A Wealth-Creating Way of Reducing Global CO2 Emissions

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.

All I need is the air that I breathe: Switching from coal to natural gas for generating electricity and heat can virtually eliminate toxic air particulates – which is urgently needed in polluted Asian cities such as Anyang City, China (pictured at top left) – while cutting carbon dioxide emissions in half for the same unit of output. The U.S. track record from fuel-switching (depicted in the graph at top right) proves this point. But for now, Asian countries keep piling on coal-fired power plants. (Source of top left photo: vtpoly, licensed under CC BY-NC-ND 2.0)

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.

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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.

Among numerous large liquefied natural gas (LNG) projects that were once proposed for Canada, only the LNG Canada facility at Kitimat, B.C. (top) has survived the Byzantine regulatory process and the Government of Canada’s increasing hostility to LNG; it is currently nearing completion and may load its first ship by year-end. At bottom, the Coastal GasLink pipeline will supply natural gas from northeast B.C.’s producing fields. (Sources of photos: (top) LNG Canada; (bottom) Coastal GasLink)

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 CO₂emissions 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.

Efficient and realistic: The completion of LNG Canada’s Phase 1 and Phase 2 by 2032 is expected to reduce greenhouse gas emissions in Asia by the same amount as removing 18 million gasoline-powered cars from Canadian roads – but without the staggering cost and disruption of forcing Canadians into electric vehicles. (Source of photo: James D. Schwartz, licensed under CC BY-ND 2.0)

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.

The Ksi Lisims LNG project (pictured in the digital rendering at left), a floating facility proposed to be built north of Prince Rupert and to operate on hydroelectricity, has faced strong objections over its natural gas production process, with the B.C. Wilderness Committee (right) calling on B.C.’s NDP government to veto any further LNG development. (Source of right photo: Behda Mahichi, retrieved from Wildeness Commitee)

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.

Canadian Conservative leader Pierre Poilievre’s “Axe the Tax” campaign can be part of a much-needed conversation about how to actually reduce CO₂ emissions and boost the country’s economy; LNG export could be part of both solutions. (Source of photo: The Canadian Press/Paul Daly)

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.

Related Topics:#C2CJournal #CanadaLNG #GwynMorgan #WealthCreatingWayOfReducingGlobalCO2Emissions feature

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Alberta

Alberta’s number of inactive wells trending downward

Published on November 7, 2025

Todayville

Aspenleaf Energy vice-president of wells Ron Weber at a clean-up site near Edmonton.

From the Canadian Energy Centre

By Deborah Jaremko

Aspenleaf Energy brings new life to historic Alberta oil field while cleaning up the past

In Alberta’s oil patch, some companies are going beyond their obligations to clean up inactive wells.

Aspenleaf Energy operates in the historic Leduc oil field, where drilling and production peaked in the 1950s.

In the last seven years, the privately-held company has spent more than $40 million on abandonment and reclamation, which it reports is significantly more than the minimum required by the Alberta Energy Regulator (AER).

CEO Bryan Gould sees reclaiming the legacy assets as like paying down a debt.

“To me, it’s not a giant bill for us to pay to accelerate the closure and it builds our reputation with the community, which then paves the way for investment and community support for the things we need to do,” he said.

“It just makes business sense to us.”

Aspenleaf, which says it has decommissioned two-thirds of its inactive wells in the Leduc area, isn’t alone in going beyond the requirements.

Producers in Alberta exceeded the AER’s minimum closure spend in both years of available data since the program was introduced in 2022.

That year, the industry-wide closure spend requirement was set at $422 million, but producers spent more than $696 million, according to the AER.

In 2023, companies spent nearly $770 million against a requirement of $700 million.

Alberta’s number of inactive wells is trending downward. The AER’s most recent report shows about 76,000 inactive wells in the province, down from roughly 92,000 in 2021.

In the Leduc field, new development techniques will make future cleanup easier and less costly, Gould said.

That’s because horizontal drilling allows several wells, each up to seven kilometres long, to originate from the same surface site.

“Historically, Leduc would have been developed with many, many sites with single vertical wells,” Gould said.

“This is why the remediation going back is so cumbersome. If you looked at it today, all that would have been centralized in one pad.

“Going forward, the environmental footprint is dramatically reduced compared to what it was.”

