With the potential surge in LNG exports from Kitimat and the problem of a potential shortage of power to run them all, premier Christy Clark announced the Liberal government’s natural gas strategy on February 3.
Clark said the strategy had four prongs:
q the government would find new customers for LNG, particularly in Asia,
q it would work with “communities, industry and educators” to support jobs in the clean technology and natural gas sectors and make sure the skills and training program match the needs of those sectors,
q it was reaffirming its commitment to “clean energy and climate change leadership”, and to do that it would make sure LNG plants were powered by “clean energy, as much as possible,” and
q it was redefining the government’s energy self-sufficiency policy “to ensure BC is well positioned for power expansion and Hydro rates remained affordable for families.”
That redefinition meant the current policy which required BC Hydro to have sufficient sources of power to handle a worst case scenario drought year, the utility would now only have to meet average year requirements.
While saying that LNG plants in Kitimat would be powered by clean energy – something Clark admitted “ represents a big commitment for British Columbia, a commitment to expanding our green energy sector” – in a question and answer session following her announcement, Clark hedged saying the intention was that the LNG industry would be powered “primarily” by clean sources of power.
And the press release sent out in conjunction with the announcement at the BC Institute of Technology confirmed that clean energy would not be the sole source of power for LNG plants – “Future energy needs will be served by local, clean energy, with BC’s natural gas used to support energy reliability if required,” it said.
The press release also raised an issue not touched on by Clark: “Proponents will be required to make capital investments towards new infrastructure needed to power LNG operations.”
In response to questions from the Northern Sentinel, a spokesman for the Energy ministry confirmed the power needs of KM LNG and BC LNG Co-op can be met with existing infrastructure and therefore they wouldn’t be hit by the capital investment requirement.
However, she added, “the second phase of KM LNG will require some transmission upgrades to the existing line between Prince George and Terrace. We are in discussions with industry now about contributions to this second phase.”
And, “the next LNG project will require new infrastructure and energy supplies. We will be seeking contributions towards these requirements from LNG proponents moving forward.”
Other companies looking at building LNG plants here include Shell – it bought the old Methanex site – Progress Ventures/Petronas (Malaysia) and Nexen/IMPEX (Japan). In addition, the UK-based BG Group has confirmed it is doing a feasibility study for a plant in Prince Rupert.
The spokesman confirmed proponents of other potential projects had been advised they would be required to come up with a contribution “toward the infrastructure and new energy required to serve their power demands” and that BC Hydro and the province were working with the natural gas industry to assess power requirements.
In answer to a question about whether the government’s new policy accepted the need to build gas-fired power generation plants and, if so, who would build them, the spokesman replied, “At this time, the province does anticipate some amount of natural gas generation will be required to firm up intermittent renewable supplies. The detailed technical studies to determine the amount of natural gas fired generation that might be required is underway.”
(NB: Clean or green energy refers to power sources that are identified in by the BC Clean Energy Act as clean or renewable and include wind, tidal, solar, run-of-river and biomass.)