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Energy

Canada’s LNG, The Cleanest in the World – Resource Works

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Karen Ogen is the CEO of the First Nations LNG Alliance

From Resource Works – See More Stories from Resources Works Here

President Biden’s halt on new U.S. LNG projects offers Canada a chance to showcase its commitment to producing exceptionally clean LNG, highlighting innovative approaches to environmental sustainability and economic growth in the industry.

President Joe Biden’s freeze on approvals of new U.S. LNG-for-export projects has generated new hope for expansion of Canada’s LNG capacity and exports to follow.

From 2015 to 2022, the U.S. experienced an astronomical rise in LNG exports, soaring by an unprecedented 14,000%. Not a single Canadian LNG export project crossed the finish line to completion during this period, a stagnation that speaks volumes about the challenges faced by the industry north of the border. The explosive American growth showcased the country’s aggressive expansion into global energy markets, capitalizing on its abundant shale gas reserves and streamlined regulatory processes.

The Canadian sector’s slower progress, stymied by stringent environmental regulations and the complexities of developing export infrastructure in landlocked regions, starkly diverged from the American approach, which for years proceeded with minimal environmental considerations. If the U.S. LNG industry feels like it has handed lemons with Biden’s new climate test, for Canada it’s a chance to make lemonade.

Thanks to its careful approach, the Canadian LNG sector can now rightly show it is going to be exporting the cleanest LNG in the world when it finally does get the first shipment to market very soon.

Look at some numbers:

  • LNG Canada is projected to operate with an emissions intensity of 0.15 percent of carbon dioxide emissions per tonne of LNG produced, less than half the global industry average of 0.35 per cent per tonne.
  • The Cedar LNG project proposed by the Haisla Nation will have an emissions intensity of just 0.08 percent of CO2 per tonne of LNG. That’s less than a third of the global average.
  • And Woodfibre LNG will have an emissions intensity of just 0.04 percent of CO2 per tonne of LNG produced — and that’s less than one sixth of the global industry average.

Woodfibre LNG will also be a net-zero facility by 2027 – 23 years ahead of government net-zero regulation. Woodfibre will also be net zero during construction – a unique commitment for construction projects in Canada.

Ksi Lisims LNG, proposed by the Nisga’a Nation in B.C., promises to be operating with net-zero emissions within three years of the project’s first shipment. And Cedar LNG’s plans call for emissions to be near zero by 2030.

Woodfibre LNG points out: “We are the first e-drive LNG facility in Canada. This means our liquefaction process will be powered by renewable hydroelectricity, which is 14 times less emitting than a conventional liquefaction process powered by gas.”

Cedar LNG and Ksi Lisims LNG also plan to be all-electric, but that means B.C. Hydro will have to step up to provide the power and to transmit it to the two floating LNG production plants.

LNG Canada’s Phase One plant (which expects to go into production in 2025, but perhaps even late this year) will have to generate a portion of its cooling power by burning LNG. It would be happy to use 100% electricity, but there simply isn’t enough available. LNG Canada would certainly hope for all-electric drives for a Phase Two expansion, which is under consideration.

(Although the Site C dam will add to B.C. Hydro’s power supply in 2025, the province will still be short of electricity by 2030. So B.C. Hydro will soon put out a call for more “clean or renewable energy” from new resources. Hydro will also have to build new transmission lines or upgrade current ones, to get the power to where it is needed; and that includes LNG plants and mines.)

One reason why our emissions will be lower is our cooler climate. That means we use less energy in the process to chill natural gas to the required -161.5°C than do LNG plants on the warmer U.S. Gulf Coast or Mexican coast.

Canadian LNG companies and their natural-gas suppliers have also been working steadily to reduce emissions from wells, pipelines, and processing facilities.

Meanwhile, various studies have found that using LNG from B.C. to replace coal at Asian power-generating stations would reduce their greenhouse gas emissions by anywhere from 35 per cent to 55 percent.

And on top of all this, B.C. LNG has another advantage over U.S. LNG: The shipping distance from B.C. to prime Asian buyers is about 10 days compared to 20 days for shipments from U.S. Gulf Coast LNG plants. That can mean a reduction of 50-60% in emissions from the ships carrying the LNG.

“The distance between Canada and the key market is a huge advantage, where we are the same distance to Asia as Australia,” says Racim Gribaa of Global LNG Consulting Inc.

There is, too, another key reason why Canadian governments should look favourably on LNG exports: the benefits to Indigenous peoples who partner in, are involved in, or work for the projects.

