B.C. Poised to Benefit from Natural Gas-Economically as well as Environmentally 

November 22, 2011

By Dave Collyer

President

Canadian Association of Petroleum Producers

 

British Columbia’s geological and geographic advantages position the province to benefit significantly if Canada is successful in becoming a supplier of natural gas to the global market.

Developing our abundant natural gas resource responsibly is also a foundation of Canada’s transition toward an energy mix with lower carbon emissions.

Two of North America’s most promising natural gas plays – the Montney and Horn River – are located in B.C. Together, they’re estimated to contain up to 262 trillion cubic feet of natural gas.

That’s the geological advantage.

The geographical advantage is B.C.’s proximity to Asia’s rapidly expanding economies. In fact, Kitimat LNG, the proposed liquefied natural gas terminal that received regulatory approval in October, is closer to China than LNG exporters in the Middle East.

The combination of these two natural advantages holds tremendous economic promise that applies directly to the communities where natural gas is developed and prepared for export. As of 2010, B.C.’s natural gas industry directly employed 12,000 people. Over the next two decades, a period the International Energy Agency has called a “golden age” for natural gas, direct employment in B.C.’s natural gas sector is expected to grow significantly and reach 40,000 people by 2035, says the Canadian Energy Research Institute.

These jobs support B.C. families, local businesses and communities. So it is no surprise that Kitimat LNG, which will be supplied from the natural gas plays in the northeastern part of the province, is receiving widespread support.

In the broader provincial context, natural gas revenues are rapidly becoming the B.C. government’s most important source of natural resource revenue. In 2012-2013, the government’s fiscal plan shows natural gas royalties will reach $597 million, compared with $534 million in revenues from forestry. Natural gas land sales are a significant additional revenue source, contributing $844 million to the province in 2010.

The province uses these funds for healthcare, education and social services that are relied on by all British Columbians.

But to view natural gas development merely through any one single lens – be it the economy, the environment or domestic energy supply – would be a mistake.

Canada’s natural gas industry supports responsible natural gas development as a means to achieving a balance of economic growth, enhanced domestic energy supply and environmental performance.

The very nature of natural gas – it is the cleanest burning fossil fuel – means it will play an important role as Canada moves toward an energy mix with lower carbon emissions. Natural gas development is a foundation for a lower carbon energy future throughout North America. There are opportunities to broaden the use of natural gas in B.C., particularly in transportation and power generation.

Natural gas development in B.C. occurs within a framework of provincial and federal environmental regulations on water, air, GHGs, land and wildlife. Regulations, coupled with industry best practices, ensure development proceeds responsibly and safely.

Industry’s track record speaks for itself.

B.C.’s government, in announcing a mandatory online registry for chemicals used in hydraulic fracturing (the process used to free natural gas trapped in shale rock), has said there has never been an incident of harm to groundwater from hydraulic fracturing operations within B.C. In Alberta, more than 167,000 wells have been fractured since the technology was introduced 60 years ago, and there has never been a documented case of fracturing activities contaminating groundwater in Alberta, according to Alberta’s oil and gas regulator, the Energy Resources Conservation Board.

Regulations, as well as industry’s operational practices, continuously evolve with changing technology. One such example is the development of CAPP’s Guiding Principles for Hydraulic Fracturing. This is an initiative of Canada’s upstream natural gas producers, with the objective of improving overall industry performance. These principles state that producers support the disclosure of fracturing fluids, the development of fracturing fluids with the least environmental risks, as well as sourcing fresh-water alternatives where appropriate.

B.C. already has made the disclosure of fracturing fluids mandatory, starting next year. We welcome this step and expect other jurisdictions to implement similar measures.

Natural gas is driving economic growth in B.C., it is being developed responsibly and is a foundation of a lower carbon energy future in Canada, and it is contributing to energy security and reliability in North America. In short, natural gas is a smart energy choice for Canadians. It is the right fuel at the right time, not only for B.C., but for all of Canada.

It is, quite simply, an opportunity definitely worth seizing.

 

Dave Collyer is president of the Canadian Association of Petroleum Producers, the trade association representing the Canadian upstream oil and gas sector. Its member companies are responsible for over 90 per cent of Canada’s crude oil and natural gas production.