Are BC Liberals about to drag taxpayers into another economic calamity? Something akin to BC Hydro’s private power initiative, where government has taken near $50 billion of financial risk and guaranteed abundant profits to private energy promoters.
[Russia’s] Gazprom Biggest Loser as Shale Gas Upends World Markets, Bloomberg Businessweek, June 21, 2012:
…The U.S. no longer needs Russia’s gas, leaving President Vladimir Putin fighting to salvage Gazprom’s $20 billion Shtokman project in the Arctic. China, the biggest energy consumer, is exploring its own shale reserves and hesitating to accept a pipeline from Russia. Gazprom’s shipments fell about 14 percent so far in 2012…
Russia, with about $13 trillion of gas deposits, has the most at stake in the energy revolution that’s blasting shale from Pennsylvania to China in rocks impossible to drill just a decade ago…
China shale gas boom could surpass U.S., Reuters, Dec. 7, 2011:
China is set for a shale gas revolution which will surpass that seen in the United States, the chairman of Sinopec, the country’s second-largest oil company, said a day after Reuters revealed Royal Dutch Shell Plc had begun shale gas production in China.
Fu Chengyu, chairman of state-controlled China Petroleum & Chemical Corp (Sinopec) , said it could take five to 10 years but that China’s output would exceed that of the United States.
” I think the total reserves are even more than the U.S. so production is not less than the U.S., but it is a matter of timing,” he told reporters at the sidelines of the World Petroleum Congress.
U.S. energy markets were fundamentally changed by the development of shale gas. In the space of several years, the country went from natural gas shortages to a point where companies are planning to export gas to Asia …
Site C and the Kitimat LNG Export Terminal: Christy Clark’s Program for Income Redistribution, Jim Quail’s Blog, February 8, 2012:
[Producers] are in a mad rush to suck the gas out of the ground and get it to China before the Chinese start exploiting their own huge shale gas reserves on a major scale: once that happens, there will be no Asian market for tankers full of LNG. That gives the Canadian developers maybe a bit over a decade to make their money and run.
It takes a lot of energy to liquefy natural gas. Almost universally, around the world, LNG plants use a portion of their own natural gas supply to provide that energy. It appears, however, that BC Hydro is prepared to supply electricity, at BC’s below-cost industrial bulk energy rates, to the Kitimat LNG consortium, for their liquefaction operations.
So what’s the big deal, you ask?
The initial phase of the Encana plant would require about 250 MW of electrical generation capacity to provide it with sufficient energy. The three projected Kitimat LNG plants would require about 1,600 Megawatts of power to liquefy its billions of cubic feet of gas for export.
How much power is 1,600 MW?
About one-and-a-half Site C dams is how much power.
Hydro would sell that much power to one corporate mega-project, at industrial tariff rates of around $35 per megawatt hour. That same power would cost Hydro at least $80 per MWh, assuming they built one-and-a-half Site C dams for that purpose, or around $129 per MWh if they bought it from Independent Power Producers. So we’d pay for Site C, through our Hydro bills, to sell the electricity it produces for less than half what it cost us…
H/T Bob Makin for the Bloomberg Businessweek article.
Please visit Jim Quail’s blog for additional information about energy.
Energy critics roast Clark’s LNG strategy, Frank Luba, The Province, June 22, 2012
NDP energy critic John Horgan believes Clark’s changes should have been debated in the legislature.
“She’s going to amend the Clean Energy Act by regulation,” said Horgan. “These are detailed and generational changes we are making and we should do that with a thoughtful eye, not with an expedient political eye and that’s what she did,” he said.