The sudden, newfound support for LNG projects in Canada is truly remarkable.

What’s all this? Green-leaning governments, federal and provincial, suddenly speaking in favour of liquefied natural gas (LNG) and other resource development?

It began with British Columbia Premier David Eby telling Bloomberg News that he’s optimistic that LNG Canada’s LNG-for-export plant at Kitimat, BC can be expanded in a way that satisfies its investors but without supercharging the province’s emissions.

This came as LNG Canada was reported continuing to look into possible Phase Two expansion. Such expansion would double the plant’s output of LNG to 14 million tonnes a year.

Industry reports say LNG Canada has been discussing with prime contractors their potential availability down the road. A key, though, is whether and how B.C. can provide enough electrical power.

The LNG Canada plant now is going through a pre-production testing program, and has finished welding on its first “train” (production line). LNG Canada is expected to go into full operation in mid-2025. And Malaysia’s Petronas (a 25% partner) has added three new LNG carriers to its fleet, to gear up for LNG Canada’s launch.

The Eby story noted that he has also thrown his support behind other projects — including hydrogen production and an electric-vehicle battery recycling plant — to create jobs and keep B.C.’s economy growing at a challenging time.

Then came Ottawa’s minister of innovation, science and industry, François-Philippe Champagne, who visited the Haisla Nation in B.C. to support its Cedar LNG project with partner Pembina Pipeline Corp.

Champagne declared: “This is the kind of project we want to see, where there are all the elements supporting attracting investments in British Columbia.”

His government news release said: “This project presents an exciting opportunity for Canada, as it is expected to commercialize one of the lowest-carbon-intensity liquified natural gas (LNG) facilities in the world and represents the largest Indigenous-majority-owned infrastructure project in Canada.”

Champagne went on to tell The Terrace Standard that “We are in active conversations with Pembina and Haisla First Nations. We are saying today that we will support the project, but discussions are still ongoing.’

There had already been reports that Export Development Canada is set to lend Cedar LNG $400-$500 million.

And then came federal minister Jonathan Wilkinson, announcing to the national Energy and Mines Ministers’ Conference in Calgary that Ottawa “will get clean growth projects built faster” by streamlining regulatory processes and moving to “make good approvals faster.”
Wilkinson has long talked, too, of streamlining and speeding up approval processes for resource projects in general, especially for mining for critical minerals. “(We’re) looking at how do we optimise the regulatory and permanent processes so you can take what is a 12- to 15-year process and bring it down to maybe five.”

The Canada Energy Regulator now is inviting input on its plans to improve the efficiency and predictability of project reviews.

All this as Deloitte Canada consultants reported that “the natural gas sector is poised for significant growth, driven by ongoing LNG projects and rising demand for gas-fired electricity generation in Canada.”

And energy giant BP said that under its two new energy ‘scenarios’, world demand for LNG in 2030 grows by 30-40% above 2022 levels, then increases by more than 25% over the subsequent 20 years.

Wilkinson earned pats on the back from some provincial ministers at the Calgary conference, but Alberta’s minister of energy and minerals, Brian Jean, aired concerns over how Ottawa’s new “greenwashing” law would impact the oil and gas sector.

Under it, companies (and individuals) must prove the truth of their public statements on climate benefits of their products or programs, or face potential millions in fines. But the ground rules for this legislation have not yet been announced.

(Jean was not alone. Other critics included CEO Karen Ogen of the First Nations LNG Alliance, who said the new law “could be used as one more tool to discourage resource companies that might seek Indigenous partnerships, and to obstruct Indigenous investment in energy projects, and frustrate Indigenous benefits from resource projects.”)

Wilkinson replied that the Competition Bureau needs to provide information so people understand how the rules apply and what is actionable.

“I think once that is done, this will be, perhaps, a bit of a different conversation. I would expect that the guidance will be something like folks simply have to have a good faith basis to believe what they’re saying. And assuming that is true, I think the sector probably will calm down.”

No pats on the back for Ottawa, though, from the mining industry or the oil-and-gas sector.

Aiming to combat China’s efforts to corner the market in critical minerals, Canada is making it harder for foreign firms to take over big Canadian mining companies. Major mining shares quickly dropped in value.

And Heather Exner-Pirot of the Macdonald-Laurier Institute and special advisor to the Business Council of Canada, says: “We produced less critical minerals last year than we did in 2019. We’re producing less copper, less nickel, less platinum, less cobalt, all these things. And the investment has not picked up; in real dollars it’s almost half of what it was in 2013 . . . and the regulatory system is still a huge barrier to that development.”

On top of that, the petroleum sector has long protested that federal moves to limit oil and gas emissions will, in practice, limit production.

While governments signalled support for LNG, supporters of natural-resource development quickly sent clear messages to governments of all levels.