During and immediately after a well abandonment for Aspenleaf Energy near Edmonton. Photos for the Canadian Energy Centre

Gould said horizontal drilling and hydraulic fracturing give the field better economics, extending the life of a mature asset.

“We can drill more wells, we can recover more oil and we can pay higher royalties and higher taxes to the province,” he said.

Aspenleaf has also drilled about 3,700 test holes to assess how much soil needs cleanup. The company plans a pilot project to demonstrate a method that would reduce the amount of digging and landfilling of old underground materials while ensuring the land is productive and viable for use.

Crew at work on a well abandonment for Aspenleaf Energy near Edmonton. Photo for the Canadian Energy Centre

“We did a lot of sampling, and for the most part what we can show is what was buried in the ground by previous operators historically has not moved anywhere over 70 years and has had no impact to waterways and topography with lush forestry and productive agriculture thriving directly above and adjacent to those sampled areas,” he said.

At current rates of about 15,000 barrels per day, Aspenleaf sees a long runway of future production for the next decade or longer.

Revitalizing the historic field while cleaning up legacy assets is key to the company’s strategy.

“We believe we can extract more of the resource, which belongs to the people of Alberta,” Gould said.

“We make money for our investors, and the people of the province are much further ahead.”

Energy

Canada Cannot Become an Energy Superpower With its Regulatory Impediments

Published on November 7, 2025

Todayville

From Energy Now

By Yogi Schulz

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Prime Minister Carney wants Canada to become an energy superpower. It’s a worthy goal because Canada has rich, undeveloped energy resources. Many Canadians happily endorse his goal because it achieves these benefits:

Economic growth and prosperity for Canadians.
Reduce the adverse consequences of American tariffs.
Additional tax revenue that reduces the mountain of Canadian public debt.
Improved energy security and reduced cost for Canadians in Eastern Canada.
Improved energy security for Canada’s international energy customers.
Alternative energy supply options for NATO allies to replace Russian energy.
Greenhouse gas (GHG) reductions that occur when Canadian high ESG energy replaces other energy sources.

However, Canada can achieve these benefits only by overcoming multiple regulatory impediments, including those described below.

Interprovincial trade barriers

Interprovincial trade barriers impose costs on all industries. Consumers, not companies, bear these costs. A Macdonald-Laurier Institute study estimated that eliminating interprovincial trade barriers could boost Canada’s economy by between 4.4 and 7.9 percent over the long term or between $110 and $200 billion per year. Examples of interprovincial trade barriers that affect the oil and gas industry include:

Pools that cross provincial boundaries: Producers must build two higher-cost processing facilities, one on each side of the border.
Gathering systems that cross provincial boundaries: Producers must obtain a federal pipeline permit, which requires a multi-year approval process, to build a pipeline that crosses a provincial border.
Many minor technical differences: Provinces set their own rules, standards, and certifications for topics such as vehicle weight, length, and safety protocols. These differences increase producer operating costs.
Professional licensing: Individuals, such as those in skilled trades, must undergo a lengthy, costly process to obtain a license to work in another province, even if they are already certified elsewhere.
Administrative hurdles: Producers operating in multiple provinces face a complex web of permit, license, and reporting requirements that vary from one province to the next.
Geographical barriers: The dimensional limitations of tunnels in the Rocky Mountains create a shipping barrier for producers, adding costs when importing large facility components.

For Canada to achieve energy superpower status, reducing interprovincial trade barriers will be necessary to enhance its competitiveness. The Canadian Free Trade Agreement (CFTA) and the Free Trade and Labour Mobility in Canada Act are encouraging federal initiatives to reduce interprovincial trade barriers. The outrageous Trump tariffs have also provided some provinces with a new incentive to lower or eliminate some of their barriers. However, the “mutual recognition” approach may be more symbolic than substantive.

Provincial regulatory incompatibilities

Oil and natural gas producers face slightly different regulations in every province and territory. These incompatibilities incur avoidable operational costs and erode Canada’s competitiveness in the global investment capital market.

Energy industry regulators operate in every province and territory where oil and natural gas are produced. These regulators have independently produced large volumes of regulations that are similar but far from identical. Most of these regulations are derived from those first written in Alberta and various US jurisdictions. Alberta created the first Canadian energy industry regulator because most of the resources are located within its borders.

