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This is the 1st affidavit of

Maximilian Kniewasser
made April 27, 2017

Court File No.: T-1836-16

FEDERAL COURT

BETWEEN:

SKEENAWILD CONSERVATION TRUST

Applicant

and

HER MAJESTY THE QUEEN, ATTORNEY GENERAL OF CANADA,


MINISTER OF ENVIRONMENT AND CLIMATE CHANGE,
CANADIAN ENVIRONMENTAL ASSESSMENT AGENCY, and
PACIFIC NORTHWEST LNG LIMITED PARTNERSHIP

Respondents

APPLICATION UNDER SECTIONS 18 & 18.1 OF THE FEDERAL COURTS ACT,


R.S.C. 1985, c. F-7

AFFIDAVIT

I, Maximilian Kniewasser, Analyst at the Pembina Institute, of 2-2153 Timber Ridge,


Whistler BC, AFFIRM THAT:

1. I am a policy and technical analyst who has reviewed the Canadian


Environmental Assessment Agencys environmental assessment report
regarding the Pacific NorthWest LNG Project (the CEAA Report), and as
such I have personal knowledge of the facts and matters hereinafter deposed to
save and except where the same are stated to be based upon information or
belief, and where so stated I verily believe the same to be true.

2. Mr. Anthony Ho, counsel to SkeenaWild Conservation Trust in this matter, has
provided me with a selection of documents that he tells me, and I verily believe
to be true, are some of the documents that have been disclosed by the Crown
pursuant to Rule 318. I have reviewed these documents. Where I refer to such
2

documents in this affidavit, I have identified them using the identification


number that the Crown uses for these documents (R318 ID#).

Qualification

3. I have been retained by SkeenaWild Conservation Trust as an expert in these


proceedings. The retainer between SkeenaWild Conservation Trust and myself
is attached to this affidavit as Exhibit A.

4. I am an expert in the following areas:

a. Domestic and international climate policy;

b. Impact of climate policy on the economic viability of major fossil fuel


projects, including climate-energy modelling;

c. Modelling of climate impacts from shale and liquefied natural gas


(LNG) developments; and,

d. Technical review of the environmental impacts from, and alternatives to,


major fossil fuel projects.

5. I am a co-creator of the B.C. Shale Tool (2015), which is a scenario-planning


tool for shale gas and LNG development in B.C. that quantifies environmental
impacts under different development, technology and policy scenarios. 1

6. This tool was extensively used by Environment and Climate Change Canada to
assess the upstream greenhouse gas impacts from the Woodfibre LNG project
and the Pacific NorthWest LNG project, which informed the projects
respective environmental assessments. 2,3

1
Pembina Institute, B.C. Shale Scenario Tool, 2015. http://www.pembina.org/pub/BCShaleTool
2
CEAA, Pacific NorthWest LNG Project Review of Related Upstream Greenhouse Gas Emissions
Estimates, 2016. http://www.ceaa.gc.ca/050/documents/p80032/115673E.pdf
3

7. My current curriculum vitae is attached to this affidavit as Exhibit B.

Expert Opinion

8. You have asked me to provide my opinion to the following: Please offer your
opinion on the CEA Agencys assessment of alternative means of powering
the Project as set out in CEAA Report.

9. Please find my response to this question below. My opinion is informed by my


experience in working on climate policy in British Columbia and Canada,
climate-energy modelling, and the assessment of greenhouse gas emissions of
LNG and upstream shale gas development under different development,
technology and policy scenarios.

A. Background information

10. Before I provide my opinion, below I set out some background information that
is relevant to understanding my opinion on the Agencys assessment of
alternative means of powering the Pacific NorthWest LNG project (the Project).

