Anyone who follows news about the Canadian Liquid Natural Gas (LNG) industry (and many who haven’t) will have heard about the new report prepared by the folks at Global Energy Monitor (GEM) called The New Gas Boom: Tracking Global LNG Infrastructure (The New Gas Boom). The New Gas Boom is the latest effort by GEM to generate earned media in its fight against new fossil fuel infrastructure. In the last week I have seen and heard lead author Ted Nace all over local and national radio and television. What is most troubling is that this report (if you can call it that) consists mostly of tables and figures with little-to-no supporting information. What is most problematic is that what information they do present about Canadian LNG developments appears incorrect…and consequently the conclusions the authors have proclaimed across our media landscape are also likely equally incorrect. The rest of this blog will expand on this topic.

Where are they getting their Project Numbers from?

According to their website GEM documents fossil fuel infrastructure developments. Given that mandate one would expect the one thing they would try to do well is keep track of fossil fuels infrastructure developments. If you expected that, you would be disappointed. Between the New Gas Boom report, their fossil fuel tracker application and their associated data tables [look for the tab in the application] they can’t seem to keep their numbers straight. The numbers in the tables of The New Gas Boom report don’t appear to reflect those in the application; and facilities identified in the data tables differ from those that appear when you open the mapping program. More problematically, their numbers, don’t correlate with other, authenticated resources available online.

In The New Gas Boom the authors report that Canada currently has 281.6 million tonnes per annum (MTA) of LNG Export Terminals in “pre-construction”. Now let’s excuse the fact that the term “pre-construction” is never defined and imagine it means projects that someone intends to construct.

I spent several hours trying to figure out what they claimed was in store on the topic of Canadian “LNG Export Terminals” and simply could not reconstruct their 281.6 MTA number. What is more important is that Natural Resources Canada (NRC) keeps a detailed list of Canadian LNG export projects and the NRC list differs significantly with the list from the GEM website.

According to NRC there are 216 MTA of projects on the books, not the 281.6 MTA reported as under “pre-construction” in the New Gas Boom report. Moreover, that 216 MTA of projects simply represent projects that have obtained export licenses, which represents the first step in a long process to construction.

Going to the Sourcewatch page for BL LNG Terminals (Sourcewatch serves as the feeder for the GEM mapping program) they list 21 LNG terminal projects on the BC coast but the NRC identifies only 13. That is a major discrepancy. The next task would be to compare the list from Sourcewatch to the National Energy Board list of LNG export licence applications [excel file] and there one discovers more discrepancies.

Ultimately the thing to understand about the list of BC LNG projects is that many are mutually exclusive in that they rely on the same pipeline capacity and others have no associated pipeline capacity. Put simply, most of these projects have no funding, no gas supply and no chance of being completed. Anyone aware of the BC LNG situation would know that currently there are only a handful of projects close to being considered viable, likely in the 30-40 MTA range rather than the hundreds described by GEM.

The question one might ask is: why does it matter that GEM’s numbers are off by so much? Well because the entire point of The New Gas Boom report is that there is too much capacity under construction; that the massive amount of construction to come will overload the global system; and this will result in financial and ecological ruin. Their headline statements include:

$1.3 trillion being invested in global gs expansion.

The scale of the LNG expansion under development is as large or greater than the expansion of coal-fired power plants,

If built, LNG terminals in pre-construction and construction would increase current global export capacity threefold

The problem, as we have discovered, is that since their numbers are flawed, so are their dire warnings. Their narrative is all wrong. BC is not going to build hundreds of MTA of export capacity and BC is not going to flood the global market with LNG. Rather, BC appears set to produce about 40 MTA of export capacity in the next decades which will fit right in with demand expectations in Asia. Moreover, now that we have established how far off this report is for BC LNG how can we seriously believe anything it has to say for Australian or American developments?

What’s Up With Their Fugitive Emissions numbers?

Besides claiming financial catastrophe, the authors of The New Gas Boom also want to convince readers that natural gas is worse than coal. They appear to do so by undertaking a careful, and some might say biased, reading of the academic literature which allows them to massively exaggerate fugitive emissions. To understand you have to go to page 13 where they explain their methodology. Under the Section: Updated leakage estimates alter the assessment” we see the following text:

Updated leakage estimates alter the assessment. The 2014 DOE report was based on the assumption that methane leakage was 1.3% for conventional onshore gas and 1.4% for fracked gas. In 2018, a comprehensive reassessment of methane emissions in the U.S. oil and gas supply chain, based on facility-scale measurements and validated with aircraft observations in areas accounting for about 30% of U.S. gas production, concluded that the overall leakage rate for natural gas was 2.3% of gross U.S. gas production, a figure 60% higher than the U.S. Environmental Protection Agency inventory estimate (Alvarez 2018). At the higher leakage rate, the advantage to using coal disappears. Multiple studies estimate the overall leakage rates even higher than the 2.3% Alvarez estimate, due to the fact that the Alvarez study did not include “downstream” leaks in the distribution of gas. Such leaks account for an additional 2.7 ± 0.6%, according to a study of Boston (McKain 2015).

