7 Reasons Why the World Needs More B.C. LNG – Canadian Energy News, Top Headlines, Commentaries, Features & Events

British Columbia’s liquefied natural gas (LNG) will reduce global emissions. This is not a question of if but when.

B.C.’s world-class LNG supply is less emissions-intensive than the global average and has shorter shipping distances to buyers in Asia of whom will account for the lion’s share of global demand growth through 2040. Canada’s renewably electrified liquefaction and stringent upstream regulations ensure B.C. LNG is the most sustainable choice for meeting the needs of energy-hungry nations across Asia and elsewhere abroad.

Here are seven reasons why the world needs more B.C. LNG. Also see:

#1 – Other Countries Say LNG Will Reduce Their Emissions

Vietnam, Japan, South Korea, Cambodia, Indonesia, and the Philippines are just some Asian countries saying LNG will reduce emissions.

If you haven’t heard by now, both Japanese and South Korean government officials have specifically said they want – and need – Canadian LNG, preferring our energy because of our reliability and shared democratic values. Japan’s Prime Minister Fumio Kishida made a trip to Canada early in 2023, where he sought commitments from the Canadian government to supply his country with more natural gas, but to no avail.

However, apart from two of the world’s top LNG importers, other developing countries want to get their hands on the fuel.

Vietnam’s push to displace coal-fired power, which accounts for half the country’s electricity supply, is on par with its net-zero goal by 2050. As a result, Vietnam has more than 20 LNG-fired power plants in the pipeline nationwide, according to local sources. ^[1]

Cambodia and the Philippines are following in Vietnam’s footsteps as they look for cleaner fuel sources. Both countries have said they also intend to displace coal-fired power generation with cleaner-burning natural gas supplied by LNG tankers, a regional trend pursued by many countries in the region. ^[1][2][3][4]

#2 – Studies Show B.C. LNG Will Reduce Coal Emissions in China, India, Indonesia

China, India, and other developing economies are rapidly building coal-fired power plants to supplement their growing energy needs. Coal use hit an all-time high in 2023, as increases in China, India, and Indonesia outweighed falling demand in developed economies of Europe and the United States. Meanwhile, global emissions also hit a new record last year, with coal use accounting for 65% of that growth. ^[5][[6][7]

Several studies show just how positive a role B.C. LNG could play in helping countries like China and India reduce their reliance on coal.

– According to an academic study published in the Journal of Cleaner Production, Displacing Canadian LNG in China for coal power and heat generation could accomplish up to a 62% reduction in emissions. ^[8]
– According to an academic study published in Environmental Science and Technology, significant net global emissions reductions can be achieved in China, India, and Taiwan by displacing more GHG-intensive fuels with LNG. ^[9]
– Research by IHS Markit/S&P Global found that switching just 20% of Asia’s coal power plants to natural gas, a.k.a. LNG, would decrease net global emissions equivalent to Canada’s total annual emissions. Consecutively, replacing 40% of Asian coal plants with LNG would result in emissions savings equal to that of two Canadas, and so forth. ^[10]
– Analysis by the National Bank of Canada found that India’s rapid build-out of coal – if displaced with Canadian-made LNG – could induce significant emissions savings of anywhere from two to four times Canada’s total emissions profile depending on the scenario. ^[11]
– A study by Wood Mackenzie found that Western Canadian LNG has less upstream, liquefaction, and transportation emissions compared to the average supplier to Northeast Asia, which could induce carbon dioxide (CO2) emissions savings equivalent to removing 41 million cars off the world’s roads permanently, or more than all the cars in Canada. ^[12]

Reducing emissions by displacing coal power and heat generation with LNG isn’t a question of if, but when. India’s government has said it intends to use natural gas as part of its long-term low-carbon development strategy and raise its use of the fuel up to 15% of its energy mix by 2030, much of which will be accomplished by coal-to-gas switching. ^[13] Other studies show that China will eventually have to adopt widespread coal-to-gas switching policies if it intends to transition to a lower emissions future and reach its net zero goals. ^[14]

