Environmental Groups Protest Canadian Proposal to Help Europe Wean Itself Off Russian Natural Gas

BLOG - Environmental Groups Protest Canadian LNG Policies Help EU

Amid the worst modern energy crisis the world has ever seen (1), environmentalists are doubling down on opposition to sustainable Canadian energy projects which, if built, could help Europe reduce its dependence on Russian natural gas.

No, seriously.

A coalition of environmental groups has called on Ottawa to reject any proposals to build liquefied natural gas (LNG) export facilities on Canada's east coast, suggesting that such projects would create "climate-wrecking emissions." These opponents are doing everything they can to prevent Canada from pursuing stronger energy ties with Europe, a continent that has found itself in short supply of natural gas amid the fallout of the war in Ukraine.

It's sad to say, but it isn't shocking that these so-called "environmentalists" have again taken an impractical, and quite frankly, insensitive approach to a big problem. That is, of course, global energy shortages, which have huge ramifications on the lives of not only those in modern nations, but also on those in developing economies worldwide – as we've seen in recent months and years.

In Europe, for example, skyrocketing energy prices have forced countless businesses to close while threatening to shutter entire industries in countries like Germany.

"We have to stop [production] immediately, from 100 to zero," said Peter Cingr, the Chief Executive of SKW Stickstoffwerke Piesteritz to Financial Times, if Russian natural gas flows dwindle or come to a halt. The company is Germany's largest ammonia producer and a key supplier to Europe of fertilizers and exhaust fluids for diesel engines (2).

Meanwhile, natural gas shortages in the UK are causing energy supply crises elsewhere in the world, as exporters choose to sell in more lucrative markets - i.e. Europe [3].

business case for liquefied natural gas from Canada is crystal clear

The moral of the story is that energy scarcity is no joke. Energy underpins nearly all aspects of modern-day society. In fact, energy improves the standard of living for those who have an abundance of it. And today, there are still more than 3 billion people worldwide who use less electricity than an old American refrigerator does per day (4).

Don't the citizens of emerging market economies deserve the opportunity to live with an abundance of energy, as we do in the West?

Here in Canada, LNG opponents would disagree. They continue to sing the same old tune, turning a blind eye to the fact that Canadian-made LNG can help provide energy security to our allies and trade partners while simultaneously reducing global greenhouse gas (GHG) emissions.

Canadian LNG opponents suggest that new export facilities on the east coast will blow our chances of meeting emissions targets. However, they don't take into account the global nature of emissions, nor do they consider the low carbon nature of Canadian-made LNG compared to other export facilities worldwide.

A molecule of CO2 released in China, for example, isn't bound by national boundaries or territories. That’s a fact.

In 2021, the world's second-largest economy began building 33 gigawatts of coal-fired power generation. According to the Center for Research on Energy and Clean Air (CREA), that was the most new coal power capacity China has undertaken since 2016 and is three times more than the rest of the world combined [5].

Today, China is also the largest global emitter of GHGs, accounting for 30 per cent of global emissions [6].

Hence, if the world is to make any real progress on climate action, we must provide developing market economies like China and India with lower carbon alternatives to more emission-intensive fuels. That includes renewables, natural gas, hydrogen, and anything else that fits the bill.

For example, Canada can provide the U.S. with more renewably generated electricity to displace more intensive power generation – as we have been. But we can also do the same with natural gas for Europe, Asia, and other international economies that are seeing industries switching from gas-to-coal and gas-to-oil due to record-high gas prices.

Canada needs to reduce red tape to get east coast LNG projects built

Yes, that's right. Chemical producers and utility providers worldwide are switching from natural gas back to more GHG intensive forms of energy, a move that should indicate to anti-Canadian LNG activists that more cleaner-burning natural gas on global markets is a good thing.

Canadian-made LNG is an ideal substitute for coal-fired power generation in Asia, according to three independent life cycle assessments by researchers at Stanford, the University of British Columbia and the University of Calgary [7]. The groups found that substituting Canadian-made LNG in China for coal-fired power and heat generation could accomplish a 34-62% reduction in carbon dioxide (CO2) emissions per unit of electricity generated.

LNG projects in Canada also have the advantage of relying on electricity grids which are almost fully renewable. In British Columbia or Quebec, for example, liquefaction facilities would be plugging into grids that already source more than 95 per cent of electricity supply from renewables.

LNG Canada – the only project underway in the country – is projected to have an emissions profile that will be 35 per cent lower than the world's best performing facilities, and 60 per cent lower than the global weighted average [8] - largely because of BC's massive hydro generation capabilities. Other potential projects such as Goldboro LNG will rely on carbon capture facilities to operate with net-zero emissions, while Ksi Lisims has promised to operate with net-zero emissions within three years of its first shipment.

Environmentalists willfully ignore the hard facts behind coal-to-gas switching. They have to, otherwise their narrative is shot.