There are two topics to be addressed in this section. The 2.3% number for overall leakage and the 2.7% number for downstream leakage. Both are useless in the Canadian context.

To address the 2.3% overall leakage you could go to my previous blog post. In my previous post I noted that the 2.3% number is derived from a paper by Alvarez et al. in Science where they calculate that 2.3% of US production of LNG was lost in the form of fugitive emissions. They argue this wipes out the emission savings in using LNG for power. The problem with the Alvarez results is that they aren’t applicable to Canadian LNG.

The Alvarez paper relies on top-down surveys (airplane surveys) in selected US gas fields and extrapolates those results to the US (and Canada). The problem with this extrapolation is that geology and regulations matter in the LNG field. BC LNG is from deeper formations; Canadian infrastructure is much newer; much of our BC natural gas is sour; and BC has enhanced regulatory controls compared to the US fields studied by Alvarez.

To explain why this all matters consider our stricter regulatory structures which have essentially eliminated flaring and strongly encourage green completions (which prevent release of gas when the well is being completed) and encourage the use of electricity in on-site equipment (to prevent the use of gas which may then be released). These regulations massively reduce the amount of fugitive emissions in the upstream industry. They do this not only because it makes environmental sense but because much of our gas is sour (read poisonous). The levels of releases considered common in Texas or Pennsylvania could result in mass casualty events in BC.

Moreover, as I noted, the Alvarez paper relies on airplane surveys to measure fugitive emissions. These types of surveys have well-understood issues that I address in detail in this blog post. The most important is temporal variability.

Recent research shows that the time when the planes fly really effects their results. The new research makes the observation that the flights used by researchers (like Alvarez et al.) to measure methane only happen during daytime hours (usually in the middle of the day), during the spring/summer on clear days. This coincides with when maintenance is typically scheduled on natural gas facilities (which requires that they flush their systems). As such, the research concludes that top-down surveys will almost always significantly overestimate total emissions.

For an analogy, it would be like traffic counters only working during rush hour and then extrapolating those rush hour conditions over the entire 24 hour day including the middle of the night.

As I noted in my previous blog post, under a 20-year time period a leakage rate greater than 2.6% is necessary for natural gas to approach an emission level for coal when dealing with low efficiency natural gas compression systems and high-efficiency coal. Most estimates for upstream BC fugitive emissions run between 0.6% and 1.1% including the transportation component. Given our high use of electricity in our LNG streams the result is that BC LNG is much cleaner than coal.

Now lets be generous and imagine that fugitive emissions are equivalent to the the entire 2.3% identified by Alvarez. Thanks to our electification BC LNG would still be much cleaner than coal. To address this shortfall the authors had more work to do. They did this by adding an additional “downstream” fudge factor; and because apparently this group of authors and to do so they went to the McKain paper to get their 2.7% downstream leakage rate.

You might wonder why I highlight their dependence on the McKain paper for downstream leakage. The reason for my disdain is that this study represents a particularly egregious case of cherry-picking.

The McKain paper does indeed document substantial leaks in downstream transportation but there is a HUGE PROVISO. The McKain research addresses the “Urban Region of Boston” which has some of the oldest and leakiest natural gas infrastructure on the planet. It has been the topic of major news stories and has its own page on the Environmental Defense Fund’s website. According to Environmental Defense over half of Boston’s natural gas pipes are over 50 years old and “nearly 45% of the pipes are made from cast iron or other corrosive [sic] and leak-prone materials“.

The authors of The New Gas Boom chose the absolute worst-case scenario in North America and used it as their signature value for their assessment. Does this sound like the typical case that should be used to extrapolate to Canadian natural gas infrastructure?

To make an analogy people might better understand, it would be like assuming that the lead issues in the Flint, Michigan water system are typical of the entire North American water system and that we should calculate lead ingestion levels for all North Americans using the numbers only from the Flint, Michigan water system.

If I didn’t know better I would have guessed that the authors of the report were counting on readers not being aware of the background of the McKain paper and so were counting on being able to slide this information by us all….and given the media reporting (and other reporting I have read) they almost did.

Conclusion

Ultimately The New Gas Boom report appears to have been intended to serve a political, rather than a scientific purpose. The numbers presented in the report appear to be massively inflated to allow for them to make catastrophic predictions and present terrifying numbers ($1.3 Trillion) in order to generate lots of free media hits. Sadly, the report did just that. In our local market I saw, or heard, the lead author Ted Nace on each of the major news and information networks. He was able to spread his apocalyptic conclusions free from any significant criticism or push-back. This happened because he was able to take advantage of the fact that 99.9% of the population would not have the knowledge of the academic literature or Canadian LNG industry to call him out.

Unfortunately, it is only now after he has enjoyed his 15 minutes of fame and generated millions of dollars of free publicity, that the limited number of individuals with the knowledge to challenge his claims have been able to come forward to challenge them. It is a sad indication of the state of discourse in our current media landscape that the numerous pieces, like this one, identifying the significant flaws in the story, will mostly serve as footnotes as the press moves on to the next Donald Trump mis-step. This is another case of an NGO promoting a false narrative and no one being available to knowledgeably push-back.