British Columbia: Adding LNG to Established Natural Gas Successes
It was a message which resonated with the delegates in attendance at the North American Gas Forum in Washington, DC.
Rich Coleman, Minister of Natural Gas Development, Ministry of Natural Gas Development British Columbia (BC), was outspoken about his region's pursuit of unconventional gas, addressing the challenges faced by his region.
“And how were going to deal with the opportunities in front of us and how we can work with the industry to make it successful in our part of the jurisdiction of North America, but also to globally defend the extraction of natural gas and let people know how important it is to the future of the world,” he said, mentioning BC's over 50 years of drilling and extracting natural gas.
Mr. Coleman explained: “We've actually been fracking for over 30 years in British Columbia and know how it works; we think we do it better than anybody else and we're not apologetic about the fact that we frack shale to get our natural gas. We've never had a well stem fault failed, nor have we ever contaminated groundwater in any way whatsoever in any area that we've drilled in BC and we're very proud of that.”
He said it was important that people received that message.
“Because, as we move forward, we're going to look at the opportunities that face us.”
Attracting investment to the region about 12-15 years ago was another topic touched upon by Mr. Coleman, who recalled how to expand and grow it BC had changed a number of its royalty programs to attract investment. “So that people would take more opportunity to drill in creative ways and move from where we thought we had reserves of about 15 years for North America to where today we could actually supply our North American customers and five liquefied natural gas plants and still have gas left 40 years from now.
“We are awash in natural gas like many other places in the world and today we now know that we have to move forward with an opportunity, which is liquefied natural gas to other customers in the world,” he continued.
Just two hears ago, he recalled, the region had two LNG facilities proposed while now it had 12. Companies like Shell, Chevron and Petronas had come to BC, performing feasibility studies to look at the opportunities there.
He added, “Because Canada is 3rd largest producer of natural gas in the world, obviously we want to make sure we have customers other than just on the North American continent, where we're already awash with natural gas, and we have lots of gas to supply this market – we need to move forward to be able to do that for others.”
Mr. Colemans said that in his opinion some of the most promising unconventional resources in North America were located in British Columbia, which he said bore a number of advantages.
He enumerated them: “First of all, our ports are two and a half days closer to Asia than any other ports on the West Coast of North America; second, our ambient temperature is about 30 degrees lower than anywhere else that people do natural gas, and our gas comes out of the ground at 30 degrees cooler than any other place in the world – that's an important fact when you think about how much energy's required to create LNG when you freeze it down to -160 degrees to liquefy it in the first place.”
For investors, he said, it was important to let them know that one's region was competitive and provided a long-term stable legal environment. “Our plan is to provide all of the above,” he explained. “We will be competitive than anyone in the next few months. We've been in significant discussions with industry over the last few months as we get to where we think the fundamentals are. Our fundamentals will be there and people won't have to worry about the risk of investing in British Columbia with regards to that, because we will lock it down to where people will know through legislation that we cannot come back in and change the game later on, so that they find that the competitiveness can be changed as it has been in some jurisdictions around the world.”
The ability to ensure this, explained Mr. Coleman, had to do with his region's fiscal responsibility.
One challenge he spoke of, however, was whether BC could bring in the skilled workforce necessary to make things happen, but emphasized the region's strength in environmental standards.