Water reclamation plants and natural gas vehicles (NGVs) may not seem to have much in common, but they were sharing the stage on the last day of the 2012 Dawson Creek Energy Conference on Friday, September 21.
The theme of the discussion was the relationship between energy sector companies and the communities where they work, the promise of which was demonstrated by a plan to bring NGVs to Dawson Creek and an explanation of the partnership between the City and Shell Canada that has resulted in the new Dawson Creek Reclaimed Water Project.
“This is not a new thing,” said Matthew MacWilliam, the energy manager for the City of Dawson Creek, adding that there are presently over 15 million NGVs in over 30 countries across the world.
MacWilliam suggested that compressed natural gas (CNG) or liquefied natural gas (LNG) as transportation fuel could be a good fit for a Dawson Creek municipal vehicle fleet that generated 530,000 tonnes of carbon dioxide (CO2) emissions by burning 225,000 litres of gasoline and diesel at a cost of over $200,000 in 2010 alone, particularly when the city is surrounded by natural gas in the prolific Montney tight gas play.
Forecasts suggest that natural gas, which is currently priced quite low, will continue to be much less expensive than oil over the next fifteen to twenty years.
“It’s a cleaner burning fuel,” said MacWilliam, noting that there are also “benefits for the actual engines.”
Heavier vehicles are leading the way for conversion to natural gas and Waste Management is one of those pioneering companies, presently using over a thousand vehicles across their operations.
MacWilliam believes there is potential for Waste Management to convert to natural gas in Dawson Creek as well.
“Is this the future?” he said. “It’s starting to look that way.”
However, there are significant obstacles to large-scale adoption in terms of the lack of refueling infrastructure in many locations and the considerable cost of converting gasoline or diesel vehicles to natural gas.
Conversion of a truck can cost between $10,000 and $12,000, but a study conducted in Saskatchewan has shown that that cost can be recovered in just 40,000 to 50,000 kilometres because of the fuel cost savings.
Pacific Northern Gas (PNG) is trying to alleviate the difficulties associated with conversion to NGVs with a plan to build natural gas cardlock stations in one or two communities in B.C.
“A new business for PNG,” said manager of financial planning and business development Peter Schriber.
The company is working on a pilot project that should see a new CNG fuelling station in Dawson Creek in early 2013 and a second station in Fort St. John by the end of the same year.
PNG would be looking for an interested third party to eventually take over those operations.
“We don’t necessarily want to be in the business of running gas stations,” said Schriber.
The discussion of companies and communities began not with the consumption of natural gas, but with one of the big issues related to how it is extracted from the ground in the Dawson Creek area: the use of water for hydraulic fracturing.
Water has been an interesting topic in Dawson Creek in recent years. Mayor Mike Bernier pointed out that the community went from a one-in-40 year drought in 2010 to a one-in-100 year flood last summer. This summer has been another one-in-40 year drought.
“At the same time, we’re seeing unprecedented growth,” said Bernier, referring to natural gas exploration and production in the region, as well as the associated rise in fracturing activity.
City council has adopted a policy whereby the oil and gas industry is the last of all users to have their potable water supply shut off in the event that a water shortage is severe enough to necessitate imposing restrictions on potable water use, primarily because of the positive economic impacts the oil and gas industry brings to the region.
So, the municipal government was looking for a way to allow industry to continue to use water for their operations, as well as let the City use water for dust suppression on roads and watering flower baskets and sports fields, if a drought it so extreme as to cause Stage 4 water restrictions, as was the case this summer.
During Stage 4 restrictions, even industry is prohibited from using potable water from the city reservoir.
According to Bernier, it was only a “tongue in cheek” suggestion to have industry use the city’s sewage for fracturing, but the idea quickly took flight.
“We think this will work, but we need somebody else to work with us,” said Bernier, remembering the early days of the plan.
The City issued a Request for Proposal (RFP) and Shell Canada stepped forward.
“It actually exceeded, as a council, what we were hoping to see,” Bernier said of the Shell proposal.
The end result is a sewage treatment system that produces water about ten times cleaner than Dawson Creek’s potable water source, the Kiskatinaw River.
As a reward for building the water plant, Shell is able to take up to 3,400 cubic metres of water per day for their Groundbirch natural gas operations. The City holds onto about 800 cubic metres per day, which they will be using for their own purposes when the permits are in place.
“The City actually doesn’t use a lot of water,” said Bernier, adding that there is a plan on the table to build pipelines from the water treatment facility to the nearby sports fields for watering that grass.
Dawson Creek can also generate up to $2 million per year in revenue by selling portions of that water to other industry players, although the price of that water is yet to be determined.
“One of my proudest days at Shell,” said Groundbirch operations manager Rej Tetrault, speaking of the day the plant was finally unveiled.
Shell has been in Groundbirch for about five years and is currently producing about 200 million cubic feet (mmcf) of natural gas from 300 wells. They expect to be active at that location for over 40 years.
“They’ll continue producing for a very long time,” Tetrault said of those wells.
That requires water.
“These wells will not flow if you don’t hydraulic fracture them,” he added, noting that fracturing requires about 7000 cubic metres of water per well.
However, not all of that water must be met by outside sources such as surface water or the reclaimed water from the treatment facility.
About 30 to 40 per cent of the water used for fracturing flows back to the surface within the first few months. Additional water returns to surface after that point. Shell already recycled a considerable amount of that water prior to building the water plant. The reclaimed water only ensures that they will not have to look to surface water or potable water to meet any of their fracturing needs in the future.
“We generate a water supply and demand forecast,” said Tetrault, explaining how they can predict when the reclaimed water will be necessary to meet shortfalls in recycled water supply.
“Now we actually have a team of people that do nothing but forecast water,” he added.
By scheduling fracturing efficiently, Shell is also able to minimize the amount of reclaimed water they need to use, which can benefit Dawson Creek in terms of what they have available for their own use and for sale.
Maximizing those benefits will require the construction of storage facilities so that surplus water isn’t simply dumped into the creek.
After the presentation, Bernier suggested that events such as the energy conference can help foster the sorts of relationships between companies and communities that can yield such positive impacts for both parties.
“We need to continue in this region working with our companies and having those partnerships because they’re here,” he said. “The resource is here. And, as citizens, we want to make sure that we engage with the companies as best as possible… to make sure that any concerns that we have are addressed to the companies.
“They want to be able to communicate back with us,” he added.
Bernier noted that he conference was also a good opportunity to learn about the companies and how they are coping with low natural gas prices.
“Sometimes, we forget how busy it really is here,” said Bernier. “Right now, it’s seems it’s a little slower with $2.00 gas. So, it’s really interesting to hear from most of the companies how important it is that they are still here in this area.
“With the liquids in the gas, they’re still working here in the Montney play and the Dawson Creek area,” he continued. “It’s still… one of the biggest assets.”
Bernier also learned a thing or two about his community, including the fact that many residents of the area still have lingering concerns about the industry.
“How do we work better with the companies?” he asked rhetorically. “And we’re always trying to strive for that. So, again, it’s trying to have everybody in the same room so we can talk about it.”
After all, the industry is going to be part of Dawson Creek life for decades to come.
“It’s not just a boom right now,” said Bernier. “Everything we’ve heard through this conference is they’re going to be here drilling and working for quite a few decades. From a community perspective, we have to take that into consideration when we’re doing our planning, when we’re making decisions at city hall for the community when it comes to building infrastructure to sustain the industry and sustain the growth of the community.
“We haven’t reached a plateau yet, so we have to continue planning.”