Canadian Energy Centre
Canada should ‘shout from the rooftops’ its ability to reduce emissions with LNG
Morning view of a coal-fired power station in China. Getty Images photo
From the Canadian Energy Centre Ltd.
By James Snell and Deborah Jaremko
Canada should work with its allies and potential customers to receive credit for the global emissions reduction benefits of exporting liquefied natural gas (LNG), says a prominent Canadian energy advocate.
The equivalent of all Canadian GHG emissions could be eliminated by helping Asia switch 20 per cent of its coal fired power stations to natural gas, says Shannon Joseph, chair of Energy for a Secure Future, citing a recent report published by the Canadian Chamber of Commerce.
“Canada could help deliver 680 megatonnes of emissions reductions, and that’s more than our whole country,” she says.
“We should do it and shout it from the rooftops. We should move forward with LNG as an energy and emission solution.”
Receiving credit for lowering emissions with LNG could come through what’s known as Article 6 of the Paris Agreement, but Joseph says Canada need not wait for these carbon accounting rules to be settled before pressing forward.
“We need to assert, confidently, the environmental value we would be delivering to the world,” she says.
Shannon Joseph, chair of Energy for a Secure Future. Photo by Dave Chidley for the Canadian Energy Centre
Article 6 conceptually allows countries to collaborate with each other on emissions reduction goals by trading carbon credits. In theory, for example that could allow Canada receive credit for emissions reductions achieved in China by using Canadian LNG to displace coal.
The Paris Agreement signatories have not yet agreed on the rules to make Article 6 a reality. Meanwhile, driven by Asia, last year the world consumed more coal – and produced more emissions from that coal – than ever before, according to the International Energy Agency (IEA).
The IEA says switching from coal to natural gas for electricity generation reduces emissions by half on average. LNG from Canada can deliver an even bigger decrease, reducing emissions by up to 62 per cent, according to a June 2020 study published in the Journal for Cleaner Production.
Even before Russia’s invasion of Ukraine, world LNG demand was expected to nearly double by 2040. The market has become even tighter as countries work to exclude Russian energy, says a report by Energy for a Secure Future.
Japan and South Korea, as well as Germany have asked Canada to step up LNG development to help mitigate the energy crisis.
With or without Article 6, Energy for a Secure Future is calling on Canada to work with its potential customers in Europe and Asia to recognize and credit the environmental benefits of Canadian LNG displacing higher emitting energy.
“Canada’s allies have come here asking for energy, and we should work directly with them to find a way to have our environmental contributions recognized,” says Joseph, adding the U.S. has moved ahead without credits, more than doubling LNG exports since 2019.
Canada has yet to export significant volumes of LNG after years of regulatory delay and cancelled projects – but things are changing.
LNG Canada in Kitimat B.C. will be the first major export facility to operate, starting in 2025. Woodfibre LNG near Squamish begins construction this fall with the aim to start operating in 2027. Other proposed projects include the Indigenous-led Cedar LNG facility in Kitimat and Ksi Lisims LNG near Prince Rupert.
LNG Canada CEO Jason Klein stands atop a receiving platform overlooking LNG processing units called trains that are used to convert natural gas into liquefied natural gas at the LNG Canada export terminal under construction, in Kitimat, B.C., on Wednesday, September 28, 2022. CP Images photo
Meanwhile, India, China and Japan remain consumers of Russian oil and gas, according to the 2023 Statistical Review of World Energy.
“We are trying to help our allies meet the challenges they are facing. One of these is ensuring that their populations – sometimes of over a billion people – can even access modern forms of energy,” Joseph says.
“If Canada wants to be relevant and to lead, we have to come to the table with solutions to this question, alongside the environmental one. LNG is our biggest card.”
India will have the world’s largest population by 2028 – climbing to 1.45 billion and rising to 1.67 billion people by 2040, according to the United Nations Population Fund.
