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Canadian Energy Centre

Canada should ‘shout from the rooftops’ its ability to reduce emissions with LNG

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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

Government can work with allies and customers to receive credit for LNG’s environmental benefits, advocate says

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 thats 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 Russias 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.   

Canadas 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 worlds 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 Indias electricity. According to the IEA, by 2040 Indias 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. Its a safe and reliable opportunity. People are looking for a country like Canada to be able to provide that.”  

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Alberta

Heavy-duty truckers welcome new ‘natural gas highway’ in Alberta

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Clean Energy Fuels CEO Andrew Littlefair, Tourmaline CEO Mike Rose, and Mullen Group chairman Murray Mullen attend the opening of a new Clean Energy/Tourmaline compressed natural gas (CNG) fuelling station in Calgary on Oct. 22, 2024. Photo courtesy Tourmaline

From the Canadian Energy Centre

By Deborah Jaremko

New compressed natural gas fueling stations in Grande Prairie and Calgary join new stop in Edmonton

Heavy-duty truckers hauling everything from restaurant supplies to specialized oilfield services along one of Western Canada’s busiest corridors now have more access to a fuel that can help reduce emissions and save costs.

Two new fuelling stations serving compressed natural gas (CNG) rather than diesel in Grande Prairie and Calgary, along with a stop that opened in Edmonton last year, create the first phase of what proponents call a “natural gas highway”.

“Compressed natural gas is viable, it’s competitive and it’s good for the environment,” said Murray Mullen, chair of Mullen Group, which operates more than 4,300 trucks and thousands of pieces of equipment supporting Western Canada’s energy industry.

Right now, the company is running 19 CNG units and plans to deploy another 15 as they become available.

“They’re running the highways right now and they’re performing exceptionally well,” Mullen said on Oct. 22 during the ribbon-cutting ceremony opening the new station on the northern edge of Calgary along Highway 2.

“Our people love them, our customers love them and I think it’s going to be the way for the future to be honest,” he said.

Heavy-duty trucks at Tourmaline and Clean Energy’s new Calgary compressed natural gas fuelling station. Photo courtesy Tourmaline

According to Natural Resources Canada, natural gas burns more cleanly than gasoline or diesel fuel, producing fewer toxic pollutants and greenhouse gas emissions that contribute to climate change.

The two new CNG stops are part of a $70 million partnership announced last year between major Canadian natural gas producer Tourmaline and California-based Clean Energy Fuels.

Their deal would see up to 20 new CNG stations built in Western Canada over the next five years, daily filling up to 3,000 natural gas-fueled trucks.

One of North America’s biggest trucking suppliers to businesses including McDonald’s, Pizza Hut, Subway and Popeye’s says the new stations will help as it expands its fleet of CNG-powered vehicles across Canada.

Amy Senter, global vice-president of sustainability with Illinois-based Martin Brower, said in a statement that using more CNG is critical to the company achieving its emissions reduction targets.

For Tourmaline, delivering CNG to heavy-duty truckers builds on its multi-year program to displace diesel in its operations, primarily by switching drilling equipment to run on natural gas.

Between 2018 and 2022, the company displaced the equivalent of 36 Olympic-sized swimming pools worth of diesel that didn’t get used, or the equivalent emissions of about 58,000 passenger vehicles.

Tourmaline CEO Mike Rose speaks to reporters during the opening of a new Tourmaline/Clean Energy compressed natural gas fuelling station in Calgary on Oct. 22, 2024. Photo courtesy Tourmaline

Tourmaline CEO Mike Rose noted that the trucking sector switching fuel from diesel to natural gas is gaining momentum, notably in Asia.

A “small but growing” share of China’s trucking fleet moving to natural gas helped drive an 11 percent reduction in overall diesel consumption this June compared to the previous year, according to the latest data from the U.S. Energy Information Administration.

“China’s talking about 30 percent of the trucks sold going forward are to be CNG trucks, and it’s all about reducing emissions,” Rose said.

“It’s one global atmosphere. We’re going to reduce them here; they’re going to reduce them there and everybody’s a net winner.”

Switching from diesel to CNG is “extremely cost competitive” for trucking fleets, said Clean Energy CEO Andrew Littlefair.

“It will really move the big rigs that we need in Western Canada for the long distance and heavy loads,” he said.

Tourmaline and Clean Energy aim to have seven CNG fuelling stations operating by the end of 2025. Construction is set to begin in Kamloops, B.C., followed by Fort McMurray and Fort St. John.

“You’ll have that Western Canadian corridor, and then we’ll grow it from there,” Littlefair said.

