Isra-Mart srl : Encana strikes new deal with B.C.’s Pacific Carbon Trust

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Isra-Mart news:

Encana and the British Columbia government’s Pacific Carbon Trust have a new deal that’s expected to cut emissions from gas flaring in northeast B.C.

The Carbon Trust is purchasing 84,000 tonnes of carbon offsets from Encana on the basis of some innovative greenhouse gas reduction technology the gas producer is employing in the Jean Marie formation near Fort Nelson.

The agreement commits the trust to buy an additional 30,000 tonnes of carbon offsets through 2012.

The trust does not disclose the per-tonne price it pays private sector companies to modernize or transform industrial processes in order to reduce carbon dioxide emissions.

Companies cutting emissions earn carbon “credits” for each tonne of emissions they curtail. Those credits represent a form of currency that is considered a cornerstone for global efforts to curtail greenhouse gas emissions.

In B.C., the Carbon Trust has a system to verify each tonne of offsets it buys, before selling them at $25 a tonne to government ministries and agencies that are mandated by the province to be carbon neutral.

Encana calculates that it reduced emissions 85 per cent by adjusting its drilling methods at the Jean Marie formation, saving emissions equivalent to 22,500 cars for one year.

In order to realize the savings, Encana made some adjustments to a gas exploration drilling technology known as underbalanced drilling, substituting natural gas for nitrogen as a lubricant.

Encana has been recovering and capturing the gas, then streaming it directly into a pipeline, rather than flaring it off into the atmosphere as greenhouse gas.

It’s believed to be the first time a program using this technology has been used on a commercial scale and it is estimated that greenhouse gas emissions can be cut by 1,000 tonnes for every well drilled.

This is one of the trust’s single largest offset purchases.

The trust estimates that it needs 800,000 to one million tonnes per year to meet B.C. public sector demand for offsets.

Scott MacDonald, CEO of Pacific Carbon Trust, said the Encana deal will account for about 10 per cent of the trust’s overall portfolio, and it’s the first offset purchase from the natural gas sector.

“It’s a sizable project. What we’ve found in British Columbia is that most of the offset projects tend to be relatively small given the size of our industrial base and the kind of industrial activities we have. This will be one of the larger projects we purchase,” MacDonald said during a teleconference.

Richard Dunn, Encana vice-president for regulatory and government relations, described the Jean Marie project as distinct, which means it’s not easily replicated at other gas drilling operations around the province.

The industry will need a suite of methods and tactics, such as wider adoption of electrical power to process gas, in order to substantially reduce carbon emissions.

“There are a lot of efforts going on to manage our carbon footprint, the industry’s carbon footprint, in B.C.,” Dunn said.

“It’s not cutting-edge research, but there’s an awful lot of effort going on into looking at electrification of compressors in the Montney field by Dawson Creek. The Montney is a very attractive play. It has a lot of activity going on and it requires a fair bit of horsepower to drive the compression.

“Historically the compression has been driven by natural gas engines. We are working very closely with the province of British Columbia, ministry of energy and mines, and also BC Hydro, in taking a look at what we can do to move away from natural gas-driven engines and go to electric motor drivers on these compressors.”