11. The liquefaction of natural gas at liquefied natural gas (LNG) facilities is an
energy and emissions intensive process. However, there are several different
ways to power LNG facilities, the choice of which can have significant
implications on the Greenhouse Gas (GHG) emissions of a project. The
Proponent is planning to power the Project almost entirely with on-site natural
gas turbines. Less than 1% of the total power requirements of the Project are
expected to be serviced with grid electricity. 4

3
CEAA, Woodfibre Liquefied Natural Gas (LNG) Project Review of Related Upstream Greenhouse
Gas (GHG) Emissions Estimates, 2016. http://www.ceaa.gc.ca/050/documents/p80060/104688E.pdf
4
KPMG states that for two trains (Phase 1) the power requirement for non-critical load is expected to
be less than 5 MW. For three trains (Phase 2), this is less than 7.5 MW. Total power needs for the
4

12. There are two main alternatives of using grid electricity to power LNG projects
and improve their GHG emissions performance, compared to using on-site
natural gas turbines. The first alternative is to use grid electricity to power non-
compression load. Non-compression load describes the power needed for
pumps, air coolers, lighting and space heating at the LNG facility. This load
accounts for approximately 25-30% of the total power needs from an LNG
facility. 5 The majority of non-compression load is critical for the LNG
operations and therefore requires stable and reliable power. The second
alternative is to use grid electricity to power the compression process. In this
alternative, electric motors drive the main liquefaction process. 6 Compression
load accounts for approximately 70-75% of the total power needs from an LNG
facility. The compression process also is critical to LNG operations, and
therefore requires stable and reliable power. In the CEAA Report on the
Project, the Agency only assessed the first alternative described above (using
grid electricity to meet non-compression load). 7 The Agency did not discuss the
second alternative (using grid electricity for compression load). The conditions
imposed on the Project would not require either of these alternative methods of
powering the Project to be implemented.

13. The Project is expected to proceed in two phases. Phase 1 consists of two
liquefaction trains, each with a capacity of 6.84 million tonnes of LNG per year

Project are expected at around 1,100 MW. As such, non-critical load represents less than 1% of total
energy needs. The Proponent has ruled out using grid electricity for critical load, but may use it to
meet non-critical load. KPMG, Pacific NorthWest LNG Limited Partnership Independent review of
power options and selection process, 2014,
http://www.pacificnorthwestlng.com/media/PNW_Partnership%20report_v.6.1(1).pdf
5
This assumes that the power capacity for compression load is between ~40-45 MW per mtpa of LNG
capacity, and that total load for both non-compression and compression load is ~55 MW per mtpa of
LNG capacity. The exact share of power required by the two loads is difficult to pinpoint precisely as
they are interrelated (i.e., waste heat from the compression process can be used to power the non-
compression process). KPMG, Pacific NorthWest LNG Limited Partnership Independent review of
power options and selection process, 2014,
http://www.pacificnorthwestlng.com/media/PNW_Partnership%20report_v.6.1(1).pdf
6
In circumstances in which a project uses grid electricity for the compression process, the project
would likely also service the non-compression load with grid electricity.
7
CEAA Report, Pacific NorthWest LNG Project Environmental Assessment Report, 2016.
http://www.ceaa.gc.ca/050/documents/p80032/115668E.pdf
5

(mtpa), while Phase 2 would see the addition of a third train at a later date. 8 As
such, the LNG export capacity of the Project would be 13.7 mtpa in Phase 1,
and would increase to 20.5 mtpa in Phase 2. Due to the different timelines, the
two phases offer different opportunities to implement alternative power supply
options as the extra time could allow for technology improvements and electric
infrastructure upgrades. Table 1 shows five potential project configurations and
the resulting GHG emissions, with Scenario 1 representing the project as
approved based on conditions in the CEAA Decision Statement. 9

Table 1: Overview of alternate project power scenarios


Scenario Phase 1 (13.6 Phase 2 (6.8 GHG Improvement in Cumulative GHG
mtpa) mtpa) emissions GHG emissions emissions
from the performance over savings over 30
Project (Mt Scenario 1 (%) year operating
CO2e) life (Mt CO2e)
1 As per Project As per Project
4.3 0% 0.0
conditions conditions
2 As per Project Grid power for
conditions non-
4.0 6% 8.2
compression
load
3 As per Project Grid power for
conditions non-
compression
3.4 22% 27.9
and
compression
load
4 Grid power for Grid power for
non- non-
3.1 29% 36.9
compression compression
load load
5 Grid power for Grid power for
non- non-
compression compression
2.4 44% 56.6
load and
compression
load
Note: As per Project conditions refers to the Ministers conditions in the CEAA Decision
Statement. These conditions include a GHG emissions intensity limit of 0.21 t-CO2e/t-LNG for
Phase 2 (Trains 1,2,3) of the Project. This is seen as a best-case scenario, as if only Phase 1
proceeds, the emissions intensity will be higher at 0.22 t-CO2e/t-LNG. Each train is assumed to
have a capacity of 6.84 mtpa. This results in annual production in 20.5 mtpa, and total

