Beneath the glowing rhetoric surrounding BC’s promised liquefied natural gas (LNG) boom lies a dirty little secret: the vast majority of the industry would be powered by controversial fracking in northeast BC. Add that to the huge carbon footprint and local air pollution from the plants themselves and “clean” LNG becomes an oxymoron of epic proportions.

Dirty fracking

The relatively new technique of fracking involves hoovering up enormous volumes of water out of lakes and rivers, injecting it with fine sand and largely unknown, toxic chemicals, then blasting this cocktail deep underground to crack open shale formations where gases are “trapped” (as if they’re just begging to be freed!).

[quote]Every time you hear LNG, think of one of the least efficient energy systems every invented. Think fracking. Think water contamination. Think asthma. Think climate change…[/quote]

This “game-changing” combination of technologies has, in the decade or so that it has been in widespread use, provoked a wave protests, bans and moratoriums around the world, over its impacts on air, water, and human health.

In touting the economic potential of LNG terminals on BC’s coast – of which a dozen or so have been proposed, along with four major pipelines to supply them with gas from northeast BC and Alberta – the BC Liberal Government ignores the fact that they would be powered by what shale gas expert David Hughes calls “a very aggressive increase in the number of fracked wells in northeast BC”.

LNG = Way, way more fracking

Today, BC produces about 4 billion cubic feet a day of natural gas. It has taken us 50 years and 39,000 wells to get to this point.

The consequences are evident whenever you fly over the Peace Valley region near Fort St. John, or the Horn River Basin, northeast of Fort Nelson. Geometrical patterns of well pads, industrial roads, seismic lines, processing plants, compressor stations and massive water pits carve up the northern Boreal landscape as far as the eye can see.

It’s hard to imagine what a several-fold increase in all this activity would look like, but that’s precisely what would be required to power BC’s LNG industry.

Presently, a little under half the gas coming out of BC is from fracking – the rest from “conventional” gas plays. But that balance is quickly shifting. We’ve already tapped most of the easy, lower-impact stuff and the majority of new supplies will come from shale gas.

BC’s Minister of Natural Gas Development, Rich Coleman, recently revealed the extent of his government’s vision for “clean” LNG: they want to see five of these plants built, with three up and running by 2020.

If you look at the volumes of the four pipelines proposed to supply these plants – two to Kitimat, the other two to Prince Rupert – the combined capacity ranges from 10-15 billion cubic feet/day (2.5 to almost 4 times our current production).

Minister Coleman intends to continue supplying BC’s own energy needs and our Canadian and US customers – this new LNG would come on top of that 4 billion cubic feet/day.

That means a several-fold increase in gas production into the distant future. Since most of that new supply would have to come from fracking, you can see why a massive increase would be required to feed LNG.

The impacts would extend in many directions. The 11 billion or so litres of water reported by the Oil and Gas Commission as used and contaminated for fracking each year in BC would be upped several-fold – this in a region often beset by drought conditions. The potential health impacts (only now being investigated by the BC government) from flaring, escaped methane and even more toxic gases would also be ramped up accordingly.

See timelapse animation of increasing water withdrawals for fracking in the Horn River Basin (story continues below).

Fracked-up economics

Fracking has been a victim of its own success. While it has opened up new supplies of previously inaccessible gas, the combination of this new technology and reduced royalties from governments like BC’s to incentivize development has seen the North American market flooded with gas.

The result has been tremendous downward pressure on domestic prices. A resource that once fetched $8-plus per unit, is now routinely below $4, sometimes much worse. But in Asia, prices have remained high – upwards of four or five times the local price. So the big idea is for North American producers to access these markets and capture higher returns. (I won’t touch the reams of evidence undermining this model here – we’ll cover that in the next piece in this series).

Climate and air pollution

The problem is that in order to carry the gas to these overseas markets, it has to be cooled to minus 160 degrees celsius, and that takes enormous amounts of energy – far more than we can supply with our public electricity system (though the BC government wants to flood a 100km section of the Peace River to build a dam that would help power LNG plants through taxpayer-subsidized pubic energy).

So a government that just a few years back brought in a “Clean Energy Act” with much fanfare is now back-pedalling, allowing the industry to use its own gas to create electricity to cool and liquefy the gas. The result would be a massive increase in BC’s carbon emissions.

