The Basics
Contents
Natural Gas ...................................................................................................................................................................................................................................... 3
What is natural gas? ................................................................................................................................................................................................... 3
What is Hydraulic Fracturing?............................................................................................................................................................................................. 4
Water use in hydraulic fracturing ...................................................................................................................................................................... 4
Protecting groundwater ......................................................................................................................................................................................... 5
Pipelines ............................................................................................................................................................................................................................................ 6
Liquefied natural gas (LNG).................................................................................................................................................................................... 6
Shipping LNG Around the World..................................................................................................................................................................................... 7
Strong safety record.................................................................................................................................................................................................... 7
Protecting the Environment................................................................................................................................................................................................ 8
Greenhouse gas............................................................................................................................................................................................................ 8
Alternative power sources and transitional fuel....................................................................................................................................... 8
Land reclamation ........................................................................................................................................................................................................ 9
Pipeline safety ............................................................................................................................................................................................................... 9
Earthquakes..................................................................................................................................................................................................................... 9
LNG: Benefits to B.C., Communities and First Nations...................................................................................................................................... 10
A better quality of life................................................................................................................................................................................................ 10
Preparing for growth ................................................................................................................................................................................................. 11
First Nations..................................................................................................................................................................................................................... 11
Resources.......................................................................................................................................................................................................................................... 12
1
2
China is – and will continue to be – the world’s
heaviest user of fossil fuels.
Fossil Fuel
Fuel Consumption
Consumption in
in 2013
2013by
byCountry
Country
What is natural gas?
Natural gas is the largest energy source used in Canadian homes. It is
also used in manufacturing plants to generate electricity, and as fuel in
heavy-duty trucks.
United States
da
Cana pan
Ja
18%
sia
ia
Ind
2%
4%
5%
6%
Europe
13%
BP Statistical Review of World Energy 2014
Between 2012 and 2020, Asian economic growth
and a switch to cleaner fuel will almost double the
demand for natural gas.
Global Demand for Liquefied Natural Gas by Region
Global Demand for Liquefied Natural Gas by Region
600
(Millions of Tonnes per Annum)
B.C. has an enormous supply of natural gas – an estimated
2,933 trillion cubic feet – primarily in four key areas in northeastern
B.C.: the Horn River Basin, the Montney Basin, the Liard Basin and the
Cordova Embayment. This is enough natural gas to support import
and export markets for the next 150 years. A significant amount of this
natural gas is accessible through sophisticated drilling technology,
including hydraulic fracturing.
23%
29%
Natural gas was formed millions of years ago as plants and animals
died, decayed, and were covered by layer after layer of rock and soil.
Over time, heat and pressure in the earth’s crust turned these plants
and animals into hydrocarbons and the fossil fuels we rely on today:
coal, oil and natural gas. Coal is the solid form of hydrocarbons and
oil is a liquid.
Natural gas is made up of the lightest molecules. It is colourless,
odourless and the cleanest burning fossil fuel, producing half the
greenhouse gas emissions of coal, and two-thirds of oil.
China
Other
Rus
Natural Gas
South America
North America
Middle East
Europe
Asia Pacific
500
400
300
200
100
0
2000
2005
2010
2015
2020
2025
2030
Wood Mackenzie – LNG Tool, Q3 2014
3
What is Hydraulic Fracturing?
Hydraulic fracturing involves pumping water and sand into a gas
well at a high pressure, creating small fractures in rock deep below
the surface and releasing the natural gas trapped inside. Hydraulic
fracturing is used for only a week or two, when the well is first drilled.
The water is withdrawn and then gas flows into the well – often
for as long as 20 or 30 years. The gas is captured and transferred to
processing plants through pipelines. The water is reused in other wells,
and eventually sent to a location where it can be safely disposed.
Groundwater
used for drinking
is between 8
and 150 metres
underground.
In 2013, 86% of new wells in B.C. were hydraulically fractured.
