The shale gas revolution could spark an industrial renaissance for British Columbia.
Speaking during a Fort St. John and District Chamber of Commerce luncheon on Jan. 22 as part of a natural gas education program, Garth Johnson, vice president of the pipeline division with Spectra Energy Transmission West, and Doug Stout, vice president of energy solutions and external relations with FortisBC, both said the opportunities arising from the substantial natural gas supply in B.C. should go beyond the much discussed liquefied natural gas (LNG) export business to other applications such as power generation, transportation fuel and production of petrochemicals ranging from methanol to fertilizers.
"I want to emphasize the word potential," said Johnson, discussing the benefits in terms of economic activity and provincial and federal government revenues that could stem from the natural gas industry in B.C.
"B.C. stands to benefit substantially."
Johnson explained that as natural gas production in the province is increasing due to shale development and advances in pad drilling and hydraulic fracturing, exports to our traditional market in the United States are set to decline significantly.
The obvious solution appears to be LNG.
"LNG gets B.C. gas to hungry Asian markets," said Johnson, noting that the natural gas price in Asia can be as much as five times the North American price, simply because it is more closely tied to the price of oil.
However, B.C. isn't alone in that pursuit.
Australia, just a hop, skip and a jump from Asian ports, has as many as seven LNG export projects in the works, while the U.S. is busy converting LNG import terminals into export facilities to take advantage of the Asian market as well.
Canada needs other options.
Johnson said that power generation is near the top of that list, particularly where natural gas is a replacement for coal. Burning natural gas to generate electricity can produce up to 60 per cent less carbon dioxide than burning coal. Natural gas doesn't produce mercury emissions and almost eliminates the production of particulate matter that causes smog.
Stout noted that remote communities not connected to the electrical grid are looking at LNG, as well as its cousin, compressed natural gas (CNG), as replacements for diesel fuel presently used for power generation.
One example of that is Haida Gwaii.
Transportation is also a high priority when it comes to growing the natural gas market.
Stout said that FortisBC is focusing on promoting LNG and CNG as transportation fuels for return-to-base operations such as public transit, waste collection, ferries and railroads.
One success story in that vein has been the conversion to LNG of a truck fleet operating in Abbotsford.
Fort St. John mayor Lori Ackerman was curious about the use of LNG and CNG for transportation in the northeast corner of the province, where temperatures can drop well below zero degrees Celsius in the winter.
Canadian natural gas producer Encana knows that is a viable option.
"We have a number of CNG trucks that we use in our operations in northeast B.C.," said Encana spokesperson Doug McIntyre, discussing the light truck fleet that Encana has converted to that fuel.
"We have found them to be very reliable in terms of running in the cold weather that is experienced in northeast B.C.," he continued, adding that the CNG trucks have also performed quite well in Encana's operating areas in southern Alberta, where there has been significant cold snaps over the past few months.
"Since CNG is still in a gas state," McIntyre explained, "CNG-fueled vehicles do not have the problems associated with starting up in cold weather that can be associated with a liquid fuel such as propane, which can freeze when temperatures drop to low levels."
Encana is also participating in the CN pilot project discussed by Johnson during the session that involves testing LNG locomotives on a rail line between Fort McMurray and Edmonton, Alberta.
Johnson said that using LNG for rail transport can reduce CO2 emissions by 30 per cent and reduce nitrous oxide emissions by as much as 70 per cent.
The heart of the industrial renaissance mentioned by Johnson could be the production of methanol, fertilizers and other petrochemicals from natural gas, as well as utilizing the fuel as a power source for metal and glass manufacturing.
Johnson and Stout said the role of Spectra and FortisBC is only to transport the fuel and promote its use, but it is up to companies operating in those industries to launch those projects.
One company, Blue Fuel Energy is interested in building a pair of methanol plants in Fort St. John, one that would convert natural gas into methanol and one that would turn CO2 from waste streams such as natural gas processing into methanol.
Johnson added, "Multiple opportunities for natural gas."