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B.C. Natural Gas Boom Fuels Alberta Tar Sands/Oil Sands Production


The “energy dispute for the ages” over the Trans Mountain pipeline has obscured the role of British Columbia’s natural gas industry in fueling tar sands/oil sands production in Alberta, resource policy analyst Ben Parfitt revealed earlier this month in a post for The Tyee.

“In the last 10 years, B.C. has effectively become a preferred supplier to its neighbour the oilsands powerhouse, a reality with grim implications for the environment and economy in Canada’s two westernmost provinces, to say nothing of our global climate,” writes Parfitt, who works in the B.C. office of the Canadian Centre for Policy Alternatives. “Much of that out-of-sight, out-of-mind energy flow is also, paradoxically, heavily subsidized by the B.C. government.” But “you wouldn’t know that by looking at most media accounts.”

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That production became the “giant elephant in the room” in the epic confrontation between B.C. and Alberta over completion of the Trans Mountain pipeline expansion, Parfitt contends. “Heavy oil production in Canada’s petro province of Alberta is powered, in part, by a glut of cheap natural gas in North America, which gas producers in B.C. have helped to create,” he writes. “B.C. is also helping to prop up Alberta’s oil industry by shipping it lots of extremely valuable ‘gas liquids’—byproducts of natural gas which are essential to dilute heavy oil or bitumen so that it can move more readily through pipelines.”

That relationship makes the Alberta tar sands/oil sands Canada’s biggest natural gas user, accounting for 25% of total consumption. Over the decade ending in 2017, B.C.’s gas exports to Alberta increased 230%, driven in large part by lavish provincial subsidies to encourage natural gas production.

“Without B.C., Alberta’s oilsands producers would have had to ramp up condensate shipments from the U.S. to make up the difference,” he writes. “But here’s where the irony of the B.C. government’s objection to the Trans Mountain project grows even thicker. Like all of that Alberta-bound natural gas, the lucrative gas liquids heading to Alberta are used to prop up the petro province’s heavy oil industry. They are essential in allowing thick, unrefined Alberta oil and bitumen to move through pipelines. Paradoxically, B.C.’s eastern-bound gas liquids could one day facilitate the westward movement of diluted bitumen through that new pipeline that Ottawa and Alberta are so intent on building,” over B.C.’s sustained objections.

Meanwhile, natural gas subsidies have pulled billions of dollars out of provincial coffers, and the activity they support “carries with it enormous ecological costs, almost all of which are borne by Indigenous and non-Indigenous communities located in the northeast region,” Parfitt writes. Those impacts include “stunning and repeated violations of provincial laws”, dozens of unlicenced dams built for “increasingly intense” natural gas fracking operations, possible groundwater contamination at hundreds of wells, accumulating financial liabilities at abandoned sites, and “disturbing evidence of methane leaking into the atmosphere at numerous gas well sites and wreaking climatic havoc. Given this, it is entirely conceivable that if the day ever came when a major LNG facility—or more accurately, a liquefied fracked gas plant—was built in B.C., the greenhouse gas emissions associated with that gas would put it on par with coal in terms of carbon emissions.”

Parfitt’s analysis looks at the secrecy surrounding B.C.’s natural gas subsidies, the economic consequences of a natural gas glut, and mounting efforts by Montney region producers to get their “landlocked” fracked gas product to coastal Kitimat for liquefaction and export.