More than that, local residents in Kitimat and Prince Rupert could see dangerous increases in air pollution. The BC government only recently announced a study into air pollution from three proposed Kitimat plants for local residents. With the modernization of Alcan’s Kitimat aluminium smelter set to double its SO2 output, even a government bullish on LNG is compelled to consider what these new LNG plants would mean for public health.

Yet an air pollution expert from the University of British Columbia, Prof. Douw Steyn, feels the $650,000 budget and six month timeframe for the study is woefully inadequate. I can understand why they want it. “The big question is: ‘Is that timeline being driven by the cause of industry or by prudent science,'” Steyn asked upon the study’s announcement last week.

Moreover, why weren’t these studies carried out before the government staked BC’s economic future on an LNG boom?

BC’s low standards

A recent study by Clean Energy Canada found that even if we’re to ignore the dirty source of BC’s LNG (fracking), the cooling process itself would be far dirtier per unit of energy produced than comparable operations in places like Australia and Norway – further putting the lie to Coleman and co.’s “world’s cleanest LNG” boasts.

In reality, BC’s LNG industry would have a profound impact on the province’s carbon footprint – a highly irresponsible economic model at the very time the world’s top scientists are reminding us of the effects of man-made climate change. While other industrialized nations are reaping the benefits of a boom in renewable energy development and building a green economy, Canada is still hellbent on old-world, fossil fuel economics.

LNG’s inefficiency

In closing, let me describe, in a nutshell, BC’s economic vision, if this LNG scheme proceeds as planned:

We will take tens of billions of litres of water out of our rivers and lakes, inject them full of chemicals, then use enormous amounts of energy to blast this concoction underground and recover gas. More energy will then used to clean and process the gas, before it’s piped 800 km across northern BC, powered by more, energy-intensive compressor stations along the way.

Then, even more gas and electricity will be consumed in massive quantities to cool the gas, which will be loaded onto ships whose trans-Pacific voyage is powered by even more gas. Meanwhile, another ship carries our raw logs and metals to a factory in China, where our gas is burned so those raw materials can be manufactured into finished goods, which are then put on a ship, fuelled by bunker diesel, on its way back to Canada.

All so those goods can be trucked to a Walmart, where we can drive our cars to save a few bucks on a cheap table that ends up in the landfill a few years later.

That’s the future BC’s politicians are trying desperately to build. There is nothing “clean” or visionary about it.

So every time you hear LNG, think of one of the least efficient energy systems every invented. Think fracking. Think water contamination. Think asthma. Think climate change…

Whatever you do, don’t think “clean”.

During a recent state visit by Canadian Prime Minister Stephen Harper to Malaysia, host PM Najib Razak pledged a “gargantuan” investment of $36 Billion for gas infrastructure in British Columbia, through national energy company Petronas.

The Sunday announcement comes following last year’s controversial $5 billion-plus takeover of Canadian company Progress Energy and early-stage plans for a pipeline and liquefied natural gas (LNG) plant near Prince Rupert, on BC’s north coast. It also marks the first tangible “final investment” commitment from any of the dozen or so LNG proposals that have flooded BC over the past couple years, involving more than 20 local and international players.

While companies like Chevron and Apache have together ponied up $500 million for engineering, surveying and early construction work (Chevron and Apache’s joint venture in Kitimat is the only one so far to obtain required permits), none have taken the plunge on the tens of billions required to follow through on their pipeline and LNG plans.

$36 Billion – that’s a lot of ringgits. If it were my state-owned energy company, I’d want to be darned sure my investment was justified.

So here is a little unsolicited investment advice for Mr. Razak, free of charge.

We don’t actually have all that gas

If you listen to BC’s Minister of Natural Gas Development, Rich Coleman, BC has discovered a magical, bottomless well of gas – through the controversial, new extraction method of hydraulic fracturing, or “fracking”. Mr. Coleman may indeed have a boundless source of fuel: it’s called hot air.

While we’ve uncovered new supplies in northeast BC, trapped in shale formations deep underground, the numbers being quoted by the likes of Coleman are wildly out of touch with reality.

I put Mr. Coleman’s figures from a recent speech at the Union of BC Municipalities’ annual convention in Vancouver to one of Canada’s top independent shale gas experts, David Hughes. Mr. Hughes is a recently retired 32-year senior geoscientist and manager for the Geological Survey of Canada. He led the development of the federal government’s coal registry and was team leader for unconventional gas on the Canadian Gas Potential Committee.

In short, the man knows what he’s talking about – and he’s not speaking for industry or government.