Water use in hydraulic fracturing
There is an abundance of water in northeastern B.C., and it is managed
carefully. The natural gas industry uses less than half of 1% of the
annual water runoff (the yearly amount of water that flows into rivers
and lakes) for hydraulic fracturing in northeastern B.C.
•
An average natural gas well uses 17 million litres of water. That
amount varies depending on the geology and the type of rock
where natural gas is found.
•
In 2013:
– Metro Vancouver used approximately 365 million cubic metres
of treated water.
Natural gas wells
must be doublelined with steel and
cement casings. The
double lining can
run up to 600 metres
underground, 3-4
times deeper than
groundwater supply.
Between 1½ and
2½ kilometres
of rock separate
drinking
groundwater from
the natural gas.
– Hydraulic fracturing in B.C. used 5.3 million cubic metres of water.
•
•
4
In northeastern B.C., annual runoff averages 120.6 billion cubic
metres. Runoff is the rain, snow or ice water that drains into lakes
and rivers over the year.
By 2019, drilling operations could peak in the province with 2,100
wells using 43 million cubic metres of water. Despite this increase, the
amount of water required is still less than half of 1% of today’s annual
water runoff in northeastern B.C.
Natural gas is
2–3 kilometres
underground.
This is where
fracturing takes
place, far below
the groundwater
supply.
Water use for natural gas development is strictly regulated. The
BC Oil and Gas Commission monitors the amount of water available
and allocates it to industry users in northeastern B.C. Ecological and
community needs are met first.
Natural gas companies must get permission before using any new
water supply by way of a permit (two years or less) or by a licence for
long-term needs. All applications are thoroughly reviewed by technical
experts. Companies must report how much water they actually use.
Drinking water in northeastern B.C. is normally found less than
300 metres below the surface. Natural gas in the province is typically
much deeper, at two to three kilometres underground, leaving a
barrier of rock between the water and the natural gas.
Strict regulations in British Columbia protect drinking water from
drilling activities including hydraulic fracturing.
•
Hydraulic fracturing fluid is a mix of 99% water and sand.
The remaining 1% are additives to help reduce friction.
•
All ingredients used in hydraulic fracturing must be reported
to the BC Oil and Gas Commission and publicly disclosed.
•
All wells in B.C. are double-lined with cement and steel to protect
drinking water from natural gas extraction activity. The linings are
up to 600 metres deep – twice as deep as most water levels. The
linings are inspected and must be tested regularly to make sure
there are no cracks or weaknesses.
43.4 million cubic metres
Amount of freshwater
required to support
forecasted natural gas
development at its
peak in 2019 (0.04% of
average annual runoff
in northeastern B.C.)
•
Fracturing fluid is pumped underground and returned to the
surface. The fracturing process lasts only a few weeks, and fluid
is prevented from coming into contact with groundwater.
•
Provincial regulators ensure natural gas wells comply with Canadian
standards for oil and gas health and safety. Every well requires a
permit to operate, and owners bear all financial risks associated
with their operations.
Less than 0.01%
of annual runoff
Amount used for
hydraulic fracturing in
both 2012 and 2013
In the five decades that hydraulic fracturing has been used in British
Columbia, no case of drinking water contamination has occurred from
the hydraulic fracturing process.
Water used for hydraulic fracturing can be recaptured and reused
in another natural gas well. This eliminates the need to use new,
fresh water.
120.6 billion cubic metres
Average runoff replenished
annually in northeastern
B.C. river basins
Protecting groundwater
5
Pipelines
Pipeline infrastructure is well established in British Columbia.
The first pipelines were built in the 1950s. Today in B.C., more than
40,000 kilometres of pipelines transport natural gas, oil, water and
other fluids. Natural gas pipelines connect wells in the Northeast to
markets across British Columbia.
Pipelines are the most efficient and environmentally safe way to move
natural gas over long distances, such as between wells in northeastern
B.C. and the Coast.
