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Canadian Energy Centre

Completing Trans Mountain, Indigenous LNG: What to watch in Canadian energy in 2024

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Workers lay pipe during construction of the Trans Mountain pipeline expansion on farmland in Abbotsford, B.C., on May 3, 2023. CP Images photo

From the Canadian Energy Centre

By Deborah Jaremko

Activity promises to highlight Canada’s position as a world supplier of choice

It’s going to be a big year for Canadian energy, with major milestones anticipated that will transform Canada from a supplier with a single customer (the United States) to a global player.  

Global demand for oil and gas is expected to stay strong in the decades ahead as the world works to reduce emissions, still supplying nearly half of energy needs in 2050, according to the International Energy Agency.  

Activity in 2024 promises to highlight Canada’s position as a supplier of choice with a leading approach to reducing emissions and engaging Indigenous communities.  

Here are five things to watch.  

5. Start-Up Activities for LNG Canada 

Construction of the LNG Canada export terminal is now more than 90 per cent complete. Photo courtesy LNG Canada

Against the backdrop of surging liquefied natural gas (LNG) demand – Asia’s consumption hit a record 26.6 million tonnes in December – Canada’s first LNG export terminal is preparing for start-up. 

LNG Canada will have among the world’s lowest emissions for LNG supply, at 0.15 tonnes of CO2 equivalent per tonne of LNG, less than half the global average.  

This year, the terminal at Kitimat, B.C. will test and fine-tune equipment and the process of producing LNG will begin, the company says.  

The start-up program will take more than one year to complete.  

Moving into the final stages at LNG Canada follows the recent completion of the Coastal GasLink Pipeline, connecting natural gas supply from northeast B.C.  

4. Progress Toward Oil Sands Net Zero 

The Pathways Alliance has extensive work underway on the environmental program for its proposed CCS project, involving 135 experts ranging from aquatic and wildlife biologists to archeologists and paleontologists who have spent more than 1,600 hours in the field working to minimize environmental disturbance. Photo courtesy Pathways Alliance

Major regulatory applications are expected in 2024 for one of the world’s largest proposed carbon capture and storage (CCS) networks, located in Canada’s oil sands.  

The project would connect CO2 captured at an initial 14 oil sands facilities by pipeline to a shared hub for storage deep underground.  

It is the foundation of the plan by the Pathways Alliance – companies representing 95 per cent of oil sands production – to reduce emissions from operations by nearly one third by 2030 on the way to net zero by 2050. 

Pathways has said that after regulatory approvals are complete, CO2 injection and storage could begin by late 2026.

3. Growth in Indigenous Ownership

Eva Clayton, back left, President of the Nisga’a Lisims Government (joint venture owner of the proposed Ksi Lisims LNG project), Crystal Smith, back right, Haisla Nation Chief Councillor (joint venture owner of proposed Cedar LNG project), and Karen Ogen, front right, CEO of the First Nations LNG Alliance pose for a photograph on the HaiSea Wamis zero-emission tugboat outside the LNG2023 conference, in Vancouver, B.C., Monday, July 10, 2023. CP Images photo

The rising tide of Indigenous ownership in Canadian energy is likely to continue growing in 2024.  

From LNG terminals to oil and gas pipelines, natural gas-fired power plants and CCS projects to reduce emissions, more Indigenous communities are taking on a leadership role. 

Since 2022, more than 75 First Nations and Métis communities in Alberta and British Columbia have agreed to ownership stakes in energy projects including the Coastal GasLink pipeline and major oil sands transportation networks.   

Indigenous loan guarantee programs like those offered by the Alberta Indigenous Opportunities Corporation (AIOC) are helping communities invest.  

So far, the AIOC has underwritten more than $500 million in loan guarantees. This year it has $3 billion of support available, up from $2 billion in 2023.  

Details of a proposed national loan guarantee program to help facilitate Indigenous equity ownership in major resource projects are also expected in the federal budget this spring.

2. Green Light for Cedar LNG 

Rendering courtesy Cedar LNG

Owners of the world’s first Indigenous-led LNG project – a floating terminal at Kitimat, B.C. –plan to make the final decision to proceed within the next three months 

Cedar LNG, owned jointly by the Haisla Nation and Pembina Pipeline Corporation, would have capacity to export three million tonnes of LNG per year, primarily to Asian markets.  

With emissions intensity of 0.08 tonnes of CO2 equivalent per tonne of LNG, it would be one of the lowest carbon footprint LNG projects in the world.   

In early January, the partners reached the critical milestone of selecting the primary contractors to engineer, build and deliver the floating LNG unit.  

A final investment decision is now expected in the first quarter of 2024. 

1. Completion of the Trans Mountain Pipeline Expansion 

Worker at Trans Mountain’s Edmonton terminal. Photo courtesy Trans Mountain Corporation

After more than 12 years in the making, Canada’s first large-scale access to growing global oil markets is now weeks away from completion. 

The existing Trans Mountain pipeline system from Edmonton, Alberta to Burnaby, B.C. runs consistently at maximum capacity with producers seeking more export space than is available.  

The expansion will increase service by about 600,000 barrels per day, bringing more Canadian oil to customers around the world, primarily on the U.S. west coast and Asia.  

After the recent resolution of a regulatory delay, Trans Mountain can now proceed with the last two per cent of construction.  

The company anticipates oil will flow on the expanded line before the end of March.  

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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