Calgary-based Canada Action, for one, reminded governments that the oil and gas sector is projected to generate more than in $1.1 trillion in revenue to governments from 2000 through 2032. And that the oil and gas sector supports nearly 500,000 direct and indirect jobs across the country.

Then the industry-supporting Fraser Institute pointed out that business investment in Canada’s extractive sector (mining, quarrying, and oil and gas) has declined substantially since 2014.

“In fact, adjusted for inflation, business investment in the oil and gas sector has declined 52.1 per cent since 2014, falling from $46.6 billion in 2014 to $22.3 billion in 2022. In percentage terms the decline in non-conventional oil extraction was even larger at 71.2 percent, falling from $37.3 billion in 2014 to $10.7 billion in 2022. . . .

“One of the major challenges facing Canadian prosperity are regulatory barriers, particularly in the oil and gas sector.”

Over to government, then, to reduce those barriers.

Following the recent positive moves listed above from two levels of government, there’s an obvious question: Would there happen to be federal and provincial elections in the offing?

Yes: B.C. will hold its next general election on or before October 19. And the feds go to the polls for an election on or before October 20.

Stand by for more promises.

Related Topics:#BCPremierDavidEby #CanadaLNG #LNGCanada #ResourceWorks LiquefiedNaturalGas PembinaPipelineCorp.

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Energy

What does a Trump presidency means for Canadian energy?

Published on November 20, 2024

Todayville

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.

Energy

What Will Be the Future of the Keystone XL Pipeline Under President Trump?

Published on November 18, 2024

Todayville

From EnergyNow.ca

By Terry Winnitoy, EnergyNow

The Keystone XL Pipeline, proposed in 2008, was designed to transport Canadian crude oil from Alberta to refineries in the United States, specifically to Steele City, Nebraska, and onward to refineries in Illinois and Texas, as well as to an oil pipeline distribution center in Cushing, Oklahoma.

Spanning approximately 1,179 miles and designed to transport up to 830,000 barrels of oil per day, the pipeline promised significant economic and energy security benefits. However, it became a focal point of political and environmental controversy, leading to its eventual cancellation by Presidents Obama and Biden.

Here’s a brief look at its history, the reasons it should have been built, the political dynamics that led to its cancellation and will President-elect Trump revive it?

Why the Keystone XL Pipeline Should Have Been Built

Economic and Job Creation

The pipeline was projected to create thousands of construction jobs and several hundred permanent jobs, providing a significant boost to the economy. It was also expected to stimulate economic activity through the development of related infrastructure and services.

Energy Security

By facilitating the efficient transport of a large volume of oil from a stable and friendly neighboring country, the pipeline would have reduced American dependence on oil imports from more volatile regions, enhancing national energy security.

Environmental Safety

Pipelines are generally safer and more environmentally friendly for transporting oil compared to rail or truck, with lower risks of spills and accidents. The Keystone XL was designed with the latest technology to minimize leaks and environmental impact.

Regulatory Oversight

The project underwent extensive environmental reviews and was subject to strict regulatory standards to ensure it adhered to environmental protection and safety measures.

Political Reasons for Cancellation

Environmental Activism

The pipeline became a symbol for environmentalists who opposed further development of fossil fuel infrastructure. They argued it would contribute to climate change by enabling the extraction and consumption of oil sands, which are more carbon-intensive than other oil sources.

Obama’s Cancellation

President Obama rejected the pipeline in 2015, citing environmental concerns and its potential impact on global climate change. He argued that approving the pipeline would have undercut America’s leadership on climate change.

Trump’s Reversal and Biden’s Final Cancellation

President Trump revived the project in 2017, citing economic benefits and energy security. However, President Biden canceled it again on his first day in office in 2021, fulfilling a campaign promise to prioritize climate change issues and transition towards renewable energy.

Political Symbolism

For both Obama and Biden, the decision to cancel the Keystone XL Pipeline was also a symbolic gesture, demonstrating a commitment to environmental sustainability and a shift away from fossil fuel dependence in line with their administrations’ climate policies.

Will President-Elect Trump Reinstate It?

Currently, there is no definitive answer on whether President-elect Trump will reinstate the Keystone XL Pipeline. His previous administration showed support for the project, citing its potential economic and energy security benefits. However, reinstating the pipeline would require navigating significant political, legal, and environmental challenges that have developed over the years.

It would also depend on the current geopolitical, economic, and environmental priorities at the time of his taking office. The Keystone XL Pipeline’s history is a complex tapestry of economic aspirations, environmental concerns, and political maneuvers.

Its cancellation has been a contentious issue, reflecting the broader national and global debates over energy policy and climate change strategy. Whether it will be reinstated remains a significant question, contingent on a multitude of factors including political will, environmental policies, and market dynamics.

That all said, re-instating its approval might be the perfect “in your face” moment for Trump to Obama and Biden as he begins his second term of presidency. We’ll have to wait and see.