The Basics

Contents

Natural Gas ...................................................................................................................................................................................................................................... 3
What is natural gas? ................................................................................................................................................................................................... 3
What is Hydraulic Fracturing?............................................................................................................................................................................................. 4
Water use in hydraulic fracturing ...................................................................................................................................................................... 4
Protecting groundwater ......................................................................................................................................................................................... 5
Pipelines ............................................................................................................................................................................................................................................ 6
Liquefied natural gas (LNG).................................................................................................................................................................................... 6
Shipping LNG Around the World..................................................................................................................................................................................... 7
Strong safety record.................................................................................................................................................................................................... 7
Protecting the Environment................................................................................................................................................................................................ 8
Greenhouse gas............................................................................................................................................................................................................ 8
Alternative power sources and transitional fuel....................................................................................................................................... 8
Land reclamation ........................................................................................................................................................................................................ 9
Pipeline safety ............................................................................................................................................................................................................... 9
Earthquakes..................................................................................................................................................................................................................... 9
LNG: Benefits to B.C., Communities and First Nations...................................................................................................................................... 10
A better quality of life................................................................................................................................................................................................ 10
Preparing for growth ................................................................................................................................................................................................. 11
First Nations..................................................................................................................................................................................................................... 11
Resources.......................................................................................................................................................................................................................................... 12

1
2
Natural Gas China is and will continue to be the worlds
heaviest user of fossil fuels.
Fossil Fuel
Fuel Consumption
Consumption in
in 2013
2013by
byCountry
Country
What is natural gas?
Natural gas is the largest energy source used in Canadian homes. It is
also used in manufacturing plants to generate electricity, and as fuel in
China
heavy-duty trucks. Other
23%
29%
Natural gas was formed millions of years ago as plants and animals
died, decayed, and were covered by layer after layer of rock and soil. United States
Over time, heat and pressure in the earths crust turned these plants da
Cana pan 18%
and animals into hydrocarbons and the fossil fuels we rely on today: 2% Ja
4%

ia
coal, oil and natural gas. Coal is the solid form of hydrocarbons and Europe

Ind

sia
5% 13%

Rus
oil is a liquid.
6%
Natural gas is made up of the lightest molecules. It is colourless,
odourless and the cleanest burning fossil fuel, producing half the BP Statistical Review of World Energy 2014

greenhouse gas emissions of coal, and two-thirds of oil.

B.C. has an enormous supply of natural gas an estimated Between 2012 and 2020, Asian economic growth
2,933 trillion cubic feet primarily in four key areas in northeastern and a switch to cleaner fuel will almost double the
B.C.: the Horn River Basin, the Montney Basin, the Liard Basin and the demand for natural gas.
Cordova Embayment. This is enough natural gas to support import Global Demand for Liquefied Natural Gas by Region
Global Demand for Liquefied Natural Gas by Region
and export markets for the next 150 years. A significant amount of this
600
natural gas is accessible through sophisticated drilling technology,
including hydraulic fracturing. South America
500

(Millions of Tonnes per Annum)

North America
Middle East
400 Europe
Asia Pacific
300

200

100

0
2000 2005 2010 2015 2020 2025 2030

Wood Mackenzie LNG Tool, Q3 2014

3
 What is Hydraulic Fracturing?
Hydraulic fracturing involves pumping water and sand into a gas
well at a high pressure, creating small fractures in rock deep below
the surface and releasing the natural gas trapped inside. Hydraulic
Groundwater
fracturing is used for only a week or two, when the well is first drilled. used for drinking
The water is withdrawn and then gas flows into the well often is between 8
and 150 metres Natural gas wells
for as long as 20 or 30 years. The gas is captured and transferred to underground. must be double-
processing plants through pipelines. The water is reused in other wells, lined with steel and
cement casings. The
and eventually sent to a location where it can be safely disposed. double lining can
run up to 600 metres
In 2013, 86% of new wells in B.C. were hydraulically fractured. underground, 3-4
times deeper than
groundwater supply.
Water use in hydraulic fracturing
There is an abundance of water in northeastern B.C., and it is managed
carefully. The natural gas industry uses less than half of 1% of the
annual water runoff (the yearly amount of water that flows into rivers
Between 1 and
and lakes) for hydraulic fracturing in northeastern B.C. 2 kilometres
of rock separate
An average natural gas well uses 17 million litres of water. That drinking
amount varies depending on the geology and the type of rock groundwater from
the natural gas.
where natural gas is found.
In 2013:
Metro Vancouver used approximately 365 million cubic metres
of treated water.
Hydraulic fracturing in B.C. used 5.3 million cubic metres of water.
In northeastern B.C., annual runoff averages 120.6 billion cubic
metres. Runoff is the rain, snow or ice water that drains into lakes Natural gas is
and rivers over the year. 23 kilometres
underground.
By 2019, drilling operations could peak in the province with 2,100 This is where
fracturing takes
wells using 43 million cubic metres of water. Despite this increase, the place, far below
amount of water required is still less than half of 1% of todays annual the groundwater
supply.
water runoff in northeastern B.C.

