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Canada’s LNG, The Cleanest in the World – Resource Works

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Karen Ogen is the CEO of the First Nations LNG Alliance

From Resource Works – See More Stories from Resources Works Here

President Biden’s halt on new U.S. LNG projects offers Canada a chance to showcase its commitment to producing exceptionally clean LNG, highlighting innovative approaches to environmental sustainability and economic growth in the industry.

President Joe Biden’s freeze on approvals of new U.S. LNG-for-export projects has generated new hope for expansion of Canada’s LNG capacity and exports to follow.

From 2015 to 2022, the U.S. experienced an astronomical rise in LNG exports, soaring by an unprecedented 14,000%. Not a single Canadian LNG export project crossed the finish line to completion during this period, a stagnation that speaks volumes about the challenges faced by the industry north of the border. The explosive American growth showcased the country’s aggressive expansion into global energy markets, capitalizing on its abundant shale gas reserves and streamlined regulatory processes.

The Canadian sector’s slower progress, stymied by stringent environmental regulations and the complexities of developing export infrastructure in landlocked regions, starkly diverged from the American approach, which for years proceeded with minimal environmental considerations. If the U.S. LNG industry feels like it has handed lemons with Biden’s new climate test, for Canada it’s a chance to make lemonade.

Thanks to its careful approach, the Canadian LNG sector can now rightly show it is going to be exporting the cleanest LNG in the world when it finally does get the first shipment to market very soon.

Look at some numbers:

  • LNG Canada is projected to operate with an emissions intensity of 0.15 percent of carbon dioxide emissions per tonne of LNG produced, less than half the global industry average of 0.35 per cent per tonne.
  • The Cedar LNG project proposed by the Haisla Nation will have an emissions intensity of just 0.08 percent of CO2 per tonne of LNG. That’s less than a third of the global average.
  • And Woodfibre LNG will have an emissions intensity of just 0.04 percent of CO2 per tonne of LNG produced — and that’s less than one sixth of the global industry average.

Woodfibre LNG will also be a net-zero facility by 2027 – 23 years ahead of government net-zero regulation. Woodfibre will also be net zero during construction – a unique commitment for construction projects in Canada.

Ksi Lisims LNG, proposed by the Nisga’a Nation in B.C., promises to be operating with net-zero emissions within three years of the project’s first shipment. And Cedar LNG’s plans call for emissions to be near zero by 2030.

Woodfibre LNG points out: “We are the first e-drive LNG facility in Canada. This means our liquefaction process will be powered by renewable hydroelectricity, which is 14 times less emitting than a conventional liquefaction process powered by gas.”

Cedar LNG and Ksi Lisims LNG also plan to be all-electric, but that means B.C. Hydro will have to step up to provide the power and to transmit it to the two floating LNG production plants.

LNG Canada’s Phase One plant (which expects to go into production in 2025, but perhaps even late this year) will have to generate a portion of its cooling power by burning LNG. It would be happy to use 100% electricity, but there simply isn’t enough available. LNG Canada would certainly hope for all-electric drives for a Phase Two expansion, which is under consideration.

(Although the Site C dam will add to B.C. Hydro’s power supply in 2025, the province will still be short of electricity by 2030. So B.C. Hydro will soon put out a call for more “clean or renewable energy” from new resources. Hydro will also have to build new transmission lines or upgrade current ones, to get the power to where it is needed; and that includes LNG plants and mines.)

One reason why our emissions will be lower is our cooler climate. That means we use less energy in the process to chill natural gas to the required -161.5°C than do LNG plants on the warmer U.S. Gulf Coast or Mexican coast.

Canadian LNG companies and their natural-gas suppliers have also been working steadily to reduce emissions from wells, pipelines, and processing facilities.

Meanwhile, various studies have found that using LNG from B.C. to replace coal at Asian power-generating stations would reduce their greenhouse gas emissions by anywhere from 35 per cent to 55 percent.

And on top of all this, B.C. LNG has another advantage over U.S. LNG: The shipping distance from B.C. to prime Asian buyers is about 10 days compared to 20 days for shipments from U.S. Gulf Coast LNG plants. That can mean a reduction of 50-60% in emissions from the ships carrying the LNG.

“The distance between Canada and the key market is a huge advantage, where we are the same distance to Asia as Australia,” says Racim Gribaa of Global LNG Consulting Inc.

There is, too, another key reason why Canadian governments should look favourably on LNG exports: the benefits to Indigenous peoples who partner in, are involved in, or work for the projects.

As CEO Karen Ogen of the First Nations LNG Alliance puts it: “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.”

And so, she adds: “Everyone wins if Canada can get into the game.”

