Electricity conversion costly but key to carbon war, experts agree
The electrification of the upstream natural gas sector in northeast B.C. could open 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 — one where there are challenges to widespread electrification and switching from using natural gas to produce power, say 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 says the challenges to electrification include the need for costly transmission lines, where it may simply 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.
And environmentalists warn that electrification alone can’t help B.C. reach its carbon targets, which also includes a 60 per cent reduction by 2040 and 80 per cent reduction by 2050.
And there is another stark reality to take into consideration: 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 Shellled 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 do to reduce carbon intensity, but it must be done in an economic way and it must have a competitive lens on it,” says 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, as well as timing and operational considerations, said Morrison.
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 already 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,” said Morrison.
“We certainly don’t have enough capital in B.C. to build an LNG plant.”
The NDP government, which, with the support of the Green party, took control of government in 2017 after 16 years of B.C. Liberal rule, has promised to roll out details of the first phase of its greenhouse gas reduction plan in the next weeks.
It’s expected to include carbonreduction incentives for industry and a clean-industry fund.
“We are giving our opinion. We’ll see what they choose to do,” said Morrison. According to the B.C. Oil and Gas Commission, just 13 of 110 natural gas plants are electrified in northeast B.C.
B.C. Hydro’s $296-million Dawson Creek-Chetwynd area transmission line, completed in 2016, has made it possible for companies like Shell Canada to decrease or avoid emissions.
For example, the electrification of the $700-million Saturn natural gas plant has decreased emissions by 150,000 tonnes of carbon dioxide equivalent, says the company.
Shell says it has reduced emissions by 25 per cent in the past three years at its Groundbirch operations, located northeast of Dawson Creek, including nearly 500 wells and four gas plants.
Most of the reductions come from the Saturn plant.
Natural gas plants remove impurities and fluids, including water, to produce a dry natural gas ready for pipelines.
Other initiatives have included using solar power to activate valves at its newer well pads.
Rej Tetrault, Shell’s general manager for Groundbirch, said as a global company they have a long technology reach, but carbon emission reductions are being driven by local workers.
“Every bit makes a difference,” said Tetrault.