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Increasing the market for LNG and renewable natural gas

March 22, 2017

​The Government of British Columbia is taking action under the Climate Leadership Plan to support investments by natural gas utilities that will increase the use of LNG and renewable natural gas in the transportation, marine and other sectors and reduce greenhouse gas (GHG) emissions.

“We’re working with utilities to stimulate the use of LNG as a marine fuel in large, ocean-going ships, and to increase the supply and use of renewable natural gas,” said Energy and Mines Minister Bill Bennett. “Building the market for B.C.’s abundant supplies of natural gas offers the opportunity to achieve significant GHG emissions reductions and supports jobs and economic opportunities in British Columbia’s natural gas sector.”

Amendments to the Greenhouse Gas Reduction Regulation (GGRR) under the Clean Energy Act will enable utilities to increase incentives provided to shipping companies for the conversion of vessels to run on LNG, invest in LNG bunkering (marine fuelling) infrastructure, and increase the supply and use of renewable natural gas (RNG).

Programs under the GGRR are funded by the utility, not the Province. The amendments are enabling only, and set the parameters for potential utility programs and investments that will reduce GHG emissions.

“We are creating market opportunities for British Columbia’s natural gas sector, offering utilities flexibility to create new incentive programs so we can continue to build a strong economy and a cleaner future,” said Deputy Premier and Minister of Natural Gas Development Rich Coleman.

Converting just one ocean-going tanker, cruise ship, or container ship to run on LNG instead of heavy fuel oil will reduce GHG emissions by about 93,500 tonnes per year, equivalent to taking over 19,800 vehicles off the road. Utility investments in LNG fuelling infrastructure will help establish B.C. as a marine bunkering centre on the west coast capable of providing LNG to an increasing number of LNG vessels and leading to global reductions in GHG emissions.

RNG is derived from biogas created when organic waste decomposes at landfills, agricultural and forestry waste sites and wastewater treatment facilities. Although conventional natural gas has 25% less carbon than diesel fuel and 25-39% less than typical marine fuels, RNG is considered carbon neutral. Increased use of RNG could result in up to 450,000 tonnes of GHG reductions per year in B.C., and will also help build the market for biogas, providing economic opportunities for local governments and farming and forestry operations.

Amendments to the GGRR will allow utilities to double the incentives available to convert vehicles and marine vessels to natural gas when the new incentives go towards vehicles using 100% RNG, and enable utilities to recover the costs of acquiring and distributing RNG in rates.

RNG can be used interchangeably with conventional natural gas and easily injected into the natural gas system, so the demand potential for renewable gas and the related GHG emissions reductions are significant.

“The provincial government's leadership allows FortisBC to build upon existing programs supporting the natural gas for transportation and renewable natural gas sectors,” said Michael Mulcahy, president and CEO of FortisBC. “LNG for marine vessels ensures the international marine shipping industry has a cost-effective, clean-burning fuel with which to meet international emissions standards. Encouraging the development of renewable natural gas provides additional business opportunities for local waste producers, such as farms, landfills and wastewater treatment plants. These initiatives not only benefit our customers by optimizing our natural gas system year-round, they benefit all British Columbians by lowering operating costs for businesses and by reducing carbon emissions in our air.”

Read the full release.