Canadian Energy Centre
Why Canada’s proposed oil and gas emissions cap goes against UNDRIP and the rights of Indigenous people
Indigenous Resource Network executive director John Desjarlais (centre), with Justin Bourque, president of Âsokan Generational Developments, and Shelby Kennedy, community and Indigenous relations advisor with Enbridge. Photo courtesy Indigenous Resource Network
From the Canadian Energy Centre
Q&A with John Desjarlais, executive director of the Indigenous Resource Network
The Indigenous Resource Network (IRN) is pushing back on Canada’s proposed framework to cap emissions from the oil and gas sector.
IRN executive director John Desjarlais says the proposal directly contradicts Canada’s support for the United Nations Declaration on the Rights of Indigenous People (UNDRIP).
He says the plan would cap opportunity for Indigenous communities as more take on ownership positions in major energy projects from oil and gas pipelines to liquefied natural gas terminals and carbon capture and storage projects.
Here’s what Desjarlais told CEC.
CEC: From the perspective of Indigenous communities across Canada who are involved in natural resources development, what’s your take on the federal government’s proposed oil and gas emissions cap?
John Desjarlais: There’s a lot of confidence that it will curtail production as well, and obvious concern that it’s going to mean less opportunity.
We’ve heard from communities that are saying we’re involved already in emissions reduction. There are communities that just want to advance their opportunities in that space. And it’s at a time when there’s probably the greatest appetite for Indigenous involvement, not just in ownership, but advanced business development and procurement. [It could] mean less jobs, less procurement, less ownership opportunity, less investment.
There are concerns that these impacts are not being heavily understood, measured, contemplated or considered in terms of the policy development and implementation.
CEC: How does being involved in oil and gas development benefit Indigenous communities?
JD: There’s a suite of benefits that are coming from increased engagement, and it’s much deeper than just jobs.
Communities are now jumping into revenue generating assets where they’re creating immediate cash flow, which is allowing them to start to self-determine and invest back into their community either through economic development or through infrastructure programming.
The other side to it is just the capacity that comes from being involved as an owner. Indigenous business and community leaders are being exposed to the requirements and the acumen needed to successfully participate in the ownership of decision making. That’s accelerating the development of the acumen and capacity of different indigenous communities at greater rates
CEC: How many communities would you estimate are now participating at this level?
JD: There’s probably upwards directly of at least 100 different communities now. There are double-digit communities that are involved in at least four or five different deals that are directly involved in the ownership and the benefit side, and then there’s cascading involvement of all the surrounding communities through procurement opportunities and employment. It’s growing quite quickly.
CEC: Why do you say the proposed emissions cap contradicts the United Nations Declaration on the Rights of Indigenous People?
It’s a policy that’s created to achieve certain goals. Creating those types of targets without Indigenous oversight – not just input, [but] oversight and ownership – is problematic because it contradicts the UNDRIP action plan in terms of stepping out of the way of affording Indigenous peoples and communities the ability to self-determine; to invest where they want to invest, and to grow how they want to grow.
We hear a lot of community leaders say, ‘we know what’s best for our territories.’ To have policy that limits our ability to make the decisions we want to make in regard to environmental and economic sustainability is a challenge.
CEC: What would you like to see happen?
JD: It’s a little hard to roll back and involve communities in a total redesign, but at least if we saw an understanding that there’s certainly going to be an economic impact. If there’s a production cap aspect to it, there’s going to be an economic impact to those Indigenous communities that have established livelihoods and revenue streams.
There’s the sentiment that if the government truly is advancing this in the direction that they are, then would they consider omission of Indigenous activity so they can continue advancing their economic interests and growth?
Ideally, [there would be] a policy that’s created in line with UNDRIP that works for communities, industries and governments in their goals.
From the Canadian Energy Centre
By Deborah Jaremko and Will Gibson“These facilities need 24/7, super-reliable power, and there’s only one power generation fuel that has any hope of keeping up with the demand surge: natural gas”
Data centres – the industrial-scale technology complexes powering the world’s growing boom in artificial intelligence – require reliable, continuous energy. And a lot of it.
“Artificial Intelligence is the next big thing in energy, dominating discussions at all levels in companies, banks, investment funds and governments,” says Simon Flowers, chief analyst with energy consultancy Wood Mackenzie.
The International Energy Agency (IEA) projects that the power required globally by data centres could double in the next 18 months. It’s not surprising given a search query using AI consumes up to 10 times the energy as a regular search engine.
The IEA estimates more than 8,000 data centres now operate around the world, with about one-third located in the United States. About 300 centres operate in Canada.
It’s a growing opportunity in Alberta, where unlike anywhere else in the country, data centre operators can move more swiftly by “bringing their own power.”
In Alberta’s deregulated electricity market, large energy consumers like data centres can build the power supply they need by entering project agreements directly with electricity producers instead of relying solely on the power of the existing grid.
Between 2018 and 2023, data centres in Alberta generated approximately $1.3 billion in revenue, growing on average by about eight percent per year, lawyers with Calgary-based McMillan LLP wrote in July.
“Alberta has a long history of building complex, multi-billion-dollar infrastructure projects with success and AI data centres could be the next area of focus for this core competency,” McMillan’s Business Law Bulletin reported.
