This weeks column for 24Hrs: Put the brakes on LNG until impact of fracking investigated.

Posted on by Laila

This week’s topic:

Should we put a stop to LNG implementation for more study and to set standards?

It appears that for Premier Christy Clark, fracking is the new F-word.

The incredibly well-crafted sales job Clark and the BC Liberals have presented in support of LNG expansion has strategically avoided any reference to fracking.

In fact, in looking through the one-year update of the B.C. government’s LNG strategy, the word fracking is nowhere to be found — the government refers only to the “extraction process.”

Read Brent Stafford’s column

Hydraulic fracturing is the process used by many gas companies to extract natural gas that is trapped in rock below the surface. Water is mixed with a combination of sand and chemicals, and forced into the ground under high pressure to fracture the rock, which allows the trapped gas to be extracted. In recent years, the word fracking has become synonymous with pictures of tap water being ignited, and dried-up streams and rivers, thanks to documentaries like Gasland and Fractured Land.

It’s no surprise that the BC Liberals don’t want the public to associate fracking with their highly dubious trillion-dollar LNG expansion plans — public outrage has quashed fracking operations in other jurisdictions. A new survey released last week by Insights West shows that while 50% of British Columbians support LNG expansion, only 26% supported fracking while 39% of people surveyed think fracking is already being done in B.C.

The rush to develop LNG resources is appalling, considering several countries, states and provinces have already banned or put a moratorium on fracking until the considerable environmental concerns can be addressed…

Read the rest of this weeks column, and vote, at this link: http://vancouver.24hrs.ca/2013/09/22/put-the-brakes-on-lng-until-impact-of-fracking-investigated

It’s important to note that while this weeks Duel takes a look at whether or not the brakes should be put on LNG until studies and standards can be set, the financial argument against such rapid expansion plans is well supported. BC is very late in the game for LNG development, and the report by the International Gas Union touches on this, as well as other challenges faced by projects in BC.

Resources:

Insights West survey on LNG and fracking: http://www.insightswest.com/news/residents-in-alberta-and-british-columbia-diametrically-opposed-on-fracking/

Fracking bans/moratoriums around the world: http://keeptapwatersafe.org/global-bans-on-fracking/

BC Gov’t has no problem with fracking :http://www.canada.com/story_print.html?id=dcbe13ef-14a8-406c-aa53-98fa7b7e7ae0&sponsor

BC Oil and Gas Commission lacks transparency on fracking violations: ( nothing to look  at here, move along…) http://www.vancouversun.com/technology/Commission+lacks+transparency+fracking+violations/7982077/story.html

Petition for water license reform from Fort Nelson Band: http://www.theglobeandmail.com/news/british-columbia/fort-nelson-bands-anti-fracking-petition-draws-overwhelming-response/article5828976/

http://thetyee.ca/Blogs/TheHook/2013/06/26/Fracked-Well-Study/

2013 World LNG report from the International Gas Union: http://www.igu.org/gas-knowhow/publications/igu-publications/IGU_world_LNG_report_2013.pdf

BC’s LNG plan boosts immigrant workers http://www.timescolonist.com/news/local/b-c-s-liquefied-natural-gas-plan-boosts-immigrant-workers-1.632957

http://www.theglobeandmail.com/news/british-columbia/fissures-appear-in-scientists-assurances-about-safety-of-fracking/article6142857/

27 thoughts on “This weeks column for 24Hrs: Put the brakes on LNG until impact of fracking investigated.”

  1. From the IGU report on LNG worldwide,listed above: http://www.igu.org/gas-knowhow/publications/igu-publications/IGU_world_LNG_report_2013.pdf

    Page 40:

    7.4.3 CANADA COMMERCIAL RISKS: PROJECT COST
    (CAPEX). The commercial position of liquefaction
    proposals in Western Canada is weakened by the need for
    greenfield facilities, as well as the early stage of
    development of the shale gas resource play in WesternCanada. Based on announced costs, projects in Western
    Canada face inexpensive liquefaction costs (~$1,000 /ton)
    relative to greenfield projects in Australia. However, a
    major factor affecting Western Canadian projects is the
    need for a long, expensive pipeline to bring gas from
    eastern British Columbia to the Coast. Currently, pipeline
    infrastructure in British Columbia is limited, with one major
    north-south trunkline and a smaller pipeline running west
    to the coast. As of may 2013, four projects have proposed
    building ~500 mile pipelines with costs of between
    $1,000/mmcf/d – $3,000/mmcf/d, which will significantly
    increase total project costs.
    7.4.4 CANADA COMMERCIAL RISKS: HENRY HUB.
    These factors are exacerbated by the tension between
    Asian buyers’ insistence on Henry Hub pricing and the
    sellers’ preference for oil-linked prices – a difference that
    has so far been hard to reconcile. Project costs in Canada
    far exceed counterpart projects in the United States where
    the natural gas market is much more liquid. Moreover, the
    distance between the proposed export facilities and the
    North American gas pipeline grid is large, and connections
    are small in both capacity and number. Exporting Henry
    Hub-linked LNG is risky because it forces sellers to
    produce no matter what happens to Henry Hub, at a
    production cost largely divorced from the Hub. This is a
    problem because Western Canada shale gas will likely be
    more expensive than the marginal acreage that sets Henry
    Hub prices. Despite numerous marketing leads for
    Western Canada’s slate of projects, there are currently no
    finalized agreements with Asia Pacific buyers.
    A few projects have attempted to circumvent this issue by
    creating an integrated project, where likely offtakers have
    stakes in the upstream. This is the case with LNG Canada
    and Pacific Northwest LNG; both projects include Asian
    players in their upstream and liquefaction ownership
    structures that would likely take LNG back to their home
    markets, though internal transfer pricing would need to be
    negotiated between the partners.

    Pg 45:

    But for higher-cost future suppliers (Australia, Western
    Canada, and potentially East Africa), even a partial
    indexation to Hub-based pricing may be difficult to financially
    justify as they are closely tied to the oil price and because
    liquefaction and upstream project costs are high. Since the
    visibility of energy markets is so short, locking in long-term
    contracts between sellers and buyers has been and will
    continue to be challenging when negotiating contracts for
    new projects.

    Meanwhile, the number of proposed projects in Western
    Canada continues to grow. Which will gain momentum in
    2013? Chevron’s entry into Kitimat has re-energized that
    project, although the project still faces a structural problem
    (buyers’ demand for hub-linked pricing). Will Shell’s LNG
    Canada outpace other projects because it has potential
    offtakers (KOGAS, PetroChina, and Mitsubishi) in the
    partnership structure already? Does PETRONAS view
    Pacific Northwest LNG as a long-term project to meet a
    future demand problem in Malaysia? Will other acreage
    holders (BG, ExxonMobil) kick-start their own projects?

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  3. It’s a fossil fuel. Leave it in the ground. Methane is a far more powerful greenhouse gas than CO2 and leaks are inevitable. Natural gas is NOT a transition fuel – it locks us into carbon dependancy at a time when it is essential we reduce our emissions. Unless, that is, we are happy to make huge profits for the short time left for life on earth. We thought 350ppm would be bad enough – but we are nearing 400ppm and the models we have do not include most of the critical tipping points. Isn’t a liquid North Pole enough of a warning sign?

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  5. Fracking
    Pumping water and chemical “lubricants” into the ground to FRACTURE the rock to allow gas to flow.
    Well I have news for ya. If the rock has been fractured, eventually water will find its way out. Especially if it has LUBRICANTS mixed in with it!
    As for people that insist.
    ” But the wells are 2kms deep! There’s no way that water could make it back up to the surface.”

    I have one question.
    “Ever seen a hot spring?”

    ANY time a large multinational oil company hires subcontractors to perform the “dirty work” we should be cautious.
    3o years from now if water tables become polluted who will we blame?
    A long gone subcontractor?. The company that hired them?
    The “experts” who insisted it was safe? “oops, sorry we screwed up. Here’s your bottled water…..”
    Great, so then we get to sue “someone” for what may take 10 MORE years?
    Meanwhile people are dying of cancer.
    And 10 years later IF you win….. AND the lawsuit isnt appealed …..AND your not dead of cancer……..Here’s your money. No clean water, just money………

    Sorry, but my trust of politicians(Liberal, Conservative, whatever) and multinational companies(Encana, SNC Lavalin, whatever) promising me “Dont worry its safe. Or the Jobs,Jobs,Jobs mantra”.
    Make me very very suspicious.

    They need to earn my trust because they do not have it now.

