Energy
A Wealth-Creating Way of Reducing Global CO2 Emissions
From the C2C Journal
By Gwyn Morgan
It is Prime Minister Justin Trudeau’s contention there’s no “business case” for exporting Canada’s abundant, inexpensively produced natural gas as LNG. But Canadians might do well to politely decline management consulting advice from a former substitute drama teacher who was born into wealth and has never had to meet a payroll, balance a budget or make a sale. Bluntly stated, someone who has shown no evidence of being able to run the proverbial lemonade stand. And one whose real agenda, the evidence shows, is to strangle the nation’s most productive and wealth-generating industry. With the first LNG ship finally expected to dock at Kitimat, B.C. over the next year and load Canada’s first-ever LNG export cargo, Gwyn Morgan lays out the business and environmental cases for ramping up our LNG exports – and having them count towards Canada’s greenhouse gas reduction targets.
Pierre Poilievre’s Axe the (carbon) Tax campaign is a spectacular success. But the Conservative Party of Canada needs its own plan to reduce greenhouse gas emissions from fossil fuels. Paradoxically, it’s a fossil fuel that provides much of the answer.
Canada’s rich endowment of natural gas resources offers an immense opportunity to reduce global carbon dioxide (CO2) emissions while also helping to rescue the Liberal-government-ravaged Canadian economy by exporting liquefied natural gas (LNG) to China, Japan, South Korea and the other coal-dependent Asia-Pacific countries. Switching from coal to natural gas for producing electricity and generating heat for buildings and industrial processes can typically reduce CO2 emissions by 50 percent for the same unit of output, while all-but eliminating the toxic compounds and lung-clogging particulates emitted from burning coal that shorten the lives of millions living in smog-stricken Asian cities.
More natural gas is urgently needed, since countries throughout Asia – especially China and India – are currently adding even more coal-burning power plants to meet rapidly growing electricity demand. The benefits of fuel-switching are not speculation, but a proven result: the United States’ pronounced switch starting in the mid-2000s from coal to natural gas for electricity materially reduced that country’s CO2 emissions (see accompanying graph), nearly equalling the entire European Union’s emissions cuts, as I wrote about in this previous column.
A study by respected consulting firm Wood Mackenzie, released in late 2022, determined the following:
- “Canada is well-positioned geographically…Western Canadian LNG is much closer to Asia relative to US Gulf Coast LNG, which needs to be shipped through the Panama Canal to get to Asia”;
- “LNG from Canada would be cost-competitive for northeast Asian importers…due to its relatively low shipping and liquefaction costs”;
- “LNG from Canada has lower emissions intensity than LNG coming from many other global LNG exporters”;
- “Asia will not be able to produce enough natural gas domestically to meet its escalating demand, therefore Canadian LNG is a compelling alternative: With its high environmental standards and stewardship, Canada would be a great partner to fill the LNG demand gap in Asia”; and
- “If Canada aggressively ramps up its LNG exports…the emissions displaced from Canadian LNG would total 5.5 [gigatons of CO2 equivalent] from 2022 to 2050 or 181 [megatons of CO2 equivalent] on average per year, which is equivalent to removing all Canadian cars from the road.”
These impressive benefits – not to mention the opportunity to create tens of thousands of well-paying jobs in our country and provide long-term returns to investors, among them millions of pension-dependent retirees – were recognized long ago by the energy industry, Western provincial premiers and former prime minister Stephen Harper. And for a time it indeed seemed that Canada was on the cusp of an LNG boom. By 2010, there were more than 20 LNG projects in the works in B.C., representing hundreds of billions in total investment. These included Exxon Mobil’s $25-billion West Coast Canada project, Chinese-owned CNOOC’s $36-billion Aurora project, Malaysian firm Petronas’s $36 billion Pacific NorthWest project, and the Shell-led $43 billion LNG Canada project at Kitimat.
Aside from the jobs created and the wealth generated for the participating companies, B.C.’s annual natural gas royalties are forecast to double. Benefits for First Nations include significant employment and business opportunities, such as HaiSea Marine’s 50 percent interest in a $500 million contract.
But through a decade of trying to navigate Canada’s increasingly obstructive and Byzantine regulatory process, project proponents dropped out one by one. Today LNG Canada is the only one of those major projects left standing. (Two much smaller LNG projects, Woodfibre LNG in Howe Sound at Squamish, and Cedar LNG just a few kilometres from the LNG Canada project, are also proceeding, and one other large project proposed by the Nisga’a First Nation is making regulatory progress.) LNG Canada succeeded only because South African project leader Andy Calitz, backed by the enthusiasm of the Haisla Nation which saw the immense potential to create a self-sustaining, wealth-generating economy for its people, refused to give up.
