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PODCAST: This $40 billion project is key to Canada's future

Susannah Pierce of LNG Canada discusses how their natural gas liquefaction project in Kitimat, B.C., will aid Canada's economic recovery, battle climate change and advance Indigenous reconciliation.

 

Susannah Pierce is the director of corporate affairs for LNG Canada, which has started construction on a $40 billion project to export liquefied natural gas from Canada's West Coast to markets in Asia.

We talk with Susannah about how this historic project is exactly the investment Canada needs: creating 40 years of opportunity for Canadian jobs and Indigenous prosperity, while reducing global GHG emissions with some of the cleanest LNG in the world.

Full transcript of podcast:

Tonya [00:00:09] Good day everyone, and welcome to another edition of Energy Examined, the podcast that discusses the issues facing Canada's oil and natural gas sector with industry insiders in-the-know. I'm your host, Tonya Zelinsky.

Today, I'm joined on the phone with LNG Canada's director of corporate affairs, Susannah Pierce. We're both self-isolating right now. It is very important that we pay attention to some of the restrictions that have been put in place to help protect the public during this health pandemic. So I do want to thank you, Susanna, for joining me on the phone right now.

For those of you who don't know, the $40-billion LNG Canada project is one of the largest energy investments in Canada's history. It plans to export liquefied natural gas to markets in Asia. But with all that said, maybe, Susannah, you can provide us with a little more context. How significant is LNG to the future of energy development here in Canada?

Susannah [00:01:05] Thanks, Tonya. And again, thanks for the opportunity to speak with you today. You know, I've been on this project now for about seven years and the project itself had been in the works for a few years before that. But I can tell you, in the course of the seven years that I've been on this project, it's become, I think, more and more important for the future of energy development in Canada, you know, for a number of reasons.

I think one of the first reasons, of course, is, well, Canada is the fourth-largest producer of natural gas in the world. And it just seems to me to be reasonable, if not a no-brainer, that we ought to be getting that gas to markets that need it the most. And so from that perspective, you know, getting our gas to markets that need it the most for a variety of different reasons is No. 1.

I think, No. 2, the fact of the matter is that we really need these types of investments that the joint venture partners of LNG Canada have made in order to develop these resources and get them to those markets, which are the fastest growing, most emission-intensive economies of the world. And what I mean by that, is having these sorts of investors who really are the powerhouse of LNG development, you know, really shows a few things: One, that they had options of where to invest and they decided to do it in Canada.

Two, it actually shows that Canadians and the people here who are helping to develop this project, working onsite, working in the various different joint venture partners or in LNG Canada themselves, also bring something to the table and are actually generating opportunities for other Canadians, like being a part of this project is another factor.

I think the other thing for us is when we really take a look at who historically has been, you know, our largest consumer of natural gas, in fact our only consumer has been the United States. And the United States, as I think everyone knows who listen to your podcast, has become energy self-sufficient. They put a lot of investment into developing their own energy resources. So now they are a net exporter. We need to find new customers. And LNG really provides that opportunity of taking our gas to those new customers because we've lost our sole customer to the south.

So as a result of all that, you know, I really think the fact that Canada does have such prolific amount of gas available; we are the fourth-largest producer; we have the skills and the know-how; we've created an investment climate for the top LNG developers in the world to invest. We have the opportunity to diversify our customer base and then get to those markets that really are expected to absorb mostly LNG over the course of the next 20 years. These are all the reasons why LNG is so important for energy development in Canada.

Tonya [00:03:39] Well, you said that you've been working on this project for the past seven years. And if we were to rewind seven years, Canada was in a different position when it came to its energy development. Do you think that LNG going forward, it represents a shift in the direction for our Canadian oil and natural gas industry?

Susannah [00:03:59] Well, I think it's really about just the fundamental market and demand. When you really think about it – sorry, supply and demand, when you really think about it, we have a lot more natural resources in our energy as well as other natural resources than we consume, and so naturally we ought to be trying to get those resources to market. And so as a result of that, when you really see the growth in other parts of the world, we really need to find the mechanisms of getting that energy there. And LNG, certainly liquefied natural gas, being able to put our gas onto LNG tankers or carriers and bring them over to Asia naturally just connects our gas supply with the areas that need it the most. And so I actually consider this just a natural evolution of markets and LNG being one of the ways of making that happen.