8
CEAA Report, Pacific NorthWest LNG Project Environmental Assessment Report, 2016.
http://www.ceaa.gc.ca/050/documents/p80032/115668E.pdf
9
CEAA, Decision Statement for the Pacific NorthWest LNG Project, 2016.
http://www.ceaa.gc.ca/050/documents/p80032/115669E.pdf
6

emissions of 4.31 Mt CO2e, almost matching the emissions cap set by the Project conditions.
The alternative technologies are based on the stated emissions intensity of projects that plan to
employ these alternative technologies in B.C. Grid power for non-compression load is based on
the stated emissions intensity of LNG Canada of 0.15 t-CO2e/t-LNG 10, and the grid power for
non-compression and compression load is based on the emissions intensity of the Woodfibre
LNG project of 0.054 t-CO2e/t-LNG. 11

14. As can be seen in Table 1, it can make a material difference to GHG emissions
performance whether and when the Project deploys grid power for either non-
compression load, or for both non-compression and compression loads,
especially over the lifecycle of the Project. Scenarios two to five could reduce
emissions by 6% to 44% compared to the emissions cap set by the Minister.
Over the expected 30-year life span, this could reduce cumulative emissions
from the Project by between 8 and 57 Mt CO2e. 12 Other LNG projects proposed
for B.C. have committed to using these two alternative grid-based power
options (see paragraphs 15 to 18). 13

15. The Project went through the environmental assessment process in parallel with
two other LNG projects, the LNG Canada project and the Woodfibre LNG
project. These two comparator projects received their respective provincial
environmental certificates and federal environmental assessment approvals
before the Project. 14,15

16. LNG Canada is planning to use grid electricity for non-compression load for
both planned phases (similar to Scenario 4 in Table 1). 16 It is a project of

10
BCEAO, LNG Canada Export Terminal Project Assessment Report, 2015. Pg. 61.
https://www.ceaa-acee.gc.ca/050/documents/p80038/101852E.pdf
11
CEAA, Woodfibre Liquefied Natural Gas (LNG) Project Review of Related Upstream Greenhouse
Gas (GHG) Emissions Estimates, 2016. http://www.ceaa.gc.ca/050/documents/p80060/104688E.pdf
12
The Project is expected to be operational, and produce at full capacity, for over 30 years. CEAA
Report, Pacific NorthWest LNG Project Environmental Assessment Report, 2016.
http://www.ceaa.gc.ca/050/documents/p80032/115668E.pdf EA report
13
The two projects that are using the two alternative means of powering the project are the LNG
Canada project, which is planning to use grid power to meet non-compression load, and the Woodfibre
LNG project which is planning to use grid power to meet both non-compression and compression load.
These two projects are the two main comparator projects to the Project.
14
CEAA, Decision Statement to LNG Canada, 2015. http://www.ceaa.gc.ca/050/document-
eng.cfm?document=101851
15
CEAA, Decision Statement to Woodfibre LNG, 2016. http://www.ceaa.gc.ca/050/document-
eng.cfm?document=109540
16
BCEAO, LNG Canada Export Terminal Project Assessment Report, 2015. https://www.ceaa-
acee.gc.ca/050/documents/p80038/101852E.pdf
7

similar size (LNG Canada will have a capacity between 24 mtpa and 26 mtpa)
and timeline compared to the Project and is located in nearby Kitimat.

17. The Woodfibre LNG project is a smaller project (2.1 mtpa) located close to
Squamish. It is planning to, and is required to, use grid electricity for both the
compression and non-compression loads (or a similar technology with equal or
better GHG emissions performance). 17 It is expected to have an earlier start up
date than the Project. 18

18. Considering that both the LNG Canada and Woodfibre LNG project received
their environmental certificates before the Project suggests that there was
sufficient time to assess the feasibility of the two grid powered alternatives for
powering the Project.

