Yukon Energy defends natural gas plans

Yukoners got an opportunity Monday night to voice concerns over Yukon Energy's plan to replace its diesel power generators with liquefied natural gas, and their concerns are many.

Yukoners got an opportunity Monday night to voice concerns over Yukon Energy’s plan to replace its diesel power generators with liquefied natural gas, and their concerns are many.

Yukon Energy president David Morrison spent hours on Monday evening fending off accusations that the power corporation was alternately whitewashing and greenwashing its plan for LNG.

That plan, announced last week, would see two back-up diesel generators near the Whitehorse Dam replaced with LNG-burning power plants, at a cost of $34 million. A storage facility would also be built next to the rail line near the dam to store fuel. The corporation plans to have the facility operational by the end of next year.

Morrison defended the plan, telling the assembly of 50 people that LNG will be cheaper, cleaner and, most importantly, more reliable.

“We’re an isolated grid. We have no connection to anyone else. We have to supply our own power. Because of our geographic location, because of our winter climate, we have a full backup of the system on a community basis … If there’s a power outage and we need to turn those engines on and they don’t come on, the lights won’t come on in Whitehorse,” Morrison said.

He said that the LNG generators would be used primarily as a backup in case of a transmission or generation failure, and wouldn’t be providing daily power to the grid. Essentially, the old diesel backups are worn out and LNG is a cheaper alternative, he said.

The generators themselves will cost about the same as installing new diesel burners, but the real savings come from the low cost of the gas itself, Morrison said.

The gas would be sourced from Shell Canada’s Jumping Pound facility in Calgary for $3 per gigajoule. Yukon Energy’s modeling allows for the price to climb up to $4.50 per gigajoule. Yukon Energy has a guarantee from Shell on the price of processing the fuel, but not on the price of the gas itself.

Roger Rondeau, a member of the Yukon Utilities Consumers’ group, asked why the corporation needs new generators at all.

“We have three megawatts at Minto that don’t belong to us, but they’re on the grid. We have Haeckle Hill, at one megawatt. We’ve got biomass in Haines Junction … that’s what we’ve been told.

“We have more than sufficient, enough energy right now without replacing these two old (engines),” Rondeau said.

“The answer, Roger, plain and simple is that we absolutely do not,” Morrison said.

One woman asked if Yukon Energy has considered taking the Minto and Alexco mines off the grid, which would save about 12 per cent of the power. Morrison said that hasn’t been considered because the mines are paying customers, and that revenue helps bring down overall power rates.

The most controversial part of the presentation involved the cleanliness of LNG versus diesel.

Yukon Energy had two reports prepared, one by the Pembina Institute and one by ICF International. Both found that conventional natural gas is slightly greener in its overall life cycle than diesel, and that shale gas obtained through hydraulic fracturing is cleaner still.

But many at the public meeting questioned the studies. In order to realize those greenhouse gas savings, both studies assumed a lifespan of 100 years for the proposed new generators. Over 20 years, fracked shale gas is three times as dirty than diesel, the audience heard.

But the world doesn’t have 100 years to transition away from fossil fuels before climate change becomes irreversible, Morrison heard.

“We want to see the 20-year life cycle,” shouted one member of the audience.

A member of the audience pointed out that ICF based part of its report on an outdated U.S. Environmental Protection Agency study on shale gas from 2009 that the agency now admits is not accurate.

“If we’re not off fossil fuels in 20 years, we’re sunk,” said another audience member.

Some people suggested the reports should be peer-reviewed by independent scientists.

Don Roberts, chair of the group Yukoners Concerned About Oil and Gas Exploration, said this rush for an LNG-burning facility in Whitehorse is part of a larger Yukon Party strategy to bring hydraulic fracturing to the territory.

The government has no guarantee on the price of natural gas, he said, and when that price inevitably rises, that will give the government the excuse it needs to start fracking in the territory to supply cheaper fuel.

“We don’t make government policy,” Morrison said. “If the system was different, we might be able to do things differently. If we could make things change, we could change the backup system, but this is the system we’ve got.”

Contact Jesse Winter at

jessew@yukon-news.com

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