As CEO Karen Ogen of the First Nations LNG Alliance puts it: “It’ll help boost our Canadian economy, it’ll help B.C.’s economy, and most specifically it will help the Indigenous people and our economy.

“If we’re the most disadvantaged population living in poverty, then this should help our people get out of poverty.”

And so, she adds: “Everyone wins if Canada can get into the game.”

Meanwhile, the forced pause south of the border might offer a moment of reflection for the industry, potentially providing Canada with an opportunity to reassess its own approach and perhaps find a middle ground that promotes both environmental sustainability and the economic viability of LNG exports.

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Energy

Global fossil fuel use rising despite UN proclamations

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From the Fraser Institute

By Julio Mejía and Elmira Aliakbari

Major energy transitions are slow and take centuries, not decades… the first global energy transition—from traditional biomass fuels (including wood and charcoal) to fossil fuels—started more than two centuries ago and remains incomplete. Nearly three billion people in the developing world still depend on charcoal, straw and dried dung for cooking and heating, accounting for about 7 per cent of the world’s energy supply (as of 2020).

At the Conference of the Parties (COP29) in Azerbaijan, António Guterres, the United Nations Secretary-General, last week called for a global net-zero carbon footprint by 2050, which requires a “fossil fuel phase-out” and “deep decarbonization across the entire value chain.”

Yet despite the trillions of dollars already spent globally pursuing this target—and the additional trillions projected as necessary to “end the era of fossil fuels”—the world’s dependence on fossil fuels has remained largely unchanged.

So, how realistic is a “net-zero” emissions world—which means either eliminating fossil fuel generation or offsetting carbon emissions with activities such as planting trees—by 2050?

The journey began in 1995 when the UN hosted the first COP conference in Berlin, launching a global effort to drive energy transition and decarbonization. That year, global investment in renewable energy reached US$7 billion, according to some estimates. Since then, an extraordinary amount of money and resources have been allocated to the transition away from fossil fuels.

According to the International Energy Agency, between 2015 and 2023 alone, governments and industry worldwide spent US$12.3 trillion (inflation-adjusted) on clean energy. For context, that’s over six times the value of the entire Canadian economy in 2023.

Despite this spending, between 1995 and 2023, global fossil fuel consumption increased by 62 per cent, with oil consumption rising by 38 per cent, coal by 66 per cent and natural gas by 90 per cent.

And during that same 28-year period, despite the trillions spent on energy alternatives, the share of global energy provided by fossil fuels declined by only four percentage points, from 85.6 per cent to 81.5 per cent.

This should come as no surprise. Major energy transitions are slow and take centuries, not decades. According to a recent study by renowned scholar Vaclav Smil, the first global energy transition—from traditional biomass fuels (including wood and charcoal) to fossil fuels—started more than two centuries ago and remains incomplete. Nearly three billion people in the developing world still depend on charcoal, straw and dried dung for cooking and heating, accounting for about 7 per cent of the world’s energy supply (as of 2020).

Moreover, coal only surpassed wood as the main energy source worldwide around 1900. It took more than 150 years from oil’s first commercial extraction for oil to reach 25 per cent of all fossil fuels consumed worldwide. Natural gas didn’t reach this threshold until the end of the 20th century, after 130 years of industry development.

Now, consider the current push by governments to force an energy transition via regulation and spending. In Canada, the Trudeau government has set a target to fully decarbonize electricity generation by 2035 so all electricity is derived from renewable power sources such as wind and solar. But merely replacing Canada’s existing fossil fuel-based electricity with clean energy sources within the next decade would require building the equivalent of 23 major hydro projects (like British Columbia’s Site C) or 2.3 large-scale nuclear power plants (like Ontario’s Bruce Power). The planning and construction of significant electricity generation infrastructure in Canada is a complex and time-consuming process, often plagued by delays, regulatory hurdles and substantial cost overruns.

The Site C project took around 43 years from initial feasibility studies in 1971 to securing environmental certification in 2014. Construction began on the Peace River in northern B.C. in 2015, with completion expected in 2025 at a cost of at least $16 billion. Similarly, Ontario’s Bruce Power plant took nearly two decades to complete, with billions in cost overruns. Given these immense practical, financial and regulatory challenges, achieving the government’s 2035 target is highly improbable.

As politicians gather at high-profile conferences and set ambitious targets for a swift energy transition, global reliance on fossil fuels has continued to increase. As things stand, achieving net-zero by 2050 appears neither realistic nor feasible.

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Energy

What does a Trump presidency means for Canadian energy?