After five years of construction, the LNG Canada liquefaction facility and loading terminal are nearing completion, with the first LNG ship scheduled to sail to China in 2025 (possibly even this year). The Kitimat plant itself is just one component of Canada’s first LNG export project. TC Energy Corp.’s (formerly TransCanada Pipelines) $15 billion, recently completed Coastal GasLink pipeline will carry the required natural gas from the northeastern B.C. gas fields to the Kitimat terminal. And additional billions of dollars have been invested in drilling natural gas wells, proving up the immense reserves needed to feed the LNG facility for decades to come, and constructing field production systems.
The economic benefits are myriad. Aside from the jobs created and the wealth generated for the participating companies, B.C.’s annual natural gas royalties are forecast to double from $700 million in 2024 to $1.4 billion in 2027. Benefits for First Nations include significant employment and business opportunities, such as HaiSea Marine’s 50 percent interest in a $500 million contract.
And that’s just LNG Canada’s Phase 1, which will produce 14 million tonnes per annum (mtpa) of LNG, or approximately 1.8 billion cubic feet (bcf) per day. With that one project coming on-stream, about 10 percent of Canada’s total natural gas production will be exported to international markets, earning premium prices. Construction of Phase 2 is scheduled to begin in 2026 and will double the facility’s output, with first delivery scheduled for 2032. A report from Canada Action estimates that completion of both phases will reduce CO2 emissions in Asian countries as much as would removing 18 million cars from Canadian roads. That is a far more efficient and realistic way of reducing emissions than the Trudeau government’s current scheme to force everyone into electric vehicles within a decade.
A major barrier for LNG project sponsors has been Canadian regulators’ fixation on a project’s domestic emissions – which come mainly from producing the energy needed to operate the liquefaction and storage process and loading facility. These emissions are miniscule compared to the enormous emissions reductions when natural gas is used instead of coal in consuming countries. But in their zeal to force Canada to “net zero” emissions, government authorities initially tried to veto LNG Canada generating its electricity and compression power using some of the natural gas that will be already piped to the site, insisting instead upon hydroelectric power. This seriously delayed the project due to the need for B.C. Hydro to first build a new dam to supply the required power, along with a new, $3 billion transmission line that has not even begun its environmental review process.
Regulators finally waived their objection so the project could be finished, and it will initially use natural gas for power. But the same objection is now being raised with respect to another major LNG venture proposed in the same region. The Ksi Lisims LNG project would utilize a floating liquefaction and loading facility docked at lands owned by the Nisga’a First Nation north of Prince Rupert. Its natural gas would be supplied through an already-approved but never-built pipeline planned for one of the cancelled LNG projects. The $10 billion venture would have approximately two-thirds the capacity of LNG Canada Phase 1. The facility would be powered by hydroelectricity.
Ksi Lisims sounds like a great addition to Canada’s modest LNG lineup, one that British Columbians should applaud. Instead, the proponents have been assailed by objections over the greenhouse gas emissions from the facility and the natural gas production process, and concurrently the B.C. Wilderness Committee is calling on the province’s NDP government to veto any further LNG development. None of these zealots acknowledge the vastly greater reduction of greenhouse gas emissions that will be achieved as consuming countries switch to natural gas.
Prior to the December 2018 UN Climate Change Conference in Katowice, Poland, Canada’s Conservative Party urged leaders of their nation’s delegation to propose that the use of imported natural gas to displace coal and thereby reduce emissions in one country should count towards the exporting country’s emissions reduction targets. But this made far too much sense for our Prime Minister and his team of anti-fossil-fuel eco-zealots. A new federal government that encourages LNG projects might well see a return of those other big sponsors that were driven off.
And that brings us back to Pierre Poilievre and the need for a Conservative alternative to Trudeau’s carbon tax. LNG export would be not only vastly superior in reducing emissions, it would also create tens of billions of dollars in economic benefits for a beleaguered Canadian private sector. It is beyond high time. A Macdonald-Laurier Institute report, Estimating the True Size of Government in Canada, concludes that Canada’s private sector has shrunk to just 36 percent of the nation’s GDP. That’s right – Canada’s public sector now represents nearly two-thirds of the Canadian economy, if one includes in that measure the vast amounts governments spend on tax credits and other tax-related expenditures, plus the economic impacts of regulating the pricing or outputs of private industries. This is appalling.
Even more incomprehensible is a research report from the Harvard Kennedy School noting that “Communist” China’s private sector generates “approximately 60% of China’s GDP, 70% of its innovative capacity, 80% of urban employment and 90% of new jobs.” By those measures, the private sector in ostensibly free and democratic Canada, with its allegedly market-based economy, has been reduced to barely half the relative size of the private sector in authoritarian China.
