BC Government forges ahead with clean energy plan

BLUEFUELENERGY.COM: The summer of 2009 has certainly been a tumultuous one for the renewable energy industry here in British Columbia. On July 26 the British Columbia Utilities Commission (BCUC)—an independent regulatory agency of the provincial government—shocked the industry and the government by rejecting the 2008 Long Term Acquisition Plan (LTAP) of BC Hydro, a BC crown corporation, saying that it was not in the public interest and ordering BC Hydro to deliver a new LTAP by June 30, 2010. That myopic decision completely ignored the BC Government’s 2007 Energy Plan and various other progressive policies. It also dropped a wet blanket on billions of dollars in investment in green power generation. Appalled by this cheeky pulling of the plug on its initiatives, the government boldly stated its resolve to pick the plug up off the floor and jam it back in the socket.

A mere month after the BCUC decision debacle, the BC Government appears ready to deliver; in its August 25 throne speech (outlining the agenda for the upcoming session of the legislature) the government clearly states what it plans to do to ensure that BC is a leader in renewable energy and climate change mitigation. Sections of the speech most germane to the renewable energy industry are as follows:

• “Green energy will be a cornerstone of British Columbia's climate action plan.”
• “Electricity self-sufficiency and clean, renewable power generation will be integral to our effort to fight global warming.
• “The BC Utilities Commission will receive specific direction.”
• “Phasing out Burrard Thermal is a critical component of B.C.'s greenhouse gas reduction strategy.” (Burrard Thermal is an archaic natural gas power generation facility that BCUC proposed ramping up.)
• “Further, this government will capitalize on the world's desire and need for clean energy, for the benefit of all British Columbians.” (Clean power exports . . . )
• “Whether it is the development of Site C, run-of-river hydro power, wind, tidal, solar, geothermal, or bioenergy and biomass — British Columbia will take every step necessary to become a clean energy powerhouse, as indicated in the BC Energy Plan.”
• “We will build on past successes with new strategies aimed at developing new clean, renewable power as a competitive advantage to stimulate new investment, industry and employment.”
• “New energy producers will be looking for long-term investments leveraged through long-term power contracts that give them a competitive edge in our province.”
• “We will open up that power potential with new vigour, new prescribed clean power calls and new investments in transmission.”
• “A new Green Energy Advisory Task Force will shortly be appointed to complement the work of the BCUC's long-term transmission requirement review. That task force will be asked to recommend a blueprint for maximizing British Columbia's clean power potential, including a principled, economically-viable and environmentally-sustainable export development policy.”
• “It will review the policies, incentives and impediments currently affecting B.C.'s green power potential, and it will identify best practices employed in other leading jurisdictions.”
• “Low-carbon gas development is the key to maximizing B.C.'s energy potential where it can occur with minimal environmental impact.”

Although the government does not specifically mention carbon-neutral Blue Fuel/DME in this speech from the throne, it does support its production by:

1) Vigorously promoting expansion of renewable electricity generation above and beyond large-scale hydro, which is currently the basis for Blue Fuel/DME production in the province;
2) Recognizing that gas is a key to maximizing the province’s energy potential, but that this gas must be low-carbon (for example, natural gas in which the CO2 is “actively sequestered” or recycled, as it would be to produce Blue Fuel/DME.

We at Blue Fuel Energy look forward to learning more about the “specific direction” that the BC Government will shortly be providing BCUC.

Methane recovery and monitoring systems may have Blue Fuel/DME implications

BLUEFUELENERGY.COM: As reported recently on the website, Mineweb, the advance of methane recovery and monitoring equipment technology is helping companies in a broad range of fields to improve safety and generate new revenue.

In terms of background, coal mine methane (CMM) is a greenhouse gas (GHG) with a global warming potential 21 times greater than that of CO2. Author John Chadwick estimates that by 2020 CMM emissions from the world's coal mines will increase by 30% from current levels and represent about 8% of methane emissions generated by human activity.

Although capturing methane emissions is both a mine safety issue and a necessity for decreasing GHG emissions, it is also a business opportunity. For example, methane gas can be burnt to create electricity. In 2007 UK Coal, a pioneer in the use of this technology, earned a US$10m profit by using gas extracted from its mines to power over 40,000 hones.

Chadwick also asks the question: what are the wider opportunities which this advanced method of methane monitoring is now helping facilitate? To give some examples, captured methane can be used for natural gas pipeline injection, electric power generation, co-firing in boilers, district heating, mine heating, coal drying, vehicle fuel, and manufacturing uses such as feedstock for carbon black, methanol - and, most importantly for readers of this blog, the production of dimethyl ether.

Also, for the very low concentration methane in mine ventilation air, technological development has progressed to the point that this CMM source can be oxidised and the resulting thermal energy used to produce heat, electricity, and refrigeration.

Although the Mineweb article does not state specifically that methane drainage techniques are being used for Blue Fuel/DME production, it is interesting to note that China - the world's leading DME producer - is also the leader in purchasing this new-generation methane capture equipment.

