BC LNG: Shale gas expert David Hughes debunks minister’s math
Video by Damien Gillis, analysis by David HughesOn Sept. 18, BC’s Minister of Natural Gas Development Rich Coleman gave the above speech to northern mayors and councillors at the Union of BC Municipalities’ annual conference in Vancouver. Coleman makes some extraordinary claims about the opportunity liquefied natural gas presents for BC’s future – acknowledging he’s “an optimist” when it comes to mounting questions about the viability of his government’s “prosperity” vision. Here, renowned geoscientist and unconventional energy expert David Hughes drills down on Coleman’s claims
Rich Coleman recently stated that the province could supply North American markets with 1.8 trillion cubic feet per year (tcf/year) of gas, along with 5 BC LNG terminals exporting to Asia for 84 years – and that would only use 30% of BC’s gas resources.
Let’s do some math.
The National Energy Board has approved 3 export permits, totalling 1.66 tcf/year (Douglas Channel Energy, Kitimat LNG and LNGCanada) and 3 more are pending for 3.1 tcf/year (Exxon, BG Group, Pacific Northwest) – for a total of 4.76 tcf/year.
Now, to give Rich a break, let’s assume that those 5 BC LNG facilities only export 3.2 tcf/year, not 4.76. So Rich needs 5 tcf/year in total, along with supplying North America with 1.8 tcf/year. So over 84 years Rich needs 420 tcf of gas – but wait – that’s only 30% of the gas that he says is recoverable. So Rich says BC has 1,400 tcf of recoverable gas and that leaves lots for his grandchildren and all future generations.
The realities of BC’s gas production
Now let’s look at BC production. It has been on a plateau recently, although at an all time high, at about 1.2 tcf/year, produced from nearly 9,000 wells, despite the much-vaunted shale resources in the Horn River, Montney and Cordova Bay fields of northeast BC.
In fact, these shale fields have only been offsetting the decline in all the rest of BC’s gas production. If Rich bothered to consult his own BC Oil and Gas Commission, he would see that natural gas reserves totalled only 34.6 tcf, or less than 7 years of his 5 tcf/year requirement, at yearend 2011.
Many estimates have been made of a higher “ultimate potential”, particularly for the shale fields, based on undiscovered resources – but it is highly questionable to base longterm policy on the assumption they exist and can be liquidated at the rates committed to.
So to put it bluntly, BC has 34.6 tcf of reserves in the bank and Rich is counting on 1365.4 tcf of undiscovered gas to be discovered and recovered, to cover his LNG projects and commitments to North America as well as look after his offspring.
BC LNG = way more fracking
It is also one thing to look at purported undiscovered resources in the ground and another at what it would take to convert them into a flow rate of 5 tcf/year, which is roughly equivalent to Canada’s entire natural gas production as of 2013. Protests surrounding fracking for natural gas are legion in the U.S. and much of any growth in BC gas production would have to come from a very aggressive increase in the number of fracked wells in northeast BC.
No firm commitments
All this points to the fact that BC is being ill-served by politicians that don’t understand the numbers but seem mesmerized by their own rhetoric (if you say something often enough it must be true). None of the proponents of the major BC LNG facilities have made a final decision to spend the money (you can bet they have done the math), and the fourth LNG export facility in the US was recently approved.
BC’s LNG plan and Rich Coleman’s rhetoric are grasping at straws in the absence of any credible, longterm energy or economic strategy.
David Hughes is a geoscientist who has studied the energy resources of Canada for nearly four decades, including 32 years with the Geological Survey of Canada as a scientist and research manager. As Team Leader for Unconventional Gas on the Canadian Gas Potential Committee, he coordinated the recent publication of a comprehensive assessment of Canada’s unconventional natural gas potential.