4
Water use for natural gas development is strictly regulated. The
BC Oil and Gas Commission monitors the amount of water available
and allocates it to industry users in northeastern B.C. Ecological and
community needs are met first.
Natural gas companies must get permission before using any new
water supply by way of a permit (two years or less) or by a licence for
long-term needs. All applications are thoroughly reviewed by technical
experts. Companies must report how much water they actually use.
Protecting groundwater
Drinking water in northeastern B.C. is normally found less than
300 metres below the surface. Natural gas in the province is typically
much deeper, at two to three kilometres underground, leaving a
barrier of rock between the water and the natural gas.
Strict regulations in British Columbia protect drinking water from
drilling activities including hydraulic fracturing.

Water used for hydraulic fracturing can be recaptured and reused
in another natural gas well. This eliminates the need to use new,
fresh water.
43.4 million cubic metres
Amount of freshwater
required to support
forecasted natural gas
120.6 billion cubic metres
development at its
Average runoff replenished
peak in 2019 (0.04% of
annually in northeastern
average annual runoff
B.C. river basins
in northeastern B.C.)
Hydraulic fracturing fluid is a mix of 99% water and sand.
The remaining 1% are additives to help reduce friction.
All ingredients used in hydraulic fracturing must be reported
to the BC Oil and Gas Commission and publicly disclosed.
All wells in B.C. are double-lined with cement and steel to protect
drinking water from natural gas extraction activity. The linings are
up to 600 metres deep twice as deep as most water levels. The
linings are inspected and must be tested regularly to make sure
there are no cracks or weaknesses.
Fracturing fluid is pumped underground and returned to the
surface. The fracturing process lasts only a few weeks, and fluid
is prevented from coming into contact with groundwater.
Provincial regulators ensure natural gas wells comply with Canadian
standards for oil and gas health and safety. Every well requires a
permit to operate, and owners bear all financial risks associated
with their operations.

Less than 0.01%
of annual runoff
Amount used for
hydraulic fracturing in
both 2012 and 2013
In the five decades that hydraulic fracturing has been used in British
Columbia, no case of drinking water contamination has occurred from
the hydraulic fracturing process.

5
 Pipelines
Pipeline infrastructure is well established in British Columbia. Additional pipelines will be needed to transport natural gas to
The first pipelines were built in the 1950s. Today in B.C., more than liquefied natural gas plants. A few of the pipeline proposals under
40,000 kilometres of pipelines transport natural gas, oil, water and consideration include:
other fluids. Natural gas pipelines connect wells in the Northeast to Pacific Trail Pipeline: approximately 480 kilometres from north
markets across British Columbia. of Prince George to Kitimat.

Pipelines are the most efficient and environmentally safe way to move Coastal GasLink Pipeline: 650 kilometres from the Dawson Creek
natural gas over long distances, such as between wells in northeastern area to Kitimat.
B.C. and the Coast. Prince Rupert Gas Transmission Project: 900 kilometres from
the Hudsons Hope area to Port Edward.
Cordova Embayment
Liard Basin The BC Oil and Gas Commission has procedures in place to monitor
Horn River Basin pipeline conditions and respond to emergencies 24 hours a day.
Fort Nelson
Western Canadian Basin By law, each company must establish and follow safety procedures,
Montney Basin
including constant monitoring of gas pressure, flow and temperature.
There are also internal and external inspections to find corrosion, leaks
or other hazards to the pipeline. Most small leaks would be detected
Fort St. John during routine maintenance and inspections.

Dawson Creek Natural gas is colourless, odourless, non-toxic and non-corrosive. In

the unlikely instance of a leak, natural gas would evaporate into the
Prince Rupert atmosphere where it would be broken down into carbon dioxide
Kitimat
Prince George and water.
Haida
Gwaii
Liquefied natural gas (LNG)
Hecate
Strait LNG is natural gas that has been chilled to -160C. Once chilled, the
natural gas becomes a liquid, shrinking to 1/600th of its original
Existing Pipelines volume. It is now safer and more efficient to transport overseas.
Proposed Pipelines
Kamloops LNG is loaded onto specially designed ships and sent to foreign
Natural Gas Basins
Western Canadian Basin
Kelowna markets. There, it is converted back into a gas, and used to generate
Pacific Ocean
Liard Basin power and heat homes and businesses.
Horn River Basin
Cordova Embayment
Vancouver
Montney Basin As of October 2014, there are 18 industry projects proposing to
Victoria produce LNG for export from British Columbia.

