At one point, 13 LNG projects in B.C. and five in Central and Atlantic Canada were proposed. Regulated timelines and a convoluted legal structure have unfortunately become obstacles to international investment.
In the natural gas market in 2015, the United States and Canada had similar profiles: both were energy superpowers capable of generating more natural gas than they consumed domestically, and both had a common problem: a lack of infrastructure to export it. As a result, both countries’ industries launched a flurry of LNG export project bids.
And what about Canada? We continue to export about the same quantity of LNG that we did in 2014, i.e., none. So, where did everything go wrong?
By 2022, things will have changed: the United States is expected to surpass Qatar as the world’s top LNG exporter. To put this achievement in context, the United States exported 0.4 billion cubic meters of LNG in 2014. In 2017, the United States became a net exporter of natural gas, with daily shipments of 0.32 billion cubic metres — roughly the total of all 2014 exports — with 2021 exports predicted to be between 72 and 77 million tonnes of LNG per year (mtpa).
In other words, US LNG shipments have increased by approximately 50% year over year since 2014. They’ve been so effective that Canadian businesses have agreed to supply Western Canadian gas to the Gulf of Mexico.
And what about Canada? We continue to export about the same quantity of LNG that we did in 2014, i.e., none. So, where did everything go awry?
At one point, 13 LNG projects in B.C. and five in Central and Atlantic Canada were proposed. Regulated timelines and a convoluted legal structure have unfortunately become obstacles to international investment. How serious is this stumbling block? Between 2014 and 2020, the US constructed seven LNG facilities, has five more under development, and has 15 more approved.
Canada only had one operational LNG facility during that time period out of the 13 projects that were taken into consideration for British Columbia. The Fortis Tilbury LNG project was one startup that first produced 0.25 mtpa of LNG for export before being upgraded to 0.65 mtpa. That represents around 0.05-0.14% of the 475 mtpa worldwide LNG sector. To provide marine bunkering fuel and exports abroad, Fortis BC is presently applying for permission to expand by 2.5 mtpa.
The LNG Canada project near Kitimat, where the first two trains should be finished by mid-decade, is Canada’s only world-scale plant now under construction. When complete, the plant will have the ability to expand to 26 mtpa and initially produce between 6.5 and 14 mtpa.
It required the direction of the Haisla Nation and numerous other northern B.C. tribes. communities to gain support for and approval for the project. Additionally, the provincial and federal governments deserve praise for approving the project’s extraordinary $42 billion private investment and for supporting it during construction.
All wonderful news, but Canada’s export capacity is still still anticipated to be between 15 and 17.5 mtpa, or 3.16 to 3.68 percent of the world’s LNG exports.
We should have moved initiatives along over the last seven years, but we didn’t. As a result, many potential developers choose to invest their money in nations where projects can be completed in a fair amount of time rather than in Canada.
I raised the possibility of chilly winters and an impending energy crisis in China and Europe in the fall. This has taken place. Daily news reports discuss price rises that are so great they force the shutdown of nuclear plants and Russian gas supply. The EU has proposed legislation to classify investments in nuclear and some natural gas facilities as “green” in order to assist combat this. In fact, there is such a high demand for natural gas that around Christmas, a lot of LNG from the American Gulf Coast was shipped to Europe.
Take a moment to consider that. We may be assisting with a global energy problem if just one of the proposed Canadian projects on the East Coast got off the ground. We could even have shipped through the Panama Canal to reach the market from the West Coast with the rates as high as they are. Canada must stay on the sidelines and observe.
The demand for natural gas is high and is only expected to rise. Canada also faces competition from nations like Qatar, which lacks the same environmental, social, and governance (ESG) norms, from Australia, a mature exporter with a well-established infrastructure, and of course from the United States.
For Canada to increase output, there is still some chance. Despite the fact that many initiatives have stalled, some are still moving forward. The regulatory process was finished by Woodfibre LNG (2.1 mtpa) several years ago, and it appears that it is still moving forward.
Indigenous leadership and cooperation are a recurring theme in the upcoming generation of initiatives. Although the United States has surpassed us in this regard, both the Cedar LNG (3–4 mtpa) led by the Haisla Nation and the Ksi Lisims LNG (12 mtpa) led by the Nisga’a Nation will assist increase Canadian exports.
Less than 2% of Canada’s total emissions are contributed to global emissions. We continue to have some of the world’s cleanest, most affordable, and most plentiful energy. With businesses reducing emissions daily, we continue to produce it to the finest standards in the world. In addition to leaving billions of dollars on the table for hospitals, schools, flood recovery, and pandemic response, we have also given those funds to regions that don’t adhere to our own standards.
The problem with losing foreign investment is that it’s difficult to get it back after it’s gone. To attract investments and move our nation ahead, we want courageous leadership.
Source: Jack Middleton and James Robson