LNG is natural gas chilled to -160 degrees Celsius so that it can be converted into a liquid form. After it has been liquefied, natural gas is compressed so it takes up much less space – approximately 1/600th less than natural gas.
Once compressed, LNG gas can be loaded on to specially equipped ships and transported overseas for sale into export markets. LNG is odourless, non-toxic, non-corrosive and less dense than water. If a spill were to occur, the natural gas would warm and evaporate, leaving no substances behind.
The Resource of Natural Gas
Widely available in many areas of the world, natural gas is a by-product of decaying organic matter in rock layers formed below the earth’s surface millions of years ago. As the matter decayed, the gas was trapped or isolated in the rock formations which prevented it from surfacing.
Natural gas is primarily composed of methane gas. It can also contain small amounts of ethane, propane butane and pentanes.
Today, natural gas is recognized as the world’s cleanest burning fossil fuel. It has a low carbon dioxide content and is often used as a fuel to produce other forms of energy.
Once processed for commercial use, natural gas can be safely used for a variety of purposes such as heating homes and businesses, generating electricity or fueling vehicles. It can also be paired with renewable power sources such as wind and solar to make these forms of intermittent energy more reliable and available.
Because natural gas is clean, safe and plentiful, it will remain an important part of the world’s future energy needs.
LNG is processed natural gas. This gas comes, primarily, from the northeast corner of British Columbia. Some of the world’s most promising areas for natural gas extraction are found in B.C. – in places like the Horn River Basin and the Montney Basin.
The need for energy is increasing globally, particularly in emerging Asian economies. Natural gas − the world’s cleanest burning fossil fuel − is able to accommodate the demand. In fact, world-wide demand for LNG is projected to increase two-and-a-half times over the next 20 years.
British Columbia is well-positioned to meet this need, with the competitive advantages to become a leading contender for LNG growth and export, including an abundant supply of natural gas which can support economic activity in the province for over 150 years.
LNG is a promising industry thanks to the high price of natural gas in the Asia Pacific region. Despite over-supply in North America, things are different in Asia. In Asia, the value of LNG is currently linked to the price of oil, making it a higher valued product. The proposed LNG facilities in B.C, focused on exporting natural gas to the Asia Pacific, will have long-term supply agreements put in place to ensure the market value of B.C.’s natural gas remains strong.
As the LNG industry develops, it will create jobs all over the province.
These jobs will include direct and indirect employment during the construction phase as well as long-term operations. In 2013, the Province commissioned an independent analysis of the potential employment benefits created by LNG development in British Columbia.
This analysis was conducted by Grant Thornton. Employment projections were created using information about the natural-gas sector provided by the provincial government as well as Grant Thornton’s own assumptions about development.
Grant Thornton concluded that an LNG industry in B.C., based on five plants operating by 2021, could create more than 39,000 annual jobs over a nine-year construction period and approximately 75,000 jobs once the plants were fully operational – more than 100,000 jobs in total.
Over 19 LNG proposals have come forward and are at various stages of development. These proposals are from various companies, both Canadian and international.
The Province manages industry’s access to natural gas on behalf of British Columbians, who actually own the rights to the resource.
As a result, the Province collects a portion of revenues from the natural gas industry – known as royalty payments. In turn, the Province uses the revenue to help fund vital programs and services in health care, education, infrastructure development and more.
As an entirely new industry, LNG creates an opportunity for the provincial government to collect additional revenue and secure a brighter economic future for our province.
Revenue from the new LNG industry will be collected in a manner that ensures a portion of the wealth flows to a B.C. Prosperity Fund. Our research shows this new fund could grow to in excess of $100 billion over the next 30 years.
The money will provide the B.C. government with the means to eliminate the provincial debt over time; reduce cost burdens for families and local communities, and support government services such as health care and education.
Despite over-supply in North America, things are different in Asia. In Asia, the value of LNG is currently linked to the price of oil, making it a higher valued product.