Tonya [00:04:46] Well, I mean, globally, there have been other nations that have been looking to export LNG, as you mentioned, the United States, there's countries like Australia, but there are big differences between getting LNG from those countries versus LNG from Canada. What makes our LNG more viable?

Susannah [00:05:05] There are a number of things that I think help to make Canadian LNG more viable. You know, I think one of the first things when you really take a look at it, is it's our distance to markets or distance to Asia. For example, we're about half the distance to Asia than you would be if you were exporting from the U.S. Gulf Coast.

We have a very economic cost of gas. In other words, so are our actual costs of gas in northern BC and Alberta is very economic. That provides an advantage in terms of making the LNG that we would produce more viable and competitive.

You know, I think the other thing that is really good from a viability perspective for those countries that are really being conscious about climate is to take a look at how we're actually developing the LNG. And when I look at LNG Canada, for example, we will emit the lowest amount of carbon per tonne of LNG. And so if you're really thoughtful about climate policy, you want to know where you're procuring your goods and services as you're considering your own consumption. And so if you're looking to buy LNG, why wouldn't you look to a country that's actually doing it with the lowest amount of carbon per tonne of LNG that's produced?

And so those are just a few of the reasons that I think LNG from Canada becomes more viable. You know, at the end of the day, though, we have to always remember, too, that to be viable, we have to be competitive with the other sources of supply. And that's going to mean pipeline sources of supply into some of these markets. But it also will mean other sources of energy into these markets. And that might be coal, that might be nuclear, that might be renewable. I actually think given the expected growth in energy demand, we're going to need it all. But I think there's an appropriate place for each type of energy and, you know, natural gas being so good for displacing coal and some of the more industrial processes and transportation and even residential heating. It's also a really good source of baseload power for renewable generation.

So, again, I think LNG has a great future coming from Canada and we need to remain viable and competitive with other sources of energy and gas elsewhere.

Tonya [00:07:07] You mentioned climate in there and I think there have been concerns, or perhaps even misconceptions by the public that LNG will produce more greenhouse gases than other projects. But that's not so cut and dry as that, I mean, should we be concerned about the greenhouse gas emissions that are emitted from LNG production?

Susannah [00:07:28] Well, I think we have to always be concerned about any emissions that any particular energy production is creating. I think that's why you have teams in place and we have a team in place very focused on what is the lowest amount of emissions that we can actually emit, because we do care about making sure that our projects are sustainable.

But when you really measure, for example, the full life-cycle emissions of LNG greenhouse gas emissions from LNG Canada, you take a look at the emissions profile and the production and the transmission on the pipeline. You take a look at the liquefaction. You take a look at the carrying or the shippage. You take a look at the regasification, the consumption. If you look at that full supply chain or value chain and then you compare it to, for example, coal value chain, you'll be able to see truly that LNG is significantly lower on a life-cycle basis than coal.

And I know that there are some who say, well, no, that's not the case. You need to factor in methane emissions. And they're right, you do need to factor in methane emissions. But when you really look at the methane emissions in Canada and when you include those in your life-cycle emissions all the way through to consumption with the end user, we are significantly lower, about 50 per cent lower than the coal value chain.

And that's the target right there. It's targeting that coal value chain so that we can reduce emissions and by the way, improve air quality in these various areas by about 50 per cent. So reducing greenhouse gas emissions by 50 per cent in some of these consuming countries is significant. And that's very important, too, as we look at how do we address global climate change.

Tonya [00:08:58] And you just hit the nail on the head that this is about addressing global climate change, not just Canada specifically, right?

Susannah [00:09:07] Absolutely right. And you know, and again and that's why this is the interesting thing about this, this is also, in my opinion, why we can't go it alone. You know, because this is about global climate. It means that we cannot ignore the policies in other countries just as much as we can't ignore our own. And so we need to make sure we're doing what we can to have the lowest amount of emissions for what we might produce here.

