Natural Gas in Canada
Natural gas is one of the fastest-growing sources of energy across the world. Many in the energy sector see it as a game-changer; comparatively, it’s a much cleaner burning, more affordable and highly versatile fossil fuel when compared to coal or oil, especially for power generation.
Canada we have lots of it, exemplified by the fact that we are the fourth largest producer and sixth largest exporter of natural gas globally.
Natural Gas in Canada: Facts
- The oil and gas sector supports approximately 530,000 jobs across the country (NRC)
- 98 percent of natural gas produced in Canada is from the western provinces, while over 70 percent of the population lives east of Manitoba (NRC)
- 46 percent of Canadian production is exported to the United States (NRC)
- The value of Canadian net exports (exports minus imports) was $6.1 billion in 2018 (NRC)
- 97 percent of U.S. imports and 9 percent of U.S. consumption come from Canada (NRC)
- 98 percent of Canada’s imports and 17 percent of Canadian consumption comes from the U.S. (NRC)
- Canada’s natural gas producers follow some of the strictest environmental regulations in the world
- In 2018, Canada finalized regulations on methane emissions from upstream oil and gas facilities, although many provinces already had their own regulations in place
New Market Access
Hundreds of thousands of Canadians in the energy sector work hard every day to provide our society with the natural gas it needs. Gas not used domestically is sent to our only export markets in the Western and Midwest regions of the United States where it’s bought at a steep discount – costing our economy tens of millions of dollars a day.
To add, the U.S. has increased its own natural gas production considerably in recent years, allowing more domestic supply to meet demand and decreasing its reliance on Canadian imports. New production from massive shale gas plays like the Marcellus formation also has resulted in an increase of natural gas imports from the U.S. into eastern Canada.
Meanwhile, the U.S. has focused on building several new plants to facilitate the export of liquefied natural gas (LNG) to Asia, Europe and other parts of the world.
Canada needs to start rethinking its natural gas export strategy before it’s too late. Maria van der Hoeven, former Executive Director of the International Energy Agency could not have expressed the situation our country is facing any better than on an Arc Energy Podcast in early 2020:
“It’s important that LNG Canada gets built because in a few years the United States, Canada’s only current customer, will become completely self-sufficient in gas. So Canada must find new outlets for its natural gas.”
Canadians have an incredible opportunity to provide the world with the natural gas it will need as the transition to cleaner fossil fuels and renewables ensues over the coming decades. By 2040, demand for natural gas is projected to soar by as much at 40 percent (IEA).
With our vast natural gas reserves and existing renewable energy infrastructure, we also have an opportunity to build some of the lowest-GHG emitting liquefaction facilities in the world, powered in-part or fully by renewable electricity which could reduce emissions elsewhere.
Canada’s Clean LNG Opportunity
- LNG can help lower GHG emissions by displacing higher-emitting sources used for power generation in other nations
- A recent analysis by Desjardins found a fully developed LNG Canada could reduce global CO2 emissions by an amount equal to 15 per cent of Canada’s overall GHG emissions
- To put that into perspective, a 15 per cent reduction of Canada’s overall GHG emissions is equivalent to removing about 18 million cars off the road annually
- Three independent life-cycle analyses conducted by Stanford University, University of British Columbia and University of Calgary indicated a switch from coal to natural gas could accomplish a 34-62 per cent reduction in CO2 emissions per unit of electricity generated
- LNG Canada in British Columbia is projected to operate with about 50 per cent the GHG emission intensity of the global LNG facility average, producing the most competitive carbon footprint gas in the world
- Energie Saguenay LNG in Quebec is projected to have a GHG emission profile that is 84 per cent lower than similar-sized producers in Asia and the U.S.
- Kitimat LNG in British Columbia is projected to operate with less than 33 per cent the GHG emission intensity of the global LNG facility average, with the potential to have the lowest emissions of any large project in the world
Global demand for natural gas is projected to increase for decades to come as the world makes the transition towards using cleaner sources of energy. As one of the most environmentally responsible natural gas producers with some of the lowest GHG-intensive LNG facilities on the planet, Canada needs to find new markets for its gas while vying for as much global market share as possible.
We have an immense opportunity through LNG exports to create billions in economic activity and government revenues plus tens of thousands of long-term jobs here at home while reducing GHG emissions on a global scale.
What’s good for the future of Canada’s natural gas industry is good for the global environment; why wouldn’t we seize the opportunity for long-term jobs, government revenues and GHG reductions while it’s here!?
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