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Liquefied Natural Gas: An opportunity for Canada and the World

Canada has the resources and knowledge to become a LNG leader—reducing global greenhouse gas emissions while building prosperity at home.

Natural gas: it’s tomorrow’s energy. World demand for natural gas is expected to increase 36 per cent by 2040 and supply 24 per cent of the world’s total energy demand, driven primarily by expanding Asian economies.

When it comes to greenhouse gas (GHG) emissions due to combustion, natural gas is cleaner than biomass or coal, which are common fuels for household heating / cooking and electricity generation in many countries.

Places like China and India are looking to natural gas for a lower-emissions, reliable and inexpensive source of energy.

With some 1.2 trillion cubic feet of natural gas, Canada’s resource is enough to fuel domestic needs for 300 years at current consumption rates. In addition, Canada’s industry is well regulated, technically advanced, and positioned to help meet global demand with the world’s most responsibly produced natural gas.

So it makes sense for Canada to export natural gas, to displace fuels with higher carbon intensities and contribute to a reduction in net global GHG emissions.

But how do you ship natural gas across oceans?

The answer: liquefied natural gas – LNG.

What is LNG?

LNG is natural gas that has been cooled to -161 degrees Celsius — the point at which it changes to liquid form. In this state it becomes a clear, odourless, non-toxic liquid that occupies about 1/600th the volume of natural gas. This means it’s possible to ship LNG via ocean-going tankers to markets around the world.

Why does LNG matter to Canada?

Natural gas / LNG development makes a strong contribution to Canada’s economy by:

  • Providing direct and indirect employment across the country
  • Generating taxes, royalties and other government revenues that in turn support education, health care, infrastructure and social services
  • Fueling Canada’s industrial / manufacturing heartland

Why does Canadian LNG matter to the world?

China, India and Southeast Asia primarily use coal to generate electricity. Coal has significantly higher CO2 emissions intensity than natural gas, and can also release sulphur, mercury and other particulates that contribute to smog and impact human health.

LNG storage tanks at a port in Shanghai, China.

Several factors play into why a Canadian LNG industry has both environmental and competitive advantages. Canada’s cooler atmospheric temperatures mean it takes less energy to turn natural gas into LNG. There’s considerable potential in B.C. for using hydroelectricity instead of diesel or natural gas to power upstream natural gas production as well as the LNG liquefaction process; use of clean hydro would also lower emissions. Plus, Canada’s West Coast is closer to Asian markets than competitors like the United States and Kuwait, meaning less sailing time and fewer emissions associated with transportation.

 

Canadian LNG is one of the most sustainably produced in the world. By displacing coal in Asia, Canadian LNG would help decrease global GHG emissions.

Addressing global emissions

Some believe the creation of an LNG industry in Canada would be bad for the environment, increasing GHG emissions to such an extent that Canada cannot meet its commitments under the Paris Agreement.

While an LNG industry would result in some additional GHG emissions within Canada, net global emissions would fall if that LNG were used to displace higher emissions energy sources like coal. Further, if Canada were able to negotiate trading of carbon offsets through Article 6 of the Paris Agreement, LNG exports could provide an additional pathway for Canada to meet its GHG reduction commitments.

Indigenous opportunities

Indigenous peoples are often portrayed as being uniformly opposed to energy development, but views and perspectives among Indigenous peoples are as diverse as they are among Canadians as a whole. Many see resource development as a pathway to economic reconciliation and a means to end poverty in their communities.

With Indigenous communities often located in remote regions of the country, developing natural resources is sometimes the only viable source of jobs and economic growth.

This is especially true of Indigenous communities in northeastern B.C. and on the West Coast where natural gas and LNG developments and pipelines are proposed or underway.

Working to innovate

Canada’s natural gas and LNG industry are also seeking to continually approve to be sustainable and meet the challenges of a low-carbon future.