From Energy Now

The LNG Canada facility under construction in Kitimat, British Columbia

Climate Goals Face B.C. Election Backlash in Home of Greenpeace – B.C. Conservatives Have Upended Race With Focus on Unlocking Natural Resource Development

An unlikely political upstart in Canada’s third-largest province, expelled from his previous party for climate science skepticism, is within striking distance of winning power with promises to ditch environmental targets and unleash natural-resources development.

The surge in support for John Rustad’s Conservative Party of British Columbia ahead of the Oct. 19 election may have been helped by the popularity of the unaffiliated federal Conservatives. Victory would add to the roster of right-leaning premiers at odds with Prime Minister Justin Trudeau’s Liberal government in Ottawa.

A Conservative government in BC might mark a bigger shift than anywhere else in the country. The province is famous for environmentalism — Vancouver is the birthplace of Greenpeace and home to Canada’s most famous climate activist, David Suzuki. David Eby, the current premier, unsuccessfully opposed the expansion of the Trans Mountain oil pipeline, and back in 2008 the province brought in one of North America’s first carbon taxes.

Although polls favor Eby’s left-leaning New Democratic Party, it’s close, and a spread between pollsters suggests the result remains unpredictable.

The public has endured inflation and strained local services, slower growth in an economy dragged by higher interest rates and lower exports, and a government that’s gone from surplus to a record C$9 billion ($6.5 billion) deficit. British Columbia, once rated AAA by S&P Global Ratings, has suffered three credit rating downgrades in three years.

The ruling NDP — whose origins lie in labor unions — is parrying criticism of its own mixed seven-year record in office. It’s running on blunting the cost of living with subsidies, tying the minimum wage to inflation, taxing home speculation, blocking Airbnb Inc.-style short-term rentals and using hydrocarbon revenues for a “clean economy transition fund.”

Rustad’s rise is also a stunning tale of revenge. The longtime representative of Nechako Lakes — a district 600 miles north of Vancouver in BC’s deep interior — was kicked out of the BC Liberal Party in 2022 on his birthday after sharing a social media post questioning carbon dioxide’s effect on the climate. He took over the BC Conservative Party, then a marginal force in provincial politics. Before long it had leapfrogged his old party in the polls.

Acrimonious talks to merge the two groups failed, and by August the previously formidable Liberals — which had rebranded as BC United — gave up, withdrawing from the election in an effort to unite voters against the NDP.

Unlocking Natural Resources

In an interview with Bloomberg, Rustad said he won’t cut social, health or education spending — a majority of the budget. He’s also promising tax cuts and plans to deepen the deficit to more than C$10 billion in his first year.

His plan to balance BC’s budget over eight years is based on an optimistic 5.4% average GDP growth rate to 2030 — more than double the average rate of the past five years — fueled by axing CleanBC, the NDP plan to cut BC’s emissions 40% by 2030. Rustad said that would save as much as C$2.5 billion in government spending, then bring in billions in extra revenue by unlocking industrial projects.

Foremost among them is LNG Canada, a new liquefied natural gas project in the remote north that the federal government said may be worth C$40 billion — possibly the largest private investment in the country’s history. There’s a plan to double its size, but it’s proving tricky to power with BC’s zero-emission hydroelectricity instead of fossil fuels, because it would need a new transmission line, with one previous cost estimate at C$3 billion.

Not a problem if looser rules let them burn gas.

“In British Columbia, we could stop everything we do, and by next year the increases from China and India will swamp anything that we’ve done,” Rustad told Bloomberg. “So my perspective is we need to make sure we’re looking after people. And so for a changing climate, we need to be able to adapt to it.”

When he appeared on climate-skeptic Canadian influencer Jordan Peterson’s podcast, Rustad said: “How is it that we’ve convinced carbon-based beings that carbon is a problem?”

Rustad also talked up billions in extra revenue from streamlining mine permits — one of BC’s oldest industries and more prominent in the remoter parts of the province he hails from.

Asked about BC’s rural vote, Rustad says: “There’s no question, the NDP completely ignored it.”

Rustad also wants to ditch BC’s carbon tax to cut costs for businesses and consumers. That’s also the top rallying cry for federal Conservatives, who are trying to force a “carbon tax election” to topple Trudeau. Provincial carbon taxes are federally back-stopped, so to banish the tax Rustad would need the Conservative Party of Canada to take power.

“The top-of-mind issues that people are frustrated about are inflation and the cost of living, housing and health care,” Kathryn Harrison, a political science professor at the University of British Columbia, said in an interview. “And what we’ve seen is that the federal Conservative Leader Pierre Poilievre has been able to connect those public concerns with the carbon tax. It’s given them something that they can focus their frustrations on.”

Even the climate-conscious NDP has pivoted away from defending the carbon tax to pledging they would repeal it for consumers — but unlike the Conservatives, they would shift the burden to corporate “polluters.”

In his plan to speed up business, Rustad has also taken issue with BC’s Declaration on the Rights of Indigenous Peoples Act because it causes “friction”. It requires government to seek Indigenous people’s “free, prior and informed consent” to implement measures that may affect BC’s more than 200 Indigenous communities.

