Taking action in support of our vital natural resource sector

The 2022 war in Ukraine has shone a light on the importance of energy security for policymakers worldwide, especially in the European Union where governments are now frantically searching for alternative oil and gas supply sources.

But the war has also brought to the forefront the importance of natural gas in other critical processes apart from transportation and heating. The fossil fuel also plays an integral role in growing our food.

Yes, that’s right, natural gas is an essential component of fertilizer, used as a raw material and as fuel for nitrogen fertilizer production.

Today, nitrogen-based products account for nearly 60 per cent of all fertilizers globally. Meanwhile, the consumption of ammonia to produce nitrogen fertilizers accounts for more than 80 per cent of the global ammonia market. With the exception of China, where coal gasification is utilized to produce ammonia, most of the world’s ammonia is produced from natural gas.

So then, is it any surprise that skyrocketing natural gas prices are affecting the price of nitrogen fertilizers, which in turn affects the price of our food?

Fertilizer plants in the UK and elsewhere are being forced to pass on rising energy costs to consumers via the supply chain, a trickle-down effect which is leaving families with less money in their pocket. Many fertilizer producers have been forced to shut down entirely as skyrocketing energy prices take their toll on businesses and families alike.

If only there were more natural gas supplies available to fill the EU’s energy gap and help balance out global energy markets, then perhaps we wouldn’t be in this mess in the first place.

Liquefied Natural Gas Tanker

Meanwhile, anti-oil and gas activists across the West continue to sing the same old tune, suggesting that liquefied natural gas (LNG) projects are a “climate bomb.”

That’s just untrue.

Natural gas is said to be an essential fuel in the energy transition to come according to the International Energy Agency (IEA) for a number of reasons, one being it burns cleaner than coal. But let’s stay on topic.

Natural gas and its ocean-borne form – cooled to -162 ° Celsius (C) and shipped across the globe via LNG tankers – can help alleviate global concerns over food and energy supply shortages simultaneously. More natural gas supplies to balance out supply and demand on international markets typically translates to healthier energy prices and lower fertilizer production costs. 

Mineral fertilizers play an integral role in feeding the world, especially one with a rapidly growing population. According to estimates by the Food and Agriculture Organization (FAO), we will need to produce 60 per cent more food to feed a population of 9.3 billion by 2050.

We won’t get there without fertilizer. Not even close.

The University of Oxford estimates that nitrogen fertilizer supports roughly half of the world’s population. In other words, Fritz Haber and Carl Bosch - the pioneers of the Haber-Bosch process used to make ammonia - are estimated to have allowed several billion people to live on our planet, who otherwise would have died prematurely, or never been born at all.

Like natural gas and fertilizer, fossil fuels are also inextricably linked to renewable energy. Wind turbines and solar panels, for example, could not exist without the energy or material components of fossil fuels.

Canada, home to vast natural gas reserves, is ideally positioned to provide the world with the natural gas it needs for heating, cooking, electricity, fertilizer, renewables, and so forth. We will do this through the build-out of LNG export facilities with access to tidewater.

We are one of the most sustainable oil and gas producers on the planet, as shown by our exceptional rankings on several Environmental, Social and Governance (ESG) indices that put us above most - if not all - other energy producers.

Additionally, significant global demand growth for natural gas through 2040 in a world ever increasingly focussed on environmental outcomes makes it counterintuitive to look anywhere else for supplies other than the most responsible energy producers.

Perhaps it’s time we start having a more realistic conversation about fossil fuels and how they make several critical processes and technologies possible. After all, the link between natural gas, fertilizer and food production isn’t something we should take for granted by any means.

Wheat Surges Amid Fears of Shortages as India Restricts Exports https://t.co/5Uwhr1X5P2

— Canada Action (@CanadaAction) May 17, 2022