LNG for B.C.

Credit: BCLNG

The Vancouver FraserPort Authority (VFPA) has joined SEA/LNG, a multi-industry coalition that views LNG as a pathway towards the global shipping industry’s goal of de-carbonization.

How B.C.’s natural gas is fostering an emissions-reducing revolution across the Lower Mainland

Liquefied Natural Gas (LNG) is not a B.C. industry-in-waiting. It’s already here.
“Many people are surprised by the extent to which LNG is being used in this province, and the opportunities for greater usage are significant,” says Arvind Ramakrishnan, FortisBC’s senior manager of natural gas business growth and regional LNG.

LNG production has been underway at FortisBC’s Tilbury facility in Delta since 1971. Today LNG from Tilbury is used in everything from BC Ferries to Seaspan Ferries to truck fleets that regularly travel some of the Metro Vancouver’s busiest arteries, improving air quality across the Lower Mainland and reducing carbon emissions.

FortisBC is not alone in recognizing the advantages of LNG. The Vancouver Fraser Port Authority (VFPA) has joined SEA/LNG, a multi-industry coalition that views LNG as a pathway towards the global shipping industry’s goal of de-carbonization. Specifically, VFPA is working closely with FortisBC, industry, academia and government to advance LNG bunkering at its facilities, in addition to helping develop LNG infrastructure in ports around the globe to reduce emissions and cut air pollution. NG can lower ship exhaust emissions of: Sulphur oxides (SOx) by over 90 per cent, nitrogen oxides (NOx) by up to 85 per cent, particulate matter (PM) by over 85 per cent, carbon dioxide (CO2) by up to 29 per cent, and GHG by up to 19 per cent.

The emissions advantage of LNG is resulting in increased demand in the marine industry. In May, Seaspan Ferries announced plans to add two LNG-battery hybrid vessels to its fleet in 2021. They will complement Seaspan’s two LNG vessels that “have operated with emission reductions of over 50 percent compared to traditional vessels,” according to Seaspan Marine Transportation CEO Frank Butzelaar. (Likewise BC Ferries has ordered four new LNG-electric hybrid vessels for its fleet.)

In addition to its partnership with SEA/LNG, VFPA is looking at the potential for container trucks to use alternative fuels, and this summer the City of Vancouver passed a motion to study what’s being done to reduce emissions from heavy trucks on the Clark-Knight corridor, one of Greater Metro Vancouver’s busiest cargo-transport routes.

Meanwhile, the high cost of traditional fuels over the past year has resulted in a strong uptake in LNG and compressed natural gas (CNG) trucks throughout B.C., with Yen Bros. Food Service and City Wide Produce among several food companies investing in such vehicles. This switch brings the added benefit of reducing the amount of particulate matter that contributes to air pollution and smog across the Lower Mainland, compared to diesel trucks.

“The reasons we are using LNG here in the Lower Mainland—cutting air pollution and reducing GHG emissions—are the exact same benefits that residents in cities across Asia are hoping for,” said Bryan Cox, president and CEO of the BC LNG Alliance, the leading voice and advocate for the LNG industry in B.C. “Air pollution was named as the greatest environmental threat to human health this year by the World Health Organization because it is responsible for approximately 7 million premature deaths each year. LNG produces almost none of the particulate matter that contributes to air pollution. B.C. will produce LNG with the lowest emissions anywhere in the world—this is why LNG from B.C. can help cut air pollution and help reduce global emissions.”

Wenran Jiang, senior fellow, UBC School of Public Policy and Global Affairs, says it’s vital that B.C. participate in the global growth of LNG.

“A lot of focus is being directed internationally on how fossil fuels can be phased out—with coal being the biggest polluter—and LNG has great potential as an alternative fuel as countries such as China transition away from fossil fuel.”

Jiang adds, “We produce some of the cleanest natural gas in the world, better than Russia, the Middle East, and even Australia, and this gives us a tremendous competitive advantage. So we’re ideally poised to help countries such as China, India and beyond achieve substantial CO2 emission reductions and air quality improvements.”

Indeed, as environmental standards intensify, LNG consumption growth is starting to assume unprecedented proportions. As part of its 2019 annual report, the International Group of Liquefied Natural Gas Importers (a non-profit organization that promotes the development of activities related to LNG including importing and processing) notes that in 2018, the LNG market grew by 8 percent, with deliveries at 314 million tonnes. This was nearly a 30 percent rise from 2015 and over a tripling since 2000. LNG now accounts for 14 percent of gas use globally. And there is currently some $1.4 trillion in LNG development across the globe, with the U.S., Canada, Russia and Australia leading.
The amount of investment is understandable given that yearly global demand is forecast to soar three to seven percent for decades. It has been estimated that in the next five years, one-third of global LNG demand is expected to come from China alone, as the country looks to tackle air pollution and reduce its greenhouse gas emissions by replacing higher-emitting coal as a primary energy source.

Cox credits FortisBC for taking a leadership role in advancing LNG use through its Clean Growth Pathway Strategy. The company partnered with BC Ferries and Seaspan to develop world-first, exclusive technology to fuel ships via tanker truck delivery on deck.

BC Ferries is using LNG thanks to the conversion of two of its largest ships, along with three newly built, natural-gas-fuelled Salish-class vessels; it calculates a CO2 emissions reduction of 21,500 tonnes annually (the equivalent of taking 4,400 vehicles off the road) as well as millions of dollars in reduced fuel costs. As for Seaspan, its two LNG ferries reduce CO2 emissions approximately 22 percent with its use of LNG fuel.

FortisBC’s next goal is to develop the Tilbury Pacific LNG marine jetty adjacent to its Tilbury LNG facility, in order to provide a ship-to-ship method of fuel delivery for local and trans-Pacific vessels. Such infrastructure would make LNG fuelling more efficient for international vessels calling into the VFPA, which in turn would presumably encourage more shipping companies to switch to LNG—and make B.C. their preferred supplier.

“Ideally, we will have the jetty ready for operation in 2021, and the project is significant because it will bring more confidence to the market,” says Ramakrishnan.

However, the growth of LNG locally is not without its challenges. Take the trucking sector as a single example: a significant drop in diesel prices could slow natural gas momentum; there is also a lack of natural-gas fuelling infrastructure outside of B.C.

As for the development of our export capabilities, Jiang says, “It’s no secret that our pace has been way too slow. We really do have to make a concentrated effort to educate people about the importance of LNG as an alternative fuel that, over the next 20 to 30 years, can replace (other) fossil fuel use.”

For his part, Ramakrishnan says FortisBC will continue to develop infrastructure and consider partnering with providers of other cleaner alternative fuels (such as hydrogen), with the intention that the latter initiative can create regional hubs in the land transportation sector that can withstand market fluctuations better than LNG. “We’re very optimistic about LNG’s future both on a regional as well as a global basis,” he says.

Cox shares this sentiment. “While we’ve been producing and using LNG responsibly for decades, we really are approaching a new era in that the export component—which is critical in making B.C. a global LNG player—is rapidly coming together. The $40-billion LNG Canada project is being built as we speak. Woodfibre LNG is looking to begin construction, and if the Kitimat LNG facility goes ahead as we hope, this will be the largest LNG plant powered by clean hydro electricity in the world.”