Also, demand is rising in countries such as Japan and China as they look to replace traditional sources of energy such as nuclear and coal with a safer, cleaner alternative. This rising demand enhances the cost customers are willing to pay.
Currently, the proposed LNG facilities in B.C. are focused on exporting natural gas to the Asia Pacific. These projects will have long-term supply agreements put in place to ensure the market value of B.C.’s natural gas remains strong.
B.C. is a world leader in environmental regulation for natural gas development.
In fact, B.C. is considered to have the strictest regulations. Exploration and extraction practices are tightly monitored to protect wildlife. The latest pipeline technology is used to safeguard water from harm.
The B.C. government is taking action to maintain a safe natural gas sector while also building the cleanest LNG facilities in the world. In negotiations with proponents, the Province continues to focus on the use of clean energy sources to power LNG facilities. New measures to manage greenhouse gas emissions are also being evaluated.
Of course, the fight against climate change is a global issue. As a future supplier of the cleanest burning fossil fuel, B.C. will help other markets transition to cleaner natural gas and away from dirtier energy sources like coal. For years, China and other areas of Asia have relied heavily on coal for energy needs. Soon, with access to B.C.’s natural gas, coal-fired power generation should decrease and cleaner energy production will fill the gap.
For more than 50 years people have been extracting natural gas in British Columbia.
To ensure industry uses safe drilling techniques, the Province has a world-class regulatory framework in place to govern extraction of natural gas from the soil.
Some of the world’s most promising areas for natural gas extraction are found in B.C. – in places like the Horn River Basin and the Montney Basin.
Thanks to new innovations, B.C. has been able to access newly discovered shale rock formations – a relatively common type of rock formation in the province – deep under the surface.
To extract the natural gas from these formations, engineers use a stimulation technique known as hydraulic fracturing. The natural gas extracted this way is often referred to as shale gas.
British Columbia’s natural gas potential is estimated at over 2,933 trillion cubic feet. To put it in perspective, each year industry extracts about 4 trillion cubic feet of natural gas. Based on the amount of gas industry is able to recover and increased activity, B.C. has over 150 years worth of natural gas supply.
And, new discoveries are being made all the time.
LNG is a once-in-a-lifetime opportunity for B.C.
Diversification of our natural gas sector will bring major benefits to communities in the Northwest and right across the province. It will also create new demands on local resources.
Over the next year, the provincial government will be helping communities prepare for the emerging opportunities and demands of growing natural gas sector and a new LNG industry.
Part of this process will include asking communities about their needs as new workers increasingly move in and take residence. The provincial government anticipates rapid economic development and population growth, especially for municipal services that support health, education and public safety.
And, we are prepared to work with impacted communities to help them plan towards that opportunity. Measures to sustain infrastructure in growing communities will be taken seriously, including the needs associated with sewers, water quality, health care, education and recreation services.
Over the coming years, the Province will work in partnership with our communities and to support economic and social opportunities for families.
Together, we will lay the groundwork to ensure our communities remain healthy and are equipped to deal with growth.
Most recently, the provincial government signed an Economic Partnership Agreement with 15 First Nations along the planned pipeline route for Kitimat LNG – a proposal by Apache Corp. and Chevron Canada.
Similar agreements are being negotiated now to secure long-term economic opportunities for First Nations all over northern B.C. As part of the provincial government’s commitment to create jobs for British Columbians, skills training and apprentice programs are also being expanded to increase First Nations participation.
First Nations have an important and direct role in the development of our natural gas export potential.
We look forward to working with First Nations, our communities and industry to advance plans in LNG impacted communities and along proposed pipeline corridors.
For more information on B.C.’s LNG industry please see the links below:
Interested in learning factual information on B.C.’s LNG? Be sure to give our five fact cards a read:
Fact Card: LNG
Fact Card: Hydraulic Fracturing
Fact Card: Water
Fact Card: Transportation