Resource integration for energy synergy

The key to making BC a clean energy powerhouse is to integrate development of the northeast’s extraordinary resources—thereby creating energy synergy. Integration scenarios that support Blue Fuel methanol production in the region are outlined below.

Integrating wind and hydro

As previously noted, the GMS generating station runs at about 50% capacity because of insufficient inflow into Williston Lake. What’s more, given climate change resulting in reduced snow packs and receding glaciers, in the future less water may flow into the lake, dropping GMS output even further below its potential. Wind can help solve this problem. When the wind blows sufficiently hard on the ridges not far from the WAC Bennett Dam to generate electricity (as it regularly does), wind-generated electricity could replace hydro-generated electricity, allowing Hydro to retain water in the reservoir instead of directing it through GMS turbines. When the wind eases off, on short notice Hydro could direct water through the turbines again and start producing hydro power. Water retained in the lake when Hydro is pumping wind-generated electrons into the grid would allow Hydro to increase its total output from GMS, significantly enhancing the plant’s efficiency. It would also give rise to the opportunity for Hydro to build a new generating station larger than GMS on the opposite side of the dam, more than doubling the power generation potential of the WAC Bennett Dam/Lake Williston complex. The use of wind to generate electricity—and store vast amounts of energy in the form of water in Williston Lake—would allow the reservoir to become, in effect, the largest battery in North America, a superb firming mechanism for intermittent wind. The synergistic benefit of integrating wind and hydro to increase the supply of attractively priced, renewable electricity is one of the keys to producing Blue Fuel methanol in the region.

Integrating methanol and natural gas

Renewable electricity from hydro and wind is primarily used to conduct water electrolysis, which separates H2O into its constituent parts: hydrogen and oxygen. Carbon dioxide is the other fundamental element of the Blue Fuel production equation, and its where the synergy arises between Blue Fuel methanol production and natural gas processing: carbon dioxide is a waste product of natural gas processing, but a feedstock for Blue Fuel methanol production.

Spectra Energy’s natural gas processing plant in the Pine River valley near Chetwynd is the largest individual source of CO2 emissions in BC. At present, Spectra simply vents the CO2 generated in its operations into the atmosphere—at no cost. However, as a result of BC’s carbon tax, this is going to start costing Spectra big dollars. Spectra needs a solution. Natural gas processors in the new Horn River basin and Montney shale gas fields are also going to need a solution. Ditto for the BC Government, with its 33% GHG reductions by 2020 target. In 2008 Spectra and the BC Government jointly announced a solution: the Fort Nelson Carbon Capture and Storage Feasibility Project. From Blue Fuel Energy’s perspective, this is tantamount to “cash sequestration.” Apart from being expensive (the CO2 needs to be transported and pumped into subsurface geological formations) and experimental (no guarantees that the CO2 won’t eventually leak out into the atmosphere), it is also unrealistic in northeastern BC because the subsurface geological formations in the region are only capable of storing a small fraction of the CO2 that will be generated. Further, it’s wasteful of a valuable Blue Fuel methanol feedstock. The carbon dioxide should be recognized for what it is: another ace in the hand of northeastern BC—a commodity that can be recycled and, when combined with electrolysis-generated hydrogen, converted into clean-burning, low-carbon Blue Fuel methanol, a fuel that can help BC reach its fuel carbon intensity reduction targets.

There is also another synergistic benefit to be derived by integrating Blue Fuel methanol and natural gas production. As mentioned, electrolysis generates oxygen as well as hydrogen. If Blue Fuel methanol production plants and natural gas plants were co-located and integrated, natural gas could be used to create low-carbon methanol by combining it in an autothermal reformer with electrolysis-derived oxygen.

The advantages of this approach for natural gas producers are significant. North America currently has abundant supplies of natural gas, and with more to come when recently discovered shale gas fields are developed, the price of natural gas is likely to remain low unless new markets emerge to greatly increase demand. Meanwhile, the price of oil continues to climb, resulting in an abnormally large but persistent price differential between gas and oil. The price of methanol tracks oil and not natural gas. By converting surplus natural gas to low-carbon methanol by using oxygen from the Blue Fuel methanol production process, natural gas producers could produce a commodity with far greater potential for profit than natural gas. Another fine example of energy synergy.

Integrating methanol and coal

What Blue Fuel methanol production can do for natural gas producers it can also do for coal producers—use mature technology to convert a carbon-intensive commodity into a low-carbon one through the co-location and integration of coal mining and methanol production. Again, the process is based on attractively priced renewable electricity that can be used to electrolyze water to generate oxygen and hydrogen. Rather than shipping out all their coal to Asia and other markets unprocessed, coal companies could convert some of it to a value-added liquid fuel by using oxygen (as opposed to nitrogen-rich air) to gasify coal into syngas gas, and then the hydrogen to adjust the hydrogen/carbon monoxide ratio of the syngas so that it can be synthesized into a low-carbon methanol. The carbon dioxide generated by this process would be in a concentrated stream that would be relatively easily and inexpensive to capture and thus recycle into more methanol. Here too, resource integration creates energy synergy, resulting in a clean, attractively priced, much-needed, proven transportation fuel.