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Shipping LNG around the world
Natural gas is the cleanest, most efficient fossil fuel available, and In the unlikely case of a leak, there is a low risk of environmental
its in high demand around the world. In its liquid state, natural gas damage. Liquefied natural gas is colourless, odourless, non-toxic and
is efficient and economical to send to overseas markets. non-corrosive. As LNG warms up from -160C, it evaporates and returns
to a gaseous state, dispersing into the atmosphere.
Prince Rupert is the shortest trade route between North America and
export markets in Asia. It takes 811 days to travel to Asia from Prince Liquefied natural gas tanks are not pressurized, and they contain
Rupert on B.C.s west coast. Prince Rupert is sheltered and ice-free year no oxygen. Under those conditions, LNG is not explosive.
round, has one of the deepest natural harbours in the world, and has
There are detailed emergency response plans in place to ensure LNG
modern, state-of-the-art facilities. It has unobstructed entry to shipping
is transported safely.
lanes in the Pacific Ocean, and there are no significant hazards such as
narrow channels to navigate.
Transportation of LNG within British Columbia waters will be tightly
regulated. Tugboats will help LNG tankers safely navigate through
inland waters. Ship movement will be monitored closely during
approach, berthing, loading and unloading. LNG tanks

Strong safety record

Last year, approximately 240 million tonnes of LNG were traded
around the world.
350 carriers have completed more than 135,000 voyages, travelling
more than 240 million kilometres at sea.
Insulation
There has been no significant incident resulting in a loss of cargo
at sea or in port. Double hull

LNG carriers are built to rigorous international standards.

Construction is supervised by third-party inspectors, and all ships must
have international certification to carry liquefied natural gas.
All LNG-certified ships have double hulls.
Cargo tanks are separated from the hull structure by thick insulation.
Carriers are specifically designed to contain LNG.
Vessels are inspected once a year, with a full dry-dock inspection
every five years.

7
 Protecting the Environment
Greenhouse gas
Natural gas is a fossil fuel. Like all fossil fuels, it generates carbon
dioxide also known as CO2, a type of greenhouse gas.
Natural gas is the cleanest burning of all fossil fuels. It is being
marketed to China and other parts of Asia as an efficient alternative
to dirtier energy sources, like coal. Changing from coal to natural
gas would cut Chinas greenhouse gas emissions by up to 40%.
Over a year, two trillion cubic feet of B.C.s natural gas could replace:
more than 70 nuclear facilities, or
approximately 100 coal plants.
Alternative power sources and transitional fuel
Natural gas is widely accepted as a transitional fuel, meaning it
can help reduce carbon emissions now while powering the shift to
renewable energy sources such as wind, solar and bioenergy.
British Columbias liquefied natural gas facilities will be the cleanest
in the world. Strict measures will be in place before LNG export plants
are built, and the provincial government will continue to focus on
using innovation and clean energy sources to reduce greenhouse
gas emissions across the natural gas industry.

Carbon Dioxide Emissions Surface Area Used for Oil and Gas Activities in Northeast British Columbia
Carbon Dioxide
(Kilograms Emissions
per Gigajoule)
(Kilograms per Gigajoule) Area used for
Per cent of
oil and gas
northeastern B.C.
100 activities
(hectares)
(hectares)
80
60 Wells 30,226 0.17
40 Roads 83,492 0.48
20 Facilities 1,543 0.01
0 Pipelines 43,893 0.25
Natural Gas Oil Coal Other oil and gas infrastructures 12,672 0.07
Energy Information Administration
Geophysical exploration (seismic lines) 227,815 1.30
Total area used for oil and gas activities 399,641 2.28

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Land reclamation
Regulatory and legal requirements cover the restoration of natural gas
sites that are no longer operating.
Planning to reclaim a natural gas well starts at the beginning
of the project, long before the well reaches the end of production.
For example, companies must minimize the disturbance to nearby
land before and during a drilling operation. This decreases the
amount of work necessary to return the area to its original state
after the well is no longer producing natural gas.
It generally takes a year or more to reclaim a well site from
the time the well is capped and equipment removed, to cleaning up
the site, replacing soil and replanting native vegetation.
Earthquakes
Infrastructure, such as wells and pipelines, is built to withstand
the effects of an earthquake or seismic disturbance.
A BC Oil and Gas Commission investigation found hydraulic
fracturing can be connected to very small, barely detectable
movements underground, which have resulted in no surface damage.
B.C. has tightened requirements to monitor, report and address
seismic disturbances.
To ensure data is monitored constantly, six additional seismograph
stations have been installed across northeastern B.C. to measure
underground activity.