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  6. Speaking of other “unintended consequences” of the frack orgy is that of other industries being sacrificed. All manner of trades people are being pulled away by the artificial fracked up economy leaving second and third tier industries and service businesses scratching for staff. All of which is adding to inflation. Now the wonder full folks at liberal central are proud to announce another $115 Milllion in subsidies to gas producers. All of whom donated generously from their Calgary bases pre election. This the last in a series spanning about 10 years and totaling $Billions. Funding for building roads that go nowhere and are not used by other industries/ residents as well as pipelines that are producer owned which most likely wouldn’t be open for the use of other producers. Handbacks if you will. In the meantime land sales have dried up to a trickle and BC residents get to watch a steadier stream of outside residents being brought in to build the projects that are 50% taxpayer funded through subsidies. Great jobs strategy. BC residents are being eliminated from jobs through producer sponsored “vendor management” programs on a daily basis. Maybe I’ve missed something but things are getting really fracked up here.

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  7. RossK, The Gazetteer, quotes the New York Times:
    “Now the [Canadian] government is doing all it can to monitor and restrict the flow of scientific information, especially concerning research into climate change, fisheries and anything to do with the Alberta tar sands — source of the diluted bitumen that would flow through the controversial Keystone XL pipeline.”

    The same attitude applies to hydrocarbon production and transportation in BC.

    The precautionary principle is ignored completely in favour of short term economic activity. Few people in Canadian politics dare to think about long term consequences.

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  8. Anyone as nauseated as I am listening to the latest round of ads from Enbridge about how they care about the environment too?
    I just love the one with the whale song in the background. It just ads to the sincerity of the moment.

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  10. LOL, good one.
    Yes, let’s see … Christy, Stevie, Gordo, Ken, Bill, Shirley, Pat, Terry, and Warren, Jimmy, Bill, Richy, Mary, Kevie, Paul, Robert, Charlie, Jim and on and on and on and on and on …

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  13. nonconfidence said it all.

    The one thing we can not live without is clean water. Fracking will contaminate it. With the uncertainly about the climate, we may want to hang on to all the clean water we can, because we could have some major droughts, as we have seen in California. Water may well become much more expensive to purchase than oil/gas.

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  14. Laila, something you should know is that the BC government is creating LNG pipelines because they can carry bitumen. Clark (Harper) just want the pipeline in for LNG. Once the pipeline is in who can tell what is going through it? No pipelines!!!

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  15. http://www.cbc.ca/news/canada/british-columbia/natural-gas-prices-fall-as-b-c-liberals-pitch-lng-boom-1.1870603

    While the B.C. government is planning for a liquefied natural gas boom, falling natural gas prices means many rigs in northeastern B.C. are sitting idle.

    In the Horn River Basin in B.C.’s far northeast, natural gas drilling has all but dried up.

    “At one time we probably had a couple dozen rigs working up there,” said David Rushford, chair of the Horn River Basin Producers Group.

    “Now you can count them on three or four fingers.”

    He says falling natural gas prices are to blame for the slowdown.

    “We don’t see that ending any time soon, so the result of that has been quite a scale back of activity up in those areas.”

    Rushford says the low gas prices are the result of too much supply in North America.

    As many as twelve export facilities are in various stages of development, and the Liberal government is the industry’s biggest cheerleader.

    Rushford expects prices will rise and work will pick up if the proposed facilities are built in B.C.

    “Once those actually start getting built, you’ll see the gas demand for those projects go up quite dramatically, and that will have a boomerang effect on all gas producers.”

    But Rushford says it will be at least five years before the first project is up and running.

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  16. One thing for sure, this province is totally fracked – all done by greedy, out of touch, corporate lackies – read BC Liberal MLA’s.
    Nothing in the last twelve years has been done for the good of the province – anything done has been for favoured corporate supporters. Same thing is happening in Federal politics, where Herr Harper dictates policy and nothing appears to be done democratically.
    OK – off soap box for now.
    Thx

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  18. http://www.vancouversun.com/business/energy/Vancouver+Edmonton+marked+plant+projects/9185986/story.html?__lsa=335e-4fa6
    http://www.calgaryherald.com/business/Chinese+company+retail+fuel+Canada/9185129/story.html
    http://www.ferus.ca/inthecommunity/news/12-12-17/Encana_and_Ferus_LNG_enter_into_joint_venture_to_build_liquefied_natural_gas_fuel_plant_in_Western_Canada.aspx
    http://www.oilandgaseurasia.com/en/news/ferus-natural-gas-fuels-enn-canada-build-two-lng-plants

    Been planning this for some time, imo. And just where is this plant being built Christy? I’m sure your plan is in place, or do we need to ask Stevie and Allison?

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  20. […] Wilson is without a doubt, an interesting choice, considering we really don’t have an LNG market yet.. all those sparkles and unicorns have yet to appear, problems are cropping up and it remains to be seen how much LNG BC will, in fact, ever produce. Considering how late to the table BC is in comparison to Australia, the US and other countries with… […]

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