Wednesday, September 30, 2009

Natural Gas Important Commodity for British Columbia Economy

By Richard Dunn, Special to the SunSeptember 29, 2009

As we officially recognized Oil and Gas Week in British Columbia this month, it is important to acknowledge the contribution that clean-burning natural gas makes to the province's financial and economic well-being.

Many British Columbians are not fully aware of the growing role that natural gas plays in our economy and our standard of living, and the role it can play in improving the environment.

In fact, over the past decade, new technologies, innovative industry practices and public policy changes have positioned B.C. in the forefront of a natural gas renaissance in North America.

This renaissance is marked by an increase in continental natural gas production of nine per cent in the past two years, due exclusively to unconventional natural gas reserves. Production from these unconventional gas sources, once difficult and uneconomic to extract, has grown from 10 per cent of total production to 50 per cent.

Technological improvements such as horizontal and pad drilling and advanced well stimulation techniques are the fundamental drivers behind the rapid growth in unconventional gas production.

Accessible natural gas was once a declining resource, but there is now enough in North America to last us 80 to 100 years at current production rates. Natural gas is abundant and affordable -- and it can go a long way toward helping address our most pressing challenges in energy use, our economy and the environment.

B.C. has a rich endowment of this unconventional gas. It was the only jurisdiction in Canada to record an increase in natural gas production last year.

Two of the hottest plays in North America are the Montney tight-gas play and the Horn River Basin Shale in Northeastern B.C.. The potential exists to grow the production levels from these plays some two to three times in the next 10 to 20 years.

EnCana's developments in the Montney and Horn River Basin are being accomplished in a sustainable, responsible manner through effective regulations, planning and using new technologies to lessen our environmental footprint.

All this translates into potential economic growth and jobs for British Columbians, today, tomorrow and well into the future.

Take EnCana, for example. Since 2000, we've invested approximately $10 billion in B.C. in pursuit of unconventional gas resources. Since 2001, the entire industry has invested about $38 billion in the province.

Along the way, employment in the industry has grown 65 per cent to 21,000 direct jobs in 2007. That has led to about 60,000 to 70,000 support and service jobs in B.C. and across Canada.

Then there is the revenue that the industry generates for the provincial treasury in the form of royalties, land bonuses and taxes. All told, our industry has contributed approximately $17 billion to the province since 2001.

As the cleanest burning fossil fuel, natural gas holds significant potential to reduce greenhouse gas emissions through expanded use in trucks, buses and cars and new electricity generation. While renewable energies such as wind and solar are expected to grow, there will not be enough to fulfill North America's energy needs in the foreseeable future.

A significant portion of the power-generation sector produces electricity from coal-fired power plants. Natural- gas electricity generation is 50 per cent cleaner and has a significant advantage because it reduces sulphur dioxide, which is linked to acid rain. Because natural gas is now so abundant, the price is also competitive with coal in regions where both fuels exist.

Switching to natural gas in our vehicles would not only grow our economy, but would cost consumers 30 per cent less than diesel or gas, and produce significantly fewer pollutants and carbon dioxide emissions.

Today there are 10 million natural gas vehicles on the world's roads; but only 150,000 in North America. While we have been slow to adopt natural gas vehicles, this is changing. U.S. lawmakers are examining several pieces of legislation designed to bring natural-gas vehicles and heavy duty trucks into the mainstream market.

Vancouver-based Westport Innovations, a builder of engines and fuel injection systems, is already among the leaders in the global shift to cleaner-burning transportation fuel, with more than 20,000 of its clean engines running on compressed or liquid natural gas in cities around the world.

B.C.'s abundant supply of natural gas is a key to the province's economic future.

As North America seeks to address climate change, B.C. is poised to play a key role in creating a new clean-energy economy.

Richard Dunn is vice-president of regulatory and external relations for EnCana's Foothill's Division.
© Copyright (c) The Vancouver Sun

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