LNG energy perogative

November 17, 2013

Energy producers, current and prospective, in Alaska, Yukon, and NWT are actively considering LNG as a fuel source instead of diesel. 

A few producers considering LNG:

• Yukon Energy has applied to replace its ageing Whitehorse diesel plant with an LNG-powered facility. Yukon Electrical will be testing LNG at Watson Lake this Fall at its production facility where one of six generators will be converted.
• The State of Alaska is funding an LNG gasification facility on the North Slope to provide LNG to Fairbanks.
• Inuvik Gas is considering LNG for its energy needs. NWT is also interested in having a gasification plant in the far north (Inuvik/Tuk).
• Several mining proponents are considering LNG for their mining projects: Western Copper and Gold and Prophecy Platinum.

The reasons they want LNG instead of diesel:

• LNG is cheaper. Natural gas prices have been flat for 4 years at around $3 per MMBtu. Before that prices spiked at $13 in 2008. By contrast diesel prices have risen in the past 5 years rather dramatically (using US prices from $2.29/gal in Jan-2009 to $3.88 in Oct-2013).
• LNG is ‘greener’. The US EPA shows all carbon emissions, nitrogen oxides (NOx), and sulfur dioxide (SO2) emissions are lower than diesel.  Coal and fuel oil also release ash particles into the environment, substances that do not burn but instead are carried into the atmosphere and contribute to pollution.
• Natural gas finds in North America in the past few years have been astounding. BC alone has enough natural gas to supply Canada for 150 years. Excess supply means that prices will be kept low for energy producers using LNG.
• Gasification plants are planned for northern BC and for the North Slope of Alaska. Ft.Nelson BC has also been touted as a possible site for LNG gasification.
• Energy producers are increasingly considering LNG. Basically the more producers that exist the more available supply becomes.

Commentary

There has been a sea change in the past five years where natural gas prices have declined while more and more supply is being found. It is just more economical for energy producers to consider LNG over diesel. And the consumer benefits.

Sources

• a)http://www.naturalgas.org/environment/naturalgas.asp



• b)http://www.eia.gov/naturalgas/weekly/



• c)http://www.platts.com/latest-news/natural-gas/anchorage-alaska/alaska-gets-four-proposals-to-partner-on-prudhoe-21344357



• d)http://www.nwtchamber.com/sites/default/files/OIL%20%26%20GAS%20-%20NT%20Energy%20-%20LNG%20in%20the%20NWT.pdf



• e)http://www.cbc.ca/news/canada/north/yukon-electrical-to-test-use-of-liquefied-natural-gas-1.1303160