Rustad’s Conservatives include Indigenous candidates, and he talks about supporting economic reconciliation — the material, financial side of redressing Canada’s colonial injustices. But some First Nations leaders have called his platform “dangerous” for pitting British Columbians against each other.

Relentless Controversies

Rustad’s biggest weak point may be the controversial things said my members of his team, leading to relentless stories since they’ve been thrust into the spotlight.

Despite his dry, phlegmatic style, the same goes for Rustad himself. He’s said he regretted getting the “so-called” Covid-19 vaccine, and a clip showed him seeming to go along with an activist’s concept of “Nuremberg 2.0” — trials for officials who oversaw pandemic health measures. Rustad apologized and said he “misunderstood” the question.

Rival party staffers gave out BC Conservative-branded tinfoil hats after a candidate’s shared posts described 5G wireless signals as a weapon, according to local media. She was ousted, but another candidate who claimed vaccines can cause a type of AIDS remains part of the caucus.

Another apologized last week for posts including one in 2015 calling Palestinians “inbred walking, talking, breathing time bombs.”

In communities like Metro Vancouver, some of the most diverse in North America, that kind of thing may jeopardize Rustad’s path to power.

But Rustad is also being cheered on by what Harrison described as an “accidental collection of voters who share frustration with the cost of living, the cost of housing, emergency room closures” — which could span from suburban families who judge the economy isn’t working for them to BC’s wealthiest, including billionaire Lululemon Athletica Inc founder Chip Wilson.

If Rustad pulls it off, his unorthodox strategy to turn one of Canada’s progressive strongholds conservative will reverberate with those fighting federal politics in the nation’s capital 3,000 miles away.

From Resource Works

Germany bet big on hydrogen, an infant technology in terms of commercial viability. Canada also jumped on the hydrogen train at a time when they should have been doubling down on LNG exports, a resource Canada has in abundance

Canada and Germany had, and probably still have, such mighty ambitions for their hydrogen. Lauded as a can’t-miss step in the journey towards a clean energy utopia that would position Canada as a world leader in hydrogen, it is now cracking before it even really gets underway.

The goal of the deal was a good one. Germany wanted to reduce its reliance on vast amounts of Russian gas following the invasion of Ukraine in 2022. However, the nonstop delays and challenges of realizing a Canada-Germany hydrogen deal have exposed the folly of going all in on a non-developed energy source at the cost of an existing one. These problems make it very clear that both Canada and Germany have miscalculated by placing all their eggs in one basket for a long-term goal, instead of turning to alternatives like liquefied natural gas (LNG) in the short term.

The federal government announced that there was no “business case” for exporting LNG to Europe at the time.

Hydrogen has a good future as a clean, renewable source of energy, and that is undeniable. It is not going to happen overnight as it will require large-scale facilities for production and distribution, especially for green hydrogen. Canada and Germany signed their hydrogen agreement in 2022, aimed at jumpstarting Canadian hydrogen exports by 2025.

We are now sitting at the end of 2024, and the necessary infrastructure is not close to being completed. Facilities in Atlantic Canada intended to help supply the hydrogen are still in their planning stages, while German investment is falling behind.

As far as logistics go, hydrogen presents a huge challenge. To produce hydrogen, massive amounts of energy are needed, and the plan to use wind energy to power these facilities is very impractical. Hydrogen also must be converted into ammonia for shipment, which is another energy-intensive and expensive process. When ammonia does theoretically reach Germany, up to 80 percent of the original energy load is expected to have been lost. If such a loss could be captured in a photo, it could slot into the dictionary for the word “inefficient.”

Germany needs energy security given its divorce from Russian gas, and this demanded a far more immediate response in 2022. Rather than diversifying energy imports and turning to short-term solutions like Canadian LNG, Germany bet big on hydrogen, an infant technology in terms of commercial viability. Canada also jumped on the hydrogen train at a time when they should have been doubling down on LNG exports, a resource Canada has in abundance, and which, like most fossil fuels, can be stored and shipped with speed and efficiency.

While hydrogen has a future, refusing to embrace LNG as an export to Europe was a mistake when responding to Europe’s energy crisis. Both the United States and Qatar secured long-term contracts for LNG exports to Europe, while Canada has been absent from the table. Germany itself invested heavily in floating LNG terminals, highlighting how natural gas will remain a vital part of the European energy mix for years to come.

There is great irony in the fact that natural gas, while still emitting more than hydrogen, produces far fewer emissions than coal, which many European states have been forced to turn to in the wake of energy shortfalls. Germany is one of the world’s most prolific consumers of coal, and that has only intensified with the cutoff of Russian gas, undermining its ambitious climate goals. Canadian LNG should have played a greater role while hydrogen infrastructure was constructed in Canada, and investment capital was raised in Germany.

What the ongoing delays and inefficiencies in the Canada-Germany hydrogen deal demonstrate is a cautionary tale. While hydrogen has a key role to play in the future of global energy, it is not a silver bullet in the short term.