Backers say propane will reduce use of coal, oil, in Asia

Photo Credit: COURTESY PORT OF PORTLAND - Pembina Pipeline Corp. hopes to transfer propane by rail from Alberta to this narrow parcel at the Port of Portlands Terminal 6. The export terminal would be between the rail line and the Columbia River slough. On the upper right is West Hayden Island. Is propane a kinder and gentler fossil fuel?

Could it help the planet as an interim “bridge fuel” in place of coal, diesel and gasoline — which cause more air pollution and carbon emissions — while we transition to clean, renewable energy?

How Portland officials answer those questions could determine the fate of a half-billion-dollar propane export terminal proposed at the Port of Portland. The project by Pembina Pipeline Corp. of Calgary, Alberta, Canada, would rank as one of the biggest-ever private investments in the city.

Portland youngsters get to school on buses powered by propane, which slashes tailpipe emissions. The state counts propane as an alternate motor-vehicle fuel to help cut greenhouse gas emissions, in the low-carbon fuel standard crafted by the Oregon Department of Environmental Quality and now before the Oregon Legislature.

“We should want that in Asia as well,” says Curtis Robinhold, Port of Portland deputy executive director.

But the environmental pluses and minuses of Pembina’s propane export terminal are not so simple.

How it’s extracted

For starters, there’s the fracking used to extract the propane, a byproduct of natural gas.

Fracking — injecting massive amounts of a sand, water and chemical mix into underground shale deposits — revolutionized the North American oil and gas industry, providing access to gas and oil once deemed unreachable and uneconomical. Pembina acknowledges that fracking is used to supply its propane.

Fracked natural gas results in carbon emissions roughly equal to coal when small amounts of gas leak into the atmosphere, says Scott Schroder, an organizer for the group Portland Rising Tide. He vows to lead civil disobedience campaigns to disrupt shipments if the propane terminal is built.

Critics also charge that Pembina’s propane will come from Canadian tar sands. That’s a sensitive issue because of the high-carbon content of that material and the environmental damage drilling has caused there on lands inhabited by Canada’s indigenous peoples. But it may be a false accusation.

Pembina does have two pipelines operating in the oil sands area, but that’s not where the propane will come from, says company spokesman Jason Fyderchuk, using the Canadian term for tar sands. The oil sands are in Northeast Alberta, Fyderchuk says, while the propane would come from the Western Canadian Sedimentary Basin in the British Columbia/Alberta border area, in west-central Alberta. “They are completely different geographic areas,” he says.

After the propane is extracted, it will be delivered to Portland via milelong trains going through the Columbia River Gorge, Pembina says. Environmentalists and gorge residents worry that spills could contaminate the river.

Photo Credit: PAMPLIN MEDIA GROUP: JAIME VALDEZ - Port of Portland and Pembina representatives discuss a proposed pipeline near this bridge that would transfer liquefied propane from storage tanks along the rail line onto ships at a nearby berth. The pipeline requires a zone change to allow such a use.  Carbon footprint

But the carbon footprint associated with the terminal looms as an even bigger environmental issue. The terminal would use an enormous amount of electricity in Portland, adding to the city’s carbon emissions. But that pales in comparison to the carbon footprint from burning 1.6 million gallons a day of fuel once it reaches Asia, the likely destination for the propane.

Critics argue that flies in the face of the Portland/Multnomah County Climate Action Plan and the city’s mission to reduce its carbon footprint.

Portland would become a cog in a virtual pipeline of fossil fuels to Asia, says Bob Sallinger, conservation director for the Audubon Society of Portland. “This is adding to the problem, not bridging it,” Sallinger says. “We need to be leaving carbon-based fuels in the ground.”

Angus Duncan, chairman of the Oregon Global Warming Commission, has been asked a lot whether he thinks the Pembina terminal makes environmental sense because of propane’s value as a bridge or transition fuel.

“The answer, that you didn’t want to hear is, it depends,” Duncan says.

“If you’re shipping natural gas or propane to China today, there is a reasonable chance that it will replace coal generation,” he says. That could be a plus for the environment, because propane produces fewer air pollutants and carbon emissions.

And some drillers wind up “flaring” or “venting” surplus natural gas at the well, burning it off or simply releasing it into the atmosphere without using it as fuel. “If you can’t get it to a market, you flare it,” Duncan says, or perhaps vent it. When vented, it’s a highly potent greenhouse gas. So it would be preferable to find uses for the propane, he says, substituting it for more carbon-intensive fuels.

But relying on propane as a bridge fuel should be accompanied with some agreements to cap and reduce overall carbon emissions, Duncan warns. Otherwise, it may just add to existing carbon emissions or become another institutionalized source of fossil fuel-derived energy.

Making plastic

Stu Taylor, Pembina’s senior vice president for its liquefied natural gas business, says the company expects more than half the exported propane will replace the use of higher-carbon energy in South Korea, Japan and China.

At a recent public hearing, Pembina general counsel Harry Anderson elaborated, saying the company “understands” that 50 to 100 percent of the propane would go to produce plastics in Asia, replacing oil-based production.

That adds a new wrinkle into the debate, because propane then would become an ingredient to make polypropylene plastic — used in water bottles, yellow rope and long underwear, among other products — rather than being burned as fuel.

In that case, Duncan says, “you could even argue that putting it into plastic is sequestering it.”

Plastic stores the carbon, akin to what trees do, rather than releasing it into the atmosphere.

But if it’s used to make plastic, it’s hard to argue that propane is a transition fuel, says John Talberth, president of the Center for Sustainable Economy in West Linn. “Greater profitability is the only transition,” he says. And such plastics manufacturing plants have an enormous carbon footprint, he notes.

End use hard to predict

“There certainly would be a worldwide plus” if propane were used in Asia to substitute for coal and gas combustion, says Larry Osgood, a Colorado consultant with 37 years’ experience in all phases of the liquefied propane gas industry. Propane also would be a welcome improvement in Hawaii, he says, which relies on very expensive fuel oil and coal for most of its energy.

But Osgood doesn’t see significant environmental benefits if the propane is used to make plastic in Asia. And, he says, fuel oil isn’t generally used in the manufacturing of polypropylene.

There’s a big push now to use propane to make polypropylene, and China has announced plans to build several plants, says Gerry Goobie, a Calgary-based industry consultant who counts Pembina as a client.

But it’s speculative to say that’s where Pembina’s product will wind up.

“It is not that simple; there are many moving pieces,” Osgood says.

There’s lots of competition among U.S., Canadian and Middle Eastern propane suppliers, and among plastics manufacturers in the U.S. Gulf Coast, Asia and elsewhere. There may be other new West Coast propane export terminals.

The export market is closely tied to the price of propane, and prices have plummetted in recent months along with the price of oil.

And the rest of the world eventually will turn to fracking, developing new supplies, Goobie says. “You can’t assume the rest of the world is not going to figure this out,” he says. “We just happen to be ahead of the curve.”

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