Recent energy figures from Europe further weaken Canada’s justification for developing LNG to export it abroad, says a new report.

Released Tuesday by energy think tank Ember, the report found fossil fuel electricity generation levels in Europe last year reached a record low. Wind power hit 18 per cent of the energy mix, beating gas power for the first time, at 17 per cent. Overall, renewable energy made up 44 per cent of electricity generation. On the same day as the report’s release, the European Commission called for a 90 per cent reduction of planet-warming greenhouse gases in the European Union (EU) by 2040.

These statistics, combined with United States President Joe Biden’s announcement of a pause on LNG exports, are further signals that Canada should back away from the fossil fuel for good, said Moe Qureshi, manager of climate solutions with the Conservation Council of New Brunswick.

Chart by Ember

The federal government has pointed to Canadian LNG as a solution to European energy insecurity. But briefing materials obtained by Canada’s National Observer in 2022 show that Canada was pitching LNG to European gas markets before Russia invaded Ukraine.

Following the invasion, the House of Commons and social media were flooded with claims from politicians and the fossil fuel industry that Canadian fossil fuels need to step in to replace European imports from Russia.

Released Tuesday by energy think tank #Ember, the report found that 2023 saw #fossil fuel #electricity generation levels in Europe reach a record low, highlighting the lack of a European market for Canadian #LNG.

“The energy crisis and Russia’s invasion of Ukraine did not lead to coal and gas resurgence — far from it,” said Sarah Brown, Ember’s Europe program director. As the phase-out of coal nears, “gas will be next to enter terminal decline,” she noted.

It’s irresponsible for Canada to try to build an LNG export market instead of focusing on building up renewables at home, said Qureshi.

“There is no justification for LNG expansion in a time where energy security is such a major topic...I don't understand why Canada's energy security is not being prioritized. Why aren't we investing in more Canadian wind, Canadian solar, Canadian batteries to back up our grid?” said Qureshi.

“What is this weird obsession with developing more LNG terminals for international markets? They're not even being prioritized for local markets here.”

Canada’s first LNG export facility is nearing completion, and once in operation, will be the largest greenhouse gas emitter in its home province of British Columbia. However, other LNG export projects have fizzled over recent years.

In 2023, both the Goldboro LNG project in Nova Scotia and Repsol’s plans for an LNG export terminal in New Brunswick were scrapped. A Repsol spokesperson called the project “uneconomical” at the time, building on evidence that LNG from Canada’s East Coast is too expensive to compete with other sources.

When asked about the business case for Canadian LNG, Natural Resources Canada said if the fossil fuel is to "play any role in the future" as we work towards reaching net zero by 2050, it will mean "it must be pursued in a manner that is aligned with Canada’s and the world’s climate commitments." The department said upstream emissions from extraction, notably methane emissions, must be reduced; that LNG facilities should electrify; and that LNG being shipped abroad should only be used to replace higher emitting energy sources such as coal.

"Ultimately, investment decisions in the LNG sector will be made by proponents based on their ability to comply with federal and provincial regulatory standards, and to be competitive within the global market," said spokesperson Shireen Ali, who noted global demand for oil and gas is set to peak in this decade before beginning to decline.

The report from Ember also noted the International Energy Agency has found the EU’s power sector must reach net zero by 2035 for the region to reach net-zero emissions by 2050. In Tuesday’s report, Ember said it found “that this means unabated gas must be reduced to less than 5 per cent of the EU’s generation by 2035.” Fossil fuels are generally considered abated when their emissions are captured and stored.

The report highlights progress specifically in reducing natural gas use, which hit a historic low at 15 per cent less than 2022.

While natural gas is often called a “bridge fuel” and is presented as a cleaner fossil fuel than oil or coal, research has found that the methane leaks that occur during extraction and transportation of natural gas could make the fossil fuel worse than burning coal. Methane has 84 to 87 times more warming potential over 20 years than carbon dioxide, making it especially relevant in achieving short-term emissions reduction goals.

According to research from Cornell University published in October, when LNG is shipped overseas, it can produce between 27 and 50 per cent more emissions than coal.

“When I think of the story, it's about how we have officially started this transition. We have officially moved away from fossil fuels,” said Qureshi, about Ember’s analysis.

“LNG is dropping, people are now realizing there are alternative solutions.”

- With files from John Woodside

Updates and corrections

| Corrections policy
February 8, 2024, 01:00 am

This article has been updated to include comment from Natural Resources Canada.

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OK, looking closely at that graph, obviously wind and solar are trending upward, coal downward and how, natural gas kind of up and down but lately down. Nuclear is gradually dropping too, which is fine by me, and hydro is pretty steady.
But the long term picture I'm seeing is, wind and solar going up, at the expense of coal and more recently gas as well. So, how long is that going to take? The wind and solar plot looks more like a slightly upturned curve than a straight line. But let's assume it keeps going fairly straight from its current progress. Looking at the last few years, both solar and wind seem to be increasing at at least 1%/year. So that's 2%/year between the two of them. And currently, they're at about 26-27% combined, while gas + coal look to be about 30% total. So, go forward 5 years to 2028, the base expectation would be wind + solar combined at 36-37%, gas & coal at 20%. Continue the trend to 2035, gas and coal in the EU would be at 6%. And that's not even taking into account that the curve of renewables adoption seems to be accelerating, not flat, or that the fossil fuel lobbies will lose power as they shrink.