19. Alternatives for powering the Project were explored by the Proponent and by
the Agency. Furthermore, Natural Resources Canada (NRCan) undertook
economic analysis of using grid electricity to power non-compression load 19
and compression load 20, and provided these analyses to the Agency. The
Agency did not refer to the NRCan economic modelling in the CEAA Report.

20. In draft conditions for the Project, the Agency had described requirements for
the Proponent to periodically assess the feasibility of using grid electricity to
power the Project, and to implement these alternatives should they become
feasible. 21 Draft Condition 3.2 would have required the Proponent to assess
every five years if electrical power was available to power non-compression
load for the full Project, and for compression load for Phase 2 of the Project,
and to implement these alternatives if they were found to be technically and

17
CEAA, Decision Statement to Woodfibre LNG, 2016. http://www.ceaa.gc.ca/050/document-
eng.cfm?document=109540
18
Woodfibre LNG, Parent company authorizes Woodfibre LNG to proceed with project, 2016.
https://www.woodfibrelng.ca/parent-company-authorizes-woodfibre-lng-to-proceed-with-project/
19
R318 ID# EA06536. A copy of this document is attached to this affidavit as Exhibit C.
20
R318 ID# EA06534. A copy of this document is attached to this affidavit as Exhibit D.
21
R318 ID# EA02909. A copy of this document is attached to this affidavit as Exhibit E.
8

economically feasible for the Project. This draft condition does not appear in
the final set of conditions for the Project. 22

21. Below I offer my opinion on the Agencys assessment of alternative ways of


powering the project. First, I describe my opinion on the Agencys assessment
of using grid electricity for non-compression load. Second, I offer my opinion
on the Agencys assessment of using grid electricity for compression load.

B. Opinion on the Agencys assessment of the alternative of using grid electricity


for non-compression load

22. In my opinion the Agency failed to assess the economic feasibility of using grid
electricity for non-compression load. I explain my reasoning below.

23. In the CEAA Report, the Agency assessed the technical feasibility of using grid
electricity for non-compression load, and found that this alternative is
technically feasible in the timeline proposed for the Project. In the CEAA
Report, the Agency states that electrification of non-compression load would
require around 215 MW of stable power. 23,24 Furthermore, the CEAA Report
states that BC Hydro provided information to the Agency that there is sufficient
generation and transmission capacity to serve approximately 200 to 250 MW of
new industrial load in the Port of Prince Rupert lands. 25 The Agency
acknowledged that infrastructure upgrades would be required to deliver the
stable electricity needed for LNG operations. However, it also acknowledged
that the LNG Canada and Woodfibre LNG projects are pursuing such

22
CEAA, Decision Statement for the Pacific NorthWest LNG Project, 2016.
http://www.ceaa.gc.ca/050/documents/p80032/115669E.pdf
23
CEAA Report, Pacific NorthWest LNG Project Environmental Assessment Report, 2016. Pg. 42.
http://www.ceaa.gc.ca/050/documents/p80032/115668E.pdf
24
R318 ID# EA02788. A copy of this document is attached to this affidavit as Exhibit F.
25
CEAA Report, Pacific NorthWest LNG Project Environmental Assessment Report, 2016. Pg. 42.
http://www.ceaa.gc.ca/050/documents/p80032/115668E.pdf
9

infrastructure upgrades in order to use grid power for their projects. 26 Given
this information, the Agency concluded:

while infrastructure improvements would be required in


order to bring reliable grid power to the Project site, these
upgrades and changes are manageable within the planning
horizon for this Project. As a result, the Agency is of the
view that using grid power for non-compression needs at
the Project site would be technically feasible. 27

24. In my opinion, the Agency failed to carry out an assessment of the economic
feasibility of using grid electricity for non-compression load. The Proponent
stated that it never undertook a cost analysis for using grid electricity for non-
compression load. 28 Nor was such a cost analysis undertaken by the Agency. As
such, the Agency did not assess the economic feasibility of using grid
electricity for non-compression load in the CEAA Report. This is surprising
considering that the Agency had determined that this alternative was technically
feasible for the Project. 29