Meanwhile, the forced pause south of the border might offer a moment of reflection for the industry, potentially providing Canada with an opportunity to reassess its own approach and perhaps find a middle ground that promotes both environmental sustainability and the economic viability of LNG exports.

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Economy

Canada’s flippant rejection of our generous natural resource inheritance

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From the Macdonald Laurier Institute

By David Polansky

The fanaticism of environmental elitists has made people unwilling to discuss the serious human and economic costs of poorly considered environmental policies.

Strategic energy resources have long been associated with some of the world’s most odious regimes. Above the surfaces that cover rich mineral and fossil fuel deposits one finds religious fanatics, brutal tyrants, and corrupt kleptocracies. And yet with one resource rich nation in particular we find not Wahhabism or gangsterism but Mounties and maple syrup.

Canada is the world’s second-largest country and its lands and territorial waters hold some of the world’s most substantial oil and gas reserves. Looking at its energy policies, one might think it was Belgium. Canada’s resource wealth would seem to be a case of the good guys winning for once. Why then does Canada flee in shame from its geological (and geopolitical) situation?

The answer is that Canada’s elites have long ceased to think in terms of its national interests or fiscal priorities but have adopted a naïve environmental dogmatism. Since it ratified the Paris Agreement in 2015, Canada has embraced an ambitious, top-down, international agenda to achieve “net-zero” emissions and limit global climate change.

But the fact is that, despite its size, In absolute terms, its output has risen marginally over the past half century, even as its population has nearly doubled. And embracing this climate agenda is hardly a perfunctory matter: it will continue to result in declining incomes for the average Canadian as well as a weakened trade balance for Canada as a whole. Canada’s economy is being sacrificed on the altar of elite preferences divorced from the realities of how Canadians actually heat our homes or put food on our tables.

An honest assessment of Canada’s flippant rejection of its generous natural resource inheritance looks more like serial masochism than virtue.

In the wake of Russia’s invasion of Ukraine and the global sanctions it triggered, The irony is that with so much of Russia’s supply coming offline, Canada could have had a remarkable opportunity to fill the vacuum with its own production capacity.

Despite being the world’s sixth-largest producer of natural gas, Canada lacks even a single export terminal for LNG. When critics of Canadian LNG production pointed to the unfeasibility of meeting overseas demand, despite the entreaties of the Germans and other Europeans, they were only technically correct. Canada couldn’t easily meet overseas demand because our regulatory regime has held up the construction of as many as 18 proposed LNG projects over the past decade, largely due to climate concerns.

Ironically, Germany—the continent’s greatest industrial power—needed to reactivate discontinued coal plants to meet its energy demands (hardly an ideal outcome from an environmental standpoint).

Much of the shortfall caused by sanctions on Russia was also made up by LNG contributions from Norway—whose leaders have maintained that reducing LNG output would only cede the market to authoritarian regimes with weaker regulatory controls around their energy industries from both environmental and human rights standpoints. Thankfully, Norway’s government moved forward with LNG production and export despite past pressure from environmentalist in the European Union that attempted to curtail its fossil fuel extraction.

Canada could have followed Norway’s level-headed approach and in that could have helped replace Russian oil in the aftermath of the Ukraine invasion. The curtailing of Canada’s energy infrastructure is not imposed by a physical limitation in the world, nor was it commanded from the heavens; it was ordered by the Canadian Net-Zero Emissions Accountability Act of 2021, supplemented by ambitious plans promulgated by Ottawa to reshape the institutions and practices of the entire country in pursuit of this quixotic goal. Not just the oil-and-gas sector, but housing, construction, agriculture, etc. must bend before Net Zero.

One can already hear activist outrage that, “to oppose this agenda is to choose temporary profits over the preservation of human life and the planet that supports it.” This rhetoric has proven effective in advancing environmental policies but it is also a false dichotomy, as it treats the dilemma as one of “good vs. greed” rather than one of complex competing goods.

A society that has signed on to this sort of imposed austerity is one with less money for infrastructure, entrepreneurship, healthcare, and defense. A lack of investment in these sectors also brings serious and immediate human costs. And further, the real issue is not the value of environmental stewardship or of taking steps to moderate consumption—both of which are worthy goals in and of themselves—but of blindly adhering to preselected targets at all costs. These apparently unassailable commitments have deprived Canada of the kind of flexible management of strategic interests that prudent political leadership requires.

Indeed, the unrealism of these climate ideals has produced systemic dissembling across the country’s major institutions, given the pressure to comply regardless of the efficacy of their practices. In other words, the fanaticism of environmental elitists has made people unwilling to debate the issues at hand or to even discuss the serious human and economic costs of poorly considered environmental policies.

