The creation of a liquefied natural gas (LNG) industry on Canada’s West Coast would be bad for the environment, increasing greenhouse gas (GHG) emissions to such an extent that it would be impossible for Canada to meet its emission reduction targets under the Paris Agreement.
It’s true that the planned creation of a thriving LNG industry on Canada’s West Coast to sell natural gas to customers overseas would result in some additional GHG emissions for B.C. and Canada. But that’s not the whole story.
GHG emissions don’t respect borders. Once emissions are released into the atmosphere they become a global issue. Therefore, a global perspective is necessary for effective reduction.
The fact is, Canadian LNG could play a key role in lowering global GHG emissions. If responsibly produced Canadian LNG is used to replace coal for electricity generation and other industrial applications in emerging economies, net global emissions can be reduced. Here’s how.
Many countries in Asia primarily use coal to generate electricity. China, for example, derived 64 percent of its electricity generation from coal plants in 2018 (EIA, 2019).
Coal has significantly higher CO2 emissions intensity than natural gas, and can also release sulphur, mercury and other particulates that contribute to smog.
To help address both global GHG emissions and local smog-related emissions, China has developed a strategy to aggressively increase use of both renewables and natural gas. In its 2019 International Energy Outlook, the U.S. Energy Information Administration noted that China is expected to increase natural gas use by 190 percent from 2018 to 2050—India by 250 percent.
In addition, Canadian LNG is positioned to have lower emissions than other global LNG sources. In 2018, a report issued jointly by the Canadian Association of Petroleum Producers (CAPP) and Natural Resources Canada (NRCan) suggested Canadian LNG would create 65 per cent lower emissions than coal on a full life cycle basis (i.e. from production to combustion).
Several factors play into why a West Coast 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 for using hydroelectricity in B.C. instead of diesel or natural gas to power upstream natural gas production and refining. Plus, Canada’s coast is much closer to Asian markets than those of competitors like the United States and Kuwait, meaning less sailing time and associated emissions transporting LNG to market.
There’s another possible bonus: emissions reductions can be recognized internationally under Article 6 of the Paris Agreement, which pertains to carbon offsets. If Canadian LNG is recognized as a carbon offset for displacing GHG emissions from coal in overseas markets, this would actually help Canada meet its Paris Agreement commitments while also addressing net global emissions reduction.
By the mid-2020s, growing global markets for LNG are expected to require additional liquefaction capacity beyond that which is currently in place or under construction. Canada’s significant natural gas resources can help meet expanding global energy demand and reduce global GHG emissions by displacing coal-fired electricity generation in Asia.