Opinion: Time to get on with LNG exports [GGP]
Vladimir Putin’s stalled assault on Ukraine has demonstrated that, by way of its standard navy, Russia is now not a superpower. But it surely stays an power superpower and, like OPEC in 1973, it has weaponized its oil and gasoline exports to attempt to undermine European and NATO help for Ukraine.
Europe is studying the onerous manner that it has been far too reliant on Russian power. Earlier than the invasion, Russia provided 45 per cent of European pure gasoline. With that offer now minimize off, Europe must rebuild its power safety for the approaching winter and the a long time to comply with.
The European Fee has proposed a four-part plan to cut back reliance on Russian fossil fuels and speed up the inexperienced transition: First, power effectivity measures by households. Second, re-engineering Europe’s energy-intensive industrial processes to cut back coal, oil, and pure gasoline use. Third, rushing up and scaling up renewables. Fourth, discovering new and diversified suppliers of pure gasoline. To that finish, Germany has simply accomplished its first LNG terminal and signed long-term LNG contracts with Qatar, whereas LNG shipments are ramping up from the U.S. Gulf Coast as American producers frantically add manufacturing and export capability.
However the place is Canada in all this? Because the world’s fifth-largest pure gasoline producer we actually have the capability to assist our European allies counter Russia’s handiest weapons system — power. However the authorities dissembles about LNG exports to Europe, caught up within the conundrum of how you can each increase pure gasoline manufacturing for overseas coverage causes and on the similar time shrink it to fulfill home climate-change objectives.
Vitality safety and local weather change are each world points. About local weather change, nevertheless, we are inclined to assume regionally. We set emissions targets nation by nation, ignoring world interconnections and penalties. For power exporters like Canada, nationwide GHG targets have the unintended consequence of limiting our skill to cut back world GHGs. Additionally they clearly penalize our pure gasoline sector, which is a significant contributor to our exports, authorities revenues, incomes and employment.
Canadian pure gasoline may assist many nations get off coal, which emits virtually 50 per cent extra CO2 per power unit. India generates about 70 per cent of its electrical energy with coal. Even Europe nonetheless depends on it for about 20 per cent of its electrical energy era. Shifting from coal to Canadian pure gasoline would yield huge positive factors in decreasing total CO2 emissions globally, however it might run afoul of Canada’s home local weather change targets and the CO2 emission caps within the power sector designed to assist obtain these targets.
How will we begin considering and appearing globally about power use? We will push for a system of world power substitution credit, the place exported gasoline that’s substituted for coal in different nations receives a credit score towards the nationwide emissions goal of the exporting nation. The system could be verifiable, economically environment friendly and completely in keeping with local weather change being a world, fairly than nationwide drawback. It will additionally enhance geopolitical safety as lots of the creating nations that might swap to Canadian gasoline would in any other case purchase from Russia.
Canada could lead on by proposing the creation of an alliance of power exporters, together with the U.S. and Australia, to make these power substitution credit a part of COP methodology. Or we may jumpstart issues and easily go it alone, establishing our personal methodology and alluring others be a part of. Such management could be good for each local weather change and power safety. And, in fact, past these advantages to the planet, it might imply extra funding, extra manufacturing of gasoline, extra exports, extra high-paying jobs and extra potential for partnerships with Indigenous folks.
To get there, nevertheless, we have to construct LNG export terminals and pipelines. The U.S. clearly sees the financial profit from and geopolitical want for increasing pure gasoline manufacturing and LNG exports. It has eight LNG export terminals, with 5 extra underneath development and one other 20 authorized or proposed. Canada has none, though one is underneath development in Kitimat, B.C.
Given our lack of capability, we can not start to fulfill Europe’s power crunch anytime quickly. However Ottawa and the provinces ought to work collectively to develop a regulatory setting that’s clear, constant, supportive, and predictable, so we are able to get on with the enterprise of constructing pipelines and LNG export terminals each on our west coast to service Asia and on our east coast, which is days nearer to Europe than U.S. Gulf ports are.
Although nicely underway, the transition to scrub power will take a long time. Within the meantime, exporting pure gasoline will scale back total world CO2 emissions, improve our allies’ and mates’ power safety and, if we reinvest a number of the proceeds in clear power and know-how, hasten the worldwide transition. Win-win-win.
Kevin Lynch was clerk of the Privy Council and vice-chair of BMO Monetary Group. Paul Deegan was a public affairs government at BMO Monetary Group and CN Rail. Each have been banned by Russia’s overseas ministry in response to Canadian sanctions towards Russia.
(This opinion piece was initially revealed right here.)
The statements, opinions and knowledge contained within the content material revealed in International Gasoline Views are solely these of the person authors and contributors and never of the writer and the editor(s) of Pure Gasoline World.