March 16, 2017 6:00 am

BC’s LNG sector could meet projected surge in natural gas demand

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As global energy prices have begun to recover from their lowest levels in decades, forecasts continue to project strong growth in global demand for natural gas. These forecasts are creating a new energy narrative for the next decades – one that could mean a bright future for liquefied natural gas from British Columbia.

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The International Energy Agency’s most recent World Energy Outlook reports natural gas will see the strongest increase in demand of all energy sources, projecting global consumption will rise by 50-percent by 2040 as countries look for sources of energy that help reduce their greenhouse gases and cut pollution. British Columbia, with its abundance of responsibly produced natural gas, is a viable energy source for international markets interested in clean energy. Converting B.C.’s natural gas to liquefied natural gas (LNG) – by cooling it until it turns from a gas into a liquid- allows it to be safely shipped to overseas markets where it can make a positive difference. China, for example, is reducing its dependence on coal to produce electricity and is looking to LNG in its shift to more environmentally friendly types of fuel.

The selling point for B.C.’s LNG is the abundant natural gas found in the province’s northeast which can be transported to coastal facilities for cooling and shipping, thereby linking B.C. to these growing global markets. When used as an energy source, natural gas releases up to 50 percent less carbon dioxide than coal and 20 to 30 percent less than oil, according to the International Gas Union. B.C.’s natural gas is also developed to some of the most stringent environmental regulations in the world, making it potentially even more attractive to these countries.

 

Environmental guidelines 

David Keane, president of the organization which represents the seven leading major LNG projects under development in B.C. emphasized that the strict environmental and regulatory systems in place in BC, put BC LNG projects in a good position.

“British Columbia is the only jurisdiction globally that places a price on carbon and it’s the only jurisdiction that has implemented a law, the Greenhouse Gas Industrial Reporting and Control Act, that requires the industry to have a target benchmark for greenhouse gas emission intensity. That essentially limits how many tonnes of greenhouse gases can be emitted by each tonne of LNG produced, on an average annual basis,” said Keane.

Target markets for B.C.’s gas exports include China, India, Japan, Taiwan and South Korea.  Keane believes B.C.’s LNG could also reach markets in Chile and Europe.

“Our expectation – and that of others in industry – is that demand for natural gas will outstretch supply early in the next decade,” said Keane. “Companies developing LNG projects here in B.C. are focused on that long-term potential. They have already invested billions of dollars and even now are investing millions of dollars into their projects each year.”

 

Getting LNG to international markets with local expertise 

LNG projects in B.C. that have secured their federal and provincial environmental approvals include Pacific NorthWest LNG near Prince Rupert, LNG Canada and Kitimat LNG in Kitimat, the Tillbury LNG expansion project in Delta and Woodfibre LNG near Squamish.

“For us, the B.C. LNG industry has been a great opportunity to share our local knowledge and understanding of how the permitting, regulatory approvals and public engagement requirements are integrated into the project,” said Jonathan Turner with Hemmera, a Vancouver-based environmental consultanting firm that has been involved in LNG terminal projects. For example, Hemmera has helped Woodfibre LNG obtain both federal and provincial environmental assessment approvals, as well as obtain an environmental agreement with the local First Nation, Squamish Nation, after undergoing a groundbreaking independent environmental review of the project.

“We’ve been involved in both natural gas pipeline projects and the LNG facility projects.  For [LNG] facility projects, we’ve been able to provide the knowledge and expertise to help Woodfibre obtain its environmental approvals.”

 

Community-focused development 

Communities with the potential for both LNG facilities and natural gas pipelines to deliver gas to the facilities are also preparing and benefitting from the potential for LNG exports. Several B.C. First Nations have been actively involved in LNG projects since the beginning and have already seen significant benefits in their communities.

Crystal Smith, Acting Chief Councillor for the Haisla Nation said the community has seen significant holistic benefits from the early work on the two proposed LNG projects in Kitimat. Her community, located adjacent to the projects, has been involved in development since the beginning, ensuring community members would have access to jobs, training and other benefits from LNG development.

“Our members have been able to look towards long-term jobs, where in the past we’ve been focused on labour in short-term positions.  We are currently seeing members make use of capacity funding so that they are able to focus on the long-term jobs that the projects are going to bring to our territory,” said Smith.

When it comes to addressing any potential environmental concerns related to LNG development so close to their community, Smith said it is through combined efforts and building relationships that the Haisla Nation is able to support resource development in a successful and sustainable way.

“From an environmental standpoint, we understand the implications of each of the projects and we’ve put provisions in place with the proponents and the regulators where we can meet any of the environmental concerns,” said Smith.

For Prince Rupert, the potential of the LNG industry and the work to date has also brought new opportunities in the community.

“The spinoff is the companies are reaching out and supporting non-profits, they are working with First Nations and working with the local colleges for training programs,” said Crystal Lorette with the Prince Rupert Chamber of Commerce and General Manager for the local arts centre. “We have to be ready. We want to see local people employed and we want to see them buy a house and support their family.”

 

Global benefits 

Val Litwin, CEO of the BC Chamber of Commerce, sees the potential for LNG for communities across B.C. and beyond.  These include global benefits that will be experienced if B.C. is able to help countries reduce greenhouse gas emissions and pollution by providing responsibly produced LNG to those markets.

“Renewable energy sources are going to play a significant role in the future, but going forward natural gas will continue to increase in demand because it is an affordable, consistent and cleaner source of energy that is easily available today.”

Litwin said a B.C. should embrace the opportunity to become an international leader in the natural gas industry as the world’s fastest growing economies transition to cleaner sources of energy.

“We need to widen the aperture here, because there is a global win if B.C. can get our natural gas to overseas markets.”

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