From gas lights to LNG

April 20, 2018

From gas lights to LNG – B.C.’s natural gas history

 

While the idea of cooling natural gas until it becomes a liquid may be a new idea in British Columbia, there’s nothing new about B.C.’s natural gas and natural gas industry.  In fact, the road to delivering it safely to homes and businesses and overseas as LNG began millions of years ago.

  • 560 million years ago the earliest of the plant and animal matter that makes up today’s natural gas resources was deposited in B.C.
  • September 28, 1862 – The first gas-powered streetlight is lit in Victoria in front of Carroll’s liquor store on Yates Street. But the gas used to power these lights is not natural gas- it is “coal gas”, gas produced from pulverizing and breaking down coal. In 1887, Vancouver and New Westminster introduce coal gas lighting and gas distribution to customers.
  • 1906 – The first official “natural” gas well in B.C. is drilled at the mouth of the Fraser River at Steveston but later abandoned.

DID YOU KNOW? The term “natural gas” comes from “nature’s gas”. Before methane deposits were discovered, gas was extracted from coal and known as “coal gas”. Coal gas was the primary source of all gas used for lighting and heating prior to the 1950s. A byproduct of pulverizing and distilling coal and extracting the gas, coal gas contains hydrogen, carbon monoxide and methane. When naturally occurring deposits of gas were discovered under the earth’s surface (the result of millions of years of decomposing plant and animal matter) it was seen as nature’s own gas, and the term “natural gas” was born.  Cleaner-burning, safer and reliable natural gas gained commercial popularity.

  • 1908 to 1940s – There is a lot of test drilling of natural gas wells across B.C. (approximately 60), mainly in the Peace Region, however, not much comes of it.
  • 1944 – The first Petroleum and Natural Gas Act” is passed by the B.C. Government to put laws in place to manage natural gas development in B.C.
  • December 24, 1947 – B.C.’s first commercial natural gas “Peace River No. 1” well begins operation at Pouce Coupe and provides natural gas to Dawson Creek.
  • 1950 – Hydraulic fracturing is first used in B.C. (Today, 75% of natural gas production in B.C. comes from wells that were hydraulically fractured and 90% of all new wells use hydraulic fracturing. This means the natural gas in your home, is mostly produced using hydraulic fracturing.)
  • 1957 – The first natural gas pipelines are built to supply natural gas from Northeast B.C. to communities across B.C. and to export natural gas to the United States.
  • 1959 – Meanwhile, in Minnesota, the first LNG ship, the Methane Pioneer, is built by British Gas. Its maiden voyage carrying LNG to Britain takes 27 days. It is renamed the Aristotle and operates for eight years before it is retired as newer, better LNG ships are built.
  • 1960’s B.C. begins a widespread switch from “coal gas” to “natural gas” and “nature’s gas” gains popularity in homes and businesses.
  • 1980’s – There are more than 550,000 natural gas customers in B.C. in 70 communities.
  • 1998 – The BC Oil and Gas Commission is created as a Crown corporation.
  • 2016 – Natural gas production in B.C. is at 36 billion cubic metres with 11.8 billion cubic metres exported to the U.S.
  • November 2017 – FortisBC sends the first shipment of B.C. LNG overseas to China.
  • Today in B.C. there are more than 1 million natural gas customers and over 40,000 kilometres of natural gas pipelines.

Is LNG the future of B.C.’s natural gas?

Liquefying B.C.’s natural gas adds value to our natural gas exports by creating skilled jobs in natural gas development, safe transport through pipelines and operation of liquefaction facilities. Right now, B.C.’s only market for natural gas is the United States which has gone from a net importer of natural gas to net exporter of natural gas in recent years. This means they don’t need B.C.’s natural gas anymore and in fact, are already exporting natural gas as LNG.

What is LNG? Cooling natural gas to -162 degrees Celsius reduces it in volume by 1/600th, or about the difference in size between a beach ball and a ping pong ball.  This allows the liquefied natural gas (LNG) to be safely transported by specially designed carriers to customers overseas. Non-toxic and non-corrosive, LNG has been safely shipped around the world for more than 50 years to ports in major cities, such as Boston and Tokyo.

Additionally, B.C. has some of the highest standards in the world for extracting and transporting natural gas.  In fact, more than a million customers in B.C. have a natural gas pipeline that safely delivers energy 24/7 to their home or business.

Developing a liquefied natural gas industry will create more high-tech jobs in natural gas extraction, pipeline monitoring and LNG facility management.  Building this infrastructure will employ thousands of trades and B.C. businesses across the province will benefit from contracts and sub-contracts that help people buy homes, pay mortgages and support families.

Did you know? The Conference Board of Canada estimates a modest LNG industry in B.C. could have a measurable effect on affordability in B.C. by providing enough revenue each year to pay for 60 new elementary schools ($1.5 billion), 1,400 teachers ($100 million), 20 MRI machines ($100 million), 900 family physicians ($200 million), 6,500 hip replacements ($100 million) and a new Pattullo Bridge ($1 billion) AND add an extra $860 of disposable income per person.

Without LNG, B.C.’s only market for our natural gas is the U.S.  With a booming LNG industry up and running already, B.C. risks selling our responsibly developed natural gas to the U.S. for pennies while they liquefy it and sell it overseas for much more.  Also, it is worth noting that U.S. LNG facilities will produce significantly higher emissions than B.C. LNG facilities.

Global demand for natural gas is growing and will increase 50-percent by 2040.  This means for B.C. to help meet that demand and see the benefits, we need projects making final investment decisions now.

Sources: Government of BC Archives, BC Power Pioneers (BC Hydro), Resource Works, Energy BC, U.S. EIA, BC OGC