Canadian Energy Centre
Indigenous leaders meet G7 diplomats to make case for Canadian LNG
Indigenous leaders meet with U.S. ambassador to Canada David Cohen. Photo courtesy Energy for a Secure Future
From Shawn Logan of the Canadian Energy Centre Ltd.
‘Every official had a real desire to really understand Indigenous sentiment around resource development’
As G7 leaders left Hiroshima, Japan last month, they made a significant admission that liquefied natural gas (LNG) is a critical fuel to help reduce dependence on Russian energy, and that increased natural gas investment is important.
“In this context, we stress the important role that increased deliveries of LNG can play and acknowledge that investment in the sector can be appropriate in response to the current crisis and to address potential gas market shortfalls provoked by the crisis,” wrote the G7 in their final communique last week.
The decision comes just weeks after a small group of Indigenous leaders went to Ottawa to meet face-to-face with diplomats from some of the world’s top economies, convened by Energy for a Secure Future.
Their message to the world was simple: Indigenous communities in Canada can and should be partners at the table when it comes to developing and sharing our country’s vast natural resources. And it may have resonated.
For John Desjarlais, executive director of the Indigenous Resource Network, the vote of confidence for LNG is music to his ears.
“I’d like to think that we were heard – we met with some pretty influential people and heard some of the right things,” he said.
“For them to make that commitment is a big deal, and certainly a difference from some of the early indicators before the G7.”
Tapped earlier this year as the new executive director of the Indigenous Resource Network, Desjarlais found himself in Ottawa with other Indigenous leaders in April, meeting with diplomatic representatives from Canada’s G7 partners – Germany, France, Japan and the United States – as well as delegations from Poland and India.
Desjarlais said he was surprised just how open diplomats were to the notion that Indigenous communities in Canada can be key players in the global energy marketplace.
“What a whirlwind. It was inspiring, especially speaking with the ambassadors,” Desjarlais said of the two-day diplomatic blitz that both challenged perceptions and paved a path for Indigenous voices to play a greater role on the international stage.
“Every official had a real desire to really understand Indigenous sentiment around resource development. There was a sincere desire to learn from our perspective.”
First Nations and Metis have emerged as key partners in Canadian resource projects, particularly the country’s nascent LNG industry.
Global demand for reliable and responsibly produced LNG has continued to grow, with Russia’s invasion of Ukraine last year thrusting it into even greater prominence. The leaders of Canada’s G7 partners Germany and Japan both came to Canada last year to make direct appeals for more Canadian LNG – they left with no firm commitments.
Desjarlais and a group of fellow Indigenous leaders who are on the advisory council for Energy for a Secure Future – a non-partisan coalition of business, labour and Indigenous representatives – outlined their vision for how Canada and First Nations can help be a solution in the drive for increased global energy security, while also helping lower emissions by providing a cleaner alternative to coal.
Crystal Smith, chief councillor of the Haisla Nation on B.C.’s coast, said the first step is dispelling the notion that Indigenous people oppose resource development in Canada.
“When Europeans, Asians and Americans think of Canada’s Indigenous peoples, they often think we oppose all energy development,” she said during a press conference to mark April’s diplomatic meetings.
“We aren’t victims of development. Increasingly we are partners and even owners in major projects.”
The Haisla Nation has a 50 per cent ownership stake in the proposed $3-billion Cedar LNG project, which was granted regulatory approval earlier this year, and is expected to begin operations in 2027.
It marks the largest Indigenous-owned infrastructure project in Canadian history, as well as the first Indigenous-owned LNG terminal in the world.
Karen Ogen, CEO of the First Nations LNG Alliance, said it’s projects like Cedar LNG and others currently under development that will not only help Indigenous communities achieve prosperity, but help the global community in the quest for vital energy security.
“LNG development has provided immediate- and medium-termed opportunities to lift thousands of Indigenous people and our communities out of inter-generational poverty,” she said.
“We are determined to develop our resources in a socially and environmentally responsible way. We want to work with Canada and our allies in the G7 to bring urgency to the development and export of Canadian LNG.”
Beyond Cedar LNG, dozens of First Nations and Métis communities have entered into equity ownership agreements in pipelines, LNG facilities and carbon capture and storage projects, among others.
The Ksi Lisims LNG project, a joint venture with the Nisga’a Nation in northern B.C., has been granted a 40-year export licence from the Canada Energy Regulator, while in Atlantic Canada the Miawpukek First Nation is a part-owner of the proposed export project LNG Newfoundland and Labrador.
