Editor’s note: This article, from law firm Clark Wilson LLP, is authored by Warren G. Brazier and deals with using renewable energy from hydro and wind to power natural gas exploration and transmission. Conventionally, natural gas would be used to drive gas pumps. But if renewable energy is used, more gas is left for sale, and taxes to local communities.
Author Warren G. Brazier.
It is no secret that beneath the surface of the northeast section of the province of British Columbia lies very large natural gas reserves. Last week, the Provincial Government announced that it believes the province has anastounding 3.93 quadrillion cubic feet of natural gas potential, of which 449 trillion cubic feet are estimated in the Montney gas field alone, roughly a 150 year supply (presumably based on current Canadian use).
Energy intensive natural gas processing and piping from the wellhead to the processing plants can be done using natural gas or electricity. In B.C., electricity from the BC Hydro grid is about 93% renewable. Given the expected long life span of the drilling activity in the Montney, it makes economic sense to electrify operations in this region. Any fear of stranded investment in electricity infrastructure is virtually eliminated.
The business case for electrifying the Montney gas fields including processing in B.C. is compelling. That it can be paid for is of course critical, but there are many more reasons:
- The Montney is located relatively close to the BC Hydro transmission grid and much of the new generation that would be required (wind and small hydro projects with thermal back-up);
- B.C.’s predominantly clean electricity makes for low emission gas extraction (attention: “Cleanest LNG in the World”);
- A significant opportunity for the B.C. renewable energy industry, including First Nations (see Premier’s mandate letterto Minister Bennett);
- First Nations participation in natural gas industry (see Premier’s mandate letter to Minister Rustad);
- Private sector investment, jobs and economic development in remote BC communities; and
- Royalty capture (less gas burned to produce gas, so more Provincial natural gas royalties).
Electrification of the fields and processing is not a novel concept. Just look at some current examples:
- The Bakken oil fields in North Dakota where the local utility, Basin Electric, is building a new 200 mile $347 million transmission line and two power plants;
- The Permian Basin oil fields in Texas will be serviced by the new $7 billion CREZ wind power supported transmission line; and
- In eastern Ohio, electricity is being used for natural gas processing.
Here in B.C., the Northwest Transmission Line is being built to support future mining development in the northwest sector of the province. The electrification opportunity in the natural gas fields and processing plants is greater and even more certain that the mining potential.
The time for expansion of the B.C. transmission grid to support electrification is now. British Columbia has no shortage ofrenewable energy resources and developers keen to supply the electricity requirements of the natural gas industry. Using clean renewable electricity to support large scale industrial development is a hallmark of this province. There are many good reasons to support electrification including reductions in greenhouse gas emissions. It is time to get on with it.
Filed Under: News, Policy
