LNG: A Canadian Dream
PD465 Drilling in the Inga field, Hudson Hope, BC
Stymied by energy politics at home, the future of Canadian energy faces three significant challenges: delivering on energy fundamentals, navigating social acceptability, and responding to a push for net-zero with policies that strike a fair balance between the economy and the environment.
The Coastal GasLink (CGL) pipeline and LNG Canada’s export terminal in Kitimat, B.C., are Canada’s first link to the Asia-Pacific gas market, advancing Canada’s goals of achieving energy security, reliability, and affordability while also helping displace coal exports abroad. LNG exports are an exciting prospect, and with a new Liberal government promising to make Canada an “energy superpower.”
Despite overtures from Ottawa, three pieces of legislation are still deterring economic growth: the Impact Assessment Act, Bill C-69, the Oil Tanker Moratorium, Bill C-48 and the emissions Cap. It is unclear how these three reforms will react under Prime Minister Carney’s Bill C-5, which enables free trade to ambitiously enact “nation-building projects.” The PM appears to genuinely wants to build the infrastructure we desperately need, but how will he do it?
Canada’s energy advantage draws on Peter Tertzakian’s philosophical energy fundamentals, which hold that “society feels good when their energy is formulated with four basic features: Cheap, clean, safe, and secure.” Despite all our best efforts, Canadian energy has three of the big four. Our “[e]nergy is cheap, safe and secure”, with “clean” being the wildcard.
What makes the Canadian gas market exciting is the effort producers are making to deploy innovative technologies throughout the value chain, ensuring that Canadian energy is produced in an ethical manner. From the wellhead to the export terminals, through technological development, producers are drilling wells faster, more cost-effectively, and producing oil and gas more ethically than anyone else on the planet.
The game changers in the last decade have been wellsite electrification, especially in Northern British Columbia, where there is an abundance of hydroelectric power, and artificial intelligence to optimize drilling and reduce emissions.
While energy ethics is of great importance to Canadians, one has to wonder how many of our customers care. After all, Canada sacrifices on its energy philosophy every day, as it still imports 10.7 per cent of its oil from Saudi Arabia; it’s light, it’s sweet and very cheap.
Gas exports to the West provide Canada with an opportunity to make a global impact, fueling the Asia Pacific, reducing its dependence on Russian gas and broadening our export customers base, while also helping to fulfill its net-zero pledges by displacing coal. Sovereignty is on everyone’s mind, and made-in-Canada projects are as important as ever.
The IEA reports that gas demand increased by 2.8% in 2024, and that global LNG growth is expected to be slow, potentially opening the door for Canada’s Pacific play. This is good news, as LNG Canada’s feedstock, the Montney Shale, has one of the lowest break-evens in North America, positioning itself and future Canadian projects to become major players in the Pacific.
If we give Canadian LNG a chance—with more projects on the way—it could be the economic breakthrough we have all been waiting for.