Author: Joseph Murphy, Natural Gas World | 9 May, 2023
How do you see LNG fitting into the long-term energy picture?
While renewable energy holds tremendous potential and is growing quickly, there simply won’t be enough of it to meet global energy demand. Natural gas, either directly or through LNG, will be needed to provide grid stability for renewable power projects, displace coal in electric power generation, provide certainty during disruptive events and help the millions of people around the world who still have no access to electricity.
The need for more natural gas is recognised by every credible long-term energy forecast. In fact, North American LNG exports are forecasted to triple from 11 to 30bn ft3/day by 2040. When you look at the energy fundamentals, it becomes clear what’s needed: the world needs more natural gas and that should come from North America where it’s produced more sustainably than anywhere else.
Can Canada become a leader in LNG, or have we fallen too far behind?
Canada could and should have a role to play in supplying LNG to the world and be a world leader given the proximity to reach markets from the west coast.
“Could” is an important qualifier because we’re not there yet. We missed the first wave of LNG development to the US, Australia and Russia who were quick to act. The US has become dominant in LNG while Canada is at a critical crossroads. This country should be a world leader in LNG development. On a comparative basis to LNG produced around the world, we have huge advantages.
On emissions, for instance, Canada is a leader in producing gas with the lowest greenhouse gas emissions footprint. Canadian LNG would make use of a significant amount of hydro-electric power, operating in a colder climate with shorter travel distances to Asia by about half compared to the US Gulf Coast – all of which results in fewer emissions. We’re one of the world’s lowest-cost, most reliable and sustainable energy providers, and that’s what the world needs to reduce its emissions, provide greater energy security and alleviate energy poverty.
Can LNG projects be used to advance Indigenous nation building and reconciliation?
Yes! The landscape has changed when it comes to developing infrastructure projects. It’s not enough to consult with Indigenous groups – we must include them as partners. By doing so, we can enable Indigenous nation building and reconciliation. It’s best achieved with financial support from the government to reduce their cost of borrowing and support economic participation in Canada’s energy future. We’re committed to do our part by ensuring Indigenous groups are participants in our operations energy transition projects. That’s why we’re advancing several projects where Indigenous partners will be critical to both project development and operations. The exact nature of the partnership will vary according to each unique situation, led by the Indigenous communities themselves. Our experience has driven home how Indigenous groups are “first choice” business partners and their expertise when it comes to environmental stewardship is second to none. We look forward to what lies ahead.
Both Europe and Japan want North American LNG. What can governments do to help advance LNG development and exports?
Most North American administrations are acutely aware of the under-investment in energy supply and related infrastructure. It will be important to translate that awareness into actionable policy to get infrastructure built and energy to consumers.
We also need to think of greenhouse gas emissions as a global issue and not a country-specific one. Countries are incentivized to focus on country emissions, but we should be looking at addressing global levels through cooperation with other countries and measuring the scope of global impacts and the potential use of instruments like Article 6 of the Paris Agreement.
The world wants our energy – to reduce emissions, provide secure and stable energy, and improve quality of life. We need to think about our obligation to provide that energy through LNG. We can do it with clearly defined regulatory and permitting requirements and timelines, clearer rules round stakeholder engagement , and increasing access to capital for Indigenous financial articipation in natural resource and energy infrastructure projects. We need a level of co-operation among government, industry and Indigenous partners that will advance the best of what we have to offer. The world is knocking; we need to answer.