments
LNG facility
Kitimat LNG Terminal Project	2004	Certificate Issued 2006 – Certificate Extension
Cabin Gas Plant Project	2008	Certificate Issued 2010 – Amendments
Fortune Creek Gas Project	2011	Certificate issued 2013
LNG Canada Export Terminal Project	2013	Certificate Issued 2015
Prince Rupert LNG Project	2013	Withdrawn 2017
Pacific NorthWest LNG Project	2013	Certificate Issued 2014
Woodfibre LNG Project	2013	Certificate Issued 2015
Aurora LNG Digby Island	2014	Withdrawn 2017
Aurora LNG Grassy Point	2014	Withdrawn 2015
Grassy Point LNG	2014	Withdrawn 2018
WCC LNG Project	2015	Pre-Application

Documents were searched for climate change terminology to identify when, where, and how climate change was considered and assessed. The search terms were based on previous reviews and federal categorizations of climate change issues (Watkins and Durning 2012; ECCC 2016) and included: carbon; greenhouse gas (GHG); nitrous oxide (N₂O); carbon dioxide (CO₂); climate change; methane (CH₄); carbon dioxide equivalent (CO₂^e); global warming; and ozone. Only when the term was used in the context of climate change was it included in the analysis. For example: coal bed ‘methane’ was excluded, as was ozone when used in reference to air quality; CO₂ and CH₄ were not included when used solely in reference to the processing of the natural gas or the chemical composition of gas. When a term was identified, the relevant sections were reviewed to understand the context of its use. This information was synthesized and provided context for phase two.

Phase two involved a more nuanced analysis of how climate change is addressed in EA in the LNG industry through 22 semi-structured interviews with EA and LNG industry experts (Table 2). Individuals from industry, government, EA practitioners, and non-government organizations (NGOs) were identified to participate. The goal was not representation by stakeholder group; rather, the intent was to engage experts with an intimate knowledge of, and experience with, LNG EA applications and climate change. Initial interviewees were identified based on participation in active EAs in the LNG industry, with subsequent interview candidates selected using snowball sampling.

Table 2. Study participants.

Sector	Description and role in LNG EA process	n
Non-government organizations	Environmental advocacy groups for environmental protection and climate, often as interveners in the EA process.	5
Government	Provincial government employees representing three separate agencies involved in project reviews and climate change.	3
Industry	Representatives from two major LNG projects, as well as an LNG industry consortium.	3
Practitioners	Individuals directly in EA applications, on behalf of project proponents.	5
Academia	Academics experts from the province who have commented publicly on the sector and who work directly in the areas of climate change and EA.	2
Legal	Practicing lawyers working in either the private or not-for-profit sectors currently working on matters related to EA and climate change.	4

Interviews explored five topics in relation to climate change and EA, namely legislation and regulatory requirements, guidance documents and regulatory direction, current state of practice, effects of considering climate change in EA, and opportunities for improved practice. Although grounded in a pre-determined set of discussion topics, the interview process was flexible to accommodate and explore emerging topics, and to then raise and revisit these new topics in subsequent interviews. Interview responses were grouped initially under the pre-determined, or emergent, interview topic and then analyzed, coded, and regrouped to identify common themes. Consistent with a grounded theory approach, analysis was not based on pre-existing theories or assumptions but allowed ideas and themes to emerge through an iterative process of coding and review (Birks et al. 2013).

3. Results

Results are presented below in three main sections. First, the extent to which climate change is addressed in LNG project EA documentation. Second, perspectives from study participants on the influence of climate change assessment on EA and project outcomes/decisions. Third, challenges to addressing climate change in the LNG sector through the EA process.

3.1 Reference to climate change in LNG project EA documentation

All project EAs made at least some reference to climate change. More than 2,200 references were identified across the seven pipeline projects, with the Eagle Mountain-Wood Fibre project comprising over one-third of these references, versus the Kingsvale-Oliver pipeline EA making only seven references to climate change. More than 4,300 references were identified across the 11 LNG facility projects, with the Fortune Creek, LNG Canada Export Terminal, Pacific Northwest, and Woodfibre projects comprising 75% of these references. The most frequently discussed topic in relation to climate change was GHGs, comprising over 60% of references across the sample of pipeline projects, and 56% for LNG facility projects. Other topics such as methane, for example, typically mentioned in terms of mitigating fugitive emissions, comprised less than 6% of EA references to climate change.

