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New report shows supplying Canadian LNG to Asia could reduce emissions by the equivalent of removing every vehicle from Canadian roads

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Calgary, Alberta, Nov. 07, 2022 (GLOBE NEWSWIRE) — 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.

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Given Canada’s vast natural gas reserves, proximity to Asian markets and competitively priced product, 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 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.

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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 means 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.

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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

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  • Examining two separate scenarios for global primary energy demand, natural gas will stay constant at 24% of the energy mix from 2020 to 2050 under the base case, while under the net zero case it will only drop to 22% of the energy mix by 2050.
  • Asia now accounts for more than two-thirds (67%) of global LNG demand and is expected to grow to 300 mtpa (million tonnes per annum), or about 73% of total global demand, by 2050 due to rising economic and population growth, the need to replace declining domestic supply, and to decarbonize the existing power supply.
  • By 2050, energy demand from Asian countries is expected to account for 47% of the global total, with China making up more than half of that.
  • A global LNG demand gap of 150 mtpa is anticipated by 2035 and Canada, if currently planned west coast projects come online by 2035, could provide up to 59 mtpa to help address the shortfall under a scenario in which Canada accelerates its LNG capacity.

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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.

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Central to this effort is the Pathways Alliance, a coalition of Canada’s six largest oil sands companies, accounting for 95% of production, that have jointly committed to reach 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.

The Canadian Energy Centre is an arm’s-length agency established by the Government of Alberta to advance Canada as the supplier of choice for the world’s growing demand of responsibly produced energy. It is largely funded by Alberta’s energy industry through the provincial Technology Innovation and Emissions Reduction (TIER) fund. For more information, visit www.canadianenergycentre.ca

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