In his speech, Coleman boldly predicted BC has enough gas to supply 5 LNG terminals for 84 years – on top of local needs and sales to Canadian and US customers – while using only 30% of our known reserves.

As Mr. Hughes counters, drawing on data from BC’s own Oil and Gas Commission (you’d think the minister would check his own government’s figures!), that statement represents an exaggeration of about 4000% from our real known reserves:

[quote]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…[/quote]

Surely, there will be new discoveries to come – particularly in the yet untapped Liard Basin, where Apache claims to have found monster reserves through recent test drilling – but that’s not what Mr. Coleman is saying when he uses the term “known reserves”. Moreover, the idea that we will discover 40 times more gas – let alone that all that proves recoverable – simply stretches the imagination.

Even if Petronas was the only LNG project and pipeline (one of four major ones proposed) to go forward, the availability of gas required to fill these demands and justify this kind of investment is highly questionable – nay, darned near impossible.

At the moment, BC produces about 4 billion cubic feet/day (bcf/day) of gas. The capacity of Petronas’ proposed pipeline, to feed its LNG terminal with gas from northeast BC, is 2-3.6 bcf/day. That means an increase of half to almost all of the gas produced in BC today, just to fill Petronas’ pipeline and plant.

Minister Coleman’s answer to skeptics? “I’m an optimist!”

That’s all good and fine – I just hope the decision-makers in Malaysia have a few realists on the payroll.

Fracking’s unprecedented decline rates

Even if it were possible to fill Petronas’ pipeline in the short term – again, assuming it beats out all its competitors to secure this supply – Prime Minister Razak acknowledges this project is a “long-term” investment.

The experience of Amercian fracking companies – the first out of the gate with this technology – should raise some big, red flags. Today, some of the major, early fracking booms south of the border are going bust – in places like Pennsylvania’s Marcellus shale.

Why? As Hughes points out, after analyzing years of actual wellhead and production data, the decline rates for unconventional shale gas are far steeper than they are for conventional supplies – of which we’re fast running out. The top 5 shale gas plays in the United States, which account for 80% of all shale gas production, are seeing an 84% decline rate over 3 years. That means that while plays like Petronas’ north of Fort St. John, BC, are pumping out large volumes today, they may quickly dwindle.

These are US figures – we won’t know until more specific BC wellhead data is analyzed just what decline rates look like here. Nevertheless, this should ring some alarm bells.

Mr. Hughes says that just for America’s shale gas production to remain flat – keeping ahead of these huge fall-off rates – would require 7,600 new fracking wells every year, at a cost of $42 billion. So Mr. Razak’s $36 Billion might not go as far as he thinks.

LNG’s exploding costs

It’s not clear how earlier discussion of a $20 Billion investment in BC gas infrastructure ballooned to $36 Billion with this announcement, but it may be a prudent reassessment.

This kind of infrastructure has a history of ballooning budgets, as we can witness with Australia’s massively over-budget Gorgon plant, being built by Chevron. As of last year, the project had exploded to $52 Billion form original estimates of $37 Billion – and at that time it was still 18 months away from completion. So be prepared to chip in some extra ringgits on top of that $36 Billion.

Environmental issues

Most of this new gas would have to come from what Mr. Hughes calls “a very aggressive increase in the number of fracked wells in northeast BC.” Fracking has ignited a wave of protest around the world – particularly in the US – driving bans and moratoriums in dozens of jurisdictions. While concerns in BC have remained relatively muted so far, Canada is already seeing a strong reaction to the controversial practice.

Quebec passed a moratorium last year, and in New Brunswick, opposition from local aboriginal communities and their supporters is heating up fast, forcing a meeting with the province and RCMP. Quebec’s moratorium has led to trade strife, with a NAFTA challenge launched against the province last week.

In the Yukon, First Nations recently passed a resolution against fracking over concerns for its impacts on their water.

How long before BC joins this chorus of fracking protests? With evidence of water contamination and air pollution impacts mounting, can BC remain an opposition-free haven for shale gas for the decades Malaysia requires to recoup its investment?

Indigenous opposition

Surely, Malaysia’s energy advisors are aware of the impact First Nations opposition to the Enbridge Northern Gateway project has had on that proposed oil pipeline and terminal’s prospects.

While the perception is that BC’s First Nations are largely supportive of fracking and LNG so far, beneath the surface, there are already cracks forming.