“Currently India is the fourth largest importer of LNG [in the world] and demand is expected to grow massively as 270 million people move up the socioeconomic ladder,” says Victor Thomas, CEO of the Canada-India Business Council.
Canada’s potential to deliver LNG to India “just makes good sense when you look at the geopolitical fractures that have occurred since 2022,” he says, noting the U.S. has recognized the opportunity and is taking action to form new business relationships in India.
Burning wood and other biomass for heat and cooking is still common in the South Asian country, while coal produces around three quarters of India’s electricity. According to the IEA, by 2040 India’s total energy demand will be 70 per cent higher than it was in 2019.
“Transitioning from wood burning to LNG is a massive emissions reduction,” says Thomas. “It’s a safe and reliable opportunity. People are looking for a country like Canada to be able to provide that.”
From the Canadian Energy Centre
By Will Gibson
Alberta oil sands projects poised to grow on lower costs, strong reserves
As geopolitical uncertainty ripples through global energy markets, a new report says Alberta’s oil sands sector is positioned to grow thanks to its lower costs.
Enverus Intelligence Research’s annual Oil Sands Play Fundamentals forecasts producers will boost output by 400,000 barrels per day (bbls/d) by the end of this decade through expansions of current operations.
“Existing oil sands projects deliver some of the lowest-breakeven oil in North America at WTI prices lower than $50 U.S. dollars,” said Trevor Rix, a director with the Calgary-based research firm, a subsidiary of Enverus which is headquartered in Texas with operations in Europe and Asia.
Alberta’s oil sands currently produce about 3.4 million bbls/d. Individual companies have disclosed combined proven reserves of about 30 billion barrels, or more than 20 years of current production.
A recent sector-wide reserves analysis by McDaniel & Associates found the oil sands holds about 167 billion barrels of reserves, compared to about 20 billion barrels in Texas.
While trade tensions and sustained oil price declines may marginally slow oil sands growth in the short term, most projects have already had significant capital invested and can withstand some volatility.
Cenovus Energy’s Christina Lake oil sands project. Photo courtesy Cenovus Energy
“While it takes a large amount of out-of-pocket capital to start an oil sands operation, they are very cost effective after that initial investment,” said veteran S&P Global analyst Kevin Birn.
“Optimization,” where companies tweak existing operations for more efficient output, has dominated oil sands growth for the past eight years, he said. These efforts have also resulted in lower cost structures.
“That’s largely shielded the oil sands from some of the inflationary costs we’ve seen in other upstream production,” Birn said.
Added pipeline capacity through expansion of the Trans Mountain system and Enbridge’s Mainline have added an incentive to expand production, Rix said.
The increased production will also spur growth in regions of western Canada, including the Montney and Duvernay, which Enverus analysts previously highlighted as increasingly crucial to meet rising worldwide energy demand.
“Increased oil sands production will see demand increase for condensate, which is used as diluent to ship bitumen by pipeline, which has positive implications for growth in drilling in liquids-rich regions such as the Montney and Duvernay,” Rix said.
From the Canadian Energy Centre
“We’re focusing on the opportunity that Canada has, perhaps even the obligation”
It was not a call he wanted to make.
In October 2017, Kevin O’Donnell, then chief financial officer of Nisku, Alta.-based Banister Pipelines, got final word that the $16-billion Energy East pipeline was cancelled.
It was his job to pass the news down the line to reach workers who were already in the field.
“We had a crew that was working along the current TC Energy line that was ready for conversion up in Thunder Bay,” said O’Donnell, who is now executive director of the Mississauga, Ont.-based Pipe Line Contractors Association of Canada (PLCAC).
“I took the call, and they said abandon right now. Button up and abandon right now.
“It was truly surreal. It’s tough to tell your foreman, who then tells their lead hands and then you inform the unions that those three or four or five million man-hours that you expected are not going to come to fruition,” he said.
