For all those naysayers predicting gloom and doom for the LNG sector, and Canada’s LNG exports, some corrective thoughts, and for our producers, good news.

Canadian-based DOB Energy puts it simply with this headline: “LNG demand forecasts are great news for North American suppliers.”

Key points from DOB Energy:

• Shell expects global LNG demand will rise from 404 million tonnes a year in 2023 to 625-685 million tonnes in 2040, as industrial coal-to-gas switching gathers pace in China and South Asia.
• Vietnam, the Philippines, Thailand, and Bangladesh could collectively have 65 million tonnes of demand by 2040. Ghana and Bahrain could also put up new demand, while India could start to absorb more.
• Canadian production is due to grow, with LNG Canada bringing 14 tonnes of production from 2025. A second phase of the project — to be decided next year — would double the plant’s capacity to 28 million tonnes. And Woodfibre LNG plans 2.1 million tonnes of liquefaction capacity from 2027, with construction underway.
• By 2030, North America expects to have over 190 million tonnes a year of capacity online (around 30 per cent of total global capacity).

Read the full DOB Energy report: https://ow.ly/RTv450RW2F0

There are some cautions. Among them, the Institute for Energy Economics and Financial Analysis (IEEFA) sees “a massive wave of new export capacity” meaning an oversupply of LNG within two years.

But UK-based consulting firm Wood Mackenzie sees that oversupply disappearing after a couple of years. “The recent wave of LNG investments will bring a surge of supply in the next couple of years, but longer term, new projects will need to be developed.”

International Consultants McKinsey and Co. estimate Asian LNG demand will grow by between 1.5-3% a year to 2035.

McKinsey also sees a gradual decline in European LNG imports. And China’s state-controlled CNOOC expects domestic natural gas consumption to peak in 2040. Demand for LNG then would continue, but not grow.

However, India, for one, will be looking for more LNG. Prime Minister Narendra Modi is pushing for a gas-based economy, and to more than double the fuel’s share in the energy mix by the end of the decade.

One of India’s LNG goals is to cut emissions from its coal-powered steel industry.

Western naysayers constantly claim that using LNG to generate electricity is no cleaner (and can be dirtier) than burning coal, but those claims have long been panned.

One anti-LNG group recently complained to the Canadian advertising industry’s “Ad Standards” body about Canada Action ads citing LNG as reducing global emissions.

The agency then, in effect, quarrelled with the wording of the ads that said LNG “will” reduce emissions rather than “could.” It ruled that the ad “:implied a definitive result that could not be guaranteed due to the lack of evidence that coal plants will disappear thanks to the B.C. LNG projects.”

Canada Action says it has taken down the ads while an appeal is pending.

And Canada Action pointed to more information on LNG as a way to reduce global emissions.

The Canada Action group has long said Canadian LNG is cleaner and greener than that from other major producers. It notes:

• According to a study in the Journal of Cleaner Production, using Canadian LNG in China for coal power and heat generation could accomplish up to a 62% reduction in emissions.
• Another study, in Environmental Science and Technology, says significant net global emissions reductions can be achieved in China, India, and Taiwan by displacing more GHG-intensive fuels with LNG.
• Research by IHS Markit/S&P Global found that switching just 20% of Asia’s coal power plants to natural gas/LNG would decrease net global emissions equivalent to Canada’s total annual emissions.
• The U.S. Energy Information Administration (EIA) says switching to natural gas from coal has resulted in a power-sector CO2 emissions decline of more than 30% from 2005 to 2019.
• Canada Action adds: “According to the United Nations Environment Programme, natural gas will produce less CO2 per unit of energy – about 50% less compared to the best coal technology – and by this measure, it’s a much better option from a climate perspective.”

The Intergovernmental Panel on Climate Change also says natural-gas power produces 50 per cent fewer emissions than coal power, even when fugitive methane emissions from natural gas are taken into account: https://ow.ly/IeqK50RSMgW

And as we have noted elsewhere:

• LNG Canada will operate with emissions of less than halfthe global LNG facility average.
• The Haisla-Nation-led Cedar LNG will operate with emissions of less than one thirdof that global average.
• Woodfibre LNG will operate with emissions less than one sixthof the average.
• The Nisga’s Nations Ksi Lisims LNG project will operate with net zero emissionswithin three years of its first shipment overseas.

Canada Action also points out that B.C.’s world-class LNG also has shorter shipping distances to buyers in Asia, and that means fewer emissions from LNG carriers than vessels from other sources such as U.S. Gulf Coast plants.

“Canada’s renewably electrified liquefaction and stringent upstream regulations ensure B.C. LNG is the most sustainable choice for meeting the needs of energy-hungry nations across Asia and elsewhere abroad.”

So Canada Action concludes with this: “Canada should do everything it can to build out its LNG export capacity not only to supplement the world with the low-emission energy it needs, but also to give a much-needed boost to our ailing economy here at home.”

Read the latest Canada Action report: https://ow.ly/ejIT50RW2Sr

(Posted here 29 May 2024)