As the world struggles to find the right balance between a carbon-free future and a present that still runs on fossil fuels, Canada could be leveraging its natural-gas riches to help fuel both, a new report suggests.
The report, to be released Monday by the Canadian Chamber of Commerce, urges the federal government to finally get serious about building the infrastructure necessary to fast-track the extraction and export of liquid natural gas.
The carbon-credits clause of the 2015 Paris climate accord could be a "key driver of growth" for the LNG sector if Canadian natural gas were to become a viable alternative for coal-fired power plants around the world, it suggests.
"This initiative could not only support natural gas exports but an array of services, technology, and materials exports," writes Eric Miller, president of the D.C.-based Rideau Potomac Strategy Group and the report's author.
"Canada should use the global carbon market framework to build a stronger Canadian natural gas sector and a cleaner world."
In addition to several measures to develop and promote Canadian gas as a global low-carbon alternative, the report encourages Canada to retool its often convoluted regulatory processes and give Indigenous Peoples a greater stake in natural gas projects.
Canadian natural gas already has certain advantages beyond the fact that it's plentiful and cleaner than coal, Miller suggests: it's also produced under Canada's carbon-price regime, an advantage that could create a market premium in coming years as demand for cleaner fuel sources with a smaller carbon footprint continues to rise.
It could well help power the switch from coal to gas around the world, Miller writes: converting just 20 per cent of Asia's coal-fired power to gas would save the equivalent of an entire year's worth of Canadian greenhouse gas emissions.
The challenges, the report acknowledges, are myriad.
First and foremost is Canada's glaring lack of the necessary infrastructure — pipelines and export terminals, particularly on the east coast — to get its gas to international markets.
Since 2008, no fewer than 18 new LNG export terminals have been proposed, Miller writes, including 13 in B.C., three in Nova Scotia and two in Quebec. Only the LNG Canada facility in Kitimat, B.C., is anywhere near completion.
The report blames a "lack of decisiveness" on energy policy over the last 20 years for the country's current inability to export its landlocked resources.
"Had Canada supported the construction of even a fraction of these terminals, it would have been at the centre of support for growing Asian and European markets that are in desperate need of LNG, and would be actively contributing to the displacement of coal."
Miller cites last summer's "missed opportunity" with Germany as an instructive example of Canada's problem.
German Chancellor Olaf Scholz visited Prime Minister Justin Trudeau in August hoping to secure an agreement for liquified natural gas to ease its dependence on Russia, now a global pariah following the invasion of Ukraine.
But he left empty-handed. Months later, Germany signed a 15-year gas supply agreement with Qatar instead.
"This opportunity to supply Germany has now passed Canada by," Miller writes. "Qatar, not Canada, will now get the economic and employment benefits of producing and shipping gas to Germany."
A more robust LNG pipeline network would have the added advantage of being adaptable to the future use of hydrogen as a modern-day low-carbon alternative to fossil fuels, the report notes.
"Being able to piggyback on existing infrastructure would be an enormous advantage in hydrogen's scaling process," Miller writes.
"In addition to investing in hydrogen research, the government of Canada should move to understand what specifically would be involved in converting gas infrastructure to hydrogen and what the cost structure would look like."
Indeed, Canada and Germany did manage to reach an export agreement for hydrogen during Scholz's visit, which proposed to establish a transatlantic supply corridor that could be operating as early as 2025.
And during last month's visit by European Commission President Ursula von der Leyen, Trudeau announced a new hydrogen deal with the EU that he vowed would "mobilize investment, support businesses, share expertise and get clean Canadian hydrogen to Europe."
Von der Leyen called Canada a "prime potential partner for hydrogen" in Europe, such as through an already-announced, long-term deal with Germany.
A better understanding of how a natural gas pipeline network could be converted to hydrogen would help "clarify the long-term economics" of building such infrastructure, the report says.
This report by The Canadian Press was first published April 2, 2023.
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Doesn't anyone at the Chamber
Doesn't anyone at the Chamber of Commerce read IPCC and IEA reports?
The IPCC warns that the world must nearly halve GHG emissions by 2030 and eliminate them by 2050 to keep warming below the danger limit of 1.5 C.
In March 2023, UN Secretary-General Antonio Guterres "called for rich countries to accelerate their target for achieving net zero emissions to as early as 2040, and developing nations to aim for 2050 — about a decade earlier than most current targets. He also called for them to stop using coal by 2030 and 2040, respectively, and ensure carbon-free electricity generation in the developed world by 2035, meaning no gas-fired power plants either." (AP, 20-Mar-23)
IEA's Net-Zero by 2050 report says no new investment in fossil fuels after 2021 to limit global warming to 1.5 C.
Fossil gas burns cleaner than coal, but it's no improvement on the climate front if fugitive emissions exceed a low threshold.
As numerous studies using actual measurements show, methane emissions from Canada's O&G operations are far higher than reported.
Most (84%) Canadian natural gas production is fracked. Fracking releases large volumes of methane.
Now add all the other emissions from production (fracking) and processing, transport, liquefaction, shipping, and regasification. All of which boost LNG emissions.
It's all those extra emissions that make fossil gas as bad for the climate as coal — and doom it as a bridge fuel.
What if LNG displaces future
What if LNG displaces future builds of hydro, renewables, and nuclear? What if LNG is additional to coal instead of replacing it?
Major fossil fuel infrastructure takes decades to recoup its capital costs. You don't build big infrastructure projects only to run them for a decade.
