With LNG, Canada can help millions

Contributed to Vancouver Sun
Tim McMillan
President and CEO
Canadian Association of Petroleum Producers
October 07, 2016
Ottawa’s decision to approve a liquefied natural gas project is a strong signal of support for Canada’s energy industry. We commend our government for making the right choice and finding a balance between our commitment to the environment and energy prosperity.

So what now?

Almost 200 countries signed the COP21 declaration last year in Paris. But many of these countries, particularly developing countries, continue to build coal-fired generation to provide electricity to their growing economies. Canadian LNG can enable these countries to have more renewables instead, and provide a lower carbon option than coal.

On a recent trip to India, executives from CAPP had a chance to sit down with officials from the Indian government who expressed a real demand for Canadian liquefied natural gas (LNG) as a complement to renewable energy, and as a means to getting the people of India off higher-polluting cooking fuels such as biomass.

According to the International Energy Agency’s (IEA) World Energy outlook 2015, 840 million people in India do not have access to clean fuel for cooking and instead cook indoors with improper ventilation. The primary sources of fuel are: wood; charcoal; agriculture waste; and animal dung. This represents the largest population of any country in the world facing this environmental and human health issue.

Globally, 4.3 million premature deaths are attributed to household air pollution from biomass every year according to the World Health Organization (WHO).

Natural gas does not just have the opportunity to be a fuel source for cooking. The IEA predicts global energy demand to increase by 32 per cent by 2040. Natural gas will be leading the charge with global demand expected to increase 46 per cent by 2040. 

While fossil fuels will account for 75 per cent of that energy demand, non-hydrocarbon sources are expected to account for the remaining 25 per cent. 

We live in a world that will need more energy. Canada can be the source and supplier of choice to boost quality of life at home and abroad.

Making up some of the non-hydrocarbon share will be renewable energy sources such as wind power and solar power. The challenge with wind and solar is the wind does not always blow and the sun does not always shine. 

One can only imagine the impact that would have on things such as hospitals, schools and other critical infrastructure. The perfect low-carbon partner for these energy sources is natural gas, for it complements their intermittent nature.

The key to replacing alternate cooking fuels and providing a clean power supply for renewables is making sure that the natural gas used is coming from a world-leading source: Canada.

As the fifth-largest producer of natural gas on the planet, Canada is well positioned to be a global supplier of choice. British Columbia alone has enough proven natural gas reserves that they could meet their own domestic supply and still have enough left over to ship overseas for more than 160 years.

In terms of policies, laws and regulations Canada is a global-leader and we should be proud of our opportunity to make a difference on the global stage.

According to a recent report from the C.D. Howe Institute if countries such as China, India, Taiwan or Japan were to make the decision to import LNG from British Columbia and displace coal power there would be a net reduction of global greenhouse gas emissions.

When it comes to sustainability the question should not be whether or not the future includes natural gas by way of Canadian LNG. The question should be how Canadian LNG can help the world progress into a lower-carbon and sustainable energy future.

Canada has a chance to make a difference in lives of millions of people. We have a chance to show the world that we are a global leader in responsible energy development and that we can lead at a standard that far exceeds that of other global suppliers of natural gas.

Taking action against climate change and meeting an increasing global demand for energy has become a huge challenge for our industry and the world. Make no mistake, the world will need more energy as it continues to grow and the developing world makes strides to increase their standard of living: LNG can give us the best balance of both.

At the end of the day the market still plays a big role in determining the commercial viability of a project of this magnitude.  All 190 conditions need to be met in order for this project to go forward, and all within the context of an extremely competitive global environment.

The federal government’s message is clear: it is committed to finding a way to get Canadian energy to tidewater and to new customers abroad and finding a balance between Canada’s sustained environmental leadership and prosperity. Approving the Pacific Northwest LNG project is a step in the right direction and provides Canadian solutions to global challenges.