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Fort St. John
Thursday, November 15, 2018
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BC Hydro to offer incentives to oil and gas companies to go electric: Bennett

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FORT ST. JOHN, B.C. – The B.C. Ministry of Energy and Mines is hoping that an aggressive new plan will see more oil and gas companies operating in the Peace Region to switch to using electricity to run some of their key equipment.

Energy Minister Bill Bennett says that many companies are using natural gas to run their gas processing equipment, because it is currently cheaper than using electricity from BC Hydro’s grid. According to Bennett, BC Hydro is proposing to offer cash rebates to these oil and gas companies to be used towards the purchase of new electric-powered natural gas processing equipment. In return, Bennett says that these companies would then sign contracts with Hydro to purchase power from them at the same industrial rate that pulp mills, mines, and other users currently pay. He says that the switch to using electricity from BC Hydro’s grid would greatly reduce greenhouse gas emissions and would also be cost-effective in the long term.

“The way that Hydro can justify doing that is that these companies will then be customers for thirty, forty years,” said Bennett. “So there’s a huge amount of revenue that Hydro is going to generate from these companies.” Bennett added that those time frames are merely speculative, and that it will be up to BC Hydro to determine the length of the contracts. When asked about the amount of potential revenue for Hydro in the next thirty years, Bennett stated, “I don’t have the numbers handy, but I can tell you that it is in the hundreds of millions.”

The plan according to Bennett would involve the construction of one or two high voltage transmission lines from the Fort St. John area towards the north end of the Montney Basin. “There are two transmission lines that are on the drawing board for the northern part of the Peace,” said Bennett. “One or both of them will eventually get built. We are waiting right now to find out how much help the federal government will provide to the province to build these transmission lines.” The Dawson Creek/Chetwynd Area Transmission, or DCAT line, was completed last year at an estimated price of $296 million. The line was built with the intention of providing natural gas companies in the South Peace access to this program.

However, due to the estimated cost of several hundred million dollars for the proposed high voltage lines, the province is going to be asking the federal government to help foot the bill. “The federal government has indicated that it may well be interested to fund at least one of the lines, if not two. If we could put that together, we would construct some more transmission lines and make electricity available for these natural gas companies that don’t have electricity available.” “Transmission lines typically are expensive infrastructure to build. So you’re certainly talking a few hundred million.”

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When it comes to a timeframe for the project, Bennett says that the program is being implemented right away for companies operating close to existing transmission lines, but that it still faces several hurdles to move forward for those that aren’t. He explained that the province won’t likely be hearing back from the Feds about the funding for several months. After that, the province would start deciding which transmission project they would invest in. “That’ll certainly happen in 2017,” he said.

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