August 19, 2022
The Right Honourable Justin Trudeau
Prime Minister of Canada
80 Wellington Street
Ottawa, Ontario K1A 0A3
Subject: Three Dimensions of the Natural Gas Opportunity in a time of Growing Instability
This latest note to you on the natural gas opportunity is written at a time of increasing economic and political instability around the world. More and more we see protests over energy prices, over energy availability, over access to critical fertilizers made from gaseous energy, and over the price of food and other goods for which affordable energy is an essential input. It is clearer and clearer that Canada’s competitive advantage in abundant, affordable, reliable and clean gas energy is something we must continue to maintain – for our own needs and those of our allies around the world. How can we do so?
First, we need to focus more clearly on what we do to maintain the economic advantage for Canadians.
The cost of energy is rising quickly. The most affordable energy option remains – in almost every application – natural gas. Are we doing all we can to maintain that affordability advantage? Are we identifying the bottlenecks in the transportation and delivery system that cause regional price bumps, with an eye to eliminating them and make sure all Canadians can benefit? Are we ensuring that our robust regulatory frameworks are efficient – so that investors will know in a timely fashion whether projects – to develop or transport fuels – will or will not proceed? Are we encouraging all stakeholders to work together to ensure robust supply – be it of natural gas itself, renewable natural gas, hydrogen, or any other gaseous energy option? Industry is working hard to address all of these and is determined to do more.
Second, we need to advertise more definitively the environmental advantage our resource supply has over virtually any other jurisdiction in the world.
In their moment of energy crisis, Europeans are looking to Canada as a potential long-term partner. Our conversations with European Ambassadors to Canada have made it clear that they have only recently come to appreciate the significant environmental and resource advantage of Canadian gaseous energy. Ambassadors are noting that:
- Canada’s existing standards ensure that our resources are world-leading in terms of both environmental impact and ethical production.
- Canada’s methane reduction targets for the oil and natural gas industry are amongst the most ambitious of any country in the world.
- Canada has comprehensive leak detection and repair (LDAR) requirements and has successfully incorporated advanced technologies like aircraft, drones, and continuous monitoring into its LDAR efforts.
- All Canadian companies must report their emissions in significant detail, separating fuel combustion, flaring, venting, and fugitive emissions.
- Since 2020, we estimate that Canada has invested well over CAD 1 billion in methane reduction technology innovation and deployment for the oil and natural gas industry, eclipsing even much larger producers like Russian and the United States.
- Empirical measurements from peer-reviewed literature using satellites and aircraft show that methane emissions are lower in Canada than the United States, Russia, and other major natural gas producing countries.
What this says is that Canadian gas is amongst the cleanest in the world. This is a credit to Canada, and underscores why gas delivery is such a responsible environmental choice for Canadians. But looking to the world, shouldn’t our molecules be the top of the list for anyone concerned about environmental performance globally, while also wanting the advantage of affordable and reliable energy that is gas energy? We in industry believe so.
Third, we need to seize the moment to help address the energy security crisis.
Deputy Prime Minister Freeland has been notable in her clear articulation of this priority for Canada. So have many others in many sectors across the country. At the same time, as Natural Resources Minister Wilkinson has noted, the amount of LNG that Canada would be able to supply, given existing infrastructure and pipelines, is not nearly enough to satisfy Europe’s needs. We in industry believe we could change that. Canada could do much, much more. As the Premiers noted in a recent communique:
As one of the world’s largest and most responsible energy producers, Canada has an important role to play in providing environmentally responsible, reliable and affordable energy products to Canadians and the world.
This growing political consensus reflects growing public support, with more and more polls showing Canadians want our country to stand up and meet the needs of our allies in a time of crisis.
European leaders like the German Chancellor and the French President are coming to Canada during this very difficult time to talk with the Government of Canada about closer ties. The natural gas industry is of the view that cooperation on gas energy – now and for the long term – should be fundamental to those relationships.
Thank you in advance for your consideration of the industry’s views expressed here. We will continue to update you as our efforts progress.
Timothy M. Egan
President and CEO, Canadian Gas Association
Chair, NGIF Capital Corporation