So far, energy industry regulators have only harmonized the following:

Canadian Standards Association (CSA) Z662 Oil and Gas Pipeline Systems. British Columbia, Alberta and Saskatchewan have adopted this standard.
Directive 017 – Measurement Requirements for Oil and Gas Operations. Alberta and Saskatchewan have adopted this directive.

Unfortunately, only these two documents, among many dozens, have been harmonized. Parochial thinking appears to be a significant impediment to more harmonization. For example:

Some Canadian regulators participate in the Western Regulators Forum (WRF). However, the WRF has yet to harmonize any regulations.
Over two decades ago, the Alberta Department of Energy and Minerals sponsored the development of Petrinex with a vision of energy industry-government data management cooperation across multiple provinces. However, the vision has not been realized because the provinces built individual, incompatible systems to protect their turf.

“Producers write more government submissions than technical papers – ten times more. Submissions consume significant effort from technical professionals and include specific oil and gas technical information such as fracking schemes, SAGD operations or facility modifications,” says Granger Low, of Regaware Systems Ltd. “When producers can easily search previous submissions using the artificial intelligence of AppIntel AI, they take advantage of Alberta’s uniquely remarkable oil and gas technical advances, and avoid the delays related to over-regulation and resubmission.”

For Canada to achieve energy superpower status, harmonizing more provincial and territorial oil and natural gas industry regulations will be required to improve its competitiveness.

Provincial regulatory issues

Dealing with regulations is a cost that all oil and natural gas producers bear. Regulations are desirable and necessary to a point. Issues where the energy industry regulators could improve performance include:

Reducing and simplifying the enormous number of directives. The issue is that the directives contain extensive related best practices that, while valuable, become indistinguishable from regulatory requirements.
Reducing and simplifying the permit application processes for wells, facilities and pipelines. How the current complexity helps regulators fulfill their mandate is unclear.
Simplifying reporting and compliance assessment would reduce administrative costs for both producers and regulators.
Eliminating the APMC in Alberta would reduce producers’ administrative costs and increase Crown royalty revenue. This article describes the details: It’s Time to Retire the APMC – The APMC Mandate Has Expired, Its Cost is Now Avoidable.
Failing to address data quality issues for wells, digital well logs, and cores undermines one of Alberta’s competitive advantages.

For Canada to achieve energy superpower status, reducing the cost of regulatory applications and compliance is a component of improving its competitiveness.

Taxation disparities

Oil and natural gas producers encounter taxation disparities across provinces. The following disparities affect geographic investment decisions:

Crown Royalty and Freehold Production Tax calculations and related settlement processes vary considerably by province and type of production.
Corporate income tax rates and reporting vary by province.
The combined GST and PST/HST rate varies from 5% in Alberta to 15% in some other provinces.
Oil and natural gas facility property tax rates and reporting vary by province.

Simplifying these taxation disparities would reduce administrative costs for both producers and the Crown. The combination of taxes and fees that producers pay in Canada is enough to cause some to invest in more profitable jurisdictions.

For Canada to achieve energy superpower status, reducing and harmonizing taxation disparities is a prerequisite to encourage more investment in production.

Additional costs that every producer accepts

Overcoming impediments is particularly important to Canadian competitiveness because the Canadian oil and gas industry incurs higher operating costs than the industry does in most other jurisdictions. The higher cost categories include:

Wages and benefits.
Health, safety and environmental standards.
Abandonment standards.
Disclosure of intellectual property in publicly-accessible permit application documents.
Lower staff productivity and added heating costs due to lower winter temperatures.

No one is suggesting lowering these Canadian standards and expectations. However, the associated costs increase the urgency of reducing other regulatory impediments to maintain Canada’s competitiveness.

Conclusions

Canada has the resources to become an energy superpower and realize the immense economic, strategic, and environmental benefits that are available. Policymakers can contribute by harmonizing regulations and removing interprovincial trade barriers to ensure investment in Canadian energy is competitive on world financial markets.

Yogi Schulz has over 40 years of experience in information technology in various industries. He writes for Engineering.com, EnergyNow.ca, EnergyNow.com and other trade publications. Yogi works extensively in the petroleum industry to select and implement financial, production revenue accounting, land & contracts, and geotechnical systems. He manages projects that arise from changes in business requirements, the need to leverage technology opportunities, and mergers. His specialties include IT strategy, web strategy, and systems project management.