Opinion

B.C. gas boom is real, all right

Gas pipeline equipment in a farmer
Gas pipeline equipment in a farmer's field east of Dawson Creek. Installations such as this have proliferated in the Peace region, where some were the target of a series of bombings in 2009.
— image credit: Tom Fletcher/Black Press

VICTORIA – Whether Christy Clark’s government survives the May election or not, the natural gas “Prosperity Fund” idea floated in last week’s throne speech is a useful one.

B.C. is poised to join Alberta in the upper rank of energy producing jurisdictions, with an expanding network of natural gas collection, refining and processing into liquid (LNG) for export. Clark’s pre-election throne speech proposed a resource fund similar to Alberta’s Heritage Fund that would be reserved for debt reduction and major projects, rather than spent on programs, which tends to happen under the political pressure of four-year election cycles.

Opposition politicians and media commentators have dismissed this as a pre-election stunt. They note that the LNG industry in B.C. doesn’t exist yet, and may never produce the hundreds of billions of dollars projected over the next 30 years.

I returned for a visit to B.C.’s northeast earlier this month, and I can tell you the gas boom is real. My parents homesteaded east of Dawson Creek near the Alberta border in 1962, and I recall when our farm was drilled for gas by Gulf Canada 40 years ago.

Many more gas wells have been drilled since then, and country roads have been widened and numbered for industrial traffic. Hydraulic fracturing, already in use when our farm was drilled, has been combined with directional drilling to open up huge new supplies.

A farming community called Montney is the latest hot play, yielding not only shale gas but petroleum liquids, which are valuable for diluting heavy oil among other things.

B.C. has never seen this kind of international investment interest before. Initial projects have been joined by global players such as British Gas, and Mitsubishi, a key player in Japan's replacement of its devastated nuclear power program.

Spectra Energy, which operates one of North America’s biggest gas processing plants at Fort Nelson and has another one under construction nearby, has begun work on a third plant near Dawson Creek. Spectra and British Gas have also proposed the latest of several pipelines, to move all this gas to an LNG terminal at Prince Rupert. The Kitimat-Prince Rupert region now has at least five proposed terminals, with investors including Shell, Chevron, ExxonMobil and state players from China and Korea.

All this is happening as shale gas is developed across the United States as well. As with oil, Canada is a captive of the U.S. market, and the flood of new gas supply has the North American price at rock bottom.

At least B.C. hopes it’s the bottom. Gas royalties passed forest income to the B.C. treasury many years ago, and now as the forest industry struggles to recover, the province faces tumbling revenues from gas.

Why would B.C.’s shale gas be seen as a priority for new global investment in LNG? For one thing, we’re a stable democratic country with a mature industry and competent regulation.

Secondly, the shipping advantage of the Kitimat and Prince Rupert ports to the Pacific Rim has finally been recognized internationally, as coal, forest products, grain and container traffic has climbed in recent years.

B.C. has another advantage that appears to be increasingly important. The shale gas deposits are deep, under a kilometre or more of solid rock, and most are in remote, sparsely inhabited locations.

That adds cost to the pipeline system, but it has a benefit. At the beginning of the year I predicted that the international protest movement that dishonestly targets Alberta oil would soon turn to demonizing natural gas.

That pseudo-scientific attack has begun, right here in B.C. I’ll have more on that in a subsequent column.

Tom Fletcher is legislative reporter and columnist for Black Press and BCLocalnews.com

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