Nalcor CEO Ed Martin was a bit apologetic as he launched into a lengthy “long winded:” speech on natural gas Tuesday.
Martin explained in painstaking detail why natural gas just won’t work for the province’s electricity needs, devoting two-thirds of his speech to the subject as he addressed the St. John’s Board of Trade.
“Bear with me, I’m in a lot more detail than I usually get into,” Martin said apologetically. “I’m sure there’s a mixed interest in the level of detail, but I feel compelled to just plow through some information.”
In recent weeks, natural gas has been the go-to alternative for several prominent critics of the Muskrat Falls hydroelectric project.
The natural gas option came up several times during the Public Utilities Board review of Muskrat Falls.
Critics opposed to Muskrat Falls, instead, suggested cheap and plentiful shale gas in the U.S. or offshore natural gas in the White Rose oil field
“It has come from many many places and a lot of people I respect immensely have just said, ‘Ed, what about the gas? What about LNG? Can you tell me a little bit more because there’s questions out there,’” Martin said. “As we move towards sanctioning of this project, one thing I know I’m going to be able to say is that we were 100 per cent transparent. People know exactly what we’re thinking, and as the questions are asked, we’re coming out and giving the detailed answers.”
First, on White Rose, Martin said Nalcor went so far as to map out a pipeline route from the offshore for natural gas, and took a look at what would be involved in producing. However, a 2001 study determined that there just isn’t enough demand for electricity to make it worthwhile to build a pipeline.
On top of that, he said, the oil companies have first rights to that gas under offshore lease agreements, and they’re using the gas to re-inject and force oil out of the ground.
Liquified natural gas is even more complicated, Martin said. It would need to be shipped here, which is expensive and tricky.
That’s the reason, Martin said, that only 6-7 per cent of natural gas is traded by shipping, whereas fully half of the world’s oil is traded on the water.
Unlike oil, where there are 4,000-5,000 tankers worldwide, there are only about 300 LNG tankers.
Because of all of this, and because natural gas tends to be used for industrial power demand — which fluctuates with the economy — Martin said it’s a “very volatile market. Lots of things are happening.”
Martin’s overall message was that he’s not pushing the Muskrat Falls project because he wants to build a big dam in Labrador, but because Nalcor has studied the situation, and they’re convinced it’s the only viable option.
“You have to be an advocate for the right decision — you have to be an advocate for Nalcor and the province,” Martin said. “Is Nalcor driven to do Muskrat Falls? No, Nalcor is driven to make the right decision.”
jmcleod@thetelegram.com Twitter: TelegramJames
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For real????