25. Even though the Agency did not undertake an assessment of the economic
feasibility of using grid electricity for non-compression load in the CEAA
Report, NRCan provided the Agency with its views on this very matter. 30 This
took the form of an economic analysis that compared using grid electricity for
non-compression load versus generating power inside the fenceline using
natural gas turbines, as proposed by the Proponent. The analysis included
assumptions designed to make the modelling relevant to the Project, including
the Proponent being responsible for paying for electric infrastructure upgrades
(estimated at $1 billion), and deploying four 55 MW backup generators. Based
on this NRCan analysis, the Agency stated in internal documents that:

26
CEAA Report, Pacific NorthWest LNG Project Environmental Assessment Report, 2016. Pg. 42.
http://www.ceaa.gc.ca/050/documents/p80032/115668E.pdf
27
CEAA Report, Pacific NorthWest LNG Project Environmental Assessment Report, 2016, Pg. 42.
http://www.ceaa.gc.ca/050/documents/p80032/115668E.pdf
28
CEAA Report, Pacific NorthWest LNG Project Environmental Assessment Report, 2016, Pg. 42.
http://www.ceaa.gc.ca/050/documents/p80032/115668E.pdf
29
See block quote in previous paragraph
30
R318 ID# EA06536. A copy of this document is attached to this affidavit as Exhibit C.
10

Based on the analysis conducted by Natural Resources


Canada, the Agency is of the view that it would be
economically feasible for the Proponent to utilize grid
power for the non-compression needs of the Project once it
reaches full build out or by 2030. 31

The final CEAA Report makes no mention of NRCans analysis nor of the
Agencys apparent conclusion, based on the NRCan report that it would be
economically feasible to use grid power by 2030 or upon full build out

26. Nor does the CEAA Report include any analysis of the relevance of the two
main comparator projects described earlier (LNG Canada and Woodfibre LNG)
to an assessment of power generation alternatives. In my opinion, the Agency
could have done a direct comparison to the LNG Canada project considering
the many similarities between LNG Canada and the Project. LNG Canada is a
project of comparable size and timeline to the Project, located in nearby
Kitimat. LNG Canada is planning to use grid electricity to meet non-
compression load for both phases of its project. This will allow LNG Canada to
achieve GHG emissions intensity that is 29-32% lower compared to the
Project. 32 The Agency acknowledged that LNG Canada would have to update
electric infrastructure to implement the use of grid power for non-compression
load, similar to what the Agency acknowledged would be required by the
Proponent were it to implement this alternative. 33 Despite these similarities, the
Agency does not compare LNG Canada and the Project in regards to using grid
electricity for non-compression load. This failure is surprising, given that these
two LNG projects offer many similarities and considering that LNG Canada is
committing to use grid electricity for non-compression load, the only power
alternative the Agency assessed for the Project in the CEAA Report.

31
R318 ID# EA06536. A copy of this document is attached to this affidavit as Exhibit C.
32
Based on LNG Canada having an emissions intensity of 0.15 t-CO2e/t-LNG produced (see note of
Table 1). In comparison, the PNW LNG Project, according to the Project conditions, must achieve an
emissions intensity of 0.22t-CO2e/t-LNG (Phase 1) and 0.21 t-CO2e/t-LNG (Phase 2).
33
CEAA Report, Pacific NorthWest LNG Project Environmental Assessment Report, 2016, Pg. 42.
http://www.ceaa.gc.ca/050/documents/p80032/115668E.pdf
11

C. Opinion on the Agencys assessment of the alternative of using grid electricity


for compression load

27. For the reasons that follow, it is my opinion that the Agency failed to consider
the feasibility of grid electricity for compression load for Phase 2 of the Project.

28. The Project is planned to proceed in two separate phases. The initial phase
(Phase 1) will see the installation of two LNG trains with a capacity of 6.84
mtpa of LNG each for Phase 1 (total of 13.7 mtpa). The Proponent has stated
that it plans to achieve an aggressive timeline for Phase 1 of the Project. 34,35
As a result of this aggressive timeline, the Proponent moved quickly to the
Front-End Engineering and Design (FEED) phase, in which the Proponent
instructed all prospective engineering contractors to design the Project to be
powered almost entirely with natural gas. 36,37 A subsequent phase (Phase 2)
will add one additional LNG train to the Project, to meet growing LNG demand
in the future. I am not aware of a timeline for implementing Phase 2 of the
Project. The later start-up date for Phase 2 could allow for additional
opportunities to include alternative power options into the Project due to
expected future technology improvements and electricity infrastructure
upgrades. This could include using grid electricity to power the compression
process of Phase 2 of the Project.