In recent years, companies such as Amazon and RBC have negotiated power purchase agreements for renewable energy to power local operations and data centres, while supporting the construction of some of the country’s largest renewable energy projects, McMillan noted.
While the majority of established data centres generally have clustered near telecommunications infrastructure, the next wave of projects is increasingly seeking sites with electricity infrastructure and availability of reliable power to keep their servers running.
The intermittent nature of wind and solar is challenging for growth in these projects, Rusty Braziel, executive chairman of Houston, Texas-based consultancy RBN Energy wrote in July
“These facilities need 24/7, super-reliable power, and there’s only one power generation fuel that has any hope of keeping up with the demand surge: natural gas,” Braziel said.
TC Energy chief operating officer Stan Chapman sees an opportunity for his company’s natural gas delivery in Canada and the United States.
“In Canada, there’s around 300 data centre operations today. We could see that load increasing by one to two gigawatts before the end of the decade,” Chapman said in a conference call with analysts on August 1.
“Never have I seen such strong prospects for North American natural gas demand growth,” CEO François Poirier added.
Alberta is Canada’s largest natural gas producer, and natural gas is the base of the province’s power grid, supplying about 60 percent of energy needs, followed by wind and solar at 27 percent.
“Given the heavy power requirements for AI data centres, developers will likely need to bring their own power to the table and some creative solutions will need to be considered in securing sufficient and reliable energy to fuel these projects,” McMillan’s law bulletin reported.
The Alberta Electric System Operator (AESO), which operates the province’s power grid, is working with at least six proposed data centre proposals, according to the latest public data.
“The companies that build and operate these centres have a long list of requirements, including reliable and affordable power, access to skilled labour and internet connectivity,” said Ryan Scholefield, the AESO’s manager of load forecasting and market analytics.
“The AESO is open for business and will work with any project that expresses an interest in coming to Alberta.”
Welders with JGC-Fluor following completion of the final weld on the first production train at the LNG Canada project, in Kitimat, B.C. in July 2024. Since construction began in 2018, upwards of 380 pipe welders have worked on the LNG Canada project. Photo courtesy JGC-Fluor
From the Canadian Energy Centre
By Will Gibson
Canada’s first liquefied natural gas export terminal ‘on the cusp’ of its testing phase
Momentum is building for the long-awaited start-up of Canada’s first liquefied natural gas (LNG) export project.
Shipments from the LNG Canada terminal at Kitimat, B.C. may now start earlier than expected, later this year rather than mid-2025, according to Martin King, Canadian energy specialist with Houston-based RBN Energy.
“LNG Canada appears to be on the cusp of its testing phase and is likely to be exporting some cargoes of LNG before the end of this year,” King wrote recently.
He made the prediction after a senior executive with Shell, the project’s lead owner, said it could deliver its first cargo earlier than previously planned, in the wake of two key milestones.
Fluor reported in July it had completed the final weld on the first production train while Petronas, which holds a 25 per cent stake in LNG Canada, announced it would add three LNG vessels to its North American fleet, doubling its size.
A longtime industry insider sees the $18 billion LNG Canada terminal as a game changer.
“This is decades in the making. Canada has been trying to get its LNG business up and running since the 1970s but it has been sidetracked for one reason or another,” says Calgary-based consultant Racim Gribaa, who has worked in the industry for more than 25 years.
“This project is perfectly placed to take advantage of an awesome opportunity given the demand for LNG worldwide is growing exponentially.”
Map courtesy RBN Energy
The project, which will use the Coastal GasLink pipeline, completed in November 2023, to bring gas from northeastern British Columbia to the Kitimat terminal for processing and shipping, will have capacity to produce up to 14 million tonnes per year in its first phase.
While that’s a fraction of the 404 million tonnes of global demand in 2023, Gribaa says Asian buyers view LNG Canada as secure supplier in part due to its geography.
“The closest point to Asia is Canada’s west coast, so you have the shortest shipping route, which makes for optimal transportation costs. The traders and LNG industry see it as valuable for that reason,” says Gribaa, who previously worked in LNG trade in Qatar, one of the world’s largest exporters.
And the project is coming online at a time when worldwide demand is surging.
“The worldwide demand has effectively doubled every decade since 1990, when it was 50 MPTA. We are now closing in on 500 MPTA and that is accelerating,” Gribaa says.
“The world will need 10 LNG Canadas in 10 years and 100 more LNG Canadas in the next 30 years.”
The project has plans for a second phase that would double production to 28 million tonnes per year. Based on demand, Gribaa says “the question isn’t if it will go forward, it’s when the consortium will announce the expansion.”
World LNG demand growth will be particularly strong in Asia, where Shell’s four LNG Canada partners – Petronas (25 per cent), PetroChina (15 per cent), Mitsubishi (15 per cent) and Korea Gas Corporation (five per cent) – are headquartered.
“Each of these markets has historical demand for LNG and that demand will continue to grow in the coming decades,” he says, adding that LNG in Asia can be used for power generation and heavy industry, and to reduce air pollution from coal-fired power.
Overall, generating electricity in China with LNG from Canada rather than coal could reduce emissions by up to 62 per cent, according to a 2020 study published in the Journal for Cleaner Production.
A 2022 study by Wood Mackenzie found that growing Canada’s LNG industry could reduce net emissions in Asia by 188 million tonnes per year through 2050.
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