Blog: World LNG demand is on the rise. Can Canada ship more?

Some 400 years ago, French explorers noted First Nations people lighting natural gas that seeped into and around Lake Erie.

We’ve come a long way since then: About one third of Canada’s energy needs now are met by natural gas. More than six million Canadians use it to light, heat, and cool homes and business premises.

It’s also used in Canada for transportation, for making fertilizer and petrochemicals and the plastics that are used in countless applications, from medical devices to clothing.

It is used around the world, and demand for it, in the form of shipments of liquefied natural gas, is on the rise.

China’s LNG imports alone are expected to be up 8.1% this year, to 77.11 million megatonnes. Four new LNG-import terminals were built in 2023, bringing the current total to 14.

And we see reports like these:

  • The rise in global population will mean the world needs by 2035 major new energy supplies, matching what the U.S. consumes now.;
  • Qatar’s huge LNG expansion plans could give it 25% of the global market, and squeeze out rivals such as Canada;
  • Australia’s Woodside Energy expects world consumption of LNG to rise 50% over the next decade;
  • Market watcher Wood Mackenzie says an additional $400 billion investment in LNG projects around the world is needed over the next decade.

Energy giant Shell sees global demand for LNG increasing by more than 50% by 2040. Shell does see peak demand after 2040 — but that doesn’t mean world demand ends; it would still continue.

Meanwhile, U.S. President Joe Biden’s pause on approvals for new LNG projects is a net positive for Canada’s economy, and our Indo-Pacific exports.

Our LNG will be environmentally cleaner than LNG from many rival suppliers. Overseas buyers can use it to generate more of their electricity, replacing coal-powered generation that produces far more emissions.

If Canada supplied LNG to India (which plans to double its coal production), our LNG  would reduce world greenhouse-gas emissions by an amount equal to Canada’s total CO2 emissions.

We increasingly think of Canadian LNG as being Indigenous LNG. And we look forward to the Haisla Nation’s Cedar LNG project and the Nisga’a Nation’s Ksi Lisims project.

But Canadian LNG, and Indigenous-owned LNG projects are at risk because of  Ottawa’s proposed oil/gas emissions cap. Just ask our Alliance CEO, Karen Ogen.

Government, especially Ottawa, needs to get the message — and get on the ball. Canada’s slow-motion regulatory processes need serious acceleration if we are to hope for further investment in Canadian LNG development.

All in all, as the Canadian Association of Petroleum Producers says:

“Canada has what it takes to be a global energy superpower: The resources, the talent, the technology, and a growing global market for our responsibly produced products. And we can do this while supporting the drive to lower the world’s emissions.

“To make this a reality, we need to recognize the world needs oil and natural gas today and for the foreseeable future. We need a pragmatic, globally competitive policy environment that attracts investment and incents further decarbonization innovation.

“We need to support nation-building projects, like LNG export facilities and carbon capture, that create high-paying jobs, enhance Canadian’s paycheques and build on our strength as a resource developer and exporter.”

LNG supply and demand

(Posted here 06 March 2024)


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