I recently interviewed a hereditary chief whose nation is steadfastly opposed to all pipelines proposed to cross its territory, which includes Enbridge and two gas pipelines. Petronas may be able to skirt this particular 22,000 square km territory with its pipeline routing, but that assumes neighbouring nations don’t follow suit.

In northeast BC, where Petronas gets its gas, there are mounting concerns among First Nations over the impacts of fracking on their local waters.

All it takes is serious opposition from First Nations at one of the many points along the gas’ trajectory to tankers on the coast and Malaysia’s massive investment will be put in real jeopardy.

Getting off on the wrong foot with disappearing river

Petronas still needs to receive environmental approval for its proposed pipeline and plant – and that may prove more difficult than it assumes.

The company began by trying to evade environmental review altogether – a ploy that failed. Then, it made a major misstep when it erased Canada’s second largest salmon river, the Skeena, from its project description.

After The Common Sense Canadian and other media outlets took the story public from a release by West Coast Environmental Law, the Canadian Environmental Assessment Agency agreed to extend the public consultation period on Petronas’ draft plan – acknowledging the mistake and inserting a proper map into the project description.

The terminal would indeed pose a serious threat to beleaguered Skeena salmon stocks, encroaching on important estuary habitat. Some upstream First Nations were forced to cut their food fishery this year for the first time in memory as a result of collapsing stocks.

The message to Malaysia is this: Canadians care a great deal about their salmon. Don’t expect this plant to sail through environmental assessment, and even if it does, don’t expect an easy ride.

Treading on Bear Country

Petronas faces another environmental battle over its proposal – the plan to bisect a the Khutzeymateen Grizzly Sanctuary. This special section of protected bear habitat lies in the path of Petronas’ proposed pipeline to the coast, a fact that has angered some of the province’s top bear biologists and already stirred up controversy in the media. Petronas should ask Enbridge about its experience infringing on BC’s Great Bear Rainforest to get some idea what kind of backlash awaits their project over the pipeline route.

Finally, with local air pollution concerns being raised and citizens beginning to delve into the enormous potential impacts of LNG – as I observed on a recent speaking tour through five northwest BC communities – companies like Petronas will face mounting opposition to their plans.

A little food for thought for Prime Minister Razak before he  plunks down all those ringgits.

LNG and fracking are risky business.

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British Columbians have been hearing a lot of glowing rhetoric from their political leaders about the economic promise of building a new liquefied natural gas (LNG) industry. We’ve heard that our gas – which is fast running out of steam in the North American market – will be transformed into a $100 billion “prosperity” fund for our provincial treasury, all by cooling and exporting it to new markets in Asia.

The extraordinary claims being levied by the BC Liberals have gone largely unquestioned in the mainstream media – which is why, all this week, The Common Sense Canadian will be drilling down on the government’s policy.

For starters, I will be speaking in six different northwest BC communities, alongside local organizations like Skeena Watershed Conservation Coalition, Douglas Channel Watch and NoMorePipelines.ca.

Through these events – highlights of which will be taped and posted to The Common Sense Canadian – along with a series of articles and videos in these pages, we’ll be examining the entire BC LNG plan. From the fracking in northeast BC and Alberta that would need to be dramatically ramped up to feed these coastal plants, to the four-plus major, new pipelines that would cross BC’s wilderness and communities to pump the gas to Kitimat and Prince Rupert, to the plants themselves, to the world’s largest tankers that would carry the liquefied gas to Asia.

We’ll discuss the taxpayer subsidies that would fund the the world’s richest companies – from royalty breaks to infrastructure, to the $10 Billion proposed Site C Dam, whose power is only required for the enormously energy-intensive LNG cooling process.

We’ll expose the truth about the BC Liberals’ claims that this gas will somehow constitute “clean energy” – when it is in fact one of the world’s dirtiest and least efficient energy sources. We’ll examine the massive increase to BC’s greenhouse gases that would arise from this process – potentially upping the province’s total carbon footprint by several fold.

We’ll look at the tens of billions of litres of fresh water that would need to be drained each year from northeast BC’s rivers and lakes and shot full of unknown, toxic chemicals for fracking.

Finally, we’ll examine the economic realities of a program that promises to be the biggest boondoggle in the province’s history – marshalling the best available evidence from around the world, rather than the wishful thinking of Natural Gas Development Minister Rich Coleman and his government.

In short, we will present the other side of the BC LNG fairytale being concocted by BC’s political leaders and media. And we’ll look at some sustainable economic alternatives that could provide a real, healthy future for the people and environment of BC.

