MYTH: Natural Gas Demand is Shrinking, Axing the Need for Canadian LNG

MYTH - global natural gas demand is shrinking anytime soon

A recent post in the Calgary Herald makes a strong case for supporting the development of the Canadian liquefied natural gas (LNG) industry as a solution to increasing global demand and Europe’s current energy woes. However, in the article, Keith Stewart, an employee of Greenpeace, is quoted saying “…there is going to be a market for natural gas but it’s going to be shrinking.”

Kudos to the author for reaching out to the other side of the aisle for another viewpoint on new Canadian LNG projects. In a free and fair society, it’s critical we support balanced and fact-based discussions in public discourse, especially in online posts that can sway public opinion on important topics such as the development of Canada’s world-class energy sector for the benefit of the Canadian economy, global energy security and emission reductions.

But there is just one problem; this Greenpeace statement isn’t rooted in fact. The notion that global natural gas demand will be “shrinking” over the long term is demonstrably false.

Amid the world’s worst modern energy crisis, we find it highly peculiar that anti-Canadian energy activists continue to protest policies that would increase the supply of sustainably produced natural gas on global markets while helping underpin energy security abroad.

Here are a few questions and answers refuting the idea that global natural gas demand is “shrinking.” Also see:


Olaf Scholz Says Germany wants and prefers Canadian-made LNG as a choice supplier for European energy needs


Is global demand for natural gas shrinking?

No. World demand for natural gas is projected to grow 22% by 2040 [2]. Additionally, global LNG demand is projected to grow 90% by 2040 over 2021 levels [3].

To say that there will be a market for natural gas but that market will be shrinking soon ignores the facts from trusted institutions such as the International Energy Agency (IEA), which says natural gas is a critical “transition” fuel [4] and will be a major global energy source in 2040 and beyond.

Are high gas prices having an effect on natural gas demand in the short term?

Natural gas demand will grow over the long term as countries look to lower greenhouse gas (GHG) emissions by displacing coal and oil for heating and power generation.

In the shorter term, however, natural gas demand is projected to decline slightly over the next three years as gas prices soar, making industry think twice about switching from coal or oil to gas [5]. Stumping the rate at which industries switch to gas for energy is not good for reducing global GHG emissions, as natural gas is the cleanest-burning fossil fuel.

You see, natural gas demand growth is actually a good thing for the global environment. When gas prices are affordable, industries are incentivized to switch away from coal or oil helping reduce emissions globally.

Will there be a “market” for natural gas decades from now?

The world has long relied on fossil fuels for its energy needs. Today, these resources still account for over 80% of global energy demand, and that figure is still growing [6].

The reality is that we cannot transition away from natural gas for energy too quickly without facing serious consequences. As the world undergoes an energy transformation, natural gas can directly support renewables as a reliable backup power source.


Olaf Scholz says Canada is a preferred partner for new LNG imports to Germany and Europe


Why is natural gas preferred over coal or oil for electricity generation?

When used for power generation, natural gas burns with about half the emissions compared to coal, up to 30% cleaner than oil and 15% less than wood [7]. Where natural gas is used to replace more GHG-intensive fuels, it improves air quality and limits carbon dioxide (CO2) emissions.

For example, since 2010 coal-to-gas switching has prevented the release of more than 500 million tonnes of CO2 – an effect equivalent to putting 200 million electric vehicles (EVs) running on zero-carbon electricity on the road over the same period [4].

Why should we support Canadian LNG projects?

The world will be using natural gas for a very long time, and reliable sources of supply are more important than ever. Additionally, global demand will increase substantially over the next few decades. Therefore, we must ask ourselves what producers are the best option for global supply moving forward.

Canadian-made LNG shines above the rest.

LNG Canada, for example, is expected to operate with 35% lower GHG emissions than the best-performing facilities in the world and 60% lower than the global weighted average [8]. Additionally, Canadian LNG projects on the west and east coasts can displace more GHG-intensive forms of power and heat generation worldwide, advancing coal-to-gas switching and reducing global emissions.

Canadian energy producers are also some of the most stable and responsible on the planet. As top performers on Environmental, Social and Governance (ESG) indices amongst the world’s major natural gas exporting nations, it only makes sense that Canada is a go-to choice for future supply.

Where would you choose to get your natural gas?

A – Democratic, stable, sustainable and reliable producers like Canada?

B – Autocratic producers with weaker governmental transparency and inferior protections for human rights and the environment?

Energy security matters, as we’ve discovered over the past few years with major turmoil in global markets. Let’s start making wiser decisions on where we source our energy from.

The World Needs More Canadian LNG

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Is natural gas demand going to be shrinking anytime soon? In the short-term perhaps, but long-term projections show that the world will need much more natural gas than it does today. The next time you hear someone suggest otherwise, you’ll know what to say.

Join us today for more balanced, fact-based, pragmatic and non-partisan discussions around Canada’s world-class natural resource sectors on Facebook, YouTube and Twitter today! We hope to see you there!

Sources:

1 – Calgary Herald – Varcoe: It’s time for Ottawa to stop dithering about backing a bigger Canadian LNG industry, Date Accessed: August 20th, 2022 (https://calgaryherald.com/opinion/columnists/varcoe-its-time-for-ottawa-to-stop-dithering-about-backing-a-bigger-canadian-lng-industry)

2 – Canadian Association of Petroleum Producers – Markets, Date Accessed: August 20th, 2022 (https://www.capp.ca/energy/markets/)

3 – Canadian Association of Petroleum Producers – CAPP Projects Investment in Canada’s Natural Gas and Oil Sector will Rise to $32.8 Billion in 2022, Date Accessed: August 20th, 2022 (https://www.capp.ca/news-releases/capp-projects-investment-in-canadas-natural-gas-and-oil-sector-will-rise-to-32-8-billion-in-2022/)

4 – International Energy Agency – The Role of Gas in Today’s Energy Transitions, Date Accessed: August 20th, 2022 (https://www.iea.org/reports/the-role-of-gas-in-todays-energy-transitions)

5 – Nasdaq – Global natural gas demand growth set to slow to 2025, says IEA, Date Accessed: August 20th, 2022 (https://www.nasdaq.com/articles/global-natural-gas-demand-growth-set-to-slow-to-2025-says-iea)

6 – Energy Now – Commentary: 20 myths about fossil fuels, refuted – Alex Epstein, Date Accessed: August 20th, 2022 (https://energynow.ca/2022/08/commentary-20-myths-about-fossil-fuels-refuted-alex-epstein/)

7 – Enbridge – Is natural gas environmentally friendly?, Date Accessed: August 20th, 2022 (https://www.enbridge.com/energy-matters/energy-school/natgas-enviro-friendly)

8 – LNG Canada – Living up to climate promises, Date Accessed: August 20th, 2022 (https://www.lngcanada.ca/news/living-up-to-climate-promises/)

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