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British Columbia LNG industry in B.C. threat to environment and energy security: study

An artistic rendering of Pacific NorthWest LNG‘s proposed liquefied natural gas export terminal on Lelu Island, near Prince Rupert in northwestern B.C.

Pacific NorthWest LNG

B.C.'s liquefied natural gas industry threatens to harm the environment and erode Canada's energy security, says a new analysis.

Geoscientist David Hughes, in a study for the Canadian Centre for Policy Alternatives, warns that LNG is far from the clean fuel that the B.C. government portrays it to be. Water filling the equivalent of nearly 22,000 Olympic-sized swimming pools a year would be required in the industry's fracking process in drilling for natural gas in northeast British Columbia, he said.

"Almost all of B.C.'s future gas production is expected to involve fracking, which requires much more water and produces much more greenhouse-gas emissions than conventional drilling," Mr. Hughes said in his 50-page report to be released Tuesday. "A major public concern is the amount of water and the chemicals and other additives used in the fracking process, as well as the potential for contamination of surface water through surface casing failures and improper disposal of fracking waste water."

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There are 19 B.C. LNG proposals in the works, but industry experts say there is room for only three or four projects at most in the province. Mr. Hughes criticized the National Energy Board for approving licences for exports that would go through a dozen terminals in North America. One licence previously awarded to the Douglas Channel Energy project, originally backed by B.C. LNG Export Co-operative, has been revoked, leaving 10 proposals in B.C. and two in Oregon (which would utilize some Canadian natural gas) that have secured NEB export licensing approval so far.

"Canada's long-term energy security may be compromised by LNG export plans," said Mr. Hughes, a former research manager with the Geological Survey of Canada. "The NEB has, to date, approved 12 terminals with a total capacity of 251 trillion cubic feet (tcf) of LNG exports over 20 to 25 years. However, the NEB's own modelling shows that only a small percentage of that amount – 18 tcf – is available for export, even with a three-fold ramp-up in B.C. production."

Several major projects are seeking to transport northeast B.C. natural gas through new pipelines to planned terminals in the province's north coast, where the gas would be super-cooled into liquid form and loaded onto Asia-bound LNG tankers.

In an interview, Mr. Hughes said the B.C. government has overstated the amount of natural gas available for export.

But B.C. Natural Gas Development Minister Rich Coleman said the province has enormous resource potential. "B.C. has a vast supply of natural gas to meet domestic and international demands for more than 150 years," he said in a statement. "The province, in conjunction with the B.C. Oil and Gas Commission, has developed a natural gas production forecast for LNG that looks at the supply needed to have five LNG plants operating."

Mr. Coleman also said the B.C. government is addressing concerns about the fledgling LNG sector's impact on the environment. "The province's greenhouse gas benchmark sets the highest standard for LNG facilities in the world. Our incentives and flexible options will encourage industry to invest in energy efficiency and clean energy – keeping our LNG industry clean, and competitive."

The NEB said market forces will dictate which projects forge ahead. "The NEB evaluates each application for an LNG export licence on a case-by-case basis. Only if the NEB determines that the proposed LNG exports are surplus to Canadian needs would a licence be issued," NEB spokeswoman Katherine Murphy said in an e-mail. "The board has technical expertise in gas market supply and demand fundamentals, and geological resource assessment."

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Pacific NorthWest LNG's proposed terminal on Lelu Island near Prince Rupert has been met with opposition from the Lax Kw'alaams First Nation, but the joint venture led by Malaysia's Petronas is still viewed by many analysts as the front-runner. Pacific NorthWest LNG, which wants to launch exports as early as 2019, believes time is of the essence because fierce global competition could squeeze out most B.C. LNG proposals.

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