Workers guide a piece of pipe along the Trans Mountain expansion route. Photograph courtesy Trans Mountain Corporation
“They’ve got to find lesser-paying jobs where they’re not honing their craft in the pipeline sector. You’re not making the money; you’re not getting the health and dental coverage that you were getting before.”
O’Donnell estimates that PLCAC represents about 500,000 workers across Canada through the unions it works with.
With the recent completion of the Trans Mountain expansion and Coastal GasLink pipelines – and no big projects like them coming on the books – many are once again out of a job, he said.
It’s frustrating given that this could be what he called a “golden age” for building major energy infrastructure in Canada.
Together, more than 62,000 people were hired to build the Trans Mountain expansion and Coastal GasLink projects, according to company reports.
O’Donnell is particularly interested in a project like Energy East, which would link oil produced in Alberta to consumers in Eastern and Atlantic Canada, then international markets in the offshore beyond.
“I think Energy East or something similar has to happen for millions of reasons,” he said.
“The world’s demanding it. We’ve got the craft [workers], we’ve got the iron ore and we’ve got the steel. We’re talking about a nation where the workers in every province could benefit. They’re ready to build it.”
The “Golden Weld” marked mechanical completion of construction of the Trans Mountain Expansion Project on April 11, 2024. Photo courtesy Trans Mountain Corporation
That eagerness is shared by the Progressive Contractors Association of Canada (PCA), which represents about 170 construction and maintenance employers across the country.
The PCA’s newly launched “Let’s Get Building” advocacy campaign urges all parties in the Canadian federal election run to focus on getting major projects built.
“We’re focusing on the opportunity that Canada has, perhaps even the obligation,” said PCA chief executive Paul de Jong.
“Most of the companies are quite busy irrespective of the pipeline issue right now. But looking at the long term, there’s predictability and long-term strategy that they see missing.”
Top of mind is Ottawa’s Impact Assessment Act (IAA), he said, the federal law that assesses major national projects like pipelines and highways.
In 2023, the Supreme Court of Canada found that the IAA broke the rules of the Canadian constitution.
Construction of the Coastal GasLink pipeline. Photograph courtesy Coastal GasLink
The court found unconstitutional components including federal overreach into the decision of whether a project requires an impact assessment and whether a project gets final approval to proceed.
Ottawa amended the act in the spring of 2024, but Alberta’s government found the changes didn’t fix the issues and in November launched a new legal challenge against it.
“We’d like to see the next federal administration substantially revisit the Impact Assessment Act,” de Jong said.
“The sooner these nation-building projects get underway, the sooner Canadians reap the rewards through new trading partnerships, good jobs and a more stable economy.”
In Defeat, Joe Tay’s Campaign Becomes a Flashpoint for Suspected Voter Intimidation in Canada
Carney’s budget is worse than Trudeau’s
Governments in Alberta should spur homebuilding amid population explosion
History in the making? Trump, Zelensky hold meeting about Ukraine war in Vatican ahead of Francis’ funeral
Columnist warns Carney Liberals will consider a home equity tax on primary residences
Low oil prices could have big consequences for Alberta’s finances
It Took Trump To Get Canada Serious About Free Trade With Itself
-
Business2 days agoTrump’s bizarre 51st state comments and implied support for Carney were simply a ploy to blow up trilateral trade pact
-
Frontier Centre for Public Policy2 days agoTrust but verify: Why COVID-19 And Kamloops Claims Demand Scientific Scrutiny
-
Alberta1 day agoAlberta’s future in Canada depends on Carney’s greatest fear: Trump or Climate Change
-
COVID-192 days agoStudy finds Pfizer COVID vaccine poses 37% greater mortality risk than Moderna
-
Agriculture1 day agoLiberal win puts Canada’s farmers and food supply at risk
-
Alberta1 day agoIt’s On! Alberta Challenging Liberals Unconstitutional and Destructive Net-Zero Legislation
-
International1 day agoNigeria, 3 other African countries are deadliest for Christians: report
-
2025 Federal Election19 hours agoThe Liberals torched their own agenda just to cling to power