Could liquefied natural gas be a solution to climate change?


Climate change and the goal of net zero emissions by 2050 have put Canada’s oil and gas producers in the role of black hat bad guys.

From now on, natural gas producers hope to recast into white hat bonds, with proposals for LNG (liquefied natural gas) ports on the Pacific and Atlantic coasts.

LNG would be a transitional fuel in this scenario. It would be shipped to Asia and Europe, where it would replace coal-fired electricity generators with natural gas generators that emit less greenhouse gases (GHGs).

Royal Dutch Shell is moving forward with its $ 48 billion LNG Canada port in Kitimat, British Columbia, described by Prime Minister Justin Trudeau as the largest investment ever in Canada.

To the east, two LNG projects are underway. In Quebec, Énergie Saguenay will decide whether or not to continue its investment of $ 9.6 billion in the LNG Quebec project at the end of 2022.

The Quebec cabinet could block the project, after the provincial agency which conducts public consultations on the environmental impacts of the projects concluded that the project would increase GHGs.

Ottawa and Quebec are also evaluating the project jointly.

In Nova Scotia, Pieridae Energy Inc. will decide by June 30 whether or not to proceed with its $ 12 billion Goldboro LNG project.

James Gunvaldsen Klaassen, a Halifax lawyer at Ecojustice, who defends environmental activists, called Goldboro LNG a “fossil fuel project that is not appropriate” and “a quick buck” for LNG proponents “that we will pay multiple times. “

Western Canada has always produced more gas than oil. Cooling this gas to -160 C, then reducing its volume by about 600 times, produces liquefied natural gas, which can be transported in refrigerated tankers.

Several LNG projects have been announced in Canada, but only Kitimat LNG and Canada LNG, also in Kitimat, are moving forward.

Both Kitimat projects are to be supplied with natural gas from the still unfinished TC Energy Coastal GasLink pipeline that crosses Wet’suet’en First Nation territory and was the scene of protests in 2020.

The Goldboro project in Nova Scotia has overcome many obstacles that have hampered other LNG projects, James Millar, Pieridae’s director of external relations, said in a telephone interview Thursday.

Goldboro uses existing pipelines running from Alberta to Nova Scotia, although modifications will be required on the TransQuebec Maritimes section from Montreal to the US border, he said.

Environnement Vert Plus, a Quebec environmental group, notes that the modifications Millar alludes to are major and would likely require expropriation.

TransQuebec Maritimes can process 350 million cubic feet of natural gas per day. Goldboro will need 800 million cubic feet per day for its first phase and an additional 800 million cubic feet per day for its second phase.

From TransQuebec Maritimes, gas would be transported by Portland Natural gas transport system, then at tThe Maritimes & Northeast pipeline, which connects Goldboro near Boston.

The pipeline was originally constructed to transport offshore gas from the now largely depleted Sable Island gas field. This pipeline can be reversed.

Alfred Sorensen, now CEO of Pieridae, was the founding CEO of Galveston LNG’s Kitimat LNG project when it was the first LNG plant licensed in North America in 2006.

Sorensen knows the Goldboro Project must be done in collaboration with First Nations, Millar said. In 2019, Pieridae signed an agreement “with the 13 bands” affected, with the promise of jobs for the Mi’kmaq and the construction of a lodge where they can live during construction.

Environmentalists say the Mi’kmaq oppose the project, but Millar said the company holds weekly meetings with the First Nation.

Pieridae has received environmental approvals from the federal and Nova Scotia governments.

Klaassen of Ecojustice points out that the Impact Assessment Agency of Canada did not assess the Goldboro LNG project; he evaluated an earlier project that was “fundamentally different”.

The former Keltic Petrochemicals plant at the Goldboro site was approved in 2008 by then Federal Environment Minister John Baird.

Keltic planned a port to import natural gas to Goldboro to make petrochemicals, but abandoned the project as unprofitable in 2010.

In 2012, after Pieridae announced its Goldboro LNG project, the federal government decided that the Pieridae project had been cleared by Keltic’s assessment.

Ecojustice claims that there has been no environmental assessment of the Goldboro LNG project.

The Impact Assessment Agency of Canada “is currently reviewing Ecojustice’s request,” the agency said in an email.

Goldboro had to undergo an assessment by the Nova Scotia government, which required the company to have a GHG emissions management plan.

Klaassen said an LNG plant is not the same as the petrochemicals plant proposed by Keltic, estimating that Goldboro LNG would emit 3.7 million tonnes of GHGs per year.

Millar said Pieridae had worked out a plan, with Navius ​​Research Inc. of Vancouver, to make Goldboro LNG a net zero emitter by 2050.

The plan would involve the capture and storage of carbon in a cave in Alberta, where the gas would come from, and other carbon capture technologies in Goldboro – as well as the use of carbon credits, if necessary.

“There aren’t enough carbon credits in Nova Scotia,” Klaassen said, adding that carbon capture and storage remains an unproven technology.

Another lesson Sorensen learned from the development of Kitimat LNG was the need to recruit a committed buyer.

“No client, no project,” said Sorensen.

Unlike Energie Saguenay’s LNG Quebec project, Pieridae has a customer for its LNG.

Uniper, a German company, has agreed to buy five million tonnes of LNG per year from Goldboro, or about half of its total production, for a period of 20 years.

In addition, a German government agency has offered Pieridae $ 5.3 billion in loan guarantees, meaning the company can borrow with Germany’s AAA credit rating, thus ensuring low interest costs, Millar said.

Millar has confirmed that Pieridae is also in talks with the Canadian government over a $ 925 million federal investment in the Goldboro LNG project.

Pieridae threatened to sue Environnement Vert Plus after publishing information about the talks, but Millar said the company was not trying to hide anything. He said the leaked information came from a PowerPoint presentation protected by a nondisclosure agreement.

Klaassen said if public funds were committed to a fossil fuel project, the presentation should be public knowledge.

“The cost of carbon to pay for jobs is significant,” he said, adding that carbon would be released at every step from extracting gas in Alberta to shipping it, with leaks and losses ongoing. of road.

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