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.
Energy
‘War On Coal Is Finally Over’: Energy Experts Say Trump Admin’s Deregulation Agenda Could Fuel Coal’s ‘Revival’
From the Daily Caller News Foundation
By Audrey Streb
Within the first months of his second administration, President Donald Trump has prioritized “unleashing” American energy and has already axed several of what he considers to be burdensome regulations on the coal industry, promising it’s “reinvigoration.”
Trump signed an executive order on April 8 to revive the coal industry, and shortly after moved to exempt several coal plants from Biden-era regulations. Though it has become a primary target of many climate activists, coal has been historically regarded as readily available and affordable, and several energy policy experts who spoke with Daily Caller News Foundation believe Trump has the cards necessary to strengthen the industry.
“When utility bills are skyrocketing or blackouts are happening in winter, people are going to want reliable power back,” Amy Cooke, co-founder and president of Always on Energy Research and the director of the Energy and Environmental Policy Center told the DCNF. “The beauty of coal is that it allows for affordable, reliable power, which is absolutely crucial to economic prosperity, and in particular, innovation.”
“I think the number one, most significant threat to humanity is no power,” Cooke said, adding that coal is a vital contributor to the nation’s “baseload power.”
Following his executive order, Trump in early April granted a two-year exemption for nearly 70 coal plants from a Biden-era rule on air pollution that required them to reduce certain air pollutants. The Environmental Protection Agency (EPA) said that the move would “bolster coal-fired electricity generation, ensuring that our nation’s grid is reliable, that electricity is affordable for the American people, and that EPA is helping to promote our nation’s energy security.”
Shortly after, skepticism swirled surrounding whether or not the coal industry would be able to experience a revival, and whether it would be economically savvy to pursue one.
Energy generated from burning coal only powers roughly 16% of the U.S., though 40 states are dependent on coal, according to data from America’s Power. Energy generation through coal reached a record low in 2023, a Rhodium Group study reported. In 2021, however, coal was the primary source of energy for 15 states, according to the U.S. Energy Information Administration.
“We can lead the world in innovation,” Cook told the DCNF, referencing developments in natural gas and nuclear power as beneficial. “But you have to have coal. It has to be part of the mix.”
“It’s insane that we would shut down any base load power right now, when the demand for power is so high,” Cooke added. She further referenced the North American Electric Reliability Corporation’s 2024 report and research from Always on Energy Research that have projected rolling blackouts to begin across the U.S. by 2028.
As American energy demand continues to climb, the odds of impending blackouts would increase if the supply fails to grow at the same rate. The push toward renewable energy sources, in addition to stringent environmental regulations approved under former President Joe Biden, may have contributed to the slower growth of energy supply currently being experienced in the U.S.
Immediately after returning to the White House, Trump declared a national energy emergency, stating that “the integrity and expansion of our Nation’s energy infrastructure” is “an immediate and pressing priority for the protection of the United States’ national and economic security.”
“We looked at it and predict that there will be periods of blackouts of 24 hours or more,” Cook told the DCNF.
She further noted that “the cheapest power is the power you’ve already paid for,” arguing for the continuation of existing coal plants and the reopening of ones that have been closed.
“The only people who think coal is bad are those who view it through the lens of carbon emissions only, and that is no way to do energy policy,” Cooke said, arguing that it is necessary to adopt a “holistic” approach to energy generation, given the nation’s projected energy crisis.
“The American people need more energy, and the Department of Energy is helping to meet this demand by unleashing supply of affordable, reliable, secure energy sources – including coal,” Department of Energy Secretary Chris Wright said in an April 9 statement. “Coal is essential for generating 24/7 electricity,” he added, “but misguided policies from previous administrations have stifled this critical American industry. With President Trump’s leadership, we are cutting the red tape and bringing back common sense.”
The president has also said that he envisions greater job opportunities for coal miners with the industry’s expansion, stating during an April 8 press conference that the workers are “really well-deserving and great American patriots.”
“For years, people would just bemoan this industry and decimate the industry for absolutely no reason,” Trump added.
“Miners can wake up today for the first time in a decade and their spouses and families will realize they have a job tomorrow,” reporter Bob Aaron said in a video shared on X. They can “hear a president of the country announce that the war on coal is over.”
