Meeting increased global energy demand
Every day, more and more people need access to affordable energy to live their lives comfortably. The reliability of that access is what we mean when we talk about energy security.
Can people get the energy they need to heat their homes, run their businesses, and support their lifestyles? Can they afford it? Do they have options to choose from?
The answers to these questions depend on several factors:
The impact of geopolitics on energy security
When countries rely on just one source for their energy supply, political changes can have a drastic impact on the energy security of the country.
For example, between 2019 and 2021, Russian oil and gas made up nearly 45% of the EU’s total energy imports. Since Russia invaded Ukraine, many European countries have been scrambling to find ways to reduce their dependency on Russian supply.
As a result, many have seen energy price increases. According to a recent article in Euronews, average electricity and gas prices increased by 14.5% and 37.9% respectively in the first half of 2023.
This is just one example of the impact of geopolitics on the global energy landscape. It’s also created an opportunity for other oil and gas rich countries to step up and fill the gaps.
Policies to fight climate change
Many countries still burn coal to generate electricity. Of the top 15 coal power generators in the world, nine are in Asia. Even after excluding China and India, the rest of Asia generates nearly 40% of coal-powered electricity in the world.
According to Statista, coal combustion produced 15.22 billion metric tons of carbon dioxide (GtCO2) worldwide in 2022, with 8.25 billion coming from China alone. Switching just 20% of Asia’s coal energy to natural gas could reduce global emissions by 680 million tonnes (equivalent to Canada’s total emissions).
With pledges being made globally to reduce GHG emissions, countries are looking for cleaner alternatives to coal, driving more demand for liquefied natural gas.
What is liquefied natural gas?
Liquified natural gas – or LNG – is the liquid state of natural gas. By chilling natural gas to -161° C, it turns to liquid.
The video below explains the process in more detail:
Where pipeline infrastructure exists, natural gas can be easily transported in its gaseous state, like it is between Canada and the US. But for many reasons, building pipelines across the ocean isn’t feasible. In its liquified state, natural gas is 1/600th of its original volume, making it easier to store and transport.
LNG is exported on large storage tanker ships. When it reaches the destination country, the LNG is converted back into its gaseous state and injected into the natural gas delivery infrastructure to heat homes and power industry.
Does Canada have the means to produce and export LNG?
The short answer is yes. Canada is the sixth-largest producer of natural gas in the world, with 200 years of supply in resources. Also, our production methods have some of the highest ethical and environmental standards in the world.
All of this means we have a generational opportunity to help our allies, reduce global emissions, and stimulate our economy by exporting liquified natural gas.
Canada’s current LNG landscape
There are currently 8 proposed LNG projects taking shape across Canada according to Natural Resources Canada. Only one has been given the green light —Kitimat, BC’s LNG Canada. Once complete, the facility will be able to export up to 14 million metric tons of LNG per annum.
Unfortunately, political will to increase domestic capacity to produce and export LNG has been slow to gain traction, so our LNG industry is lagging behind other countries.
The world is asking for Canadian LNG
With global demand for LNG on the rise, countries are looking to Canada to fill that gap.
In late August 2022, German Chancellor Olaf Scholz visited Ottawa to ask for Canadian LNG. He was met with a disappointing answer that cited a lack of infrastructure, which at the time, Germany also lacked.
Since Scholz’s visit, Germany built an LNG terminal, in record time, in Wilhelmshaven, giving them the ability to receive imported LNG from the North Sea. Unfortunately, we still lack the infrastructure to export LNG from our East coast.
Just like Europe, Japan scrambled for an alternative source of natural gas after their supply from Russia was cut off. Japanese Prime Minister Kishida Fumio made a visit to Ottawa to pitch for Canadian LNG.
Kishida told Canadian Prime Minister Justin Trudeau that Canadian LNG will play a crucial role in supplementing their lost supply from Russia and energy transition to cleaner energy.
In Japan’s case, there is hope in the form of Kitimat BC’s LNG Canada, but to be a reliable energy partner for Europe and Asia long-term, we need to increase our capacity to export LNG.
Why should Canada step up?
Canada’s approval and development of the 8 proposed LNG projects would have an astounding impact globally and domestically.
For context, the total global LNG trade in 2021 was equal to 516 billion cubic metres. If all the proposed LNG projects start up as anticipated, they would grow Canada’s export capacity to 65 billion cubic metres per year by 2028, representing a 13% increase in global LNG supply. This would also make Canada a top three LNG exporter, just behind the USA and Australia.
Also, the estimated emissions reduction from coal-to-gas conversions enabled by these LNG projects is 140 million tonnes of CO2e, equal to roughly 20% of Canada’s total emissions.
Providing our allies with a cleaner, alternative energy source doesn’t just bolster global energy security. It will benefit the Canadian economy. According to a report by the Conference Board of Canada, the LNG industry is expected to create 96,550 new jobs in British Columbia.
Canada can help
The world has an energy problem that Canada is well-positioned to solve with LNG. Unfortunately, due to a lack of political will, we’re not ready yet.
If you’ve made it this far, you understand what LNG is, how it’s produced, and why Canada has a tremendous opportunity to help the world with it. A thriving Canadian LNG sector would:
- Create jobs and economic opportunity
- Reduce global emissions
- Support our allies with secure, reliable energy
- Help meet growing global energy demand
If reducing emissions and increasing global energy security matter to you, it’s time to tell our decision makers that LNG needs to be a priority for Canada moving forward.
