2. nergy markets are dynamic, with long transition
E
periods to new technologies and new supplies, owing
in part to the massive capital stocks involved in energy
systems; and
3. atural gas, due to supply and demand
N
dynamics, will inevitably play an important
role in the shift to a less carbon-intensive
global economy.
The Natural Gas Imperative
The logical necessity of increasing natural gas use to help
manage climate concerns is now well-established in the
literature. Looking at global energy demand and supply
options, it is clear that it won’t be possible to quickly
convert to low/no CO2 energy sources.
The size and complexity of the existing energy
infrastructure, and the relative cost of supply options
to satisfy demand, make it both technically difficult and
costly to convert energy systems. 1 This is particularly
true in a world where the lion’s share of future growth in
population, economic activity, and energy consumption
will be heavily concentrated in emerging market
economies.
Due to these energy supply and demand realities, the
option to increase natural gas use is identified as a core
component of the solution because only natural gas
can serve as a relatively rapid substitute for higher CO2emitting energy sources. This transition role for natural
gas, in combination with other actions, can ratchet down
an otherwise increasing global CO2 trend.
Although it is generally agreed that natural gas
has fewer greenhouse gases (GHG) than coal,
a more definitive report from the US Department
of Energy’s (DOE) National Energy Technology Laboratory
confirms that, on a life-cycle basis, this also holds true
for LNG – even with long pipelines and long shipping
distances to end-use markets.
GHG life-cycle emissions, from natural gas exploration to
LNG to final conversion in a power plant (in China), are
1
For an insightful review of energy system transitions, see Peter A.
O’Conner “Energy Transitions.” Pardee Papers, No. 12, 2010.
40% lower than those produced from coal in a Chinese
coal-fired generation facility. This difference would likely
be even more favourable in the case of BC LNG, because
the distance travelled from upstream through to delivery
is shorter than that from the US (New Orleans).
Upstream Natural Gas Activities Fracking
Hydraulic fracking was first used on an
experimental basis in 1947 and deployed
commercially in 1949 in Oklahoma. Fracking is
not revolutionary, except to the extent it was combined
with horizontal drilling techniques, an innovation which
has enabled access to gas that cannot be extracted using
more conventional methods. This innovation has resulted
in the shale revolution – providing substantial volumes of
shale gas in a cost-effective manner.
The environmental concerns about fracking include:
1) Water – quality and volume impacts;
2) Methane leakage; and
3) Earthquakes.
A well-regulated shale gas sector, using today’s
technologies, yields an upstream natural gas
industry that can and does operate safely and
with a relatively small environmental footprint.
More importantly, where impacts outside of acceptable
parameters have been found in other jurisdictions, the )