Mark Jaccard and Brad Griffin, Pacific Institute for Climate Solutions, July 2010
Shale gas development in northeast B.C., is associated with high concentrations of CO2, which is normally vented to the atmosphere. To meet provincial GHG reduction targets, this CO2 will all need to be captured. This paper recommends policy steps the government must take.
The B.C. government seeks to reduce provincial greenhouse gas (GHG) emissions 33% below their 2007 level by 2020. By 2050, it has committed to emissions that are 80% below their 2007 level. While pursuing these GHG emission targets, the government continues to promote the exploitation of highly valuable provincial natural gas resources in spite of the challenges this strategy creates for its GHG objectives.
Shale gas development in northeast B.C., particularly in the Horn River Basin near Fort Nelson, could become a major economic driver for the province. ... However, this gas is associated with high concentrations of CO2, which is normally vented to the atmosphere as the gas is processed to market standards.
Raw natural gas extracted from shale in the Horn River Basin contains approximately 11-12% CO2, considerably higher than the average content of only 2-4.5% for B.C.’s conventional natural gas reservoirs.
Natural gas processing plants also have significant emissions from in-plant fuels combustion. We have decided not to pursue this issue in this paper because we are not contesting the development of a natural gas industry in B.C. Such an industry may for a time contribute to continental reductions in GHG emissions if the gas is used almost entirely to supplant coal in electricity generation and/or gasoline in vehicles. But long run simulations indicate that if North America is to reach emissions reductions of 80% and more by mid-century, then almost all fossil fuel use will need to involve conversion to electricity and hydrogen with 90% capture and storage of all carbon in the fuels.
... the broad options for the government [ to meet the 2020 GHG reduction target ] are: (1) abandon its GHG reduction target, (2) ban shale gas development completely, or (3) restrict shale gas development so that it is no more GHG-intensive than the conventional natural gas industry. This latter option requires industry to adopt carbon capture and storage (CCS) technologies at natural gas processing facilities to capture CO2.
In the case of B.C.’s current target for 2020, the potential development of shale gas makes it likely that this province will sustain the Canadian tradition of failing to meet GHG emissions reduction targets. If, however, the government is serious about achieving its target, then our analysis suggests that it needs to either ban shale gas development in B.C. or only allow such development if it includes CCS to prevent CO2 venting. Even in this latter case, it is likely to be difficult to achieve B.C.’s GHG emissions reduction targets.
We therefore recommend the following:
1. The B.C. government should immediately amend the EnCana Cabin plant Environmental Assessment Certificate approval and require that this project, as well as all future natural gas projects processing shale gas (including the retrofit or expansion of existing plants), include CO2 capture and storage ...
2. The B.C. government should establish a competitive bidding process for gas industries to apply for government funding to assist in the first development of shale gas with CCS. The lowest bid per unit of CO2e sequestered will receive a subsidy offer from the government ... Funds for the subsidy could be provided from natural gas royalty revenues or from a portion of carbon tax proceeds as the carbon tax should soon be applied to combustion emissions from natural gas processing facilities. ...
3. The B.C. government should conduct a thorough analysis of its evolving natural gas industry and the implications for its GHG targets. In particular, it needs to extend the preliminary analysis of this paper to examine options for preventing CO2 venting and for reduction of methane leaks from pipelines and emissions from processing facilities. Policies to be explored include carbon taxes, subsidies, regulations and, if necessary, moratoriums.