A South Korean firm has recently announced over $1 billion of drilling and development money to help Encana pull natural gas from British Columbia’s northeast.
This area of the province, east of the Rocky Mountains in BC’s portion of the Western Canadian sedimentary basin, has been subject to record lease sales in the past 2 or 3 years, helped on by BC’s generous offering of road, pipeline, and royalty subsidies to the richest industry in the world.
However, the pace of actual drilling has been slowed somewhat by the new found abundance of natural gas in similar shale and tight rock formations in the United States, which are closer to markets and therefore cheaper and more profitable to develop.
South Korea’s move to kick-start the flow of gas out of NE BC isn’t grounded in a desire to participate in the continental natural gas game, it’s grounded in a desire to bring that gas back home.
Korea is an energy hungry, but petroleum-poor country. They have very limited natural gas and oil reserves of their own. The $1.1 billion investment in Encana’s lease areas could translate into enough gas to power that country’s economy for one year – an insignificant-sounding amount to me given the non-renewable nature of the fuel, but apparently enough to get excited about.
Towards actually getting the gas from BC to Korea, Korea Gas Corp. has inked a memorandum of understanding for a proposed Liquefied Natural Gas terminal in Kitimat, where LNG tankers would transit the same routes through BC’s inside north coast as proposed oil tankers.
The terminal would be fed by the Kitimat Summit Loop pipeline: a not-yet-built-but-approved-by-the-government pipeline that is currently opposed by the Wet’suwet’en Nation.
The big picture problem I see with the South Korean investment is that the deal means more potential energy security for South Korea and less energy security for British Columbia and Canada.
In essence, the natural gas boom currently unfolding in our province is accompanied by no coherent plan to use this finite resource wisely, as part of a transition to an economy where it is no longer required – not provincially, and not nationally.
If the gas heads east it’s more than likely to end being used for tar sands processing, whereby the cleanest fossil fuel is burned to produce the dirtiest. If it heads west across the Pacific, then in essence we trade our energy security away to someone else.
BC’s non-renewable reserves of natural gas seem to be viewed by many of our provincial politicians more as a short-term revenue generator and not as an actual source of scarce energy to be used cautiously.
To play on Stephen Harper’s oft-quoted and ironic ambition for Canada to become an energy superpower, the current selling-out of finite public energy resources sans long term energy security plan makes BC an energy super chump.