So. Twelve years from now, we can expect natural gas use for power in the EU to be almost gone. Presumably their need to import expensive LNG from overseas will dry up before they even reach that point. That's not a long time for one of these LNG plants on the West coast to make back their investment. And you know, China's going to be heading in the same direction; their annual installation of solar is huge and exponentially rising. So even if you forget about, you know, not ending human civilization, just the pure "business case" for these things seems really, really bad.

Which, on the plus side, means that even if they set a couple of them up, probably they won't be shipping anything for very long. Same goes for the damn dilbit pipeline the feds are building for Alberta--hopefully demand for tar sands oil will dry up before we actually have any major spills. This also means that even if protests, legal fights and so forth can't actually STOP these things, every delay is significant. If a fossil fuel facility would end up in use for 10 years, but opposition manages to delay it for 2 years, that cuts its total output by 20%. Well worth the effort IMO. Or in some cases, delay might actually buy time for the writing on the wall to start glowing in such bright living colour that the backers are forced to realize it's a money-losing lemon and dump the project.

Nicely said

"Charities controlled by members of the Rockefeller family and billionaire donors were key funders of a successful campaign to pressure President Biden to pause new approvals of liquefied natural gas exports from the U.S. " - WSJ, Feb 8.

I just wanted to put that sentence in this paper. Come on, everybody, say "thank you" to the Rockefellers and other billionaires!

“The federal government has pointed to Canadian LNG as a solution to European energy insecurity. But briefing materials obtained by Canada’s National Observer in 2022 show that Canada was pitching LNG to European gas markets before Russia invaded Ukraine.”

This paragraph suggests that European energy policy had no misgivings about its dependency on Russia-sourced fuels, and resulting feelings of insecurity, prior to the Russian invasion of Ukraine. This is not the case.

A similar head-scratcher was

““What is this weird obsession with developing more LNG terminals for international markets? They're not even being prioritized for local markets.”

I’m struggling to think why we would consider building an LNG terminal for local markets, even in the best of times.

There are plenty of reasons for arguing that Canadian LNG is not desirable without applying dodgy logic.

On the other hand, the referenced research out of Cornell, now under peer review – “According to research from Cornell University published in October...” -- whose author states:

“While some proponents of LNG have argued it has a climate benefit by replacing coal, the analysis presented here indicates otherwise. Total greenhouse gas emissions from LNG are larger than those from domestically produced coal, ranging from 27% to 2‐fold greater for the average cruise distance of an LNG tanker.”

is very promising and could be game changing regarding energy policy.

Very good article.

BC LNG has Asia in its sights, not the EU. China, Indonesia and Malaysia are top of the list. The problem is that Australia also has the same nations in its renewable power export sights and they are a helluva lot closer. So close that they are in the process of building massive solar and wind farms in Western Australia in part for exports to Asia via an array of undersea high voltage direct current lines.

Singapore has already signed contracts for this abundant, affordable power for delivery before 2030, and it's only a matter of time before the line is extended north by just one km across a body of water to Malaysia where it can no doubt be extended into Thailand, Vietnam and China. A branch line to Indonesia is also really easy; the first line will be running in Indonesian waters anyway.

The great Australian Outback could become the solar furnace for Asia.

As commenters above noted, China is already well on its way to replace coal, oil and gas with renewables at a record pace completely in house. This puts into question the long term economic viability of LNG and TMX. Though dilbit from TMX will in reality mainly head south to heavy oil refineries in the US and receive the same old US discount Albertans love to hate, the stated objective of building TMX in the first place was to diversify the markets for dilbit and to obtain premium prices for it in Asia, a completely dubious justification from the start.

LNG and the TMX planners and backers have clearly not done their basic due diligence. Probably the best course of action for the BC and federal governments moving forward would to let these projects peter out on their own purely from international economic forces that are fast moving toward the destruction of demand for fossil fuels.

If Eby and Trudeau / Freeland are secretly very uncomfortable with the big tankers of public money shovelled into the maws of these dinosaurs they could publicly start asking pertinent questions about the proponent's calculations in light of recent analysis and reports by luminaries such as the IEA and Bloomberg Energy. Raising small doubt balloons could set the stage for later reductions in subsidies and to split off some of the public money stream to directly fund renewables.

Both governments must state categorically that they will not cover the losses experienced by sunset industries due to international economic conditions beyond Canada's control. In addition, First Nations who bought into these projects should be offered first dibs for opportunities to build renewables on their land coupled with solid power purchase agreements.

Just a thought.