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Canadian liquefied natural gas (LNG) exports to Asia could provide the annual net emissions equivalent reduction of removing every single car from Canadian roads, shows a new study from global energy research and consultancy firm, Wood Mackenzie.
As world leaders gather in Egypt for the COP27 world climate summit Oct. 8-18, the study, commissioned by the Canadian Energy Centre, demonstrates how natural gas from Canada could help energy-hungry Asian countries meet growing demand, while helping lower net global emissions by supplanting coal.
Given Canada’s vast natural gas reserves, proximity to Asian markets, and competitively priced products, Canada has an opportunity to become a key supplier for decades to come.
“In Canada, we have an abundance of natural gas. Someone will produce that natural gas – if it’s not Canada, someone else will,” said Matthias Bloennigen, Wood Mackenzie’s Director of Americas consulting.
“If we were to have more western Canadian LNG, that would allow a lot of the other sources to go to Europe. It’s like a domino.”
Canada currently has no ability to export LNG to global markets, but a handful of west coast projects could see Canada enter a global marketplace that has grown significantly as nations look for alternatives to Russian natural gas.
LNG from Canada would be very competitive with other suppliers due to lower transportation costs to Asian markets, as well as lower facility emissions and lower supply costs than many of its competitors.
“The shorter shipping distance and lower resource breakevens mean Canadian LNG is more competitive,” said Bob Kubis, Wood Mackenzie’s Director – Americas Natural Gas, LNG & NGL Consulting.
“Canadian natural gas resources are developed in a regulatory environment where they’re less emitting than certain U.S. shale basins.”
The report’s authors examined three scenarios – a base case that considers moderate growth of Canada’s LNG industry, one in which Canada greatly accelerates its LNG capacity and one in which it remains largely stagnant.
In the base case, by 2050, Canada could account for nearly 20% of the northeast Asia LNG market share, compared to 31.7% under the accelerated model and just under 7% if Canada limits LNG growth.
Under the scenario in which Canada accelerates its LNG capacity, helping Asia switch from coal to natural gas, net emissions in the region could be reduced by an average of 188 MtCO₂E (metric tonnes of carbon dioxide equivalent) per year, or about 29% of Canada’s total annual greenhouse gas emissions, the equivalent of removing all of today’s cars from Canada’s roads. Should Canada limit LNG growth, total emissions in northeast Asia would continue to rise by an average of four MtCO₂E per year.
Other key takeaways from the report
With the world gripped by a global energy crisis, many nations in both Asia and Europe have moved back to coal, among the dirtiest of fossil fuels, in an effort to ensure reliable power. Canadian LNG is a cleaner solution that could have a real measurable impact on global emissions by reducing dependency on coal over the medium term.
Meanwhile, the CEC has also launched a digital media campaign during COP27 targeting delegates with the message that Canada’s oil sands industry has “accepted the challenge” of reaching net zero greenhouse gas emissions by 2050.
The campaign includes online display banner ads in Egypt as well as print ads in the New York Times international edition, which will appear in 190,000 papers. The ads will direct people to www.oilsandsnetzero.ca, which will highlight the important role oil and gas plays in meeting current and future global energy demand, and how Canada’s oil and gas industry is the supplier of choice for meeting the world’s growing energy needs.
Central to this effort is the Pathways Alliance, a coalition of Canada’s six largest oil sand companies, accounting for 95% of production, that have jointly committed to reaching net zero emissions by 2050. Together they are developing one of the world’s largest carbon capture and storage projects, investing more than $24 billion in CCS and other emissions reduction technologies by 2030. The goal is to eliminate 22 million tonnes of emissions per year by 2030.
The $136,000 campaign focuses on this world-leading collaboration and will run for the duration of the conference.
Visit www.canadianenergycentre.ca for more information.
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