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Canadian Energy Centre

Opportunity knocks for Canada to become key LNG supplier as U.S. pauses projects

Published

2 years ago

5 minute read

Rendering courtesy Cedar LNG

From the Canadian Energy Centre

By Cody Ciona

“Everyone wins if Canada can get into the game.”

Canada’s emerging liquefied natural gas (LNG) industry has an opportunity to become a key supplier for energy-hungry countries in Asia and beyond following the U.S. pause on new or pending LNG export approvals, industry watchers say. 

With much of the world looking for alternatives to Russian natural gas following its invasion of Ukraine in 2022, the U.S. emerged as the number one global exporter of LNG. According to the International Energy Agency, the U.S. accounted for 80 per cent of additional supply in 2023. 

But with the U.S. putting its LNG industry on pause, the timing could be good for Canada. 

The recent completion of the Coastal Gaslink pipeline along with progress on Canada’s first LNG export projects are bringing Canada closer to becoming a key global supplier. 

An opportunity to showcase clean LNG 

As the LNG Canada terminal moves into its final stages of construction, Kitimat, B.C. will become the gateway for exports from Canada. 

For First Nations LNG Alliance CEO Karen Ogen, this means Canada, which has so far missed the global LNG boom, will have another chance at becoming a player.  

“I think this is an opportunity for us to showcase our clean LNG and I think we can do it through the various projects [underway].” Ogen said. 

Those projects, which include LNG Canada and Woodfibre LNG that are under construction, along with the proposed Cedar LNG and Ksi Lisims LNG terminals, will operate with an emissions intensity less than half that of the global average.  

Cedar LNG, headed by the Haisla First Nation, will operate at less than one-third of the global average. 

Ogen said these projects will create significant prosperity, not just for Canada and B.C. but for Indigenous peoples as well. 

“It’ll help boost our Canadian economy, it’ll help B.C.’s economy, and most specifically it will help the Indigenous people and our economy. If we’re the most disadvantaged population living in poverty, then this should help our people get out of poverty.” she said. 

“Everyone wins if Canada can get into the game.” 

Reduced LNG supply could increase reliance on coal 

Racim Gribaa, founder and president of Global LNG Consulting Inc., said a potential decrease in LNG exports to international markets, particularly in Asia, may heighten dependence on coal, thereby escalating global emissions. 

“If [importers] can’t get U.S. LNG, they would be left with very few viable alternatives including coal. And if they burn coal, that’s twice as much emissions. Coal is cheaper and reliable, but emits twice as much carbon. Countries in Asia such as China, with over 1,140 operational coal plants, are building new coal plants every week both in Asia and abroad,” Gribaa said. 

Canada has a significant geographical advantage to supply LNG to Asia that can reduce associated transportation emissions by up to 60 per cent, he said.  

Export terminals in B.C. are about half the distance to Asia compared to terminals on the U.S. Gulf Coast. 

“The distance between Canada and the key market is a huge advantage, where we are the same distance to Asia as Australia,” Gribaa said. 

“Monetizing natural gas in Canada through LNG exports not only will help reduce global emissions but it also will enhance health and economic well being of Canadians future generations.” 

Establishing Canada’s LNG credibility 

The starting point will be LNG Canada in 2025, which will allow Canada to export LNG on international scale, Gribaa said. It will help establish Canada’s credibility as a supplier, just as the U.S. pauses new development.  

Once that credibility is established, Canadian LNG could become a bigger player on the global scale. 

“Canada’s abundant natural gas reserves empower the nation to produce and export decades of dependable, cost-effective, and environmentally-friendly LNG to global markets, leveraging direct marine routes unaffected by constraints like the Panama or Suez Canals, the Strait of Hormuz, or having to navigate around the Cape of Good Hope,” Gribaa said.  

“Canada stands poised to secure market share for years to come, irrespective of whether the U.S. temporarily halts or reconsiders its involvement.” 

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Myth: Oil sands emissions are unchecked

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The province reports that oil sands emissions per barrel declined by 26 per cent per barrel from 2012 to 2023. At the same time, production increased by 96 per cent.

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Myth: There is no demand for oil sands production

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Today, America imports more than 80 per cent more oil from Canada than it did in 2010, according to the U.S. Energy Information Administration (EIA).

New global customers also now have access to Canadian oil thanks to the opening of the Trans Mountain pipeline expansion in 2024.

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The world’s appetite for oil keeps growing — and it’s not stopping anytime soon.

According to the latest EIA projections, the world will consume about 120 million barrels per day of oil and petroleum liquids in 2050, up from about 104 million barrels per day today.

Myth: Oil sands projects cost too much

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Reality: Operating oil sands projects deliver some of the lowest-cost oil in North America, according to Enverus Intelligence Research.

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Vast oil sands reserves support mining projects with no drilling, and the standard SAGD drilling method involves about 60 per cent fewer wells than the average shale play, BMO says.

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Myth: Indigenous communities don’t support the oil sands 

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That reflects total direct spending — including capital investment, operating costs, taxes and royalties — not profits or dividends for shareholders.

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Enbridge CEO says ‘there’s a good reason’ for Alberta to champion new oil pipeline

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B.C. tanker ban an example of federal rules that have to change

The CEO of North America’s largest pipeline operator says Alberta’s move to champion a new oil pipeline to B.C.’s north coast makes sense.

“There’s a good reason the Alberta government has become proponent of a pipeline to the north coast of B.C.,” Enbridge CEO Greg Ebel told the Empire Club of Canada in Toronto the day after Alberta’s announcement.

“The previous [federal] government’s tanker ban effectively makes that export pipeline illegal. No company would build a pipeline to nowhere.”

It’s a big lost opportunity. With short shipping times to Asia, where oil demand is growing, ports on B.C.’s north coast offer a strong business case for Canadian exports. But only if tankers are allowed.

A new pipeline could generate economic benefits across Canada and, under Alberta’s plan, drive economic reconciliation with Indigenous communities.

Ebel said the tanker ban is an example of how policies have to change to allow Canada to maximize its economic potential.

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The federal government’s commitment to the tanker ban under former Prime Minister Justin Trudeau was a key factor in the cancellation of Enbridge’s Northern Gateway pipeline.

That project was originally targeted to go into service around 2016, with capacity to ship 525,000 barrels per day of Canadian oil to Asia.

“We have tried to build nation-building pipelines, and we have the scars to prove it. Five hundred million scars, to be quite honest,” Ebel said, referencing investment the company and its shareholders made advancing the project.

“Those are pensioners and retail investors and employees that took on that risk, and it was difficult,” he said.

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Energy companies want to build in Canada, Ebel said.

“The energy sector is ready to invest, ready to partner, partner with Indigenous nations and deliver for the country,” he said.

“None of us is calling for weaker environmental oversight. Instead, we are urging government to adopt smarter, clearer, faster processes so that we can attract investment, take risks and build for tomorrow.”

This is the time for Canadians “to remind ourselves we should be the best at this,” Ebel said.

“We should lead the way and show the world how it’s done: wisely, responsibly, efficiently and effectively.”

With input from a technical advisory group that includes pipeline leaders and Indigenous relations experts, Alberta will undertake pre-feasibility work to identify the pipeline’s potential route and size, estimate costs, and begin early Indigenous engagement and partnership efforts.

The province aims to submit an application to the Federal Major Projects Office by spring 2026.

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