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July 2018

Vol. 23, No.27 Week of July 08, 2018

Canada aims high with LNG, wants production cleaner, more efficient

Gary Park

for Petroleum News

Canada is positioning itself to become the world’s cleanest producer of LNG, using that fuel to displace dirtier sources of electricity around the world, especially coal-fired plants in Asia, said Natural Resources Minister Jim Carr.

He based that ambitious goal on a report from his own advisory council, consisting of 14 members from the energy sector, aboriginal communities and environmental groups who issued a report in late July targeting the environmental and economic benefits of shipping and burning oil and natural gas that is cleaner and more efficient.

Carr said the report shows that oil and gas, which will be a vital part of the energy mix “for quite a while,” can over time be extracted “more sustainably than ever. We are on the road to accomplishing that.”

He said the report’s advice is closely aligned with a recent consensus reached by G20 energy ministers on how to move the world off the dirtiest sources of energy and will form the basis of Canada’s national energy strategy that will be developed more fully in August at a meeting of federal and provincial energy ministers.

But not everyone is buying into Carr’s view, with Keith Stewart, a senior energy strategist at Greenpeace, arguing that the report has failed to establish a vision for moving off fossil fuels entirely in line with its Paris agreement goal of net zero emissions.

“Natural gas might be better than coal, but it’s still pretty greenhouse gas intensive,” he told The Canadian Press.

Others, however, reject the arguments of some environmentalists that the development of LNG in British Columbia is incompatible with provincial GHG reduction targets.

Rod Seeley, president of E3 Merge Consulting, wrote in the National Post that British Columbia is poised to become a world leader in LNG facility performance.

He said the province’s climate policies, including a C$35 per metric ton carbon tax that will increase to C$50 by 2022, and a 45 percent reduction in methane emissions from oil and gas are setting a standard for the rest of the world.

Lowest GHG emissions

Seeley said LNG facilities that meet British Columbia’s performance requirements will have the lowest GHG emissions anywhere, producing 50 percent fewer emissions than the average global LNG facility and 30 percent fewer than the best LNG plants currently in operation.

But he cautioned that British Columbia needs to “find the right balance between climate policy to ensure that significant opportunities like LNG investments being proposed in B.C. don’t go to other countries that have little or no GHG policy and are more carbon intensive (than B.C.).”

B.C. has the ability to develop its wealth of natural resources “in a sustainable manner, provide jobs and economic opportunity for the province and deliver products to the world that have the lowest carbon intensity,” Seeley said.

He estimated that output from one LNG plant in B.C. exported to Asia could provide enough energy to replace or displace up to 40 coal-fired power plants with cleaner-burning natural gas.

That, Seeley estimated, could reduce global GHG emissions by 60 million to 90 million metric tons a year of carbon dioxide - an amount roughly equal to 10 percent of Canada’s annual GHG emissions.

- GARY PARK






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