Frequency of occurrence of climate change-related terms does not indicate the quality of the EA regarding climate change consideration; though it is reasonable to relate frequency at different stages of the EA process with the relative attention the topic received. The frequency of climate change reference by EA phase is shown in Table 3. At the pre-application phase, all 10 project descriptions for LNG facilities made some reference to climate change; compared to only three of the eight project descriptions filed for pipelines. There was no difference between older and more recent projects. The application information requirements issued by the provincial government and stipulating what the proponent must include in their application and assessment, focused largely on GHG emissions and all but one project (Coastal Gaslink) included some component of climate change in their valued component selection (Table 4).

Table 3. Climate change references, by document type, for all reviewed provincial LNG EA documents by assessment phase.

	Pre-Application			Application Review		Decision
Terms	PD (n = 18)	AIR (n = 15)	VCR (n = 7)	PDA (n = 11)	EAR (n = 10)	EAC (n = 10)
Carbon	14	18	1	335	156	3
CO2	51	69	19	676	222	2
GHGs	133	386	47	2,530	666	36
Climate change	16	58	16	463	98	0
Global warming	1	0	0	36	13	0
Nitrous oxide	20	41	8	89	23	0
Methane	27	39	8	188	40	0
Ozone	4	1	0	9	3	0
Total	266	612	99	4,326	1,221	41

Table 4. Reference to climate change by project (pipeline, facilities) and by EA phase.

	Reference to climate change
Project	PD	AIR	VCR	PDA	EAR	EAC	# references to climate change	% by project type (pipeline, facility)
Pipelines
Pacific Trail		✓	–	✓	✓	✓	108	4.9
Kingsvale to Oliver		✓	–	–	–	–	7	0.3
Westcoast Connector	✓	✓	✓	✓	✓	✓	416	18.8
Coastal GasLink	✓	✓		✓	✓	✓	455	20.6
Pacific Northern Gas Looping		✓	✓	–	–	–	53	2.4
Eagle Mountain – Woodfibre		✓	✓	✓	–	–	789	35.6
Prince Rupert	✓	✓	✓	✓	✓	✓	386	17.4
LNG facility
Kitimat LNG Terminal		✓	–	✓	✓	✓	364	8.4
Cabin Gas Plant	✓	✓	–	✓	✓	✓	354	8.1
Fortune Creek Gas	✓	✓	–	✓	✓	✓	831	19.1
LNG Canada Export Terminal	✓	✓	–	✓	✓	✓	894	20.6
Prince Rupert LNG	✓	✓	–	–	–	–	91	2.1
Pacific NorthWest LNG	✓	✓	–	✓	✓	✓	690	15.9
Woodfibre LNG	✓	✓	✓	–	✓		842	19.4
Aurora LNG Digby Island	✓	✓	✓^1	–	–	–	97	2.2
Aurora LNG Grassy Point	✓	–	–	–	–	–	78	1.8
Grassy Point LNG	✓	–	–	–	–	–	43	1.0
WCC LNG	✓	–	✓	–	–	–	65	1.5

PD (project description); AIR (application information requirements; VCR (valued component selection report); PDA (project development application); EAR (environmental assessment report); EAC (environmental assessment certificate)

¹The AIR and VC documents were provided in a single document file for the Aurora LNG Digby Island LNG project.

✓reference to climate change in EA documentation

–no project document filed

Most climate change discussion was observed in the application review phase, specifically the project development application. The focus was predominately on GHG emissions mitigation, rather than the assessment of total GHG emissions or the project’s contributions to climate change per se. At the decision phase, climate change was addressed in all EA certificates, where issued, except the Woodfibre LNG facility. Climate change terminology appeared throughout the Woodfibre EA and was reported to be an example of a LNG project with minimal GHG production. It may be that climate change was adequately addressed in the EA review, not necessitating further EA certificate conditions. Overall, reference to climate change throughout all stages of the EA process for most projects indicates that, at least on the surface, climate change is routinely incorporated into EA practice in the LNG sector. However, how this assessment occurs and the value it provides is not explicit from document analysis alone.

