Why Canada needs a liquefied natural gas (LNG) industry

June 25, 2018

Natural gas exported from Canada as LNG will help reduce global emissions and grow our economy

If the U.S. were to decide tomorrow to stop importing Canadian natural gas, $19 billion in revenues and 533,000 jobs across the nation would be in jeopardy. Twelve of Canada’s 13 provinces and territories benefit in some way from natural gas development. Just over half of our economic activity from natural gas relies on continued exports to our only trading partner- the United States.

Canada can find new markets for natural gas if we develop a liquefied natural gas (LNG) industry. Globally, demand for LNG is booming, in 2016, 18 countries imported natural gas as LNG. Just two years later, 42 countries are now meeting their energy needs with LNG.

LNG is natural gas cooled to -161 degrees Celsius, the temperature that natural gas changes from a gas to a liquid. British Columbia is perfectly positioned to build facilities to cool natural gas to LNG and export to new markets overseas.

Natural gas demand expected to grow as countries reduce emissions

Even under the most ambitious scenarios to meet the world’s climate goals, the International Energy Agency predicts global demand for natural gas will continue to increase even as demand for coal and oil drops. Natural gas demand is expected to increase as countries look to reduce their greenhouse gas emissions. Switching from coal to natural gas provides countries with the lowest-carbon source of consistent, reliable and affordable energy. China alone is expected to lead 40 percent of the growth in natural gas demand by 2040.

We need to remember that more than one billion people around the world still do not have access to electricity in any form. Millions more have only wood or dung for cooking needs. Providing affordable, consistent electricity is key to lifting millions from poverty. Natural gas is also able to support the development of renewable energy, providing consistent electricity when the sun is not shining or the wind is not blowing.

Canada’s climate leadership role 

Canada can be a climate leader by providing the world with LNG produced with the lowest-emissions, leading to even more greenhouse gas reduction potential when LNG from B.C. LNG facilities is used to displace coal in other countries.

For example, the LNG from a large facility in B.C., when used to displace coal, could reduce global emissions the equivalent of 34 coal-fired electricity plants or, Canada’s annual greenhouse gas emissions by eight percent. B.C. facilities will produce LNG with a maximum carbon intensity of 0.16 tonnes of carbon dioxide per tonne of LNG produced. Globally, the carbon intensity of LNG facilities is currently double that, at 0.32 tonnes of CO2 per tonne of LNG produced.

When it comes to producing natural gas, Canada is also doing more to limit the amount of methane in natural gas production which includes electrifying natural gas well pads and production facilities with solar energy and clean hydro-electric power. In B.C., methane gas detectors, infrared cameras capable of detecting small leaks and mobile air quality monitoring trailers are all being used to spot and fix fugitive emission leaks. Using these measures and more, B.C. has pledged to reduce emissions from oil and gas operations by 45 percent by 2025.

If Canada does not develop an LNG industry, it will not reduce global greenhouse gas emissions but instead, lead to “carbon leakage”- where global demand for LNG is met by other jurisdictions that produce LNG with more greenhouse gases. We must think globally when it comes to reducing greenhouse gases and combating climate change. While countries have borders, emissions do not.

Supporting existing jobs and building our economy

Building a liquefied natural gas industry in B.C. will support the thousands of jobs across Canada that are tied to natural gas development. According a report by the Conference Board of Canada, developing a 30 million tonnes per annum LNG industry in B.C., which is approximately two large and one smaller LNG facility, would grow Canada’s economy by an average of $7.4 billion per year over the next 30 years and raise national employment by 65,000 jobs annually. The Conference Board of Canada also estimates that the boost in economic activity in B.C. would increase household disposable income by $864 per person every year for 30 years.

In B.C., the new revenues from the industry paid to government could fund every year for 30 years- hiring 2,500 new nurses, 2,500 new teachers, 900 new family doctors, building 60 new elementary schools and a billion-dollar major infrastructure project, such as a new bridge or subway line.

The time is now for Canadians to support developing a new industry that will protect and create growth in jobs and revenue while meeting growing global demand for LNG produced with the fewest emissions.

David Keane, President BC LNG Alliance