If you’re in one of the communities in northwest BC that will be directly affected by these proposed pipelines, LNG plants and terminals, I invite you to join us for one of these presentations – to learn more about the consequences for the health of your community, environment, and economic future (click each link for more details).

• Smithers: Sept. 30 – 7pm
• Moricetown: Oct. 1 – noon
• Old Hazelton: Oct. 1 – 7pm
• Terrace: Oct. 2 – 7 pm
• Prince Rupert: Oct. 3 – 7 pm
• Kitimat: Oct. 4 – 7 pm

And stay tuned to exclusive coverage and analysis from The Common Sense Canadian and our team of expert commentators. Together, we’ll get to the bottom of this BC LNG and fracking pipe dream.

VICTORIA – British Columbia’s pledge to develop the world’s cleanest liquefied natural gas plants looks hazy to an environmental organization that says the province appears to be prepared to allow oil and gas companies to belch carbon emissions three-times higher than those in Australia and Norway.

A report released Monday by Clean Energy Canada, an affiliate of Tides Canada, warns that without B.C. government policy leadership, LNG produced in the province could emit more than three-times the carbon produced at other plants around the world.

“We conclude that this leadership gap can be closed if the government creates the policy environment that both directs and incentivizes the energy industry to employ a mix of strategies and technologies proven to drive carbon pollution down all the way across the life cycle of LNG production,” states the report entitled “The Cleanest LNG in the World?”

But B.C. Environment Minister Mary Polak said the report may be making assumptions on government directions before they are officially decided.

Government blowing smoke?

Polak said she is under directions from Premier Christy Clark to develop the cleanest LNG industry and challenging negotiations are underway that take into account the province’s goal to be a world environmental leader without adversely affecting the bottom line of the oil and gas firms who want to invest in the province.

Clark’s Liberals have said LNG development represents a trillion-dollar economic opportunity that could create 100,000 jobs.

“They’ve outlined a whole number of ways in which we can address the challenges posed by LNG development and greenhouse gases,” said Polak about the report.

“For our part, we know that that’s part of the balancing that we need to do in our negotiations with the proponents because, of course, we have to balance our interest in protecting the environment with the viability of their projects, and so we have to take a look at what’s possible for them and what hits their bottom line.”

LNG in conflict with climate targets

B.C.’s environmental goals include the Greenhouse Gas Reduction Target Act of 2007 that put into law the cutting of greenhouse gas emissions by at least 33 per cent below 2007 levels by 2020. The government has been steadfast in its pledge to meet those targets.

Clean Energy Canada spokeswoman Merran Smith said the emissions targets are already in jeopardy, but increased carbon emissions from proposed LNG makes the reduction target virtually impossible to achieve.

She said the Clean Energy Canada report focused on the carbon footprint that could be left from the proposed B.C. LNG plants if the government allows the plants and gas-field operations to be powered by natural gas as opposed to electricity, which is considered clean and renewable.

“There’s really no details on what does that mean, cleanest energy in the world,” she said.

[quote]What the companies are proposing to do in B.C. would be three times dirtier than the existing cleanest LNG in the world.[/quote]

Cooling gas by burning gas

Smith said most of the companies proposing LNG developments in B.C. are putting forward plans to power their operations with natural gas.

Earlier, Natural Gas Minister Rich Coleman said at least two plants were proposing to run part of their operations with electricity. There are currently about a half dozen LNG plant proposals in B.C.

Smith said B.C. could reach its goal of the cleanest LNG industry in the world if electricity was used to power the proposed LNG plants on the northwest coast and the gas fields in northeastern B.C. She said gas companies should also move to carbon capture technology that involves storing carbon dioxide emissions underground.

“These technologies are proven and in places like Australia and Norway the government mandated them,” said Smith.

Carbon tax on way for LNG

Clark has said the Liberals will introduce legislation next spring that includes a taxation policy and regulations relating to LNG developments.

Polak said she was not about to speculate about the environmental rules that will be included in that legislation.

But the government did offer a package royalty credits of almost $116 million Monday to help companies build roads and pipelines for the natural gas industry in the province’s northeast.

More taxpayer subsidies for gas industry

The government said the royalty credits will go towards 12 new infrastructure projects in northeast B.C., that will eventually advance the growth of LNG development in B.C.

Last week, Clark offered municipal leaders from northwest B.C. concerned about an LNG-driven population boom $150,000 to conduct studies on their hospital, school, sewer, road, bridge and social needs.

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