PD (project description); AIR (application information requirements; VCR (valued component selection report); PDA (project development application); EAR (environmental assessment report); EAC (environmental assessment certificate)

3.2 Influence of climate change considerations on LNG project approvals, conditions, and proponent actions

Most all participants identified a need for greater climate change consideration in EA for LNG projects. Five participants, from government, industry, and a practitioner, who thought that greater inclusion of climate change in EA was not required, suggested that British Columbia has other, more comprehensive tools to evaluate climate change considerations that are also more effective than EA. No participants indicated that EA was sufficient on its own to address climate change in the LNG sector, and all participants indicated that EA needed to be coupled with higher level policies and programs to assess and manage climate change. No participants responded that project level EA was sufficient to address climate change.

All participants, except for one NGO representative, indicated that they had observed an increase in the amount of attention to climate change in EA practice in the LNG industry in recent years. Participants noted that the increase has occurred notwithstanding stagnating provincial climate change policies and legislation. Public pressure was said to be the dominant reason, along with increased political awareness, pressure from industry investors, asset management, and anticipated changes to federal and provincial regulations regarding climate change.

Legal and regulator participants reported that climate change consideration in EA often leads to some sort of condition within the project’s EA certificate regarding emissions reduction. The LNG Canada project was provided as an example, whereby a condition set out in the EA certificate was the development and implementation of a GHG management plan. However, these views were in the minority: only four participants indicated that the inclusion of climate change in LNG EAs has influenced regulatory decisions about project approvals or mitigation conditions. Most all participants commented that while climate change in EA should impact project approvals and conditions, it has not done so thus far. One practitioner stated that it ‘…makes no bearing on the decisions ultimately’, while another indicated that ‘government has made up its mind and EA process is more about shaping how development occurs versus changing whether development occurs or not’. An example provided was the Canada Export Terminal, which received EA approval notwithstanding a determination that the project would have un-mitigatable and significant adverse effects in terms of GHG emissions. A participant from academia commented that ‘if climate change weighs in at all it’s just not yet exerting enough leverage on the process to actually shape outcomes’.

Eight participants, however, indicated that including climate change in EA has positively impacted proponent actions in terms how they designed and assessed their proposed projects. The Woodfibre LNG project was provided as an example of a project that was improved because of the consideration of climate change in EA. The proponent committed, through enhanced project design, to use electric drives in its project operation. An EA practitioner and an industry participant noted that the Woodfibre project had ‘…done a number of substantial things to address concerns about climate change…’ and that the project ‘in many ways will improve the environment’, but they also noted that these positive attributes received little recognition amidst a much stronger and more vocal opposition to development of the LNG sector in general. The practitioner went on to say that climate change is often waved as a ‘flag of convenience’ during EA processes for those opposed to energy projects, regardless of the actions of the proponent to mitigate or offset effects, and there is ‘no way for an EA to deal with that kind of an approach; there is a fundamental disjoint …between what the common view and the descending expectation of what EA is’.

3.3 Enduring challenges to addressing climate change in LNG project EA

3.3.1 Weak policy and regulatory support

Most all participants indicated that current policy and regulations were insufficient to ensure that climate change is adequately addressed in LNG project EAs, but three different explanations were provided. First, for some, the challenge was simply that the province’s Environmental Assessment Act makes no reference to climate change or emissions. As a result, they perceived no legal obligation for proponents to address climate in their project applications, thus limiting the ability of regulators to impose climate-related EA conditions.