It is clear that for Canada, getting out of the way of privately-driven growth in LNG exports would be a vastly superior environmental alternative to Trudeau’s economically destructive and politically divisive carbon tax, while also helping to reverse the decline of what was once a proud, thriving nation into an indebted, unproductive, government-dominated basket case.
Gwyn Morgan is a retired business leader who was a director of five global corporations.
This article supplied by Troy Media.
Global oil markets are stumbling under too much supply and too little demand but Canada’s energy sector is managing to hold its own
Oil prices are sliding under the weight of global oversupply and weakening demand, but Canada’s oilpatch is holding steady—perhaps even thriving—as others flounder.
Crude is piling up in tankers, major producers are flooding the system, and demand is fading fast. According to a Windward report cited by Oilprice.com, the amount of oil held in floating storage—tankers sitting offshore waiting for buyers —has hit record highs. Sanctions on Russian and Iranian crude have sidelined entire fleets. Meanwhile, Middle East cargoes continue to pour in, keeping global supply bloated.
Gunvor CEO Torbjorn Tornqvist called the scale “unprecedented,” warning the market would be flooded overnight if sanctions against Russian and Iran were lifted.
And there’s more coming. U.S. crude production has hit a new record of 13.8 million barrels per day in August. And China’s Changqing oilfield just surpassed 20 million tonnes in cumulative output, and national totals have topped 400 million tonnes of oil equivalent this year. More barrels. More pressure. Less price support.
At the same time, demand is slipping. U.S. gasoline use is down. Global shipping activity has slowed. JPMorgan just trimmed its 2025 oil demand forecast by 300,000 barrels per day. China’s manufacturing sector shrank for the seventh month in a row.
Japan’s purchasing index dropped to an 18-month low. And recession fears are back in the headlines.
OPEC+ tried to calm the chaos by announcing a modest increase in output this December, with a pause on future hikes. But the move didn’t move markets. Then Saudi Arabia cut its selling prices to Asia, a clear signal that the kingdom sees weak demand ahead.
In short, it’s messy out there. But not everywhere.
Amid this global downturn, Canada’s energy sector stands out for one rare quality: resilience. While other producers are scaling back or scrambling to adapt, Canada’s oilpatch is quietly outperforming.
A recent CBC News report highlighted the sector’s staying power and why it’s better positioned than its U.S. counterparts. “The companies that have survived here are the companies that have been able to adapt,” said Patrick O’Rourke, managing director at ATB Capital Markets. “It’s effectively Darwinism.”
It’s also smart design. Canada’s oilsands—primarily in Alberta—are expensive to build but cheap to run. Once the upfront costs are covered, producers can keep pumping for decades with relatively low reinvestment. That means even in a
downturn, output stays strong.
Dane Gregoris of Enverus says Canada’s conventional sector is holding up better than the U.S. shale patch. Why? Canadian oil producers operate more efficiently, with fewer legal and logistical barriers tied to land access and ownership than their U.S. shale counterparts. They also benefit from lower operating costs and are less dependent on relentless drilling just to maintain output.
And now, they finally have a way to get more oil out.
The long-delayed Trans Mountain pipeline expansion is finally complete. It delivers Alberta crude to B.C.’s tidewater and, from there, to Asian markets. That access, once a significant limitation for Canadian producers, is now a strategic advantage. It’s already helping offset lower global prices.
Canada’s energy sector also benefits from long-life assets, slow decline rates and political stability. We have a reputation for responsible regulation, but that same system can slow development and limit how quickly we respond to shifting global demand. We can offer a stable, secure supply but only if infrastructure and regulatory hurdles don’t block access to it.
And for Canadians, that matters. Oil prices don’t just fuel industry headlines; they shape provincial and national budgets, drive investment and underpin jobs across the country. Most producers around the world are bracing for pain but Canada may be bracing for opportunity to expand its presence in Asian markets, secure long-term export contracts and position itself as a reliable supplier in a turbulent global landscape.
None of this means Canada is immune. If demand collapses or sanctions lift, prices could sink further. But in a volatile global landscape, Canada isn’t scrambling—it’s competing.
While others slash forecasts, shut wells or hope for an OPEC rescue, Canada’s energy producers are doing something rare in today’s oil market: holding the line.
Toronto-based Rashid Husain Syed is a highly regarded analyst specializing in energy and politics, particularly in the Middle East. In addition to his contributions to local and international newspapers, Rashid frequently lends his expertise as a speaker at global conferences. Organizations such as the Department of Energy in Washington and the International Energy Agency in Paris have sought his insights on global energy matters.