The International Energy Agency (IEA) says that natural gas is a critical mainstay of global energy. Where it replaces more GHG-intensive fuels (such as coal), it improves air quality and reduces CO2 emissions with tangible results (9).

For example, since 2010, coal-to-gas switching has prevented around 500 million tonnes of CO2 from entering the atmosphere – an effect equivalent to putting 200 million electric vehicles (EVs) running on zero-carbon electricity on the road over the same period (9).

Additionally, switching just 20 per cent of coal-fired power to natural gas globally could prevent the release of 680 million tonnes of CO2 per annum, equivalent to Germany's emissions [10].

The United States is yet another nation that has seen the benefits of switching away from coal to natural gas. Over the past decade, doing so in power generation has driven domestic emission reductions and positioned the U.S. as a global leader in climate and air quality progress (11).

Clearly, the benefits of coal-to-gas switching cannot be ignored.

Canada could be making 250 million a day from just one LNG export facility given current prices

Given the facts, anti-Canadian LNG activists should be all for coal-to-gas switching. But the truth is that these opponents don't want the most amount of energy for the least amount of carbon. If they did, they wouldn't oppose natural gas, hydro and nuclear.

Perhaps the most shocking aspect of environmentalist opposition to Canadian east coast LNG is the fact that they support policies which help state-owned enterprises (SORs) to continue dominating global energy markets.

The war in Ukraine has brought energy security into the limelight worldwide. It turns out that it really does matter where you source your energy, food and other critical commodities that underpin modern society as a whole.

It is sad that despite the turmoil in Europe – not to mention the global energy crisis that is making life unaffordable for millions worldwide – that this coalition of environmentalists cannot see the obvious benefits of building new LNG export facilities on Canada's east coast.

With growing global demand for both oil and natural gas, the question remains: where would these opponents of Canadian LNG choose to get their energy from? Would it be Canada, a democracy that is global leader in emission reductions and environmental protection? Or, from SORs that often have no measurable transparency and little to no protections for human rights and the environment?

The choice should be clear to this coalition of environmentalists.

A pragmatic and realistic approach to energy supply is needed. That means choosing Canada as a go-to supplier for as much of the world's energy needs as possible - not only in current global context, but for as long as necessary.

i love oil and gas banner

Sources:

1 - Bloomberg – Worst of Global Energy Crisis May Still Be Ahead, IEA Says, Date Accessed: August 5th, 2022 (https://www.bloomberg.com/news/articles/2022-07-12/worst-of-global-energy-crisis-may-be-ahead-iea-s-birol-warns)

2 – Financial Times – Russian gas cuts threaten to shutter Germany industry, Date Accessed: August 5th, 2022 (https://www.ft.com/content/07df3f2e-6991-4842-a047-41f2b6fb853d)

3 – Bloomberg – Europe's Plan to Quit Russian Fuel Plunges Pakistan Into Darkness, Date Accessed: August 5th, 2022 (https://www.bloomberg.com/news/articles/2022-06-13/energy-prices-in-europe-are-creating-power-outages-in-pakistan#xj4y7vzkg)

4 – Forbes – My Old Refrigerator Used More Electricity than 3.3 Billion People, Date Accessed: August 5th, 2022 (https://www.forbes.com/sites/robertbryce/2020/05/22/my-old-refrigerator-used-more-electricity-than-33-billion-people/?sh=48e4dd477d5a)

5 – Wilson Center – Chinese Coal-based Power Plants, Date Accessed: August 7th, 2022 (https://www.wilsoncenter.org/blog-post/chinese-coal-based-power-plants)

6 – U.S. Environmental Protection Agency – Global Greenhouse Gas Emissions Data, Date Accessed: August 7th, 2022 (https://www.epa.gov/ghgemissions/global-greenhouse-gas-emissions-data)

7 – Journal of Cleaner Production – Volume 258 – Greenhouse-gas emissions of Canadian liquefied natural gas for use in China: Comparison and synthesis of three independent life cycle assessments, Date Accessed: August 6th, 2022 (https://www.sciencedirect.com/science/article/abs/pii/S0959652620307484)

8 – LNG Canada – Living up to climate promises, Date Accessed: August 7th, 2022 (https://www.lngcanada.ca/news/living-up-to-climate-promises/)

9 - International Energy Agency – The Role of Gas in Today's Energy Transitions, Date Accessed: August 5th, 2022 (https://www.iea.org/reports/the-role-of-gas-in-todays-energy-transitions)

10 – Shell - LNG Outlook 2022, Date Accessed: August 5th, 2022 (https://www.shell.com/energy-and-innovation/natural-gas/liquefied-natural-gas-lng/lng-outlook-2022.html)

11 – American Petroleum Institute – Affordable Natural Gas & U.S. Emissions Reductions, Date Accessed: August 7th, 2022 (https://www.api.org/news-policy-and-issues/blog/2020/01/15/affordable-natural-gas-emissions-reductions)