Large consortiums representing Indigenous communities have also acquired or are looking to acquire stakes in major pipeline projects including Coastal GasLink, Trans Mountain, and several oil sands pipelines.
According to Desjarlais, the Ottawa summit proved to be a fruitful meeting of the minds. He said it could signal a more important role for Indigenous communities both as more equal resource partners in Canada, but on the world stage as well. The group has been asked to meet again in June with U.S. ambassador David Cohen.
“I never thought it would accelerate to this point – it’s accelerating so fast,” he said.
“Ownership is reconciliation. There’s a whole cascade of benefits that come from these projects everywhere.”
From the Canadian Energy Centre
The vast majority of Canadian oil exports to the United States are processed in Midwest states. Above, the Cushing Terminal near Cushing, Oklahoma is Enbridge’s largest tank farm and the most significant trading hub for North American crude.
Canada and the United States share something that doesn’t exist anywhere else. A vast, interconnected energy network that today produces more oil and gas than any other region – including the Middle East, according to analysis by S&P Global.
It’s a blanket of energy security researchers called “a powerful card to play” in increasingly unstable times.
But, according to two leaders in governance and energy policy, that relationship is at risk.
Analysis has shown that the federal proposal to cap emissions in Canada’s oil and gas sector would result in reduced production. That likely means less energy available to Canada’s largest customer, the United States.
Jamie Tronnes, executive director of the Center for North American Prosperity and Security, is a former Canadian political staffer born in northern Alberta now living in Washington, D.C.
Jamie Tronnes
Heather Exner-Pirot is a prominent energy policy analyst and senior fellow with the Ottawa-based Macdonald-Laurier Institute.
Heather Exner-Pirot
Here’s what they shared with CEC.
CEC: The U.S. is one of the world’s largest oil and gas producers. Why does it need imports from Canada?
HEP: It’s because all oil is not the same. The United States developed its refinery industry before the shale revolution, when they were importing heavier crudes. Canada has that heavier crude. They are now exporting some of their sweet light oil and importing Canadian crude because that’s what their refinery mix requires.
What’s interesting is that we have never exported more Canadian crude to the United States than we are right now. Even as they have become the world’s largest oil producer, they’ve never needed Canadian oil more than today.
They also import a ton of natural gas from us. They have become the world’s biggest gas producer and the world’s biggest gas exporter, but part of that, and having their LNG capacity being able to so quickly surpass Qatar and Australia, is because some of the production is being backfilled by Canada.
CEC: Will the incoming new administration (either Democrat or Republican) impact the Canada-U.S. energy relationship?
JT: I don’t see a big change happening in such a way as it did when the Biden administration came in with the axing of the Keystone XL pipeline. Now that Russia has invaded Ukraine, the global energy market has changed radically.
On the Republican side, Trump often repeats the phrase “drill, baby drill.” The issue is that the U.S. is already drilling about as much as demand allows.
I don’t think a Harris government would move quickly to limit oil and gas production without having a strategic alternative in place. It simply would make her look very weak, and she has explicitly said that she would not ban fracking.
In the post-COVID world, I believe that the Democrat side of the aisle is coming to the view that it was a geopolitical mistake in terms of securing North American energy dominance to cut the Keystone XL pipeline.
The reality is that being able to export refined Canadian feedstock is key to keeping the U.S. as an energy superpower.
The U.S. government continues to offer and subsidize tax credits for investment in carbon capture technology. Even though Trump has said that he would end all of those carbon capture credits and subsidies, it still would not stop the U.S. from importing Canadian oil and gas.
That’s only going to grow as things like AI continue to create more demand for energy. A huge amount of the United States electrical energy grid is powered still by natural gas, and that’s going to take decades to change.
CEC: Would a reduction in Canadian production from the federal government’s proposed oil and gas emissions cap impact the United States?
HEP: Yes, and we should be raising the alarm bells. The federal government has said it is a cap on emissions, not a cap on production, but all the analysis that Alberta and the oil and gas sector have done is that it will create somewhere between 1 million and 2 million barrels of production being shut in.
Well, 95 per cent of our exports are to the United States. If we are shutting in 1 million barrels or 2 million barrels, that all comes out of their end just when their shale oil is expected to plateau and decline.