Troy Media empowers Canadian community news outlets by providing independent, insightful analysis and commentary. Our mission is to support local media in helping Canadians stay informed and engaged by delivering reliable content that strengthens community connections and deepens understanding across the country
Ship containers are stacked at the Panama Canal Balboa port in Panama City, Saturday, Sept. 20, 2025. The Panama Canals is one of the most significant trade infrastructure projects ever built. CP Images photo
From the Canadian Energy Centre
Q&A with Gary Mar, CEO of the Canada West Foundation
Building a stronger Canadian economy depends as much on how we move goods as on what we produce.
Gary Mar, CEO of the Canada West Foundation, says economic corridors — the networks that connect producers, ports and markets — are central to the nation-building projects Canada hopes to realize.
He spoke with CEC about how these corridors work and what needs to change to make more of them a reality.
Gary Mar, CEO of the Canada West Foundation. Photo for the Canadian Energy Centre
CEC: What is an economic corridor, and how does it function?
Gary Mar: An economic corridor is a major artery connecting economic actors within a larger system.
Consider the road, rail and pipeline infrastructure connecting B.C. to the rest of Western Canada. This infrastructure is an important economic corridor facilitating the movement of goods, services and people within the country, but it’s also part of the economic corridor connecting western producers and Asian markets.
Economic corridors primarily consist of physical infrastructure and often combine different modes of transportation and facilities to assist the movement of many kinds of goods.
They also include social infrastructure such as policies that facilitate the easy movement of goods like trade agreements and standardized truck weights.
The fundamental purpose of an economic corridor is to make it easier to transport goods. Ultimately, if you can’t move it, you can’t sell it. And if you can’t sell it, you can’t grow your economy.
CEC: Which resources make the strongest case for transport through economic corridors, and why?
Gary Mar: Economic corridors usually move many different types of goods.
Bulk commodities are particularly dependent on economic corridors because of the large volumes that need to be transported.
Some of Canada’s most valuable commodities include oil and gas, agricultural commodities such as wheat and canola, and minerals such as potash.
Rail cars carry commodities through Saskatchewan. Photo courtesy CN Rail
CEC: How are the benefits of an economic corridor measured?
Gary Mar: The benefits of economic corridors are often measured via trade flows.
For example, the upcoming Roberts Bank Terminal 2 in the Port of Vancouver will increase container trade capacity on Canada’s west coast by more than 30 per cent, enabling the trade of $100 billion in goods annually, primarily to Asian markets.
Corridors can also help make Canadian goods more competitive, increasing profits and market share across numerous industries. Corridors can also decrease the costs of imported goods for Canadian consumers.
For example, after the completion of the Trans Mountain Expansion in May 2024 the price differential between Western Canada Select and West Texas Intermediate narrowed by about US$8 per barrel in part due to increased competition for Canadian oil.
This boosted total industry profits by about 10 per cent, and increased corporate tax revenues to provincial and federal governments by about $3 billion in the pipeline’s first year of operation.
CEC: Where are the most successful examples of these around the world?
Gary Mar: That depends how you define success. The economic corridors transporting the highest value of goods are those used by global superpowers, such as the NAFTA highway that facilitates trade across Canada, the United States and Mexico.
The Suez and Panama canals are two of the most significant trade infrastructure projects ever built, facilitating 12 per cent and five per cent of global trade, respectively. Their success is based on their unique geography.
Canada’s Asia-Pacific Gateway, a coordinated system of ports, rail lines, roads, and border crossings, primarily in B.C., was a highly successful initiative that contributed to a 48 per cent increase in merchandise trade with Asia from $44 million in 2006 to $65 million in 2015.
China’s Belt and Road initiative to develop trade infrastructure in other countries is already transforming global trade. But the project is as much about extending Chinese influence as it is about delivering economic returns.
Piles of coal awaiting export and gantry cranes used to load and unload containers onto and from cargo ships are seen at Deltaport, in Tsawwassen, B.C., on Monday, September 9, 2024. CP Images photo
CEC: What would need to change in Canada in terms of legislation or regulation to make more economic corridors a reality?
Gary Mar: A major regulatory component of economic corridors is eliminating trade barriers.
The federal Free Trade and Labour Mobility in Canada Act is a good start, but more needs to be done at the provincial level to facilitate more internal trade.
Other barriers require coordinated regulatory action, such as harmonizing weight restrictions and road bans to streamline trucking.
By taking a systems-level perspective – convening a national forum where Canadian governments consistently engage on supply chains and trade corridors – we can identify bottlenecks and friction points in our existing transportation networks, and which investments would deliver the greatest return on investment.
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