Report calls for electric-run LNG plants
VICTORIA - Oil and gas companies planning to develop liquefied natural gas operations in British Columbia should be forced — or strongly encouraged — by the provincial government to run their plants with renewable electric energy instead of greenhouse gas-emitting natural gas, says a Clean Energy Canada report released Wednesday.
The report, "Lock In Jobs, Not Pollution," says B.C.'s proposed LNG industry would create more jobs and less pollution if electricity is used to power the plants.
Clean Energy Canada concludes electric-drive LNG plants could create up to 45 per cent more regional jobs and cut harmful greenhouse gas emissions by one third. It also concludes the impact to the bottom line would be minimal, with a two per cent rise in the break-even price on natural gas.
The 21-page report says requiring LNG developers to drive their projects with electricity unlocks the multiple social, employment and environmental benefits of LNG operations.
The B.C. government is expected to outline parts of their LNG tax and regulatory policy next month in the throne speech and budget, but Premier Christy Clark has said the final package may not be ready for several months.
Clark has said exporting LNG to markets in Asia represents a trillion-dollar economic opportunity that could generate up to 100,000 jobs and generate enough revenue for the province to eliminate the debt, which is currently pegged at more than $60 billion.
She said the government aims to create the cleanest LNG operations in the world, but suggested last year that hitting the government's targets to reduce greenhouse gas emissions by one third by 2020 may be a challenge if the LNG industry expands.
Clean Energy Canada spokeswoman Merran Smith said the Liberal government can mandate electric-drive LNG plants or work with industry to create and support conditions that favour the use of electric-drive LNG plants powered from the BC Hydro grid or from energy-harnessed wind or run-of-river projects.
Smith said the majority of the world's LNG operations are powered by natural gas, but a plant in Norway is electric drive and construction on an electric-drive LNG plant in Freemont, Texas is scheduled to start this year.
"It's not too late," Smith said. "Companies are still making plans and engineering this. The government is still making decisions about the policies related to LNG and they have been clear that they want to maximize the use of renewable power. Now is the time to step up and make sure this happens."
The report said running LNG plants on renewable energy such as electricity will leave a lasting legacy of clean-power infrastructure for communities and companies in B.C.'s north.
"Compared with a business-as-usual approach —which we characterize here as a 'Fossil Energy scenario' — maximizing renewable energy use by LNG facilities will increase regional permanent employment related to LNG by 45 per cent, decrease carbon pollution by 33 per cent, reduce smog, and build the foundations of a renewable energy economy in Northwestern British Columbia," the report said.
"Further, government and industry can capture all these benefits without sacrificing competitiveness. According to our conservative assessment, the necessary technical solutions will increase the selling price of LNG of two per cent relative to the standard fossil energy scenario."
Smith said companies have traditionally considered natural gas to power LNG plants, but moving to electricity is not new or complicated.
"We think there needs to be a fair balance between the benefits to British Columbians and the benefits to corporations," she said.
Liquefied national gas consultant Zoher Meratla, who has worked on LNG plants in Qatar, Algeria and Peru and helped with the original design work on the Kitimat Chevron LNG project, said companies are looking for stability and solid regulatory frameworks from the government as they consider making final investment decisions.
Meratla, who is based in Whistler, B.C., said he is presenting a paper this month at an energy forum in Vancouver that supports electric-driven LNG plants for B.C.
"The information I have from interfacing with them (LNG companies) is they only want one thing from the government: tell them which way to go," he said. "Set a policy. I think the biggest problem we're facing is a lack of policy."
Meratla agrees that electric-drive LNG will create less pollution and actually save companies money because they won't be burning natural gas.
"Electric drive is really the best solution around for everybody," he said. "It's good for the proponent. It's very good for the environment. It's very good for the communities because they don't have to face the pollution."