Don’t bet big on liquefied natural gas, warns expert

An international expert is warning the Yukon not to put all its eggs in the liquefied-natural-gas basket.

An international expert is warning the Yukon not to put all its eggs in the liquefied-natural-gas basket.

David Hughes, a fellow with the Post Carbon Institute, will be in Whitehorse on Thursday to give a talk on how the territory fits into the global energy picture.

“There’s quite a bit of controversy, I understand, about LNG being used to generate electricity, versus diesel,” he said in an interview this week. “Yukon is in an enviable position because of all the hydro, which is a big proportion. But down the road it looks like that’s not going to be enough.”

Hughes said he recognizes that Yukon will need to continue to rely on diesel or natural gas for energy in the short term. But he has bigger dreams for the future.

Instead of a mainly-hydro system with diesel or LNG backup, he asks why not a solar and wind system with hydro backup?

“The beauty of hydro is that it’s dispatchable. It means you can turn it on and off. Wind is intermittent, solar’s intermittent, so they need to be backed up.”

Hughes’s recent research has focussed mainly on the shale gas industry in the United States. His 2013 report on the subject works to dispel the myth of an endless supply of cheap fracked gas.

“What’s the long-term supply picture for shale in North America? There’s a lot of hype surrounding it, you know, ‘cheap gas forever,’” he said.

“Production is rising in some plays, but production has collapsed in others. Looking long term, from my analytical work, prices are going to have to go up. If you’re drilling in low-quality parts of the play, so the wells produce half as much gas, they still cost as much to drill. So obviously you need higher prices.”

When Yukon thinks about its energy future, it needs to consider that natural gas is a non-renewable resource, and prices will necessarily have to go up, he said.

“If you’re going to have a long-term plan, it should recognize that, and develop a strategy that’s going to minimize the impact for people if supplies become limited and if prices go up a lot.”

“Likely you can’t get away from needing some diesel/LNG for backup, certainly in the shorter term,” he said.

However, “I would look at things that would reduce consumption, and alternatives, before I looked at a straight swap out of diesel for LNG.

When it comes to a shale gas production industry here in the Yukon, Hughes said that’s very likely to still be quite a ways away.

Gas plays in northern B.C. that are still in early stages of production will be developed before the industry knocks on the territory’s door, he said.

Those northern reservoirs are already expensive to develop compared with other regions of North America, and Yukon’s gas would likely cost more still, said Hughes.

Hughes will speak Thursday at 7 p.m. at the Beringia Centre. The Yukon Conservation Society organized the event. Admission is by donation.

Contact Jacqueline Ronson at jronson@yukon-news.com