For others, inadequacies were attributed to a disconnect between already existing climate legislation or policy and the EA review and approval process. An NGO participant explained that EA can thus ‘…lead to the approval of projects that contravene BCs targets’. Another NGO participant suggested that project level EA was ‘pointless’ for addressing climate change, since it does little to mitigate climate change in isolation of strong legislation and incentives around emissions reductions. As a regulator explained, EA is ‘not in the business of setting new requirements or new policies, it’s the Ministries and the government that set the policies and the legislation and then the EA is a checking tool’. The problem acknowledged by many respondents was that the province has GHG reduction targets, but it lacks clear mechanisms for achieving those targets through the EA process. It was reported by some practitioners and by participants from academia and NGOs that development of the LNG industry is at odds with the province’s own legislated GHG reduction targets; with one participant noting that the recently approved Pacific Northwest LNG project would reach more than a quarter of the province’s proposed 2030 GHG emission targets.

The third explanation was that the province’s existing climate legislation and policy are inadequate, which restricts the ability of any process, including EA, to implement measures that promote emissions reduction or climate change mitigation. The provincial carbon tax was cited as an example. Implementation of a carbon tax was seen a positive action by government to encourage developers to limit their carbon footprint, but participants were critical that the tax had been frozen since 2012. An academic participant explained that provincial climate policies ‘have stagnated (and) because of that our EA approach is consistent with a stagnated set of climate actions’. For five participants, EA application in the LNG sector aligned with provincial climate policy but only because the policies are weak.

3.3.2 Mitigating investor uncertainty

Participants highlighted the potential for regulatory requirements at both the provincial and federal level to change in the near future, thus creating uncertainty in climate change requirements for project EAs. The concern was largely about whether a LNG project, assessed and approved under current requirements, would need to realign with future regulatory requirements with respect to climate change and GHG emissions. Participants from government, academia, and EA practitioners noted that while project-specific application information requirements are established at a single point in time for the duration of an EA, policy and legislation can change creating a ‘moving goalpost’ for assessment, mitigation and approval conditions. This creates challenges both in terms of effectively implementing and enforcing new regulations, as well as in creating certainty for industry seeking to make large investments in major projects.

To help reduce uncertainty, project development agreements (PDAs), established between the province and project proponents, have recently been introduced to the LNG sector. The Pacific Northwest¹ LNG PDA, for example, was established to provide long-term certainty to the proponent in terms of regulatory requirements and GHG emissions for LNG facilities. PDAs committing to current intensity targets of 0.16 CO₂ equivalent tonnes for each tonne of LNG produced, set through the Greenhouse Gas Industrial Reporting and Control Act, were identified by many government, industry and legal participants as providing regulatory certainty to project proponents over the lifetime of a project’s operations.

One NGO representative, however, expressed concern that projects span several decades and if in the future more ambitious policies and regulations can be implemented through EA to mitigate GHG emissions, PDAs risk ongoing projects not having to adapt and implement improved mitigation strategies. The concern was exacerbated given that PDAs also provide financial certainty to proponents on such matters as the provincial carbon tax rate. All but three participants indicated that the added costs to EA for climate assessment and mitigation, including a carbon tax on emissions, would not increase investment uncertainty or adversely affect the feasibility of LNG projects; most suggested that it has no impact. As explained by one NGO participant, the more favourable economic considerations that PDAs establish for LNG projects may reduce the market incentive for proponents to move to technologies and methods that limit GHG production in the face of potential future increases in the province’s carbon tax.

3.3.3 Inconsistent application of emissions benchmarks

Notwithstanding targets set under the province’s Greenhouse Gas Industrial Reporting and Control Act, the lack of clarity around benchmarks and management triggers for mitigating climate change impacts was often raised as an enduring challenge to the EA process. One practitioner explained that benchmarks or thresholds that can be applied during the EA process ‘are the most important tool we have to determine whether something is significant’. There was consensus that a major challenge is the amount of discretion applied by proponents when assessing their project’s impacts in terms of emissions and climate change, and the benchmarks applied when determining whether impacts are significant. An example provided was the Pacific NorthWest LNG terminal, which was approved based on an emissions intensity target of 0.22 CO₂e/t-LNG – significantly above the provinces regulatory benchmark. An academic interviewee suggested that clearer guidance and consistency of benchmarks would provide for ‘a more transparent and level playing field for stakeholders who are trying to participate in the process’. Practitioners expressed similar concerns that the lack of clear benchmarks is a major impediment to EA when trying to address climate change, with one practitioner reporting that in the absence of clear and consistent benchmarks EA results in only ‘a pretty vague assessment of whether it’s [climate change] important or not’.