Making such huge investments locks us into a fossil-fuel future. Governments and fossil fuel companies are not going to invest billions only to see expensive infrastructure stranded a decade or two from now.
"China is unlikely to shut down coal plants that are already built and have operating life remaining. In light of this, LNG from B.C. is more likely to displace the low-emitting sources of energy — namely, solar and wind — now coming online in China, rather than the polluting legacy assets.
"Given recent energy developments in China, the claim that B.C. LNG will only displace coal is unfounded. Rather, the opposite scenario — that LNG from B.C. will displace low- and zero-emitting power sources — is more likely."
"Will B.C. LNG exports reduce global carbon pollution? The math simply doesn't add up" (Pembina Institute)
"There is no evidence that LNG [from Canada] will replace coal in Asia. … LNG will also likely displace nuclear power, renewables, and natural gas from other sources in many importing countries. There are many locations where LNG consumption would be additional to coal consumption, instead of replacing it. Importantly, GHG emissions from fracking, transport, liquefaction, and regasification significantly reduce LNG's GHG benefits over coal."
"Unjustified adverse greenhouse gas impacts of the Pacific Northwest LNG proposal" (2016)
LNG is not a climate solution.
When you are in a hole, stop digging.
The facts matter.........and
The facts matter.........and the facts don't support increasing fracked gas pipelines.........or continuing to grow the short term, expensive to drill fracked gas wells turning parts of northwestern Canada into a pin cushion of sorts.
But The Chamber of Commerce doesn't likely factor in all the externalized costs of the crazy business of getting fracked gas from western Canada to Europe and Asia.........those are all externalities........dumped on a warming planet essentially for free.
So the usual Canadian oil and gas suspects can rake in short term profits.
do you post this crap to
do you post this crap to illicit outrage from you generally climatechange informed audience?. We despair of the old boys still getting to make the rules of community building standards, locations, energy sources. but money is going to make them obsolete all by itself. As it gets more expensive to use fossil, and easier to not use it ( eg. heat pump teck instead of gas in homes). the profit the comps. seek will require higher and higher prices, pushing more people off them onto cheap renewables. but do we have time for such incremental change?
Agreed. If NO is going to
Agreed. If NO is going to carry such idiotic content, it should be analysed. Sheesh. Did Postmedia just buy the NO?
To hell with the Canadian
To hell with the Canadian Chamber of Commerce. Bunch of lying bastards. And most of them are representing foreign-owned companies, incidentally, so they're not very Canadian.
In addition to the comments
In addition to the comments above, it's apparent the CoC is out of touch with emerging economic and technology trends. That's kinda strange for an 'economic' outfit.
There is new information now coming out of China and independent online analysis that predicts bankruptcy and demand destruction for fossil fuels, with particular emphasis on the debt levels of the world's car majors, a glut of legacy brand burner cars currently sitting in parking lots in China and burner models still planned beyond 2030 (are they that crazy?), and the increasing replacement of all fossil fuels with clean, renewable electricity. Does the CoC even understand the ramifications of two million drivers on waiting lists for EVs in the US alone? That is Alberta's Number One market for its oil. And those are only the ones willing to wait, while millions more will no doubt instantly sign up when cheaper EVs finally flood the market with a significant proportion of intelligent EV owners who publicly question the source of their electricity.
Oh, and a special message to this biased, myopic and out of touch economic organization: World coal consumption peaked in 2017. What exactly do you expect to replace with expensive LNG?
Battery tech is evolving at an astounding rate, mainly in China. Like it or not, the Chinese have locked up most of the world's rare earths (Canada is, nonetheless, well placed to follow up) and have had a very powerful, well-financed focus on developing new battery chemistries that double or even triple the energy density of the lithium ion batteries we are familiar with today. And they are cheaper and safer because new generation chemistries use affordable commonplace materials like sodium, iron, phosphate, silicon and so forth, materials that do not catch fire and that perform well in specially designed hybrid mixes for both hot and cold weather. With less expensive tech using more common materials, it's a matter of just a few years (surely before 2030) before batteries are ready for prime time in grid-scale storage too.
The above is the very definition of game changing disruptive tech evolution, demand destruction for fossil fuels, and the sure fire formula for the creation of stranded assets.
In addition, the CoC is willfully ignorant about the leakage of methane from fracking and freezing operations that pile up emissions to the level of coal plants. And nowhere will they admit to the well documented steep decline rates of fracked oil and gas wells in constrained geological formations, some as high as 90% after one year, the rest averaging over 50%. This necessitates more and more drilling with all the attendant impacts on ecosystems and geological stability.
Wind already outcompeted both coal and gas in Alberta electricity auctions years ago. So where on Earth has the CoC been all that time? Are they being unconscionable enough to issue reports to influence public opinion and policy just to protect their own private investments in gas and oil from spiralling downward? If that's the case, then no one but their bankers and BMW-driving family members will have any sympathy for them when renewables and EVs really hit their stride, perhaps well before 2030.
Let's hope senior governments aren't goaded into tacking their burden of losses onto the backs of Canadian taxpayers that are ready strained under the weight of subsidizing a still mighty profitable but destined to be sunset industry.
I'm wondering if it might not
I'm wondering if it might not be time to start a tax revolt. I remember in the 60's some Americans started withholding the %age of their taxes going to the Vietnam War. I'm that mad about crazy plans for our tax dollars to build boondoggles like Carbon Capture....
We've let the Oily Fossil Fuel sector control our governments for far too long already.
Thanks all of you responders
Thanks all of you responders (above) for calling out N.O. for publishing this pro-LNG piece without a critique.
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