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BC Premier Clark's impossible LNG dream

By: 
Bradley Hughes

February 10, 2014

Before, during and after last year's provincial election the BC Liberals have put forward a plan for massive expansion of natural gas extraction, largely via fracking, and Liquid Natural Gas (LNG) exports via ship to Asia.
 
They have promised government revenues from LNG of $130 billion to $270 billion over the next 30 years. The plan involves having at least three pipelines and LNG export terminals in operation by 2020, and having the first one completed by 2015. In January, Premier Christy Clark boldly asserted that BC could one day export four trillion cubic feet of natural gas per year, an amount that would put us on par with the output of Alberta’s tar sands industry. At the same time, LNG is promoted as a clean fuel that will replace coal production elsewhere, while being produced in the cleanest way in the world.
 
The myth of increased government revenues
In an analysis of the government's claims revenues from LNG, David Schreck concludes that the government must double the amount they charge the gas companies in order to make the billions they have claimed: “The calculations demonstrated here indicate that before the election the government assumed it could more than double its take from the natural gas industry.” You can bet that whatever LNG revenue framework the Clark government eventually introduces as law won't come close to more than doubling its take per unit of production from the industry. Bye-bye “prosperity-fund.”
 
The Liberals have also made revenue cuts that now amount to more than $3.5 billion per year according to the Canadian Centre for Policy Alternatives. Simply removing these tax cuts would provide ample funding for government programs.
 
The myth of new LNG terminals
According to the Liberals, “The BC Jobs Plan commits to bring at least one LNG pipeline and terminal online by 2015 and have three in operation by 2020, assuming all environmental and permitting applications are granted.” At the beginning of 2014, no construction on any terminals has started, the three projects that have been approved by the National Energy Board are planning to start construction in 2015 and finish in 2018, 2019 and 2020. However, the government's revenue projections are based on five LNG terminals by 2018.
 
The myth of increasing gas extraction
If all the projects that have been approved by the National Energy Board go ahead, the output of natural gas from BC “ would require increasing BC’s gas production to nearly 50 per cent more than all of Canada currently produces—within less than a decade,” according to a recent report by David Hughes of the Post Carbon Institute. C
 
Currently BC produces around 4 billion cubic feet per day (bcf/d) and the newly approved exports would raise this to 14.6 bcf/d. However rasing production by more than three times the current amount requires fracking way more than three times the current number of natural gas wells. This is because the production at each well starts high and drops of quickly, so the average gas well in BC after three years produces only around 40 per cent as much as it did when it started. In one of the most popular areas to frack, the Horn River, only 20 per cent of the initial rate of extraction remains after three years.
 
Because of this, even keeping total production at the same level requires constantly fracking new wells. Hughes estimates that to reach the approved volume of LNG exports BC would need an additional 10,000 gas wells by 2020 and a total of 50,000 new wells by 2039. To put this into perspective the total of all oil and gas wells drilled in BC since the 1950s is only 25,000. So the plan is to do 100 years worth of drilling in a couple of decades. His projections do not include the losses due to the fact that 10-15 per cent of the gas is CO2 and also the planned LNG terminals will be burning gas to power the refrigeration required to cool the gas to -160OC required to turn it into a liquid for shipping. So the actual number of wells will be higher. As he also points out, each well will require up to 40 million litres of water for fracking.
 
The Liberals’ LNG dream is a nightmare of climate injustice, and must be stopped.

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