The gap between the province’s GHG emissions benchmarks versus emissions levels that are approved following EA review was acknowledged by all participants, including government; however, the implications were interpreted differently. For example, one regulator explained that the province has ‘all the tools’ in place for EA to address climate change mitigation and that criticism of the current mitigation practices are related more so to what the current GHG emissions targets have been set at, stating: ‘You might not like the target, but that’s a separate issue, that’s not EA’s problem’. Other respondents, including an NGO representative, indicated that while the current process is effective in identifying and quantifying emissions it is not ‘a good process for ensuring that BC stays within its legislated targets’. Others were more critical, including a participant from academia who stated that the province has a ‘legislated reduction target and they ignore it in EA’.

3.3.4 Lack of full supply chain and life cycle assessment

Current project-based EA in British Columbia does not consider the full supply chain of a project, but rather examines only a single step in the LNG extraction, transport, production, and market process. Participants across consultancies, legal practice, NGOs and academia reported that the lack of full supply chain analysis that examines direct and indirect GHG emissions from extraction to consumption means that EA can never be truly effective at examining the industry’s climate change impacts. A local assessment, through the EA process, cannot effectively lead to meaningful conclusions about an impact that is global in scale, though it should be able to identify the total emissions associated with a project and mitigate those.

The more immediate and tangible concerns raised by participants were twofold. First, nearly half of participants identified project splitting, whereby an LNG facility and a pipeline may be assessed independently, as a constraint to accurate assessment and mitigation for climate impacts. A participant from academia explained that ‘so many parts of the supply chain aren’t covered under EA because of project splitting’, with a practitioner adding that ‘if an LNG project necessitates a pipeline then the two of them should be looked at together’. This concern was echoed by an NGO participant, who suggested that the public does not always understand the rationale for evaluating pipeline and facility projects separately, which creates ‘frustration’ and ‘suspicion’ and that project splitting may seem like an attempt to ‘dodge some of the regulatory requirements’.

A related challenge raised was the limited temporal scope of project-based EA for considering climate impacts. The lifespan of a project is a generally agreed upon EA timeframe by which to assess project impacts, but this timescale may not align with the longer-term or delayed effects associated with a project’s emissions. One NGO participant suggested that EA time scales should be aligned with the timelines for the provincial reductions targets, namely 2050.

That said, other participants cautioned that for an EA to offer defensible predictions the temporal horizon for modeling emissions-related impacts must be constrained. The problem though, is that emissions at a current value may be relatively low in the context of provincial emissions, but projections 20 to 30 years into the future, when both nationally and globally there is likely to be greater restrictions on GHG emissions, these project contributions may be much more significant. An academic participant explained that this could result in a stranded asset whereby LNG projects become a liability rather than a gain for the province as changing climate policies and taxes make these projects economically non-viable.

4. Discussion

Various laws and regulations exist in British Columbia to manage GHG emissions, including emissions specific to the LNG sector. Climate change is also considered, to some extent, in all phases of recent EA applications filed for most LNG projects. However, evidence from EA documentation sometimes contrasted the experiences or perceptions of interviewees, who spoke about the lack of government legislation and regulation for addressing climate change in LNG project assessments. This perception may be due to a dissatisfaction with the state-of-practice, but also different understandings of current EA requirements. We observed multiple requirements and provisions for addressing climate change in the LNG sector, but many interviewees were often unaware of the legislation and targets in place, such as LNG intensity targets and various project-specific EA application information requirements. This is not a unique challenge to climate change or to the LNG sector. Previous research has also identified gaps in practitioner and regulator understanding of EA requirements and also differences in perceptions and understandings (Vicente and Partidário 2006; Arts et al. 2012; Kågström and Richardson 2015; Runharr 2016).