Additional pipelines will be needed to transport natural gas to
liquefied natural gas plants. A few of the pipeline proposals under
consideration include:
•
Pacific Trail Pipeline: approximately 480 kilometres from north
of Prince George to Kitimat.
•
Coastal GasLink Pipeline: 650 kilometres from the Dawson Creek
area to Kitimat.
•
Prince Rupert Gas Transmission Project: 900 kilometres from
the Hudson’s Hope area to Port Edward.
Cordova Embayment
The BC Oil and Gas Commission has procedures in place to monitor
pipeline conditions and respond to emergencies 24 hours a day.
By law, each company must establish and follow safety procedures,
including constant monitoring of gas pressure, flow and temperature.
There are also internal and external inspections to find corrosion, leaks
or other hazards to the pipeline. Most small leaks would be detected
during routine maintenance and inspections.
Liard Basin
Horn River Basin
Western Canadian Basin
Fort Nelson
Montney Basin
Fort St. John
Natural gas is colourless, odourless, non-toxic and non-corrosive. In
the unlikely instance of a leak, natural gas would evaporate into the
atmosphere where it would be broken down into carbon dioxide
and water.
Dawson Creek
Prince Rupert
Prince George
Kitimat
Haida
Gwaii
Liquefied natural gas (LNG)
Hecate
Strait
Existing Pipelines
Proposed Pipelines
Kamloops
Natural Gas Basins
Western Canadian Basin
Liard Basin
Kelowna
Pacific Ocean
Horn River Basin
Cordova Embayment
Montney Basin
6
Vancouver
Victoria
LNG is natural gas that has been chilled to -160°C. Once chilled, the
natural gas becomes a liquid, shrinking to 1/600th of its original
volume. It is now safer and more efficient to transport overseas.
LNG is loaded onto specially designed ships and sent to foreign
markets. There, it is converted back into a gas, and used to generate
power and heat homes and businesses.
As of October 2014, there are 18 industry projects proposing to
produce LNG for export from British Columbia.
Shipping LNG around the world
Natural gas is the cleanest, most efficient fossil fuel available, and
it’s in high demand around the world. In its liquid state, natural gas
is efficient and economical to send to overseas markets.
Prince Rupert is the shortest trade route between North America and
export markets in Asia. It takes 8–11 days to travel to Asia from Prince
Rupert on B.C.’s west coast. Prince Rupert is sheltered and ice-free year
round, has one of the deepest natural harbours in the world, and has
modern, state-of-the-art facilities. It has unobstructed entry to shipping
lanes in the Pacific Ocean, and there are no significant hazards such as
narrow channels to navigate.
Transportation of LNG within British Columbia waters will be tightly
regulated. Tugboats will help LNG tankers safely navigate through
inland waters. Ship movement will be monitored closely during
approach, berthing, loading and unloading.
In the unlikely case of a leak, there is a low risk of environmental
damage. Liquefied natural gas is colourless, odourless, non-toxic and
non-corrosive. As LNG warms up from -160°C, it evaporates and returns
to a gaseous state, dispersing into the atmosphere.
Liquefied natural gas tanks are not pressurized, and they contain
no oxygen. Under those conditions, LNG is not explosive.
There are detailed emergency response plans in place to ensure LNG
is transported safely.
LNG tanks
Strong safety record
•
Last year, approximately 240 million tonnes of LNG were traded
around the world.
•
350 carriers have completed more than 135,000 voyages, travelling
more than 240 million kilometres at sea.
•There has been no significant incident resulting in a loss of cargo
at sea or in port.
Insulation
Double hull
LNG carriers are built to rigorous international standards.
•
Construction is supervised by third-party inspectors, and all ships must
have international certification to carry liquefied natural gas.
•
•
•
•
All LNG-certified ships have double hulls.
Cargo tanks are separated from the hull structure by thick insulation.
Carriers are specifically designed to contain LNG.
