March 8, 2012 - In its mad rush forward to develop Muskrat Falls, the provincial government and Nalcor seem determined to not discuss natural gas.
However, I number among those detractors who think a good, hard look at natural gas is needed, and insist that we at least understand WHY it isn’t feasible, before piloting our boat over Muskrat Falls.
This blogger has learned that Dr. Steve Bruneau, one of the most articulate and best-qualified proponents of the natural gas option, will be facilitating a public forum on this topic.
The Leslie Harris Centre of Regional Policy and Development is hosting Grand Banks Natural Gas: A Source of Electricity for the Island of Newfoundland, a “Memorial Presents” Public Policy Forum, on Wednesday, March 28 at 7:30 pm, at the Bruneau Centre for Innovation and Research (the former Inco Innovation Centre).
This is how the Harris Centre will describe the event, in a news release:
As the debate over Muskrat Falls continues, many people in this province have questions about the potential of natural gas as an energy source.
Could natural gas be brought ashore to Newfoundland and used as fuel to generate electricity? Are there sufficient supplies of natural gas to meet the anticipated long‐term energy demands on the Island? What are the approximate costs of constructing a pipeline from the Grand Banks to the Island, and of building and operating natural gas turbines? What are the barriers to bringing gas onshore?
Join Dr. Stephen Bruneau, Assistant Professor of Engineering at Memorial University of Newfoundland, as he outlines the issues involved with bringing natural gas onshore, and join him in a moderated discussion session.
Natural gas is being produced right now offshore by three active projects, and is fueling thermal generators that are the primary power sources on all three installations. Some, though not all, of that gas is injected back into the earth to provide pressure support for the reservoirs. There are many who believe that a pipeline could be built to the Grand Banks, and the Holyrood plant retrofitted to burn natural gas, at less than half the cost of Muskrat Falls.
In last Wednesday’s Telegram (February 29), Nalcor’s Ed Martin offered his best arguments for why natural gas is not feasible. Assuming that his key points were covered in the article, it was a pretty weak argument indeed.
Martin’s first point? That a 2001 study determined there wasn’t enough demand for electricity to make it worthwhile to build a pipeline.
Perhaps there wasn’t, 11 years ago. But now, Nalcor says there is sufficient demand to build a $7.3 billion project, in the wilds of Labrador. Why not consider natural gas, too? According to a report by Dr. Bruneau, such a pipeline could be constructed for $300 million, in 2005 dollars. (To find that report, search for "bruneau natural gas.")
Martin’s second contention is that oil companies have first rights to the gas produced offshore, and are reinjecting the gas to provide pressure support. This point will be dealt with by Dr. Bruneau, a few paragraphs down.
There is considerable space wasted on Liquid Natural Gas (LNG) but this is a red herring: LNG is not feasible, and I don’t know of any credible observer who suggests otherwise.
Martin says natural gas is used for industrial power demand, which fluctuates with the economy, and that it’s “a very volatile market. Lots of things are happening.”
What does that even mean? We’re going to double our provincial debt, and sign up permanently to high electricity prices, on the strength of bland statements like that? Thus ends Martin’s argument against natural gas – and I remain unconvinced.
If you’d like to read more about this topic, Dr. Bruneau has prepared a discussion paper, which he submitted to the Public Utility Board. At time of this posting, the report is not available on the PUB site. However, you can read it here:
The report is brief – just five pages – but makes for fascinating, informative reading.
For one thing, the report deals with the study referenced by Ed Martin, as the basis for Nalcor's decision to exclude natural gas from serious consideration. Check this excerpt – and note that the reason Navigant was told not to consider natural gas in its report was the “commercial unavailability” of the resource.