The response of many interviewees was thus for stronger legislation to assess climate change in EA, requiring a higher standard of practice across the LNG sector. This is not a novel suggestion. Since mid-2017, following the revised European EIA Directive (2014/52/EU), all EAs prepared in European Union member states must consider climate change mitigation and adaptation. We agree that a strength of EA is its legislated foundation (Runhaar 2016); however, we posit that there are many, more immediate opportunities for improved practice. Better-practice standards can be applied to EA without stunting creativity through over mechanization of the EA process (Morgan 2012). We observed that LNG project EA application information requirements, issued by the province, do provide detail on how climate change mitigation and adaption are to be addressed in a proponent’s application for an EA certificate. A major challenge is that these requirements are not applied consistently across LNG projects, resulting in variability from one project to the next in how climate change impacts are assessed and the nature and extent of proposed mitigation, notwithstanding a sector-based GHG emissions intensity target. This can lead to a lack of confidence and trust in the EA process and in climate legislation, and suspicion of political or economic interference in EA – as we observed in British Columbia’s LNG sector.

Second, regulators and decision makers need to clearly demonstrate how climate impacts and mitigation measures presented in a proponent’s EA are considered when issuing project approvals and setting approval conditions. In British Columbia’s LNG sector, climate change appears in all phases of the EA process for most projects reviewed; however, how this information is considered by decision makers when setting the terms and conditions of project approval is rarely explicit. The result can be a lack of public trust in the EA process (Runhaar 2016; Gélinas et al. 2017), with blame often placed on the project proponent, their consultants, or on weak legislation. Though there are examples from practice showing that EA information is central to decision making, even resulting in major project modifications (Phylip-Jones and Fischer 2013), other studies have shown limited influence – especially when dealing with complex issues such as climate change or cumulative effects. Noble et al. (2016), for example, reviewed cumulative effects consideration in EA practice in Quebec, Canada, reporting that cumulative effects are often identified in the terms of reference for project EAs, and variably considered by proponents in their assessments, but rarely addressed by decision makers when setting project approval terms and conditions. Based on the Australian experience, Grafton and Lambie (2014, p. 11) argue that the public must trust the ‘approval, development, and monitoring processes of government regulators and proponents’ for a social license to be granted to LNG projects. Providing a more transparent framework for when and how climate change is considered in the regulatory approval of major projects, and in approval conditions, may provide better understanding of the weight-of-evidence of climate change in project decisions.

Third, notwithstanding emphasis in the scholarly literature on the need for increased climate change consideration in EA, observations from British Columbia’s LNG sector suggest that there are many practical implications or limitations to doing so – not all of which are internal to the EA process. For example, some LNG projects that have, or have proposed, to adopt electrification for facility operations to reduce GHG emissions were faced with barriers due to a lack of supporting electrical power infrastructure. An LNG facility requires a large amount of energy to cool natural gas into a liquid state and to operate site infrastructure. In 2014, the province announced a megawatt per hour rate of CDN $83.02 for LNG facilities connected to the provincially-owned hydro-electricity grid, while other industrial users were charged a rate of $53.34 (Government of British Columbia 2014). The province indicated that this rate was to ensure that other utility users would not be subsidizing the costs associated with LNG use of the grid, but it also presented a financial disincentive for LNG facilities to connect to the grid – especially in project locations where grid connection required that the proponent construct or upgrade transmission-line infrastructure.

Fourth, at best project proponents can identify their likely direct emissions and devise project-specific strategies to minimize or offset those emissions, such as emissions reduction strategies or the creation or protection of carbon sinks; they are not well-positioned to devise sector-wide policies or solution or to assess the implications of their project on future climate change. Our argument is not that the contributions of individual LNG projects are negligible and should not be assessed and appropriately mitigated (Sok et al. 2011; Agrawala et al. 2012), but the questions asked about climate change in project EAs, and the issues raised, are sometimes beyond the scope and capacity of a single project EA – focused instead on uncertain climate futures and issues that are of a broader provincial, national or global policy scale. Gray (2015) suggests that the question at hand for project-based analysis should not be whether a project contributes to climate change per se, but rather the level of GHG emissions and mitigation effectiveness, thusly avoiding the inherently complex causal relationships that reach far beyond the scope and scale of the assessment and decisions made for any single project. The province’s Environmental Assessment Office (2016) ‘recognizes that the impacts of GHG emissions must be addressed globally, and that it is not possible to estimate the impacts of an individual project’s emissions on global climate change’. However, there appears to be a misalignment between what is desired or expected in terms of climate change assessment in the LNG sector and what EA at the project scale can reasonably deliver.

