A sustained increase of at least 50% — and possibly more — is on the horizon for exports of natural gas from British Columbia to the Pacific Northwest region of the United States, Westcoast Energy told Canada’s National Energy Board (NEB) in an application with a 10%, C$270-million (US$170-million) expansion of its B.C. pipeline system’s capacity by 200 MMcf/d to 2.1 Bcf/d.

Burgeoning production growth in the northern part of the province and growing demand from power generation in the Pacific region if the U.S. is driving the need for expansions. Westcoast’s affiliate, Duke Energy Gas Transmission (DEGT), received NEB approval last week to expand the Fort Nelson Mainline in northeast British Columbia by 43 MMcf/d to accommodate the strong production growth in the area. Construction on that project is scheduled for mid-August with an in-service date set for November.

Westcoast told the NEB that it expects exports from the province to reach 1.345 Bcf/d in 2016 compared to the 891 MMcf/d in 2001 and 896 MMcf/d expected this year. The totals exclude expectations for the Alliance Pipeline between Fort St. John in northeastern B.C. and Chicago, and for the TransCanada-Nova system’s branch lines into the region.

The Westcoast mainline expansion project, scheduled for completion in the fall of 2003, is among many capacity expansions planned for the B.C. grid. Long-range growth prospects in the province were among the attractions that prompted the Duke takeover of Westcoast last year. Westcoast also gave Duke interests in Alliance, Vector Pipeline, Union Gas, Maritimes & Northeast Pipeline and Foothills Pipe Lines.

Formerly the weak sister of the gas industry, Westcoast has outgrown its 1970s and ’80s reputation as a low-volume exporter at mostly poor prices. Westcoast pointed out that it has consistently outperformed its own projections. Deliveries on the B.C. pipeline system were forecast a decade ago to grow by an annual average 1.6-1.9%. Instead, the growth rate has turned out to be an average 2.7% per year since 1994.

On combined B.C. and northwestern U.S. markets, Westcoast projects annual growth rates of 1.9% in demand by “core” residential and commercial consumers, 0.9% by industrial users, and 4% by gas-fired electric power generation.

Other evidence in the B.C. pipeline expansion case assures the NEB that the province will come up with the gas to answer the anticipated growth in demand and export opportunities. Westcoast expects the number of successful gas wells in northern B.C. will average 427 annually through 2015. The sustained drilling is projected to find 10.4 Tcf of marketable gas reserves in northeastern B.C. or 11% more than the total of 9.4 Tcf currently connected to the pipeline system.

Westcoast’s conservative forecasts steer clear of trying to guess the outcome of plans for new developments in a region renowned for opposition by landowners and environmentalists. The current projections of market growth do not rely on contentious projects such as a hotly contested proposal currently before the NEB and U.S. counterparts for a gas-fired power plant in Washington State about 60 miles inland from the Pacific coast and just south of the Vancouver suburb of Abbotsford by Sumas Energy 2 Inc. A prolonged fight over the Sumas proposal, plus an associated international power line and a local gas-service connection, has spilled over into the Westcoast expansion case.

Although relatively modest by standards of Canadian gas-industry projects, the Westcoast proposal faces a second set of public hearings before the NEB starting Sept. 30 after going through a first round in July. Opponents of the Sumas project claim it will increase greenhouse-gas emissions and air pollution in the B.C. lower-mainland and adjacent U.S.territory. In the Westcoast case, fencing has continued between the public hearings with interveners attempting in exchanges of regulatory paperwork to link the Sumas project and the pipeline expansion proposal.

Conservation and landowner groups are asking the NEB to order Westcoast to conduct a wide-ranging environmental assessment forecasting increases in carbon-dioxide and other emissions that would result from use of all the additional gas to be carried on its pipeline. Westcoast is resisting, insisting there is no direct connection between its expansion and the Sumas project and that the wider assessment is neither possible nor required by any Canadian legislation.

So far in similar previous tangles, Canadian regulators have held that environmental assessments should center on direct, reliably measurable effects of projects such as the new compressors and lengths of pipe involved in the Westcoast case, but environmental and landowner groups continue to press federal authorities to require wider appraisals of cumulative effects of industrial development.

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