Canada has an abundant natural gas supply and there is a focus on its global export. How can Canada position its natural resources to the world?
The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of the Canadian Gas Association.
Canada remains a nation with an abundance of natural resources, natural gas and crude oil among our key assets. While rightly there is a global push to address climate change, our nation and many of its regional economies still are heavily reliant on these resources to drive their prosperity.
During the recent Conservative leadership race there was a cordial discussion among the four candidates about the value of natural gas development, both as an economic driver and contributor to arresting greenhouse gas emissions. Erin O’Toole, the eventual winner of the Conservative contest, in his early comments as that party’s chieftain, stressed the importance of having our natural resources be part of powering a post-pandemic recovery.
Specifically, as it relates to natural gas, Canada’s reserves and geography leave us well placed to advance opportunity. Having worked on a natural gas development initiative in the West and recently been briefed on an emerging venture in the East, I have seen firsthand the potential and the challenge. Both Asia and Europe are looking for suppliers – Canada’s coasts leave us ideally positioned to sell to both continents, while also providing a reliable domestic supply.
In Canada, regulatory challenges and sometimes access to project capital can be challenges. There in some cases, can also be local coalition-building work and public education that needs to be done. Many prominent environmental organizations question the thesis of natural gas being a reliable tool to propel GHG reductions.
Industry advocates need to continue to educate both politicians and more importantly, the broad public, about the benefits of natural gas. There needs to be a realization that a common ground be found around the importance of development, while not throwing climate change under the proverbial bus.
“Canada remains a nation with an abundance of natural resources.”
There should be thought given to a clever public education campaign that is co-opting by nature, not adversarial. It should focus on the workers in the industry, the communities they come from, the benefits we all derive from the economic activity and the leadership that is being taken on environmental stewardship. Rather than having it portrayed as an afterthought, a full-frontal acknowledgement that the industry’s future comes from embracing the environment would be wise.
Natural gas development should be a key opportunity for the Canadian economy, but politicians need help making that case and demystifying critiques that exist about the resource. The industry could learn valuable lessons on campaigning and narrative development from ENGOs who often make the counter argument.
We live in an age when more industrial persuasion needs to be done comprehensively in the public square. Failure to grasp and act on that, means development success lessens from the outset.
Tim Powers, is the Vice-Chairman of Summa Strategies Canada and the managing director of Abacus Data, both headquarters are in Ottawa. Mr. Powers appears regularly on CBC’s Power and Politics program as well as on VOCM in his home province of Newfoundland and Labrador.
In the upcoming weeks, the federal government will unveil its plan for Canada’s post-pandemic economic recovery. Prime Minister Trudeau has promised that this plan will not just reintroduce the pre-COVID status quo but will build the country back better: a Canada that is “healthier and safer, greener and more competitive.” The latter claim – greener, and also more competitive – is the crux of a long-standing challenge for the country. Canadians have constantly been forced to grapple with the conflict between environmental protection and economic development, particularly given the unique structure of our economy.
Canada’s natural resources sector is at the heart of this dilemma. Canada is the fourth-largest producer and sixth-largest exporter of natural gas in the world, and the industry’s focus remains on developing the capacity to export our abundant natural gas supply internationally. Our natural resources sector is a critical part of our economy and cannot be left behind in recovery efforts. As with the rest of the economy, the goal should be to build a better, more resilient, and greener natural resources sector. Now is the moment for Canada to do so.
Canada should seize the opportunity to build our capacity to export cleaner, more efficient sources of fuel to global markets. The global natural gas industry is already trending in the direction of more efficient fuels, and now is the time for Canada to establish its leadership in the market. The LNG Canada project is the perfect example. Once built, the LNG Canada facility in British Columbia will position Canada as one of the world’s top liquid natural gas (LNG) exporting countries, while displacing less efficient fuels like coal. The LNG Canada project is also the largest private sector investment project in Canadian history. Further strategic investments in LNG developments like LNG Canada will bolster Canada’s competitive advantage and position Canada as a global leader in clean energy development and export.