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From Resource Works

Heather-Exner Pirot of the Business Council of Canada and the Macdonald-Laurier Institute spoke with Resource Works about the transition to Donald Trump’s energy policy, hopes for Keystone XL’s revival, EVs, and more. 

Do you think it is accurate to say that Trump’s energy policy will be the complete opposite of Joe Biden’s? Or will it be more nuanced than that?

It’s more nuanced than that. US oil and gas production did grow under Biden, as it did under Obama. It’s actually at record levels right now. The US is producing the most oil and gas per day that any nation has ever produced in the history of the world.

That said, the federal government in the US has imposed relatively little control over production. In the absence of restrictive emissions and climate policies that we have in Canada, most of the oil production decisions have been made based on market forces. With prices where they’re at currently, there’s not a lot of shareholder appetite to grow that significantly.

The few areas you can expect change: leasing more federal lands and off shore areas for oil and gas development; rescinding the pause in LNG export permits; eliminating the new methane fee; and removing Biden’s ambitious vehicle fuel efficiency standards, which would subsequently maintain gas demand.

I would say on nuclear energy, there won’t be a reversal, as that file has earned bipartisan support. If anything, a Trump Admin would push regulators to approve SMRs models and projects faster. They want more of all kinds of energy.

Is Keystone XL a dead letter, or is there enough planning and infrastructure still in-place to restart that project?

I haven’t heard any appetite in the private sector to restart that in the short term. I know Alberta is pushing it. I do think it makes sense for North American energy security – energy dominance, as the Trump Admin calls – and I believe there is a market for more Canadian oil in the USA; it makes economic sense. But it’s still looked at as too politically risky for investors.

To have it move forward I think you would need some government support to derisk it. A TMX model, even. And clear evidence of social license and bipartisan support so it can survive the next election on both sides of the border.

Frankly, Northern Gateway is the better project for Canada to restart, under a Conservative government.

Keystone XL was cancelled by Biden prior to the invasion of Ukraine in 2022. Do you think that the reshoring/friendshoring of the energy supply is a far bigger priority now?

It absolutely is a bigger priority. But it’s also a smaller threat. You need to appreciate that North America has become much more energy independent and secure than it has ever been. Both US and Canada are producing at record levels. Combined, we now produce more than the Middle East (41 million boe/d vs 38 million boe/d). And Canada has taken a growing share of US imports (now 60%) even as their import levels have declined.

But there are two risks on the horizon: the first is that oil is a non renewable resource and the US is expected to reach a peak in shale oil production in the next few years. No one wants to go back to the days when OPEC + had dominant market power. I think there will be a lot of demand for Canadian oil to fill the gap left by any decline in US oil production. And Norway’s production is expected to peak imminently as well.

The second is the need from our allies for LNG. Europe is still dependent on Russia for natural gas, energy demand is growing in Asia, and high industrial energy costs are weighing on both. More and cheaper LNG from North America is highly important for the energy security of our allies, and thus the western alliance as it faces a challenge from Russia, China and Iran.

Canada has little choice but to follow the US lead on many issues such as EVs and tariffs on China. Regarding energy policy, does Canada’s relative strength in the oil and gas sector give it a stronger hand when it comes to having an independent energy policy?

I don’t think we want an independent energy policy. I would argue we both benefit from alignment and interdependence. And we’ve built up that interdependence on the infrastructure side over decades: pipelines, refineries, transmission, everything.

That interdependence gives us a stronger hand in other areas of the economy. Any tariffs on Canadian energy would absolutely not be in American’s interests in terms of their energy dominance agenda. Trump wants to drop energy costs, not hike them.

I think we can leverage tariff exemptions in energy to other sectors, such as manufacturing, which is more vulnerable. But you have to make the case for why that makes sense for US, not just Canada. And that’s because we need as much industrial capacity in the west as we can muster to counter China and Russia. America First is fine, but this is not the time for America Alone.

Do you see provinces like Alberta and Saskatchewan being more on-side with the US than the federal government when it comes to energy?

Of course. The North American capital that is threatening their economic interests is not Washington DC; it’s Ottawa.

I think you are seeing some recognition – much belated and fast on the heels of an emissions cap that could shut in over 2 million boe of production! – that what makes Canada important to the United States and in the world is our oil and gas and uranium and critical minerals and agricultural products.

We’ve spent almost a decade constraining those sectors. There is no doubt a Trump Admin will be complicated, but at the very least it’s clarified how important those sectors are to our soft and hard power.

It’s not too late for Canada to flex its muscles on the world stage and use its resources to advance our national interests, and our allies’ interests. In fact, it’s absolutely critical that we do so.

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