Canada At Risk Of ‘Missing The Boat’ On Energy/Emissions Front: GPAC Panel
The war in Ukraine and subsequent restrictions on Russian exports has disrupted global natural gas markets, creating yet another entry point for Canada to build out its LNG industry and meet growing demand for safe, secure energy supply, three panelists told the Gas Processing Association of Canada (GPAC) forum in Calgary this week.
But governments need a focused plan to address the global energy transition and climate change in a meaningful way, or the country is once again at risk of missing the boat, the panelists added.
The shift in global natural gas supply chains has created “market pull” as both Europe and Asia scramble for longer-term supply, said Heather Christie-Burns, Pembina Pipeline Corporation VP for its Transmission Business Unit.
The LNG market pull in Asia is being driven by security concerns as cargos destined for the region were rerouted to Europe last winter. Canadian LNG has an advantage in this market as the West Coast is much closer to markets than the U.S. Gulf Coast.
“They want a cost-competitive, reliable, flexible supply,” said Christie-Burns.
Leaders of both Germany and Japan, two of the world’s largest industrial economies, recently came to Canada requesting it build export terminals and increase supply to take pressure off global markets. The federal government gave no commitment in response.
“Are we going to let our traditional partners down?” she asked. “They are our partners, not our adversaries.”
While the visits from Germany and Japan were helpful, “It’s going to take more international pressure to get this government to wake up and realize there’s a market for our product,” said Kelly Howlett, commercial director for the Coastal GasLink project for TC Energy Corporation.
The federal and B.C. governments will decide whether Canada answers the global call on gas, and both governments are “fence-sitting,” Christie-Burns said. “The time is now. They will decide whether we have a couple of LNG projects or an LNG industry. They are on the fence trying to reconcile around LNG and climate targets.”
Canadian governments remain tightly focused on reducing emissions at home, rather than seeing the big picture on emissions, said Teresa Waddington, VP corporate relations for LNG Canada. They need to recognize climate change as a global problem and reducing emissions at one end of the supply chain by limiting gas production does little if people on the other end are forced to burn higher emitting coal.
“At the end of the day there is no peeing and non-peeing end of the swimming pool,” she said. Instead, Waddington said she would prefer an approach to the energy transition that puts emphasis on responsible, reliable energy production from countries that follow international law, that also reduces emissions and forwards reconciliation with Indigenous peoples.
“We need LNG,” said Waddington, but it is only part of the energy transition picture. “There is also a conversation on critical minerals and where they will come from. It’s an energy security issue. China and Russia have set themselves up well to control a huge part of that energy future.”
Global energy demand is growing, “and more of everything is required. The pie is getting larger,” said Christie-Burns. “The mixture will be different depending on geographic needs.”
Many regions are energy poor, she added, and LNG makes sense in that context. The federal government needs to recognize, “the customer for LNG is global.”
Canada’s natural gas industry needs to send a message to governments and the public that, “we are helping the world meet global GHG targets and doing it right with meaningful Indigenous reconciliation, and we’re doing it safely, reliably, and sustainably, said Howlett. “Energy needs in the future are not diminishing and we have an abundant supply that is low cost and safe. We can do this.”