Finally, many of the issues emerging from our analysis relate to the inability of a project-based review process to adequately capture, and plan for, sector-wide development that meets broader climate policy and objectives. This culminates in the need to off-ramp climate change to more strategic levels of assessment, such as strategic environmental assessment (SEA) at the sector level (Fischer et al. 2011; Jiricka-Pürrer et al. 2016); to explore whether an LNG development scenario is compatible with climate policies and targets, to examine the trade-offs involved in achieving economic objectives, and to set the emissions thresholds and mitigation standards that must apply across developments within that sector (ECCC 2018). SEA would allow for an evaluation of the climate change implications of sector-wide LNG development prior to planning and investment at a project level, thereby providing greater regulatory certainty to industry, ensuring consistency across project assessments, and facilitating transparency in the rationale for project approvals or rejections (Wende et al. 2012; Posas 2011). Westcoast Environmental Law and the Northwest Institute for Bioregional Research (2016) have similarly advocated for the use of a SEA to address both the direct and indirect effects of LNG development, and similar calls have emerged in other resource-intensive regions across Canada. In the absence of SEA, project-based reviews for LNG projects, and for industrial developments in general, become the battle ground for contrasting visions of development and for dealing with the global effects of climate change – whether directly associated with the project at hand, and manageable at that scale, or not (Hegmann and Yarranton 2011; Noble 2017).

5. Conclusion

The recent decline in global LNG prices has led to stagnation of the industry. At the same time, other energy projects, such as large hydroelectric facilities and major oil pipelines, are facing strong opposition and criticism over climate change concerns. The province of British Columbia is confronted with the same challenges faced by other regions and countries – how to reconcile growing energy demands with a need to reduce GHG emissions and maintain a stable economy. The EA process can, and should, play a meaningful role in meeting this challenge (Sok et al. 2011; Enriquez-de-Salmoneca et al. 2016). Results from this research, however, indicate an overall dissatisfaction with how climate change is integrated in EA practice – often predicated on expectations about EA that perhaps exceed what it can deliver as a project-based tool, and sometimes based on an incomplete understanding of the regulations, requirements and practices that do exist.

Demands for stronger legislation to integrate climate change in EA is often the typical response. Strong legislation is important, but it is of limited value if project-specific direction is not provided consistently across the resource sector. It is even of less value if the climate impacts and mitigation presented in EA appear to play limited to no binding role in project decisions or approval terms and conditions. The result is skepticism about the EA process. Arguably, there are immediate and practicable options to ensure better-practice, including: improving stakeholder EA literacy to enhance knowledge and awareness of current practice and the scope of EA; life cycle analysis for project proposals to better understand and communicate the full range of direct emissions; consistency across projects in terms of emission assessment and mitigation standards; and improved decision maker communication on how climate change factored into their reasons for decision and any project approval conditions.

At the same time, however, EA is not the ‘magic bullet’ (Fuggle 2005) for addressing climate change – in any resource sector. The majority of challenges to current practice predominantly relate to the inability of EA to address the larger scope and scale of issues related to climate change. Although there is room for improvement at the project-level, more robust economic tools and instruments are also needed, including SEA. There is some action on this front in the Canadian context, at least federally, with the release of a discussion paper on the strategic assessment of climate change, exploring options to strengthen EA processes including setting emissions thresholds and evaluating compliance with climate policy. Of course, the challenge is whether decision-makers are willing to make the tough decision of rejecting a major energy project proposal when it exceeds emissions thresholds or does not fully align with climate policy objectives.

Disclosure statement

No potential conflict of interest was reported by the authors.

Additional information

Funding

This study was supported by the Social Sciences and Humanities Research Council of Canada.

Notes

1. The Pacific Northwest LNG project was cancelled by Petronas and its partners in mid 2017, less than a year after it was approved, citing changes in market conditions and shifts within the energy industry.