The Environmental, Social, and Governance (ESG) model has had the effect of placing certain questions effectively beyond the reach of politics. But questions of policy—as environmental and energy questions surely are—are by their nature political; they have inevitable tradeoffs that should be a matter of debate with an eye to our collective interests.

Instead, we have an intolerant environmental elitism that obstructs the open and honest public deliberation that is the hallmark of democratic politics. A more truthful and practical approach wouldn’t necessarily promote any one policy, but it would allow for public discussion that recognizes the genuine toll that environmental policy takes on Canada’s domestic well-being and our standing in the world.

David Polansky is a Toronto-based writer and political theorist. Read him at strangefrequencies.co or find him on X @polanskydj.

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Economy

Indigenous Loan Program Could Pave the Way for More Natural Resource Economy Ownership

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From EnergyNow.ca

By Resource Works

“We want to be part of the oil and gas industry”

Ottawa has promised a loan program for Indigenous communities to buy equity stakes in natural resource projects, but many questions are still unanswered.

Ottawa is currently under scrutiny as it prepares to incorporate an Indigenous loan-guarantee program into its 2024-2025 budget, aimed at assisting Indigenous communities in acquiring equity stakes in natural resource projects. This commitment was made in Finance Minister Chrystia Freeland’s fall economic statement on November 21.

The government will advance development of an Indigenous Loan Guarantee Program to help facilitate Indigenous equity ownership in major projects in the natural resource sector. Next steps will be announced in Budget 2024.

The federal budget is typically presented to Parliament in either February or March, with the 2023-2024 budget having been announced on March 28 last year. While Ottawa has engaged in consultations with Indigenous leaders and organizations, there remains a notable lack of specific details, including a critical issue – whether the program will permit investment in oil and gas projects.

The First Nations Major Projects Coalition, boasting over 145 members, strongly advocates for Indigenous peoples to have the autonomy to determine their investment choices without constraints imposed by Ottawa. Although the government did assert its commitment to ensuring Indigenous communities benefit from major projects within their territories on their own terms, First Nations groups worry that the loan-guarantee program might mirror the green restrictions of the current Indigenous loan program provided by the Canada Infrastructure Bank.

This existing program allows equity stakes only in infrastructure projects aligned with the bank’s investments, such as clean power, green infrastructure, broadband technology, and transportation. For some time, the First Nations Major Projects Coalition (FNMPC) and the Indigenous Resource Network have been at the forefront of campaigns urging federal loan guarantees to facilitate Indigenous participation in natural resource projects.

Sharleen Gale, Chair of FNMPC, argues that fossil fuel investments must be a component of any federal loan-guarantee program, as equity in the oil and gas industry can empower First Nations to thrive in alignment with their values.

“We want to be part of the oil and gas industry,” says Gale.

In 2022, the Indigenous Resource Network (IRN) initiated the “Ownership Changes Everything” campaign, advocating for Indigenous ownership in resource projects. This campaign calls upon Ottawa to implement a loan program modeled after similar initiatives in Alberta, Saskatchewan, and Ontario. Robert Merasty, highlights the challenges faced by Indigenous communities due to the Indian Act, which prohibits First Nations from using their land and assets as collateral. Consequently, they lack the necessary at-risk capital to secure favorable interest rates.

“The problems our communities are facing is that there are few mechanisms to access the necessary capital for investing in projects and having equity,” says Merasty.

In 2023, FNMPC penned an open letter to Finance Minister Chrystia Freeland, emphasizing the significance of advancing major resource projects for a successful energy transition and economic growth benefiting all Canadians. They also pointed out that the Indian Act remains a significant hurdle, preventing First Nations from leveraging their assets and land for borrowing.

FNMPC estimates that over the next decade, 470 major projects impacting Indigenous lands will require more than $525 billion in capital investment, with approximately $50 billion needed for Indigenous equity financing. An illustrative case from Alberta involved energy giant Enbridge, which partnered with 23 First Nation and Métis communities to sell an 11.57% interest in seven pipelines in northern Alberta. This partnership was made possible through a loan guarantee from the Alberta Indigenous Opportunities Corp., which provides financing to Indigenous communities seeking commercial collaborations, alongside various other financial supports.

Greg Ebel, CEO of Enbridge, has joined the campaign for a national program.

“Investment in the entire energy sector and many others could be accelerated by the immediate implementation of a federal Indigenous loan-guarantee program to ensure Canada’s Indigenous Peoples have a seat at the table while also having equity that helps them secure a more prosperous future,” says Ebel.

As we await further developments, the question remains: Will a federal loan-guarantee program come to fruition, one that encompasses loan guarantees for investments in natural gas and oil? We are hopeful for a positive outcome.

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