OP/ED: Natural gas must be top of mind for B.C.’s next government

The following piece, written by ICBA Chief Economist Jock Finlayson and consulting economist Ken Peacock, first ran in Business in Vancouver on October 15, 2026.

Energy issues have been much in the news in 2026. The ongoing Gulf war has disrupted global markets for crude oil and liquefied natural gas (LNG). Higher oil prices have not left Canada unscathed, while LNG prices in Asia and Europe have contributed to declining demand in some markets. Closer to home, the Carney government and Alberta recently agreed to develop a new oil pipeline to the west coast under an accord to expand Western Canadian oil production while affirming Ottawa’s long-term climate policy goals.

Meanwhile, before the election, the Eby government was adjusting B.C.’s energy policy framework in response to growing concerns about energy affordability, Ottawa’s intent to fast-track more major energy and related infrastructure projects, and British Columbia’s rapidly deteriorating fiscal position and largely stagnant economy.

To the surprise of some, the Premier and several of his Ministers have recently emerged as putative champions of the nascent LNG industry, despite having poured a steady stream of cold water on proposed LNG projects while the NDP was in opposition in the mid-2010s. Building out the LNG industry will attract desperately needed private sector investment and generate revenue for a depleted provincial treasury. In the past 18 months, the NDP also scrapped the consumer- carbon tax (albeit only after Ottawa acted first), tweaked the rules governing natural gas and LNG production, and doubled down on electricity expansion.

While the province has significant potential to increase all forms of energy production, politicians and the media rarely focus on trends in domestic energy demand. How much energy do B.C. residents and businesses consume, and in what form?

Statistics Canada’s data on “final energy consumption” tell the story. Despite years of political chatter about moving away from fossil fuels, B.C.’s end-use energy mix has changed little, with fossil fuels still satisfying about three quarters of end-use energy demand (see table). Refined petroleum products such as gasoline, diesel, and aviation fuel account for two-fifths of consumption. Natural gas supplies another 29 per cent. Electricity chips in about one quarter.

Most of the electricity generated in B.C. comes from non-emitting sources. That is positive. But the mathematical reality is that electricity represents only a modest share of all end-use energy consumed in B.C. Fossil fuel energy sources still dominate in transportation, the heating and cooling of buildings, agricultural production, and most industrial processes. Electricity’s share of final energy demand has scarcely budged, even with emissions taxes and an alphabet soup of government programs and incentives designed to augment electricity’s role in the wider energy system. These programs have cost B.C. taxpayers hundreds of millions of dollars and arguably have acted as a drag on investment and growth. Energy transitions take a long time, and they aren’t much influenced by the episodic enthusiasms of politicians.

The recent policy-driven push to engineer a “big switch” to electricity is real and will persist. Earlier this year, the Carney government pledged to double electricity production by 2050. But doubling production will not, by itself, quickly replace fossil fuels. That depends on whether and when the equipment and processes using those fuels can switch to electricity. While the aspiration is clear, the pace is not. And in any case, Ottawa has very limited jurisdiction over what happens in provincially regulated electricity markets.

We believe natural gas deserves a fresh look in the context of B.C.’s evolving energy policy. It remains a vital energy source for heating and cooling, agriculture, and manufacturing. Its abundance in B.C. could also strengthen domestic energy security and improve affordability. As the least carbon-intensive fossil fuel, jurisdictions around the world view natural gas as an efficient way to expand the supply of reliable base-load electricity. Yet the current B.C. government continues to aggressively discourage domestic natural gas use, including for power generation, even while it lauds and promotes LNG and piped gas exports from those same resources.

By our reckoning, by the early 2030s piped natural gas together with LNG will comprise a quarter of the province’s international merchandise exports, with export volumes at least doubling from current levels. The NDP and the Conservatives both seem comfortable with growing B.C.’s natural gas sector. But to date, the NDP has been unwilling to acknowledge the central place of natural gas in the domestic energy system. Instead, the New Democrats portray it as an “export” industry. That blinkered perspective requires a re-assessment, in our view.

In B.C, industry – notably manufacturing and resource production -- is the biggest energy-consuming sector as well as the number one user of natural gas. Provincial policy presents electricity as the only option to provide the energy needed for business growth and expansion. But the electricity system in B.C. cannot dependably supply the electricity required to support new industrial development.

We recommend that the government elected on October 24 enable a larger role for natural gas in B.C.’s energy system. Embracing natural gas to augment electricity production is the only realistic way to ensure that reliable, cost-effective electricity will be available to local businesses and residents.