29. The Proponent did assess the technical feasibility of using grid electricity for
compression load. 38 Its study concluded that BC Hydro would not have enough

34
PNW LNG, Environmental Impact Statement and Environmental Assessment Certificate
Application, (2014). Page 2-34. http://www.ceaa.gc.ca/050/documents/p80032/98676E.pdf
35
CEAA Report, Pacific NorthWest LNG Project Environmental Assessment Report, 2016, Pg. 17.
http://www.ceaa.gc.ca/050/documents/p80032/115668E.pdf
36
The Front-End Engineering and Design (FEED) process requires detailed specifications of the
Project, including power supply options for non-compression load. In 2012, the Proponent instructed
all Engineering Procurement providers competing in the FEED process to use natural gas turbines for
both compression and non-compression load. The start of the 2012 FEED study was before the
Proponents 2013 Feasibility study was published that showed that sufficient electricity would not be
available in time to achieve the Proponents aggressive schedule, and therefore grid powered
alternatives were not considered viable.
37
R318 ID# EA02781. A copy of this document is attached to this affidavit as Exhibit G.
38
PNW LNG, Environmental Impact Statement and Environmental Assessment Certificate
Application, (2014). Pg. 2-31. http://www.ceaa.gc.ca/050/documents/p80032/98676E.pdf
12

reliable electricity available in the timeline specified for the Project. I


understand that this timeline refers to the aggressive timeline for Phase 1 of
the Project. 39,40 It is my understanding that no study of the technical feasibility
of using grid electricity for compression load was done for Phase 2 of the
Project.

30. The Proponent acknowledged that opportunities exist to include grid electricity
into Phase 2 of the Project to lower the Projects GHG emissions, including
possibilities for using electricity to power compression load. In a letter to the
Tsimshian Nation Chiefs, the Proponent stated that it looks forward to
incorporating renewable power in future expansion plans (i.e., Phase 2) by,
amongst others, assessing the technical feasibility and viability for
compression processes to utilize electrical power from renewables should they
become available. 41

31. In the CEAA Report, the Agency does not describe or assess the alternative
power option of using grid electricity for compression load. 42 Furthermore, in
the report, the Agency does not discuss opportunities to improve the GHG
performance of Phase 2 of the Project. In particular, the report does not discuss
the technical or economic feasibility of using grid electricity for compression
load for Phase 2 of the Project. This is surprising, given that the Proponent
highlighted that the short timeline was a major obstacle to using grid power for
compression load. 43

32. However, during the Agencys review of the Project, NRCan provided the
Agency with an analysis that assessed the economic feasibility of using grid
electricity for compression load for LNG Projects. The analysis shows that

39
PNW LNG, Environmental Impact Statement and Environmental Assessment Certificate
Application, (2014). Pg. 2-34. http://www.ceaa.gc.ca/050/documents/p80032/98676E.pdf
40
CEAA Report, Pacific NorthWest LNG Project Environmental Assessment Report, 2016, Pg. 17.
http://www.ceaa.gc.ca/050/documents/p80032/115668E.pdf
41
R318 ID# EA02781. A copy of this document is attached to this affidavit as Exhibit G.
42
CEAA Report, Pacific NorthWest LNG Project Environmental Assessment Report, 2016.
http://www.ceaa.gc.ca/050/documents/p80032/115668E.pdf
43
PNW LNG, Environmental Impact Statement and Environmental Assessment Certificate
Application, 2014. Pg. 2-34. http://www.ceaa.gc.ca/050/documents/p80032/98676E.pdf
13

using grid electricity for compression load has a 2% higher internal rate of
return 44 compared to generating power on site, as currently proposed by the
Proponent. 45 In the CEAA Report, the Agency does not mention this study.

