Natural gas sector seeks to step up electrification

VANCOUVER — The electrification of the upstream natural gas sector in northeast B.C. could open up a significant path for the province to meet its aggressive carbon reduction targets in the next decade and potentially allow for industry expansion.

But it’s not an easy path — and one where there are challenges to widespread electrification, a switch from using natural gas to produce power, according to industry supporters and critics alike.

B.C.’s new greenhouse gas-emission target calls for a 40 per cent reduction by 2030 over 2007 levels, a decrease of 24 million tonnes of carbon dioxide equivalents. The latest B.C. inventory numbers from 2015 peg emissions at 63.3 million tonnes, a little less if carbon offsets are included.

In 2015, the mining and upstream oil and gas sectors accounted for 7.15 million tonnes of those emissions.

Industry sources say the challenges to electrification include the need for costly transmission lines, where it might be too expensive to reach some regions; the cost of hooking up to those lines; and the higher price of electricity versus natural gas, used now to power compressors in natural gas processing plants and valves in producing wells.

Environmentalists warn that electrification alone can’t help B.C. reach its carbon targets that include a 60 per cent reduction by 2040 and 80 per cent by 2050.

And there is another stark reality. If B.C. wants to continue to develop a liquefied natural gas (LNG) export sector, the province, industry and possibly the federal government, are going to have to invest more in electrification.

The decision in October by Shell-led Canada LNG to build a plant on B.C.’s northwest coast will add 3.45 million tonnes of additional emissions in its first phase, according to the B.C. government. The environmental research group Pembina Institute pegs the emissions higher at 4.3 tonnes. The second phase would double those emissions.

“Electrification is the single greatest thing you can to do reduce carbon intensity, but it must be done in an economic way and it must have a competitive lens on it,” said Geoff Morrison, manager of B.C. operations for the Canadian Association of Petroleum Producers.

Some electrification has taken place — and there is the potential for more — but cost is important, including the cost of hookup to transmission lines, timing and operational considerations, Morrison said.

Karen Tam Wu, the Pembina Institute’s managing director for B.C., said there is no silver bullet to building a clean economy. “Electrification is an important tool, but it needs to be part of a broader strategy,” she said.

That includes determining the overall energy demands for the province and how to transition to a lean-carbon economy, Wu said.

It’s also important to know how electrification will fit into new methane reduction regulations expected from the B.C. government soon, she said.

Canada has implemented regulations requiring methane emission reductions of 45 per cent by 2025 over 2012 levels.

At the same time, the natural gas industry is pushing for consideration of so-called carbon leakage, the notion that greenhouse gas emissions can shift to another part of the globe — areas where emission intensity is greater — if B.C. is not competitive.

“We’re competing for investment dollars. … We certainly don’t have enough capital in B.C. to build an LNG plant,” Morrison said.

The B.C. government is to roll out details of the first phase of its greenhouse gas-reduction plan soon. It’s expected to include carbon-reduction incentives for industry and a clean-industry fund.