“I really anticipate a revival in the coal industry in the United States under Trump,” David Blackmon, an energy and policy writer who spent 40 years in the oil and gas business told the DCNF. He pointed to the Trump administration loosening restrictions on coal, adding that the Biden administration made it “near impossible” to build new coal plants due to aggressive climate rules.
Under Biden’s signature climate bill, the Inflation Reduction Act, the U.S. prioritized renewable energy generation and subsidization, resulting in a hefty price tag for taxpayers who had to foot the bill for several environmental initiatives, including hundreds of millions of dollars for solar panel construction in some of the nation’s least-sunny locations.
“The cheapest, the most affordable thing to do is to keep our current infrastructure online,” André Béliveau, Senior Manager of Energy Policy at the Commonwealth Foundation, told the DCNF. “Coal remains one of, if not, the most affordable energy source we have.”
“You’re forcing retirement of full-time energy sources and trying to replace them with part-time energy sources, and that’s not going to work,” Béliveau continued, referencing renewable energy avenues such as wind and solar. “We can’t run a full-time economy on part-time energy.”
From the Canadian Energy Centre
By Will Gibson
NeeStaNan project would use port location selected by Canadian government more than 100 years ago
Building a port on Hudson’s Bay to ship natural resources harvested across Western Canada to the world has been a long-held dream of Canadian politicians, starting with Sir Wilfred Laurier.
Since 1931, a small deepwater port has operated at Churchill, Manitoba, primarily shipping grain but more recently expanding handling of critical minerals and fertilizers.
A group of 11 First Nations in Manitoba plans to build an additional industrial terminal nearby at Port Nelson to ship liquefied natural gas (LNG) to Europe and potash to Brazil.
Courtesy NeeStaNan
Robyn Lore, a director with project backer NeeStaNan, which is Cree for “all of us,” said it makes more sense to ship Canadian LNG to Europe from an Arctic port than it does to send Canadian natural gas all the way to the U.S. Gulf Coast to be exported as LNG to the same place – which is happening today.
“There is absolutely a business case for sending our LNG directly to European markets rather than sending our natural gas down to the Gulf Coast and having them liquefy it and ship it over,” Lore said. “It’s in Canada’s interest to do this.”
Over 100 years ago, the Port Nelson location at the south end of Hudson’s Bay on the Nelson River was the first to be considered for a Canadian Arctic port.
In 1912, a Port Nelson project was selected to proceed rather than a port at Churchill, about 280 kilometres north.
The Port Nelson site was earmarked by federal government engineers as the most cost-effective location for a terminal to ship Canadian resources overseas.
Construction started but was marred by building challenges due to violent winter storms that beached supply ships and badly damaged the dredge used to deepen the waters around the port.
By 1918, the project was abandoned.
In the 1920s, Prime Minister William Lyon MacKenzie King chose Churchill as the new location for a port on Hudson’s Bay, where it was built and continues to operate today between late July and early November when it is not iced in.
Lore sees using modern technology at Port Nelson including dredging or extending a floating wharf to overcome the challenges that stopped the project from proceeding more than a century ago.
Port Nelson, Manitoba in 1918. Photo courtesy NeeStaNan
He said natural gas could travel to the terminal through a 1,000-kilometre spur line off TC Energy’s Canadian Mainline by using Manitoba Hydro’s existing right of way.
A second option proposes shipping natural gas through Pembina Pipeline’s Alliance system to Regina, where it could be liquefied and shipped by rail to Port Nelson.
The original rail bed to Port Nelson still exists, and about 150 kilometers of track would have to be laid to reach the proposed site, Lore said.
“Our vision is for a rail line that can handle 150-car trains with loads of 120 tonnes per car running at 80 kilometers per hour. That’s doable on the line from Amery to Port Nelson. It makes the economics work for shippers,” said Lore.
Port Nelson could be used around the year because saltwater ice is easier to break through using modern icebreakers than freshwater ice that impacts Churchill between November and May.
Lore, however, is quick to quell the notion NeeStaNan is competing against the existing port.
“We want our project to proceed on its merits and collaborate with other ports for greater efficiency,” he said.
“It makes sense for Manitoba, and it makes sense for Canada, even more than it did for Laurier more than 100 years ago.”
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