The exact source cited to support the claim of “commercial unavailability” was a 2001 report by an industry group that was contracted by Government to assess “the technical and economic aspects of developing the offshore gas and gas liquids resources of Newfoundland and Labrador.” Included were considerations for use of gas on the island for generation, however, it must be very clearly understood that the explicit and implicit purpose of the study was to look at the development of the natural gas resources in their entirety and for their transportation and sale in the North American energy grid. This fact is further obviated by the finding that a sustainable production rate of 700 million standard cubic feet of gas per day was required in order to maintain the economics of the system that they were considering. This flow rate equates to 4200MW continuous production - far in excess of all conceivable domestic requirements. In an inexplicable reversal of logic, present authorities have taken this to mean that natural gas can only be brought to the Island for domestic use today if demand for 700 million cubic feet of gas per day can be arranged. Therefore, the question of whether natural gas can be purchased from the producers for domestic use only, has neither been asked nor answered.
Oh, what the heck. Here’s one more excerpt, that challenges Martin’s second contention:
The depth of the misunderstanding is underscored by the apparent lack of knowledge expressed by Navigant in its summation of natural gas availability in Newfoundland. They correctly state that gas is available as an associated product from NL offshore oil production, and are superficially correct that the nearest gas pipeline is in Nova Scotia. But the statement that gas is generally re-injected into reservoirs to maintain or increase oil production is misleading.
All Grand Banks production platforms use natural gas for power generation. In 2010, the withdrawal and use of natural gas as a fuel for electrical generation and heating was greater for Hibernia alone than was the total oil-fired energy used at Holyrood for the same year. This point must be taken in and considered carefully to fully understand the scale of the natural gas energy resources already used and/or are presently available for use. Remarkably, the quantity of natural gas that is produced, rerouted and reinjected into a storage reservoir at WhiteRose annually is considerably more than double the amount required for all thermal generation needs in Newfoundland. Since reinjection into the oil producing reservoirs is detrimental to oil production at White Rose all gas that is not used as fuel is packed away for future access if a market arises. The natural gas quantities produced at Hibernia are much higher though the reinjection in some cases is also used for supporting oil pressure and so not all can be said to be available for sale if market were to exist. The natural gas reserves presently accessible with existing wells and production facilities is considerably greater than the total cumulative thermal energy requirement of the Island for the next thirty years, thus the long term supply question is in little doubt. Worrying to those who know is the permanent loss of a portion of the natural gas that has already made it to the surface but is reinjected for preservation. Though the exact figures are unclear it is very likely that more gas is permanently lost in this way than would be required for Island thermal needs - yet it needn’t be so if arrangements to buy surplus gas were made.
Natural gas needs full, open and honest consideration as a viable alternative to Muskrat Falls. I, for one, want to know more about it. I will definitely be attending this forum.
I hope to see you there.
Dr. Steve Bruneau
Assistant Professor, Faculty of Engineering and Applied Science
Steve Bruneau graduated from Memorial University’s civil engineering program in 1987 and later obtained an MESc in Industrial Aeronautics and Hydrodynamics from the University of Western Ontario. In 1992 he returned to Newfoundland to work at CCORE, working on the iceberg design load for the Terra Nova floating production system. He obtained his PhD from Memorial University in 1996, when his doctoral thesis dealt with ice loads at the Confederation Bridge.
Steve was appointed regional manager of operations for North Atlantic Pipeline Partners in 1998. In this position, he managed the business affairs, research thrusts, marketing and other efforts for the development of a natural gas industry for Newfoundland. An interest in energy policy and in conventional and alternative generation led him to the consulting arena in which micro hydro power proposals and wind power experimentation became the focus of his work.
Steve joined Memorial University’s Faculty of Engineering and Applied Science in January 2006 as an assistant professor in civil engineering and focuses his R&D work in niche areas of ice, wind, hydro and energy disciplines as they relate to development in Newfoundland and Labrador. Recent consulting and business partnering have involved construction‐related activities for the Voisey's Bay Nickel Project.
Steve recently undertook time‐lapse surveillance work in Newfoundland and Greenland for the Canadian Ice Services, involving the tracking and filming of iceberg deterioration for improved forecasting and mapping.