A cap would also tap down natural gas production and LNG capacity. If you’re Japan or South Korea and you’re looking to secure 20 years of supply, the cap creates a lot of uncertainty with that Canadian supply. There’s zero uncertainty with Qatar’s supply. If you’re Japanese, these are not pleasant conversations. This is not giving you confidence. And if you don’t have confidence in LNG, you’re going to burn coal.
In a perfect world, Canada would supply LNG to Asia, the United States would supply it to Europe, and we’d be a pretty energy-independent Western alliance.
I wish we would be honest that we need a different way to reduce emissions that does not take away from production, because that capacity is a big part of what we offer our allies right now.
JT: It threatens the security of North America in a big way because the energy dominance of the United States is tied to Canada. Especially with what’s going on in Russia and other countries, it behooves us as Canadians and me as an American to remember that security is not freely granted.
We have to make sure that we are thinking more holistically when we think of things like emissions cap legislation that’s going to have knock-on effects and may even increase emissions. If you’re trying to replace that feedstock, it’s got to come from somewhere.
From the Canadian Energy Centre
By Deborah Jaremko and Will Gibson“These facilities need 24/7, super-reliable power, and there’s only one power generation fuel that has any hope of keeping up with the demand surge: natural gas”
Data centres – the industrial-scale technology complexes powering the world’s growing boom in artificial intelligence – require reliable, continuous energy. And a lot of it.
“Artificial Intelligence is the next big thing in energy, dominating discussions at all levels in companies, banks, investment funds and governments,” says Simon Flowers, chief analyst with energy consultancy Wood Mackenzie.
The International Energy Agency (IEA) projects that the power required globally by data centres could double in the next 18 months. It’s not surprising given a search query using AI consumes up to 10 times the energy as a regular search engine.
The IEA estimates more than 8,000 data centres now operate around the world, with about one-third located in the United States. About 300 centres operate in Canada.
It’s a growing opportunity in Alberta, where unlike anywhere else in the country, data centre operators can move more swiftly by “bringing their own power.”
In Alberta’s deregulated electricity market, large energy consumers like data centres can build the power supply they need by entering project agreements directly with electricity producers instead of relying solely on the power of the existing grid.
Between 2018 and 2023, data centres in Alberta generated approximately $1.3 billion in revenue, growing on average by about eight percent per year, lawyers with Calgary-based McMillan LLP wrote in July.
“Alberta has a long history of building complex, multi-billion-dollar infrastructure projects with success and AI data centres could be the next area of focus for this core competency,” McMillan’s Business Law Bulletin reported.
In recent years, companies such as Amazon and RBC have negotiated power purchase agreements for renewable energy to power local operations and data centres, while supporting the construction of some of the country’s largest renewable energy projects, McMillan noted.
While the majority of established data centres generally have clustered near telecommunications infrastructure, the next wave of projects is increasingly seeking sites with electricity infrastructure and availability of reliable power to keep their servers running.
The intermittent nature of wind and solar is challenging for growth in these projects, Rusty Braziel, executive chairman of Houston, Texas-based consultancy RBN Energy wrote in July
“These facilities need 24/7, super-reliable power, and there’s only one power generation fuel that has any hope of keeping up with the demand surge: natural gas,” Braziel said.
TC Energy chief operating officer Stan Chapman sees an opportunity for his company’s natural gas delivery in Canada and the United States.
“In Canada, there’s around 300 data centre operations today. We could see that load increasing by one to two gigawatts before the end of the decade,” Chapman said in a conference call with analysts on August 1.
“Never have I seen such strong prospects for North American natural gas demand growth,” CEO François Poirier added.
Alberta is Canada’s largest natural gas producer, and natural gas is the base of the province’s power grid, supplying about 60 percent of energy needs, followed by wind and solar at 27 percent.
“Given the heavy power requirements for AI data centres, developers will likely need to bring their own power to the table and some creative solutions will need to be considered in securing sufficient and reliable energy to fuel these projects,” McMillan’s law bulletin reported.
The Alberta Electric System Operator (AESO), which operates the province’s power grid, is working with at least six proposed data centre proposals, according to the latest public data.
“The companies that build and operate these centres have a long list of requirements, including reliable and affordable power, access to skilled labour and internet connectivity,” said Ryan Scholefield, the AESO’s manager of load forecasting and market analytics.
“The AESO is open for business and will work with any project that expresses an interest in coming to Alberta.”
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