Perspectives on methanol

BLUEFUELENERGY.COM: Although DME can be manufactured directly from synthesis gas produced by the gasification of coal or biomass, or through natural gas reforming, world production today is primarily through the catalytic dehydration of methanol. Given that Blue Fuel Energy will produce methanol to produce Blue Fuel/DME, it is important to be informed about methanol because it too is an alternative fuel garnering considerable attention. It is certainly not lost upon Blue Fuel Energy that if demand for methanol were to escalate, being in a position to introduce a carbon-neutral version of it into the marketplace would have its advantages.

Methanol, of course, has its detractors and proponents. The monthly magazine Energy Tribune has recently presented articles from both camps in the methanol debate. To learn the views of detractor Geoffrey Styles, please read this July 16 piece; in response, the Methanol Institute has responded to Styles article in this July 29 article by John Lynn.

Natural gas royalties in BC

BLUEFUELENERGY.COM: Following up on our August 6 post about BC’s GHG emission baseline—and the role that Blue Fuel/DME produced with renewables can play in helping the province comply with its Greenhouse Gas Reductions Target Act–on that very day Toronto's Globe and Mail featured an article by Dave Ebner titled “BC slashes natural gas royalties”.

As Mr. Ebner points out, all wells drilled in BC from September through the end of June 20 will be charged a nominal royalty of 2% for the first year of production, a move designed to spark drilling in the province’s northeast. The BC Government is aggressively seeking to spark drilling for natural gas in the northeastern part of the province, where the huge Montney and Horn River gas plays are located. The government’s reliance upon these gas plays to help it deal with its rising deficit is very real—as will be the carbon dioxide emissions that these plays will generate when production gets cranked up. The natural gas processing industry is already a huge generator of carbon dioxide emissions in BC, which means that both this industry and the BC government have a major problem on their hands.

The only solution proposed thus far is the passive sequestration of this carbon dioxide into subsurface geological formations, a measure that is experimental, alarmingly expensive—and wasteful of captured carbon dioxide. It is Blue Fuel Energy’s view that active sequestration of this valuable resource by using it as a feedstock for Blue Fuel/DME is the answer. Natural gas processors can relieve themselves of their carbon burden and the government can rightfully claim that BC is setting an example to the rest of the world when it comes to greenhouse gas emissions.

LCE BioEnergy LLC initiates biomass to DME project

BLUEFUELENERGY.COM: It is encouraging to note that efforts are being made in the US to produce low-carbon DME through the gasification of biomass. Located in Lackawanna, New York, just south of Buffalo in the northwestern corner of the state, LCE BioEnergy will use DME technology from JFE Holdings in Japan and consult with stalwarts of the DME field such as Dr. Theo Flesch (IDA) and Jim McCandless (Alternative Fuel Technology). For a summary of the project, please click here.

BC Government sets 2007 GHG emission baseline

BLUEFUELENERGY.COM: On July 30 BC Environment Minister Barry Penner and Minister of State for Climate Action John Yap reaffirmed the BC Government’s commitment to reducing carbon emissions by releasing the British Columbia Greenhouse Gas Inventory Report 2007. According to the report, in 2007, BC emitted 67.3 million tonnes of greenhouse gas emissions measured in carbon dioxide equivalent (CO2e). Trends in GHG emissions in BC show a 21% increase from 1990, a 7.6% increase since 1997, and a 3.8% increase since 2006.

2007 was established under the provincial Greenhouse Gas Reductions Target Act as the base year for calculation of GHG emissions targets. The Act puts into law BC’s target of reducing GHGs by at least 33% below 2007 levels by 2020 and includes the long-term target of an 80% reduction below 2007 levels by 2050.

Complying with the Act it created is a daunting task for the BC Government. On a page of its LiveSmart BC website discussing BC’s greenhouse gas emissions, the government recognizes that the two primary drivers for the growth in GHG emissions since 1990 are population growth and expansion of the natural gas industry. Although the industry did boom from 1990 to 2007, it is now poised for a gas boom to end all gas booms as a result of natural gas discoveries in the Horn River Basin in northeastern BC. Indications are that the Horn River discovery is the largest discovery of natural gas in Canadian history.

Given the demise of the forest industry in BC and other economic shortcomings that have resulted in substantial revenue shortfalls for the government, the prospect of exploiting the natural gas resources of the Horn River Basin is enticing. Too enticing for the government to ignore. That said, the processing of natural gas generates huge volumes of carbon dioxide. Too much carbon for the government to ignore. A dilemma indeed.

Fortunately, there is a solution—producing Blue Fuel/DME using wind energy—which is also abundant in northeastern BC—and waste carbon dioxide from natural gas processing. Energy synergy at its finest. The BC Government has been apprised of this opportunity to make BC a wind energy powerhouse, a natural gas powerhouse—and a Blue Fuel/DME powerhouse. It will be fascinating to see how the government responds. Stay tuned to this blog for more.