In response to Mr. McConnell’s letter of the July 17, dialogue is good, as it defines both sides.
I was very pleased to read your last paragraph, particularly the last line “if this B.C. government has nothing else to show for their term other than the first commercial model of an LNG industry, they will have been successful.” Pure politics, which was my argument.
Referring to other points:
• Russia-China deal. Russia will back up the pipe supply with LNG facilities. Japan is inching towards re-starting the nuclear plants. The LNG market available to us will shrink.
• Aussie cost overruns. Australia has repealed the carbon tax to support both LNG and coal industry which are the pillar of the Australia economy. The price modifications are starting.
• Ambient temperatures and LNG facilities. I agree that LNG efficiencies are better in lower temperatures but that is not the complete story to the liquefaction power — you must add the power of the pipeline to get the gas to the plant. If you look at proposed LNG facilities in terms of pipeline length and temperature, the massive proposed facility in Alaska wins.
Canadian natural gas will not be needed in the U.S.
• On carbon sequestration, I refer you to the MIT and Bloomberg websites and review the trials of the Kemper Mississippi coal fired facility and the massive cost overruns. (www.bloomberg.com/news/). Sequestration will only work with plants that can supply the CO2 to EOR (enhanced oil recovery).
The combined-cycle coal gas cannot make the 1000-pound-per-MWh limit. Natural gas pure will average 850 pounds per MWh. In reviewing the Kemper pricing, the original estimate was $2.4 billion in 2010 — at 582 megawatts, the cost was $4,124 per kilowatt capacity. A natural gas plant cost is $1,003 per kilowatt. The current cost at Kemper will be $6 billion or approximately eight times that of a gas feed plant. Combine the electrical generation use with the T Boone Pickens natural gas use in trucks that is gaining support in Congress and the shale gas depletion rates points to the significant increase in usage. That was borne out by your comments on pricing. If the U.S. is producing gas at much higher rates, why has the price not come down?
The area in your letter that was not covered was the transportation of the product through the corridor and Haro Strait. I would like to hear your thoughts.
Gord Homer
Furry Creek