Vessels are inspected once a year, with a full dry-dock inspection
every five years.
7
Protecting the Environment
Greenhouse gas
Alternative power sources and transitional fuel
Natural gas is a fossil fuel. Like all fossil fuels, it generates carbon
dioxide – also known as CO2, a type of greenhouse gas.
Natural gas is widely accepted as a transitional fuel, meaning it
can help reduce carbon emissions now while powering the shift to
renewable energy sources such as wind, solar and bioenergy.
Natural gas is the cleanest burning of all fossil fuels. It is being
marketed to China and other parts of Asia as an efficient alternative
to dirtier energy sources, like coal. Changing from coal to natural
gas would cut China’s greenhouse gas emissions by up to 40%.
Over a year, two trillion cubic feet of B.C.’s natural gas could replace:
• more than 70 nuclear facilities, or
• approximately 100 coal plants.
Carbon Dioxide Emissions
British Columbia’s liquefied natural gas facilities will be the cleanest
in the world. Strict measures will be in place before LNG export plants
are built, and the provincial government will continue to focus on
using innovation and clean energy sources to reduce greenhouse
gas emissions across the natural gas industry.
Surface Area Used for Oil and Gas Activities in Northeast British Columbia
(Kilograms
per Gigajoule)
Carbon
Dioxide
Emissions
(Kilograms per Gigajoule)
Area used for
oil and gas
activities
(hectares)
100
80
60
40
Wells
30,226
0.17
Roads
83,492
0.48
20
Facilities
1,543
0.01
0
Pipelines
43,893
0.25
Other oil and gas infrastructures
12,672
0.07
Geophysical exploration (seismic lines)
227,815
1.30
Total area used for oil and gas activities
399,641
2.28
Natural Gas
Energy Information Administration
8
Per cent of
northeastern B.C.
(hectares)
Oil
Coal
Land reclamation
Earthquakes
Regulatory and legal requirements cover the restoration of natural gas
sites that are no longer operating.
•
Infrastructure, such as wells and pipelines, is built to withstand
the effects of an earthquake or seismic disturbance.
•
Planning to reclaim a natural gas well starts at the beginning
of the project, long before the well reaches the end of production.
•
•
For example, companies must minimize the disturbance to nearby
land before and during a drilling operation. This decreases the
amount of work necessary to return the area to its original state
after the well is no longer producing natural gas.
A BC Oil and Gas Commission investigation found hydraulic
fracturing can be connected to very small, barely detectable
movements underground, which have resulted in no surface damage.
•
B.C. has tightened requirements to monitor, report and address
seismic disturbances.
•
It generally takes a year or more to reclaim a well site – from
the time the well is capped and equipment removed, to cleaning up
the site, replacing soil and replanting native vegetation.
•To ensure data is monitored constantly, six additional seismograph
stations have been installed across northeastern B.C. to measure
underground activity.
Pipeline safety
•Natural gas companies are required to monitor and inspect pipelines
regularly to ensure they are safe.
•
Companies must report the details of their monitoring actions
to regulators.
•
Provincial laws outline how industry must protect wildlife. These
laws are carefully considered before any pipeline or facility permits
are granted. Permits regularly contain additional requirements to
increase protection for wildlife during all phases of operation, from
construction to decommissioning.
9
LNG: Benefits to B.C., communities and first nations
Research shows that if five LNG plants were built in the province,
British Columbians would receive the following benefits over a
30-year period:
•
a total investment of $175 billion and a contribution of up to
$1 trillion to the province’s gross domestic product.
•
over $100 billion in provincial tax revenues.
This revenue could be used to help eliminate the provincial debt over
time, reduce cost burdens for families and local communities, and
support services such as health care and education.
It would also create:
•
58,700 direct and indirect construction jobs.
•
23,800 permanent direct and indirect jobs for operations.
•
thousands more of spinoff jobs as a result of households having
more income.
