Canadian Energy Centre
To reduce emissions, the world needs more LNG: report
The LNG Canada export terminal is about 85 per cent complete. Photo courtesy LNG Canada
From the Canadian Energy Centre
By Deborah JaremkoWood Mackenzie says spending needs to rise by $400 billion over the next decade
An additional $400 billion investment in liquefied natural gas (LNG) projects around the world is needed over the next decade to ensure energy security and achieve emissions reductions, according to a new report by Wood Mackenzie.
Without increased LNG supply, it said Asian countries in particular will continue to rely on high-emitting coal as they grow power generation.
“On a global scale, limited supplies of LNG risks stalling progress towards 2050 net zero targets in the near term,” says the report by Wood Mackenzie and Petronas, one of the joint venture owners of the LNG Canada project.
The fallout from Russia’s invasion of Ukraine rerouted LNG shipments from Asia to Europe, contributing to record coal consumption in 2022, analysts noted.
“A key pillar of the energy transition is to reduce the consumption of coal. A critical step in that transition is to shift power production from coal to much lower-emissions gas. The shift helps drive immediate decarbonization while renewables, energy storage, and other clean energy technologies scale-up.”
Power generation from natural gas reduces emissions by half on average, according to the International Energy Agency (IEA). LNG from Canada can deliver an even bigger decrease, reducing emissions by up to 62 per cent, according to a 2020 study published in the Journal for Cleaner Production.
Global natural gas use is rising, driving increased demand for LNG. The U.S. Energy Information Administration’s latest outlook projects natural gas consumption will rise to 197 quadrillion BTU in 2050, up from 153 quadrillion BTU in 2022.
“Gas can be used to not only replace coal for power generation, but also to provide fuel for blue hydrogen production, and as an essential source of flexibility as electricity grids incorporate increasingly large amounts of intermittent renewable generation,” Wood Mackenzie said.
“Gas also plays a critical role in non-power sectors such as commercial and residential heating, as a feedstock for chemicals and fertilizers, and as an energy source for metals, cement, and other manufacturing processes.”
Canadian LNG has advantages in a lower emission world, the report said.
“Canada’s western ports are ideally positioned to supply growing Asian demand because its shipping routes aren’t dependent on an uncongested Panama Canal. The country is also poised to produce some of the lowest-emission LNG in the world,” Wood Mackenzie said.
The low emissions per tonne of LNG in Canada come from shorter shipping distances to customers, a colder climate, the use of hydroelectricity, and methane emissions reduction from upstream natural gas production.
Once it starts operating in 2025, LNG Canada will have emissions intensity of 0.15 per cent CO2 per tonne, less than half the global average of 0.35 per cent per tonne, according to Oxford Energy Institute.
Proposed Indigenous-led project Cedar LNG would have emissions intensity of 0.08 per cent, and smaller-scale Woodfibre LNG would have emissions intensity of 0.04 per cent.
“The gas and LNG supply and demand mismatch that spawned the current energy crisis and stalled energy transition progress can’t be repeated,” Wood Mackenzie said.
“This will require a long-term commitment to expanding capacity to ensure reliable, increasingly low-emission, and affordable LNG that won’t be upended by future geopolitical and economic disruptions.”
From The Canadian Energy Centre
By Cody Ciona
Starting with LNG Canada, producers will finally have access to new customers overseas
Canada’s natural gas production and exports are primed for growth as LNG projects come online, according to Houston, Texas-based consultancy RBN Energy.
Long-awaited LNG export terminals will open the door to Asian markets and break the decades-long grip of the United States as the sole customer for Canada’s natural gas.
RBN projects that Canada’s natural gas exports will rise to 12 billion cubic feet per day (bcf/d) by 2034, up from about 8 bcf/d today. But as more LNG terminals come online, less of that natural gas will head south.
“We think the real possibility exists that the amount of natural gas being exported to the United States by pipeline will actually decline,” said Martin King, RBN’s managing director of North America energy market analysis, on a recent webinar.
