Canada is Part of the Solution to the Global Energy Crisis. What Are We Waiting For?

Canada is Part of the Solution to the Global Energy Crisis. What Are We Waiting For?

Canada is Part of the Solution for the Global Energy Crisis

Amid a global energy crisis deemed worse than the oil crises of the 1970s, Canada seems to have forgotten about its vast petroleum reserves, which, if unleashed, could help stabilize energy markets and improve energy security worldwide.

Canada is one of the few democratic countries considered a major exporter of oil and natural gas, two commodities which many parts of the world are increasingly in short supply. On the wayside is the fact that the world is also low on non-state-owned energy production (a majority of which is from autocratic governments), another huge cause of concern for us all in light of war in Ukraine.

As a result, policymakers across the West should be adamant about creating policies that put as much energy production as possible into the hands of stable and responsible suppliers like Canada.

Just look at the severe consequences of energy shortages if you need to ask why.

Global Energy Crisis - How it Started - How it's Going

Germany, for example, is saying some industries may have to shut down if there is not enough natural gas come winter, according to Economy Minister Robert Habeck via reporting from Der Spiegel magazine.

"Companies would have to stop production, lay off their workers, supply chains would collapse, people would go into debt to pay their heating bills, that people would become poorer," Habeck told Der Spiegel in late June.

According to AP News, Germany's backup plan is to fire up 16 dormant fossil fuel power plants and extend permits for 11 more amid fears of further cuts in Russian natural gas supplies.

Italy, Austria, the UK and Netherlands are just a few other European nations also eyeing coal-fired power plants as an alternative to Russian fuel. The UK in particular has also seen dramatic drops in wind power generation, exacerbating its domestic energy crisis.

More coal plants are likely the last thing EU members want, but they have no choice – and may not for quite some time.

Europe is eyeing a 42 per cent rise in LNG import capacity by 2026 as it weans itself off Russian energy. According to Argus Media, Europe's LNG import capacity expansions could exceed new global liquefaction capacity until 2025, raising the question of whether or not Europe can secure sufficient LNG supplies to make use of its new facilities.

In other words, those coal plants in Europe may be up and running for a while unless more natural gas supplies hit the global market.

We also shouldn't forget that global energy systems are incredibly complex. Other developing economies can feel the pain when energy shortages exist in more lucrative markets like Europe.

For example, Europe's plan to quit Russian energy is taking its toll on a nation thousands of miles away. Pakistan has been plunged into 12-hour rolling blackouts as the country's suppliers in Qatar and Italy have defaulted on long-term contracts while choosing to sell to more profitable markets i.e. Europe.

The "domino effect" on global economic stability and energy security resulting from Russia's stranglehold on European energy has awoken the West from its "energy amnesia," according to Daniel Yergin, Vice Chairman of S&P Global and renowned global energy expert.

But how do we know this is the last time a major state-owned energy producer cuts energy supplies at some point in the future?

We don't.

Germany wants more Canadian LNG - Olaf Scholz

What we do know is that global demand for LNG is expected to grow 90 per cent by 2040, according to Shell's latest LNG Outlook. Oil demand is also expected to continue growing according to the International Energy Agency's World Energy Outlook 2021's STEPS scenario.

We also know that some of our closest allies and trade partners need reliable energy sources for decades to come.

So then, the question remains: is Canada up to the task of rapidly developing its energy export capabilities to help our friends in need?

The Americans sure are.

Since the war in Ukraine began, the White House has authorized boosting LNG exports from the existing Sabine Pass and Corpus Christi terminals. It also approved increasing liquefaction capacity at the Golden Pass and Magnolia projects by a combined 3.3 million tons per year. Two other U.S. LNG projects in Louisiana have also seen significant progress, one of which could be shipping LNG within 12 months.

Blaine Higgs says New Brunswick Can Help Supply Europe With Natural Gas

Meanwhile, our federal government has said that Canada's existing LNG import facility in New Brunswick is the most likely candidate to boost natural gas supplies to Europe as quickly as possible.

"The amount of gas that is available would be available only for one facility at this point," Environment Minister Steven Guilbeault said in an interview, adding the idea of constructing new gas pipelines in Canada was not "very realistic," according to Reuters.

Has the federal government forgotten about Energie Saguenay, Bear Head and Goldboro? The three LNG projects on Canada's east coast could combine for an additional 33 megatonnes of annual LNG production if built.

Sure, these projects would need new natural gas pipelines, but recognizing what's happening around the world right now should enable all of us to rally behind getting infrastructure built. If the Americans can reduce red tape to fast-track new energy projects – as they have done over the past several years to become the world's top LNG exporter – then so can we.

Canada just needs the willpower to do so. We need to take a page from the American energy playbook and expedite new infrastructure while cutting red tape that has bogged down Canadian energy projects for years.

Europe backs green label for natural gas and nuclear power

It's hard to fathom that any country would sit on top of the vast wealth of petroleum reserves we have and not develop them to their full potential - energy crisis or not.

Will Canada snap out of the energy amnesia we are seemingly stuck in while the rest of the West is focused intently on energy security and sustainable supply sources?

Will we realize that as one of the best global energy exporters – with vast oil and gas reserves – we have a real opportunity to be a go-to supplier for the world’s energy needs?

Only time will tell. However, we cannot and should not let such an opportunity pass us by. More responsibly produced Canadian energy on international markets is good for our families and global energy security. Let’s not forget that.