A better quality of life
•
First Nations, rural and remote communities across northern
British Columbia will benefit directly from the creation of
well-paying jobs close to home.
•
Large numbers of skilled workers moving to northern B.C. will
help to grow communities and create a more vibrant economy.
These workers will bring a diversity of culture, experience and
skills with them.
•
Higher disposable income will bring new spinoff industries and
businesses, providing additional goods, services and amenities
to people living in northern and coastal B.C.
Jobs
B.C.’s LNG industry could
create more than 100,000
jobs in total:
58,700
direct and indirect
construction jobs
23,800
permanent direct and
indirect jobs for operations
There will also be thousands of spinoff jobs,
not directly related to LNG operations, but
created as a result of households having
more income.
10
Preparing for growth
First Nations
Communities are already planning and preparing for an
unprecedented demand for better housing, infrastructure and
community services.
First Nations are critical partners in the LNG industry, and B.C. is
working to ensure First Nations communities can participate in and
benefit from the opportunity. The B.C. government is negotiating
economic benefit agreements with First Nations.
•
•
Just like athletes’ residences during the Olympic Games, modular
housing for temporary workers will be relocated and used for
other purposes once the construction stage is complete and
plants are operational.
Communities are working with industry and the federal and
provincial governments to upgrade infrastructure and services.
This means improvements to highways, bridges, airports, sewer
and water, fire and emergency services, recreational facilities, and
broadband connectivity for Internet access.
Revenue
•B.C.’s Skills for Jobs Blueprint focuses on increasing Aboriginal school
completion rates and skills training to reach the goal of 15,000
Aboriginal workers over the next 10 years.
•
First Nations along the pipeline route for the Kitimat LNG Project
have agreements in place with both the provincial government
and industry.
•
Haisla First Nation in Kitimat are partners with Golar LNG in the
B.C. LNG project, and will host the Kitimat LNG facility on their
territory – Bish Cove.
•The Lax Kw ’alaams and Metlakatla First Nations have revenuesharing agreements for LNG proposals in Grassy Point near
Prince Rupert.
More than
$100 BILLION
over 30 years will be used to:
•
Industry is developing Impact Benefit Agreements with First Nations
to address employment, contract and business opportunities.
To date, over $7 billion in investments have been made by industry
to acquire natural gas assets needed to support the LNG industry.
It is estimated that another $2 billion has been spent preparing for
the construction of LNG infrastructure.
Eliminate the
provincial debt
over time
Support
Reduce cost
government
burdens
services such as
for families
health care and
and local
education
communities
11
Resources
For more information about natural gas and liquefied natural gas, see the following resources:
Liquefied Natural Gas in British Columbia
engage.gov.bc.ca/lnginbc/
Canadian Society for Unconventional Resources (CSUR)
www.csur.com
BC Jobs Plan
Engage.gov.bc.ca/bcjobsplan
Clean Air Strategic Alliance (CASA)
www.casahome.org
British Columbia Ministry of Natural Gas Development
www.gov.bc.ca/mngd/
BC Oil and Gas Commission
www.bcogc.ca
Canadian Association of Petroleum Producers (CAPP)
www.capp.ca
Canadian Centre for Energy
www.centreforenergy.com
Canadian Energy Research Institute
www.ceri.ca
Canadian Energy Pipeline Association
www.cepa.com
Canadian Gas Association
www.cga.ca
Canadian Natural Gas Initiative
www.canadiannaturalgas.ca
12
Environment Canada
www.ec.gc.ca
Frac Focus Chemical Disclosure Registry
www.fracfocus.ca
Go with Natural Gas: An Industry and Government Initiative
www.gowithnaturalgas.ca
British Columbia Ministry of Energy and Mines
www.gov.bc.ca/ener
National Energy Board
www.neb-one.gc.ca
Natural Resources Canada
www.nrcan.gc.ca
Statistics Canada
www.statcan.gc.ca
U.S. Energy Information Administration
www.eia.gov
www.lnginbc.ca