This is also the opportunity to scale up Canada’s cleantech industry to accelerate the natural resources sector’s clean transition. Canada’s cleantech companies are rapidly producing innovative technologies to reduce the environmental impact of our natural resources sector. The emerging use of carbon capture, utilization and storage (CCUS) technologies to reduce emissions in natural gas plants demonstrates that cleantech innovation can have a significant positive impact on industry and the environment, while generating additional economic growth. Investing in the scale up of cleantech, and providing industry with incentives to adopt and utilize these technologies, will position our natural resources sector for a greener future.
Strengthening our natural resources sector, generating economic growth, and protecting the environment can go hand-in-hand-in-hand. To do this, Canada must ensure that the framework for a clean economic recovery includes strategic investments to accelerate the natural resources sector’s clean transition and positions the sector for global success.
Patricia Sibal is a consultant at Crestview Strategy, based in Ottawa. She has practiced government relations in Toronto and Ottawa and sits on the Board of Directors of the Government Relations Institute of Canada.
Today, Canada has a once-in-a-generation opportunity to set our country on a new and better path, towards a recovery that is equal parts economic, environmental and equality-based.
The COVID-19 crisis has taught us that science matters. Collective action matters. Paying heed to warning signs and preparing for the future matters. These are lessons that we must apply to the climate crisis if we want Canada to be successful on the world stage in the coming years and decades.
It is a lesson that will not come easy in some places. Alberta’s government has recently doubled down on its obstinate approach – inflexibility that is proving Canada will be increasingly shut out of the world economy if we do not meaningfully address the climate crisis.
We have seen some more promising approaches. In 2019, the British Columbia government unveiled its Clean BC plan—a plan that sets targets, includes reconciliation, and helps create jobs and benefit local communities. Alberta’s previous government showed a willingness to fight climate change by capping oil sands emissions, bringing in a universal carbon price and moving the province away from coal-fired electricity in favour of renewable energy sources.
These governments embraced the idea that we must urgently address greenhouse gas emission reductions if we want to position Canadian companies to succeed in an economy and expand our exports in a world that is increasingly embracing environmental concerns.
Warning signs against inaction are everywhere.
Investors – from giant pension funds to individuals – are considering climate change when choosing how to invest. The 2018 Responsible Investment Association’s report said that more than 50 per cent of Canadian assets were now managed using responsible investment strategies. In late July, Frankfurt-based Deutsche Bank joined a growing list of European investors, insurance companies and banks pulling out of investing in oil sands companies.
And earlier this year, Norway’s $1+ trillion wealth fund cut back substantially on its fossil fuel investments, including divesting in several Canadian oil and gas companies. Norway’s oil and gas industry has also embraced new technologies so that its Johan Sverdrup field will reduce carbon emissions from 9 kg to 0.67 kg per barrel.
In November, an American election could see Canada’s largest trading partner under new management in 2021. And the potential next President, Joe Biden, has already declared his intention to make the U.S. a leader in the fight against climate change.
This doesn’t mean shutting down Canada’s LNG exports – even an under two-degree scenario climate plan includes countries continuing to rely on oil and gas for some decades. But Canada can start implementing aggressive carbon reduction plans, embracing new technologies, and exporting lower-emission natural gas to customers that are currently using high-emission coal-fuelled power plants.
The future is coming, whether we acknowledge it or not. If Canadian energy export businesses are to succeed, it will be because Canada’s business and government leaders have woken up to reality and demonstrated that our industries and communities have truly embraced the challenge of transitioning to a low-carbon future.
Kathleen Monk is a Principal at Earnscliffe, where she is trusted by Canadian leaders to navigate complex public strategy issues, design strategy and bring together diverse stakeholders to tell authentic stories that deliver results. She appears regularly on CBC The National’s pre-eminent political panel, The Insiders, and provides analysis for CBC News Network’s Power and Politics.