Pipeline safety
Natural gas companies are required to monitor and inspect pipelines
regularly to ensure they are safe.
Companies must report the details of their monitoring actions
to regulators.
Provincial laws outline how industry must protect wildlife. These
laws are carefully considered before any pipeline or facility permits
are granted. Permits regularly contain additional requirements to
increase protection for wildlife during all phases of operation, from
construction to decommissioning.

9
 LNG: Benefits to B.C., communities and first nations
Research shows that if five LNG plants were built in the province,
British Columbians would receive the following benefits over a
30-year period:
a total investment of $175 billion and a contribution of up to
$1 trillion to the provinces gross domestic product.
over $100 billion in provincial tax revenues.
This revenue could be used to help eliminate the provincial debt over
time, reduce cost burdens for families and local communities, and
support services such as health care and education.
It would also create:
58,700 direct and indirect construction jobs.
23,800 permanent direct and indirect jobs for operations.
thousands more of spinoff jobs as a result of households having
more income.
A better quality of life
First Nations, rural and remote communities across northern
British Columbia will benefit directly from the creation of
well-paying jobs close to home.
Large numbers of skilled workers moving to northern B.C. will
help to grow communities and create a more vibrant economy.
These workers will bring a diversity of culture, experience and
skills with them.
Higher disposable income will bring new spinoff industries and
businesses, providing additional goods, services and amenities
to people living in northern and coastal B.C.
Jobs B.C.s LNG industry could
create more than 100,000
jobs in total:

58,700 23,800
direct and indirect permanent direct and
construction jobs indirect jobs for operations

There will also be thousands of spinoff jobs,

not directly related to LNG operations, but
created as a result of households having
more income.

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Preparing for growth
Communities are already planning and preparing for an
unprecedented demand for better housing, infrastructure and
community services.
Just like athletes residences during the Olympic Games, modular
housing for temporary workers will be relocated and used for
other purposes once the construction stage is complete and
plants are operational.
Communities are working with industry and the federal and
provincial governments to upgrade infrastructure and services.
This means improvements to highways, bridges, airports, sewer
and water, fire and emergency services, recreational facilities, and
broadband connectivity for Internet access.
First Nations
First Nations are critical partners in the LNG industry, and B.C. is
working to ensure First Nations communities can participate in and
benefit from the opportunity. The B.C. government is negotiating
economic benefit agreements with First Nations.
B.C.s Skills for Jobs Blueprint focuses on increasing Aboriginal school
completion rates and skills training to reach the goal of 15,000
Aboriginal workers over the next 10 years.
First Nations along the pipeline route for the Kitimat LNG Project
have agreements in place with both the provincial government
and industry.
Haisla First Nation in Kitimat are partners with Golar LNG in the
B.C. LNG project, and will host the Kitimat LNG facility on their
territory Bish Cove.

Revenue The Lax Kw alaams and Metlakatla First Nations have revenue-
sharing agreements for LNG proposals in Grassy Point near
More than
Prince Rupert.
$100 BILLION Industry is developing Impact Benefit Agreements with First Nations
over 30 years will be used to:
to address employment, contract and business opportunities.

To date, over $7 billion in investments have been made by industry

to acquire natural gas assets needed to support the LNG industry.
It is estimated that another $2 billion has been spent preparing for
the construction of LNG infrastructure.

Eliminate the
provincial debt
Reduce cost over time Support
burdens government
for families services such as
and local health care and
communities education

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 Resources
For more information about natural gas and liquefied natural gas, see the following resources:

Liquefied Natural Gas in British Columbia Canadian Society for Unconventional Resources (CSUR)
engage.gov.bc.ca/lnginbc/ www.csur.com

BC Jobs Plan Clean Air Strategic Alliance (CASA)

Engage.gov.bc.ca/bcjobsplan www.casahome.org

Environment Canada
British Columbia Ministry of Natural Gas Development
www.ec.gc.ca
www.gov.bc.ca/mngd/
Frac Focus Chemical Disclosure Registry
BC Oil and Gas Commission www.fracfocus.ca
www.bcogc.ca
Go with Natural Gas: An Industry and Government Initiative
Canadian Association of Petroleum Producers (CAPP) www.gowithnaturalgas.ca
www.capp.ca
British Columbia Ministry of Energy and Mines
Canadian Centre for Energy www.gov.bc.ca/ener
www.centreforenergy.com
National Energy Board
Canadian Energy Research Institute www.neb-one.gc.ca
www.ceri.ca
Natural Resources Canada
Canadian Energy Pipeline Association www.nrcan.gc.ca
www.cepa.com
Statistics Canada
Canadian Gas Association www.statcan.gc.ca
www.cga.ca
U.S. Energy Information Administration
Canadian Natural Gas Initiative www.eia.gov
www.canadiannaturalgas.ca

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www.lnginbc.ca