But we also have to recognize the amount of emissions that would be displaced through the value chain, through purchases of gas instead of coal or other more carbon intensive sources of energy. That is where you start to really understand the give and take of the energy system and how we can effectively be successful in overall reducing emissions.

Tonya [00:09:47] Well, switching gears a little bit. What stage of development is LNG Canada currently in?

Susannah [00:09:53] Well, we're in our second year of construction and of course, we took a final investment decision back in 2018, October. And so we've been quite busy onsite, we've been quite busy in the module yards and making very good progress up until of course recently, with COVID-19 pandemic, which we along with our EPC [engineering, procurement and construction] JGC Fluor made the decision that we really needed to essentially ramp down significantly within Kitimat to make sure that our workers were safe and to make sure that the community was safe.

And so the decision was made to do that in a manner again which could protect people and community, as well as continue to maintain the essential construction activity set that we needed to maintain, environmental compliance and safety and security of site. But we've really ramped down in response to COVID-19 and we'll ramp back up when we believe it's safe to do so. But when we do again, we're still targeting to be up and running and ready to deliver our first cargo by mid 2020s.

Tonya [00:10:57] Oh, that's coming up very fast.

Susannah [00:11:02] It goes by fast.

Tonya [00:11:02] Absolutely. You're located along northern B.C. You're near the Haisla Nation. I do know that LNG Canada has some relationships with local Indigenous communities but to what extent did they play in the development of the project?

Susannah [00:11:17] Local indigenous communities are absolutely fundamental to the development and the success of this project. And quite frankly, I think of any projects, you know, where in our sector or other sectors today. So we've had a very close relationship, for example, with the Haisla First Nation, which is on whose traditional territory we are building the facility. And so right from the beginning, we entered into a partnership really of understanding each other and understanding what was important to the Haisla community. What did they want to see out of a project like this? And it included, you know, also, what do all the other Nations want to see out of a project like this.

Our engagement very early started with making sure that we understood the traditional territory on which this particular project could impact. And then also making sure that we were building those relationships right out of the gate so that we could collectively work on developing the project together. And I think we've had good success. You know, we have very good relationships with Indigenous communities, we have very good relationships with non-indigenous communities where we're building the facility. And we want to maintain those. Which means that we need to make sure that decisions the project is making are well understood by the communities, Indigenous and non-indigenous, so that we can maintain that trust and essentially develop the project and operate the project together.

Tonya [00:12:35] Well, I had the pleasure of speaking with the Chief Councillor, Crystal Smith, several weeks ago, talking about the impact, just development in general when it comes to the energy industry and others has in that community. And she spoke very favorably and highly of LNG Canada, because it's not just a project that's there on their traditional territory. It's a project that they are actively involved in and have become important partners in this. Do you envision this, sort of, expanding beyond just the Haisla Nation, or does this speak to the direction I should say that industry is going in these days. Indigenous communities, they're not just neighbors, they are partners.

Susannah [00:13:18] Well, indeed. And in fact, I imagine that's essentially the direction that many Indigenous communities would like to go as well, at least the Indigenous communities that I have the opportunity to engage with. You know, some of them have said that, ‘you know, for decades we would sit and we would watch projects and opportunities go through our territory. And we were never asked about whether or not it can go ahead. Well, now we actually have the opportunity to have a seat at the table. We actually have an opportunity to take some control back in our own future. We have an opportunity for self-determination, our ability to generate our own income.’

So they're not neighbouring anymore. They're actually right front and center. And I think that's a very fundamental shift. And I think a very positive shift to the extent to which many of these Indigenous communities have an opportunity and they have the control over that opportunity that they've never had before.And I find it actually quite inspiring. And I'm really pleased and proud of the relationships that we have. And many of them have become quite personal. And I have a lot of hope and faith and aspirations for all the communities that we're operating in. And I see a great future for us.

Tonya [00:14:32] Well, once the project itself is operational, what do you think those long term benefits will be to Canada and those communities that are affected by your operations? How long will this last?

