Opportunities Abound For LNG On Domestic And Global Front

Some say Canada has been slow to the LNG gate but an industry panel agreed natural gas opportunities are far from lost in the country.

While natural gas competition is heating up south of the border, Mike Gladstone, director external affairs Canada, Enbridge Inc., said it is not Canada versus the U.S., but rather a North American market with North American resources.

The question is not who is going to produce the product but who is going to build the facilities to get the product off the continent, and whether Canada can get its act together to do it, said Gladstone.

He was part of a three-person Energy Relaunch panel on Thursday, which also featured the Canada West Foundation’s president and CEO Martha Hall Findlay, and Ferus Natural Gas Fuels Inc.’s vice-president of business development Blaire Lancaster.

The $40-billion LNG Canada project in Kitimat, B.C. acted as the launching pad for the discussion around natural gas, environmental arguments, global emissions and the investment climate.

Lancaster said there is an economic and environmental case to use LNG domestically to replace diesel or other heavy fuels for marine and rail fuel and in oil and gas operations. For example, she said the rail industry in North America is the second largest consumer of diesel after the U.S. military. She added that if the Canadian National Railway Company switched to LNG, the company would likely save hundreds of millions of dollars annually in fuel costs. On the environmental front, there is a 20 to 30 per cent reduction in carbon dioxide emissions when diesel is replaced with natural gas or LNG.

Gladstone added there needs to be government support if they want to see more LNG projects in Canada.

All three panellists agreed Canada is not too late in fighting the environmental activist battle against natural gas development, in response to a question from moderator Danielle Smith.

Gladstone said you cannot reduce emissions in Canada and locally without natural gas in the mix.

“The real concern about some of the municipal efforts and from environmental groups as well, if we don’t take action now as industry and governments to defend the benefits of natural gas, we will lose that fight on that resource as we had on the oilsands,” said Gladstone.

Hall Findlay said one of the reasons LNG has support in British Columbia and federal Environment and Climate Change Minister Catherine McKenna and others is because it is starting to get through to people that LNG is actually good for reducing global GHG emissions.

 “It may not have an impact on Canadian emissions but for goodness sake the real problem is global emissions,” said Hall Findlay. “If Canada can be seen to be helping global greenhouse gases that’s a real plus for LNG.”

She said the global demand for energy is not slowing down in places like China and India, which are becoming more affluent. The more affluent those societies become, the more energy they are going to want to use.

“LNG is the absolutely the alternative not only because it is cheaper but because of all the environmental benefits,” said Hall Findlay.

Smith pointed out that while Canada may ship its LNG to other markets thus helping reduce GHS emissions, Canada does not get carbon credits for helping reduce that country’s carbon footprint. Hall Findlay said this is a huge opportunity for Canada to sound its own horn —  to take credit for helping those countries and using this as a political argument for using natural gas.

Top-of-mind was also Bill C-69, which the panellists agreed is a real concern for the overall investment climate in Canada.

 “The real risk with Bill C-69 is they will choose to leave the country,” said Gladstone. “The jobs will leave. The investment will leave. That’s true on the gas and oil side and all other industries caught under that legislation.”

Hall Findlay said it is going to affect every single major infrastructure project, not only pipelines in this country. Hall Findlay spoke at the Downstream Engineering and Construction Canada conference earlier this week where she warned of the Bill C-69 implications. (DOB, Oct. 24, 2018)

Gladstone said at the end of the day, the investor climate must be addressed; it will continue to weaken with Bill C-69. He said there would be less domestic investment as a result of political interference in regulatory processes.