RBN’s analysis suggests that Canada’s natural gas exports to the United States could drop to 6 bcf/d by the early 2030s compared to around 8 bcf/d today.
With the first cargo from the LNG Canada terminal at Kitimat, B.C. expected to ship in late June, Canada will finally have access to new markets for natural gas. The first phase of the project will have capacity to ship about 1.8 bcf/d.
And more projects are on the way.
LNG Canada’s joint venture partners are considering a second phase that would double export capacity.
Also at Kitimat, the Cedar LNG project is under construction and is expected to be completed in 2028. The floating terminal led by the Haisla Nation will have capacity to export 0.4 bcf/d.
Woodfibre LNG, located near Squamish, B.C. began construction in late 2023 and is expected to be substantially completed by 2027, with export capacity of about 0.3 bcf/d.
Expansions of LNG Canada and Cedar LNG could put LNG exports into the range of 5 bcf/d in the early 2030s, King said.
From the Canadian Energy Centre
By Will Gibson
‘Much of the habitat across the region is in good condition’
The footprint of energy development continues to occupy less than three per cent of Alberta’s oil sands region, according to a report by the Alberta Biodiversity Monitoring Institute (ABMI).
As of 2021, energy projects impacted just 2.6 per cent of the oil sands region, which encompasses about 142,000 square kilometers of boreal forest in northern Alberta, an area nearly the size of Montana.
“There’s a mistaken perception that the oil sands region is one big strip mine and that’s simply not the case,” said David Roberts, director of the institute’s science centre.
“The energy footprint is very small in total area once you zoom out to the boreal forest surrounding this development.”
Between 2000 and 2021, the total human footprint in the oil sands region (including energy, agriculture, forestry and municipal uses) increased from 12.0 to 16.5 per cent.
At the same time, energy footprint increased from 1.4 to 2.6 per cent – all while oil sands production surged from 667,000 to 3.3 million barrels per day, according to the Alberta Energy Regulator.
The ABMI’s report is based on data from 328 monitoring sites across the Athabasca, Cold Lake and Peace River oil sands regions. Much of the region’s oil and gas development is concentrated in a 4,800-square-kilometre zone north of Fort McMurray.
“In general, the effects of energy footprint on habitat suitability at the regional scale were small…for most species because energy footprint occupies a small total area in the oil sands region,” the report says.
Researchers recorded species that were present and measured a variety of habitat characteristics.
The status and trend of human footprint and habitat were monitored using fine-resolution imagery, light detection and ranging data as well as satellite images.
This data was used to identify relationships between human land use, habitat and population of species.
The report found that as of 2021, about 95 per cent of native aquatic and wetland habitat in the region was undisturbed while about 77 per cent of terrestrial habitat was undisturbed.
Researchers measured the intactness of the region’s 719 plant, insect and animal species at 87 per cent, which the report states “means much of the habitat across the region is in good condition.”
While the overall picture is positive, Roberts said the report highlights the need for ongoing attention to vegetation regeneration on seismic lines along with the management of impacts to species such as Woodland Caribou.
The ABMI has partnered with Indigenous communities in the region to monitor species of cultural importance. This includes a project with the Lakeland Métis Nation on a study tracking moose occupancy around in situ oil sands operations in traditional hunting areas.
“This study combines traditional Métis insights from knowledge holders with western scientific methods for data collection and analysis,” Roberts said.
The institute also works with oil sands companies, a relationship that Roberts sees as having real value.
“When you are trying to look at the impacts of industrial operations and trends in industry, not having those people at the table means you are blind and don’t have all the information,” Roberts says.
The report was commissioned by Canada’s Oil Sands Innovation Alliance, the research arm of Pathways Alliance, a consortium of the six largest oil sands producers.
“We tried to look around when we were asked to put together this report to see if there was a template but there was nothing, at least nothing from a jurisdiction with significant oil and gas activity,” Roberts said.
“There’s a remarkable level of analysis because of how much data we were able to gather.”
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