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Canadian Energy Centre

Alberta Indigenous energy ownership driving increased economic activity

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In December 2023, the Alberta Indigenous Opportunities Corporation provided a $150 million loan guarantee to support the 12 Indigenous Communities of Wapiscanis Waseskwan Nipiy Limited Partnership (including the Peerless Trout First Nation) in financing an equity investment in oil and gas midstream infrastructure in the Clearwater play in Northern Alberta. Photo courtesy AIOC

From the Canadian Energy Centre

By Will Gibson

‘We live in a new world, and I’m excited about the possibilities’

Five pristine lakes sit in and around the Peerless Trout First Nation in the unbroken boreal forest of north-central Alberta about 200 kilometres north of Slave Lake.

When asked about the fishing, Tyler Letendre smiles wryly. “It lives up to the name,” says the Nation’s director of operations and economic development officer. “It’s peerless.”

The community’s leadership is exploring the idea of building a lodge to lure recreational anglers from across North America to reel in the large pike, trout and walleye that inhabit the dark blue waters in those lakes.

After joining the Clearwater Infrastructure Limited Partnership in December 2023 with 11 other Indigenous communities and Tamarack Valley Energy, they have the financial clout to develop a resort.

“Joining the partnership has been a game changer for our nation, 100 per cent. We won’t compromise on treaty rights, but we are big fans of economic growth,” says Letendre.

“The money provided by the federal government to First Nations isn’t enough to sustain the programs and infrastructure required so we have to generate our own income. Equity deals like Clearwater do that,” he says.

“We are shareholders along with major institutions. We now have banks who want to come invest in our communities. We live in a new world, and I’m excited about the possibilities.”

The Peerless Trout First Nation is located about 200 kilometres north of Slave Lake, Alberta. Photo courtesy Peerless Lake First Nation

The growing number and value of Indigenous equity ownership deals in Alberta is helping fuel stronger participation in the province’s economy, according to a recently released report from ATB Financial and MNP.

The study concluded that total Indigenous economic activity in Alberta grew by a substantial 42 per cent between 2019 and 2023.

Last year, Indigenous-owned businesses generated $5.25 billion in economic output, $380 million in tax revenues and $1.33 billion in labour income from 25,800 full-time jobs.

The resource sector has an outsized impact in this area as its relationship with First Nations and Métis communities in Alberta has evolved and grown.

“The fastest growing and largest opportunities for Indigenous communities in Alberta come from the resource sector,” says Justin Bourque, president of Âsokan Generational Developments, a consultancy that specializes in partnerships between Indigenous communities and industry.

He says the evolution of the relationship between Indigenous communities and the resource sector has mirrored the broader progress of reconciliation.

“Our entire society is on a journey of reconciliation between Indigenous and non-Indigenous communities. The engagement and relationship between the resource industry and Indigenous has continued to evolve.”

In recent years, particularly following the creation of the Alberta Indigenous Opportunities Corporation (AIOC) in 2019, these relationships have increasingly moved from short-term benefits to long-term legacies through equity ownership deals like Peerless Trout’s agreement with Tamarack Energy.

Justin Bourque, president of Âsokan Generational Developments, pictured on his trap line with the Long Lake oil sands facility in the background. Photo for Canadian Energy Centre

ATB highlighted the Astisiy project in the oil sands region, a Cree word meaning “thread from sinew” that is used for Indigenous beading.

In September 2021, Suncor Energy and the AIOC enabled eight Indigenous communities to acquire 15 per cent ownership of the Northern Courier Pipeline, a 90-kilometre system that transports bitumen from the Fort Hills mine to the East Tank Farm north of Fort McMurray.

The community partners are projected to receive $16 million in annual payments from the deal.

Bourque’s Willow Lake Métis Nation has used its portion of the revenues to purchase a 205-acre parcel southeast of Fort McMurray, giving the community land to call its own.

“Ownership and partnership is the next logical evolution of the relationship between Indigenous communities and the energy sector,” says Bourque.

“Before Indigenous communities had the opportunity to invest in these resource assets, a lot of the economic value out of these investments would flow to institutional investors along with the corporation,” he says.

“By having some of those benefits flow into Indigenous communities, it builds both resilience by giving them financial sovereignty and allows that community to address priorities and needs determined by them, not somebody in Ottawa.”

Opportunities are now happening at the Peerless Trout First Nation.

“Our chief and council are in the best position to decide what works for the 900 members of Peerless Lake when it comes to how to invest the monies from the partnership, whether that’s in housing, education, health care, more post-secondary scholarships or building a hockey arena or community facility,” Letendre says.

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