Blog: Our LNG exports only make sense

Activists keep telling us that LNG processing won’t get BC (or Canada) to their targets of net zero emissions by 2050.

Maybe they should have a word with Pakistan, which has announced plans to burn more coal to generate electricity, and says: ‘LNG is no longer part of the long-term plan.’ Or with Germany, which has failed to secure LNG from Canada and plans to buy from Qatar — and to reactivate five coal-fired power plants. Or with India, which this week ordered coal-burning plants to increase output. Or with those who buy coal from Indonesia, which expects to achieve record exports of coal this year. Or with China, which, for ‘energy security,’ plans to continue expanding its already massive army of coal-fired power facilities. In all, more than 120 countries use coal to generate power.

Fact: China has approved enough new coal-burning power plants (168 units at 82 different sites) to power the entire United Kingdom and its 67.3 million people. As Energyminute notes: “That is four times higher than all the coal-fired plants China approved last year, and equivalent to two new project approvals every week.”

Surely the goal is to reduce global emissions as a whole, not just to reduce emissions in BC and Canada while they go up elsewhere.

So with world demand for liquefied natural gas expected to rise more than 75% by 2040, it only makes sense for BC and Canada to export more LNG, and thus to help the world on the road to net zero by replacing coal to generate electricity.

And, importantly, to bring in government revenues that pay for healthcare, education, and more.

The 75% estimate for the increase in world LNG demand comes from Shell, a 40% partner in LNG Canada’s project in BC. Shell also noted that Europe’s LNG imports increased by 60% last year to replace pipeline gas from war-monger Russia.

And Alberta’s Canadian Energy Centre pointed out that analysts expect Europe’s LNG requirements to nearly double by 2030, reaching 140 million tonnes compared with about 73 million tonnes in 2021.

“More investment in supply will be needed to meet future LNG demand,” Shell said in its LNG Outlook 2023. “Gas will be needed in the long term to balance energy systems as the world transitions to a lower-emission future.”

LNG from BC would mainly be shipped to Asian users, rather than Europe, but that could free up other world cargoes to go to Europe instead.

“More Western Canadian LNG would allow a lot of the other sources to go to Europe,” says Matthias Bloennigen, Wood Mackenzie’s director of Americas Consulting. “It’s like a domino.”

Offering low-emissions production, LNG Canada still talks of its first cargoes going out in 2025, but Japan’s ambassador to Canada has said it could be in late 2024. “That will be a game changer,’ Yamanouchi Kanji added.

(Shell and partners are eyeing future Phase Two expansion of LNG Canada, but Dan Tsubouchi of the SAF investment group in Calgary quotes Cederic Cremers, Shell’s executive vice president of LNG, as saying: ‘It’s something that we’re working on hard right now, but I don’t think . . .  that we will be seeing that come to an FID this year.”)

Then there’s Woodfibre LNG, which is looking at its first exports in 2027 and promises the lowest emissions of any LNG-export plant in the world.

Those two BC plants alone would help big overseas customers switch to cleaner LNG from coal to generate electricity.

Then, we hope, will come two more prime projects in BC, the Haisla Nation’s Cedar LNG project, and the Nisga’a Nation’s Ksi Lisims venture.

In addition, FortisBC will also help reduce world emissions by supplying LNG to visiting LNG-fuelled ships, and by achieving some modest LNG exports of its own.

All of these projects mean continuing benefits for Indigenous Peoples and communities, plus opportunities for Indigenous expertise and leadership, and commitment to stewardship of the environment. And not just in BC.

But in the BC legislature this week, Liberal MLAs asked the government why it is taking so long to make a decision on the Haisla Nation’s Cedar LNG project. In response, Premier David Eby spoke of “complex issues” involving climate change targets and economic development with First Nations. And he said the world is transitioning away from fossil fuels.

Reporter Rob Shaw then posted this: “Dave Eby for first time calls BC’s climate targets ‘conditions’ for approval of future LNG projects. Not clear what this means for LNG Canada (which already has permits), but for three other smaller LNG facilities awaiting approval could have big ramifications.”

While activists jabber about blocking LNG in Canada, the US is moving fast to fulfill foreign demand. It now has seven LNG-for-export plants in operation, plus 15 more in various stages of process, and the betting is that plans for another three will be approved very soon.

And if BC or Canada do block LNG plans, our natural gas will simply go to one or more of those US plants, and there be processed and exported as US LNG. That means higher emissions, as those US plants aren’t as clean as ours will be.

And if foreign customers can’t buy LNG from us, won’t they just turn to other suppliers with lower environmental and social standards than us?

Meanwhile, Business in Vancouver reported on a webinar that had the central theme of “Can Canada provide clean, secure energy to meet demand in Japan and Korea?” The answer was not at all clear, noted BIV reporter Nelson Bennett.

He wrote: “Officials for Japan and South Korea made it clear there is a demand for LNG in both countries and that they viewed Canada a potential energy ally and reliable trade partner. But it’s unclear whether any more large LNG projects will ever be built in Canada, beyond the one that’s under construction.

“Kenryo Mizutani, deputy director and legal counsel for the Japan Organization for Metals and Energy Security (JOGMEC), noted that Japan’s energy sufficiency ratio is just 12 per cent; Canada’s is 180 per cent. In other words, Canada has more energy than it can ever use. . . .

“‘The market potential in Korea and Japan is just tremendous,’ said Dulles Wang, director, Americas Gas and LNG Research, at Wood Mackenzie. But a decade of failure on the LNG development front in Canada appears to have left potential customers questioning Canada’s apparent reluctance or inability to fully exploit its potential as a major exporter of natural gas.”

To address that reluctance, we have suggested that, if you support further LNG development in BC, you let your MLA know that. Find their contact info here:

And if you support potential LNG exports from the East Coast, how about sending a similar message to your MP? Here’s where to find contact info:

(Posted here 22 February 2023)

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