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Up, up, up. . . Soaring expectations for gas; BC energy ministry mum on oil, coal potential

30th September 2017

By: Henry Lazenby

Creamer Media Deputy Editor: North America

     

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VANCOUVER (miningweekly.com) – The British Columbia government on Wednesday shared optimistic prospects for its energy sector, outlining lofty expectations for natural gas exports and the growing renewable energy sector.

“The emerging renewables sector is addressing climate action and LNG has the ability to reduce dependency on coal, thereby reducing carbon emissions. If we take coal [power] plants off line in China with our LNG, we can only go up, up, up,” commented British Columbia’s Minister for Energy, Mines and Petroleum, Michelle Mungall, during a resource-focused breakfast series held in Vancouver on Wednesday morning.

She noted that 96% of British Columbia’s electricity is carbon free and is a great advantage to its emerging natural gas sector in the north-east, while surplus hydropower represents opportunities for electricity exports further afield to provinces eastwards, such as Saskatchewan.

ENERGY POWERHOUSE
Mayor of the City of Dawson Dale Bumstead talked about the “unbelievable potential” of the emerging Montney formation, in North-East British Columbia, placing the liquid-rich gasfield among the top five unconventional natural gas formations in North America.

The basin holds around 449-trillion cubic feet of marketable natural gas, just under half of the country’s total natural gas resources, according to National Energy Board estimates.

He mentioned that global economic issues were a negative for natural gas development in the province over the past several years, creating the perception that no growth is happening in the sector at all. “The truth is that three projects have progressed to an advanced stage.

“Upstream is a bit of an invisible story, despite the world-class assets. There are existing reserves in Montney to last us for more than 100 years of production, which can ultimately act as a transition resource to new technologies both domestically and internationally,” he said.

Innergex Renewable Energy SD for governmental and regulatory affairs Colleen Giroux-Schmidt talked up the province’s energy potential. “We’re a natural gas, hydropower and renewables powerhouse. Renewables contribute 5% of BC’s power, with two significant renewable projects being championed within the province.

She enlightened attendees about a new focus to develop renewable energy projects, in conjunction with communities, around Canada. The country is signatory to the Paris Climate Accord, which calls for the reduction of the carbon footprint.

“BC has the cleanest gas, coal, steel, because these resources’ production is powered by clean energy,” she stated, noting that British Columbia has about 18 geothermal sites, presenting further opportunities for clean power generation. However, developing them will take time.

“We need to help the regulatory process along to get deployment of assets quicker.

“We have the ability to be an energy powerhouse. That’s the vision. It is still early days, but we’re asking and going to answer these questions in due time,” Mungall chimed in.

To that end, the BC Government is looking at resuscitating the dormant Innovative Clean Energy Fund. This could help the strong First Nation desire to augment BC’s clean energy infrastructure, and we’re looking at ways to implement that,” Mungall stated.

When asked: ‘How can carbon taxes not hurt industrial growth?’, Mungall said government does not have all the answers. “The fact is the international market has dropped, and as a result, has encouraged government to work even closer with industry, communities and First Nations to address goals of reaching new markets, while reducing the carbon footprint. The review of government policies is going well,” she advised.

INFRASTRUCTURE QUESTIONS
Bumstead noted that there is insufficient infrastructure in the northeast of the province at the moment to move natural gas product to markets abroad. He called for more natural gas pipelines to be built to capitalise on British Columbia’s emerging unconventional gas wealth.

“We need to build pipelines to get product to market,” he stressed.

“We need to educate people about the generational opportunity the emerging gas formation represents. We’ve been a lumber-based economy for so long, but with about C$30-billion invested in natural gas and tight oil in the Montney formation to date, it is more than the oil sands are attracting at the moment, and goes to show how active the region is right now.”

The minister agreed, saying infrastructure investment is critical. “We’ve been selling power to Alberta for decades, but if we want to reach further, we’ll need stronger transmission lines.”

FOSSIL FUELS
One word conspicuous in its absence during the breakfast discussion: oil.

The coalition government had in August outlined its plans to stop an expansion of the Kinder Morgan oil pipeline that transports Alberta crude oil to Vancouver, on Canada's West Coast.

Last year, the federal government, under Prime Minister Justin Trudeau, approved Kinder Morgan’s C$7.4-billion Trans Mountain Expansion project, which will match the existing 1953-built Trans Mountain pipeline system between Edmonton, Alberta, and Burnaby, British Columbia. This is expected to triple Canada’s access to new crude markets, as the country looks to diversify oil exports away from the US, its largest customer.

Getting its crude resources to market is something Auspice Capital Advisors founder and chief information officer Tim Pickering recently pointed out should be made a “national priority”.

Canada supplies about 40% of US crude imports, giving it, as the fourth-largest oil producer in the world, far greater exposure to the largest crude consumer, ahead of top producers Saudi Arabia and Venezuela. But it needs to access new markets across the Pacific to wean it from its dependency on US trade, especially with a possible trade war brewing between the long-standing economic partners.

“It is the only way to narrow the discounts. We have seen at times that oil prices in Venezuela and Mexico traded at par with WTI price levels, which further illustrates the importance of building the infrastructure needed to get Canadian crude to where it is needed, and to receive full market prices for it,” Pickering told Mining Weekly Online in a recent interview.

The British Columbia Ministry for Energy, Mines and Petroleum did not return requests for comment from Mining Weekly Online on the government’s official policies regarding oil and coal at the time of publication.

Edited by Samantha Herbst
Creamer Media Deputy Editor

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