Susannah [00:14:44] Yeah, it's a great question. Well, you know, a project like LNG Canada is anticipated to last 40 years. So we are a new project with a long lifeline.

And as part of that, having the ability to have an LNG export facility means that we're creating opportunities not just at the facility itself, but all the way up. For example, in northeast B.C., where you have a whole bunch of communities that are benefiting from the production of natural gas. Well, now they have an outlet for that. So it provides a more sustainable opportunity for those communities along the pipeline.

Similarly, by having a pipeline in place that's buried, they have the revenue that's generated by the construction of that pipeline. But then also some of the ancillary benefits that come from that pipeline being built through and operated through their territories and communities.

When you get to the facility itself, again, the opportunity to actually work at the plants, the opportunity to actually provide goods and services to the plant, the opportunity that the plant would provide in terms of government revenues, that then can see all the various different social services, such as schools and hospitals or some of the other benefits that come with that.

And so, you know, when you think of a plant like this, an opportunity like this, again, it extends all the way up the value chain from where the gas is produced along the pipeline to the plant itself. And if anything, too, the other thing that I look at this project that I think is quite profound is the fact that many of these communities where these projects are being built or proposed really don't have the same amount of opportunities that you might find in Lower Mainland or on the island. You know, they've suffered through the ups and downs of the mining sector, the forestry sector. Here's a new opportunity. An opportunity for 40 years. And I think that is also profound, because now people who love the north can see their families stay in the north, can see their children come back to the north. And that's actually really, really inspiring.

Tonya [00:16:37] It seems like a very important aspect of this, because as you said, traditionally, that hasn't always been the case. Well, we had originally tried to speak, Susannah, it seems like a lifetime ago, but it was really maybe a month or two. One of the biggest issues at the time was the Coastal GasLink and some of the protests associated with that. And do you think that in light of all of that, some of these positive benefits that you spoke of were getting lost in this issue; that people, the public, they weren't seeing some of the good that was coming out of this project?

Susannah [00:17:14] Well, yes, certainly. I think what happens there, again, was like any type of project these days, particularly in the energy sector. And you have a variety of groups which are not happy with the project. And you have groups that are happy with the project. And I think it's almost human nature when you're unhappy, you tend to organize more effectively than when you're happy. When things are going great, you don't run out to the streets and tell everybody how great things are. But when things are not, you're more inspired to do that.

And I think it's one thing that, you know, in Canada is a great part of our democracy. You have the right to protest. You have the right to go to the street to be heard. I think the challenge, though, is sometimes those protests can overwhelm what really is a very solid base of support. And that's the case with Coastal GasLink.

You know, when you really take a look at that project that really has so much Indigenous support, the 20 First Nations along the pipeline that have signed agreements. You've got the communities, of course, within the LNG Canada footprint itself. You know, that's unprecedented, really. And when you really think about it, all those communities, it's somewhat unnerving to just stand up and try to get above the fray of the opposition, especially in the heat of it all.

So I think that's unfortunate that this is the way that projects, you know, normally have to develop is go through these periods of opposition. But I'm quite comfortable and confident in the support of that project. I know many of the people that are working on the Coastal GasLink project. I know many of the communities as well as Indigenous leaders. And, you know, I'm quite excited to see that project continue delivering those benefits, being in place and supplying, you know, our facilities so we can get that gas to market.

Tonya [00:19:00] Well, it's been very exciting and interesting to watch LNG Canada progress and grow, and really, our industry evolve into the next phase, if you will. So thank you so much for joining me today on this call to talk about the project and help clear up some misconceptions, and just understand what is happening in northern B.C. and how things are looking brighter going forward. Thank you so much, Susannah.

Susannah [00:19:28] Thank you Tonya.

Tonya [00:19:29] And everyone listening, thank you for joining us. I hope you’re staying happy, healthy and safe. Stay indoors, self-isolate and we can all get through this together. Thanks so much.

In this article, Context speaks with:
  • Susannah Pierce Director of Corporate Affairs, LNG Canada