33. Finally, the CEAA Report does not include in its alternatives assessment a
comparison between the Project and other relevant comparators, including the
Woodfibre LNG project. Woodfibre LNG will use grid electricity for
compression load (see paragraph 17). 46 It also went through the environmental
assessment process at the same time as the Project. Woodfibre LNG is planning
to have an earlier start up date than Phase 1 of the Project (and of course much
earlier than Phase 2 of the Project). 47 The Agencys failure to consider a
comparison to the Woodfibre LNG project is surprising given that Woodfibre
will use grid electricity for compression load within a shorter timeframe
compared to the Project, while the Projects aggressive timeline was seen as a
major obstacle to the technical feasibility of this alternative power option.

D. Conclusion

34. Above I described two alternatives to power LNG projects other than burning
natural gas: using grid electricity to power non-compression load, and using
grid electricity to power compression load. These two alternatives will be used
in other LNG projects in B.C., notably the LNG Canada project and the
Woodfibre LNG project, the two other most advanced LNG project proposals
for British Columbia. These alternatives offer material GHG emissions benefits.
Specifically, my analysis (see Table 1) shows that the alternatives could reduce

44
Internal rate of return (IRR) is a metric used in capital budgeting measuring the profitability of
potential investments. Internal rate of return is a discount rate that makes the net present value
(NPV) of all cash flows from a particular project equal to zero. Generally speaking, the higher a
project's internal rate of return, the more desirable it is to undertake the project. Investopedia, Internal
Rate of Return - IRR, http://www.investopedia.com/terms/i/irr.asp
45
R318 ID# EA06534. A copy of this document is attached to this affidavit as Exhibit D.
46
CEAA, Decision Statement to Woodfibre LNG, 2016. http://www.ceaa.gc.ca/050/document-
eng.cfm?document=109540
47
Woodfibre LNG, Parent company authorizes Woodfibre LNG to proceed with project, 2016.
https://www.woodfibrelng.ca/parent-company-authorizes-woodfibre-lng-to-proceed-with-project/
14

GHG emissions from the Project by between 6% and 44% compared to the
Project as approved. 48 Over its 30-year lifespan, using these alternatives could
reduce the Projects cumulative emissions by between 8 and 57 Mt CO2e. The
amount of GHG emissions reduction depends on which alternatives are used
and when they are implemented (see Scenario 2 to 5 in Table 1). These
potential emissions reductions are especially significant given the Projects long
operating life, B.C.s legislated long-term climate targets, and Canadas Paris
climate commitments.

35. One way to ensure that the Proponent continues to consider alternative means
of powering the project is to require the Proponent to revisit the technical and
economic feasibility of the two alternatives on a periodic basis. This
requirement was included in draft conditions prepared by the Agency. 49 Draft
condition 3.2 stated that:

The Proponent shall assess, every five years, if electrical


power is available to power components of the Designated
Project, including the compression requirements of Train
3, and shall report the results of that assessment to the
Agency. In the event that electrical power becomes
available, the Proponent shall use it to power non-
compression requirements of the Designated Project and
compression requirements of Train 3, unless the Proponent
can demonstrate to the Agency that it is not technically or
economically feasible to do so.

48
This is seen as a best-case scenario for the Proponent, as it assumes the emissions intensity of 0.21 t-
CO2e/t-LNG. If Phase 2 is substantially delayed the emissions effective average emissions intensity
over the 30 year life of the project would be higher, and the cumulative emissions benefits from
alternative technologies would also be higher.
49
R318 ID# EA02909. A copy of this document is attached to this affidavit as Exhibit E.
15

36. According to documents that I have seen, this draft condition was last included
in draft conditions dated August 23,2016.s0 However, this condition does not
appear in the final CEAA Decision Statement on the Project published on
September 27,2016.s1

AFFIRMED BEFORE ME )
in the City of Vancouver, )
Province of British Columbia )
onApril27,2017. )
)
)
)
)
A commissioner for ) Maximilian Kniewasser
for British Columbia )
)
Pak Yan Anthony HO )
Barrister & Solicitor )
Suite 16 Shoal Point )
21 Dallas Road )
Victoria, BC Y8Y 429 )
Tel: (778) 678-3818 )
Email : anho @pacifi ccell. ca )

50
R3l8 ID# EA02909. A copy of this document is attached to this affidavit as Exhibit ,,E',.
sr
CEAA, Decision Statementfor the PaciJic NorthWest LNG Project,2016.
http://www.ceaa. gc.calO50/documents/p 800321 ll 5669E.pdf

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