The U.S. EPA could work wonders for natural gas
The cleanest fossil fuel holds promise in a carbon-constrained world
Illustration by Gracia Lam
As Alberta’s former energy minister and envoy to Washington, D.C., Murray Smith warns against letting the environment drop off industrial or policy agendas because the Copenhagen climate change summit ran out of gas. “Nothing is going away. The time frame has just stretched,” he says.
And the long-range prospect that Copenhagen raised – a strong global carbon emissions control treaty including the holdouts that made the 1997 Kyoto pact unenforceable (the United States and China) – is not an evil for Alberta as Canada’s fossil fuel mainstay, he adds.
“You can’t suppose anything. You can’t predict the future. But you can prepare for it. The keynote is going to be energy efficiency. That will be how we have an effective environmental cleanup,” he says.
“Where we’re headed is towards the apex of two priorities. We’re going to a point where environmental and economic efficiency meet at an apex of profits,” Smith predicts. As an adviser with TD Securities and the global Hatch Ltd. engineering empire, the apple of his eye is N-Solv Corp., inventor of an oil sands technology billed as capable of fulfilling his vision by cutting water use, fuel consumption and carbon emissions.
On a larger scale, industry captains are echoing Smith. A spreading consensus, emerging at events from Calgary business conferences to auctions of Alberta and British Columbia drilling rights, says there is far more to Canadian energy growth prospects than bitumen projects. On top of having the world’s second-biggest oil reserves after Saudi Arabia, Alberta’s natural resource endowment has made Canada the second-largest natural gas exporter after Russia.
After the current slump caused by an unhappy surprise coincidence of supply growth and economic recession drops in demand, a gas renaissance is coming, EnCana Corp. president Randy Eresman predicts. Innovations for tapping vast new supplies embedded in dense shale formations are cutting costs and making possible equally great increases in use of the cleanest fossil fuel.
Not all the next generation of production is expected to come from Alberta, even if the government’s “competitiveness review” of royalties and regulation eventually restores the province’s traditional stature as the uncontested prime drilling target. But Calgary firms are responsible for almost all the growth that is spreading to gas-rich shale deposits in northern B.C., Quebec and the Maritimes. TransCanada Corp. predicts its 23,720-kilometer Nova pipeline grid in Alberta will assure that the old mainstay supply province remains the biggest gas trading and shipping hub in North America.
Expert forecasts of shale gas vary wildly depending on estimating methods, expectations for the evolving production technology, cost projections and views on the geological deposits. But on one score, all the outlooks agree. The new supply source is measured in astronomical numbers – reserve additions in trillions of cubic feet, and production growth in billions of cubic feet per day.
The Nova pipeline grid has received industry requests for 2.5 billion cubic feet per day in capacity additions for shale production by 2014, reports TransCanada senior vice-president Max Feldman. The first Canadian development targets in the new field – the Horn River geological formation in B.C., and the Montney in B.C. and Alberta – stack up well compared to older U.S. counterparts, he told a Calgary industry conference held by the Canadian Energy Research Institute.
TransCanada is proceeding on schedule with two extensions of the Nova system, for $550 million, from Alberta into northern B.C. The National Energy Board granted approval in March for the first project, the Groundbirch Pipeline for Montney output from the Dawson Creek region. A construction application has been filed for the second extension, the Horn River Pipeline to serve its namesake shale deposit near B.C.’s boundary with the Yukon and Northwest Territories.
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