A consultation paper and request for feedback on a proposed new set of regulations limiting greenhouse gas emissions (i.e. methane) from proposed new LNG export facilities in Nova Scotia--should those facilities get built.

1. Consultation Paper and Request for Feedback
Liquefied Natural Gas
Proposed Greenhouse
Gas Standard

2. Introduction
Nova Scotia’s Environmental Goals and Sustainable Prosperity Act sets an economy-
wide greenhouse gas (GHG) emission target of at least 10 per cent below 1990 levels
by 2020. Currently in Nova Scotia, the electricity sector is our largest source of GHGs
and is the only sector of the economy that is required by law to reduce GHG emissions
from its facilities. By 2030, emissions from electricity generation will be cut by more
than half.
The production and export of liquefied natural gas (LNG) to international markets is an
important economic development opportunity for Nova Scotia. The province welcomes
this opportunity while recognizing that the production of LNG is an energy-intensive
process and that LNG facilities will be large emitters of GHGs.
Technology choices in the design of an LNG facility can affect the GHG emissions
associated with LNG production over the lifetime of the facility. To enable
environmentally sustainable development of LNG, Nova Scotia Environment is
proposing to develop regulations for LNG facilities.
The purpose of this consultation paper is to seek feedback about the proposed
approach from stakeholders and the general public.
Objectives of the Proposed GHG Standard
• To provide the industry with regulatory certainty through transparent and consistently
applied GHG performance expectations
• To drive innovation and minimize GHG emissions from new LNG facilities
• To contribute to Nova Scotia’s GHG reduction goals and prepare our economy for a
low-carbon future
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3. Proposed GHG Standard for LNG Facilities
About LNG production
LNG is natural gas that has been condensed into a liquid state. This allows for ease of
transport to overseas markets.
The conversion of natural gas to LNG involves two primary steps:
• treatment of the feed natural gas to reduce impurities that interfere with liquefaction
• liquefaction, which reduces the temperature to about -162 degrees Celsius
Factors that impact GHG emissions
A variety of factors can have an impact on GHG emissions from LNG facilitates.
Factors that operators have the most influence over include those that are related to
facility design and technology, including
• choice of liquefaction process and power generation
(choice of turbines and configuration)
• use of waste heat
• implementation of other energy efficiency or GHG-mitigating technologies
Most GHG mitigation opportunities must be captured in the engineering and design of
the facility, rather than making operational improvements after the facility is built.
Setting a benchmark for GHG emissions intensity
Nova Scotia Environment is proposing to implement a regulated performance standard
for LNG facilities. A performance-based standard requires a GHG emissions intensity
be met, but allows operators to choose any available method to meet that intensity.
GHG emissions intensity in this context is defined as the GHG emissions associated
with producing one tonne of liquefied natural gas:
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GHG emissions intensity = Total annual GHG emissions from a LNG facility [tonnes carbon dioxide equivalent (CO2
e)]
Total annual LNG production (tonnes)

4. Proposed benchmark: 0.24 tonne CO2
e/tonne of LNG produced
For LNG facilities, Nova Scotia Environment proposes a facility GHG emissions
intensity standard of 0.24 tonne CO2
e/tonne of LNG produced. This intensity is based
on findings from a study commissioned to better understand opportunities to minimize
GHG emissions from LNG in Nova Scotia. The study is available for download at:
www.novascotia.ca/nse/resources/public.consultation.asp
The GHG emissions intensity standard is intended to encourage operators to optimize
efficiency and mitigate GHG emissions from LNG facilities.
What will be included in the calculation
For the purposes of calculating a GHG emissions intensity, only emissions associated
with the production of LNG at the facility will be considered as regulated emissions.
This will include all facility GHG emissions (i.e. combustion, venting, and fugitives) from
the point when gas enters a facility to where it is loaded onto a vessel to go to market.
In addition, GHG emissions associated with grid electricity consumed on site will also
be included in the GHG emission intensity.
What will NOT be included in the calculation
GHG emissions associated with upstream activities, such as gas extraction and pipeline
transportation are not included. GHG emissions associated with downstream activities,
such as the shipping and combustion of LNG by consumers are also not included.
Options for compliance
Option to design an efficient processing facility: LNG operators will have the flexibility
to meet the GHG emissions intensity standard through choices in the design of
their facility.
Option to contribute to a compliance fund: NSE is also considering additional options for
flexible compliance, including the option for facilities to contribute to a compliance fund
at a rate of $25/tonne CO2
e for emissions that exceed the set performance standard.
The revenue deposited in the fund would be used to achieve a variety of climate change
and GHG reduction goals. In other jurisdictions where funds have been established
(e.g., Alberta’s Climate Change Emissions Management Fund, British Columbia’s LNG
Technology Fund), revenue has or will support energy efficiency, clean technology,
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5. biological carbon sequestration, climate change adaptation, and other climate
change projects.
Penalties for exceeding the benchmark
If an LNG operation’s GHG intensity during a calendar year exceeds 0.24 tonne CO2
e/
tonne LNG produced the amount an LNG operation will be required to contribute to a
compliance fund will be determined using the following equation:
[Facility GHG emission intensity (tonne CO2
e/tonne LNG) –0.24 tonnes CO2
e/tonne LNG] x
total annual LNG production (tonne LNG) x $25/ tonne CO2
e
Regulations
After the LNG GHG standard is finalized, NSE will undertake a regulatory development
process on more detailed elements of regulatory design.
Submit your feedback
We welcome your comments. We would especially like to hear your responses on the
following questions:
1. About the benchmark: Do you consider the proposed facility emission intensity
benchmark to be achievable in Nova Scotia? What particular constraints and
opportunities are you aware of in Nova Scotia that affect LNG facilities’ ability to
minimize GHG intensity?
2. About the fund: A fund is being proposed as an option for compliance. In your
view, is the price per tonne for fund contributions currently under consideration a
reasonable rate, and do you have additional comments on how the rate should be
set? How should funds be directed to improve the effectiveness of the policy? Are
there other compliance mechanisms that should be considered in the framework?
3. About the calculation: Do you have comments on how facility boundaries should
be set, or other issues related to GHG quantification for compliance purposes?
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6. You can provide your feedback by mail or email.
E-mail address: policy1@novascotia.ca
Mailing address:
LNG Greenhouse Gas Standard Comments
Nova Scotia Environment
Climate Change Unit
1903 Barrington Street
2nd Floor, Suite 2085
PO Box 442
Halifax, NS B3J 2P8
To request a printed copy of this paper, call 902-424-4300
Deadline for submitting feedback: July 29, 2016
All feedback summited to Nova Scotia Environment will be considered public and,
therefore, may be shared through freedom of information requests, under the Nova
Scotia Freedom of Information and Protection of Privacy Act.
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