#3 – B.C. LNG Emissions Are Lower than Elsewhere

It is important to note that with or without coal displacement, B.C. LNG has lower upstream, liquefaction, and transportation emissions than many major Northeast Asian suppliers. For example:

Global LNG demand is projected to grow up to 70% by 2040, with China and other Asian countries accounting for most of that growth. Hence, with or without B.C. LNG, global demand will continue to grow for years to come. ^[15]
Canadian LNG is 25% less carbon intensive than the global average, driven by lower upstream emissions due to Canada’s stringent regulations and electrified transmissions and liquefaction enabled by B.C. hydro – meaning for every three tons of carbon emitted by LNG production in Canada, four tons are saved elsewhere. ^[16]
Canada’s four proposed LNG facilities will reduce global emissions by about 8 million tonnes per annum, equivalent to permanently removing 2 million passenger vehicles from the world’s roads. ^[16]
Canada’s four current LNG export facilities (proposed or under construction) are projected to have the lowest carbon emissions in the world, producing a fraction of the liquefaction GHGs than other comparable projects. For example:
- LNG Canada will operate with emissions of less than 1/2 the global LNG facility average. ^[17]
- Cedar LNG will operate with emissions of less than 1/3 of the global LNG facility average. ^[18]
- Woodfibre LNG will operate with emissions less than 1/6 of the global LNG facility average. ^[19]
- Ksi Lisims LNG will operate with net zero emissions within three years of its first shipment abroad. ^[20]
Canadian natural gas production has a much cleaner footprint than U.S. natural gas production, where methane emissions may be as much as five times higher than in Canada. If reporting discrepancies are considered, upstream natural gas operation emissions in the U.S. could be as much as eight times higher than Canadian production. ^[21]

B.C. LNG’s emissions-related performance alone shows that its existence on global markets, where global demand is growing rapidly with or without Canada, will reduce net global emissions – no coal displacement is necessary for this to occur.

#4 – B.C. LNG Has Shorter Shipping Distances to Asia

Apart from having the lowest-emission-intensive LNG anywhere in the world, B.C. also has another massive environmental advantage: its short shipping distance to major Asian buyers such as China, Japan, and South Korea, which translates to less emissions from transportation.

Shipping emissions from Western Canadian LNG facilities to Northeast Asia are lower than those of other major suppliers, including Mozambique, Qatar, Mexico, and the United States. ^[12]
Canadian LNG is advantaged by proximity to major buyers in Northeast Asia such as China, Japan, and South Korea. Shipping distances from suppliers to NE Asia: ^[16]
- Canada – 7,300 km
- Qatar – 11,700 km
- USA – 17,100 km

In days, Canada’s environmental advantage of shorter shipping distances to Asia: ^[22]
- Australia – 7 days
- Alaska (Kenai) – 8 days
- Canada West Coast – 11 days
- Qatar – 13 days
- Mozambique – 15 days
- U.S. Gulf Coast (via Panama Canal) – 20 days
- Russia (via Northern Sea Route) – 22 days
- U.S. Gulf Coast (via Suez Canal) – 31 days
- U.S. Gulf Coast (via Cape of Good Hope) – 34 days
- Russia (via Northern Sea Route) – 44 days

Clearly, with shorter shipping distances to Asian buyers and growing global demand, the sheer presence of B.C. LNG on global markets translates to less emissions from transportation – once again, with no coal displacement necessary.

#5 – Real World Examples of Coal-to-Gas Switching, Reducing Global Emissions

Important considerations on how B.C. LNG will reduce global emissions are several real-world examples showing the practicality of using natural gas as a transition fuel.

Since 2010, coal-to-gas switching has saved around 500 million tonnes of CO2 from entering the atmosphere – an effect equivalent to putting an extra 200 million EVs running on zero-carbon electricity on the road over the same period. ^[23]
Coal-to-gas switching in America’s power sector has seen CO2 emissions decline by more than 30% between 2005 and 2019, despite the economy growing by 28%. ^[24]
Electricity sector emissions in Alberta dropped nearly 50% between 2015 and 2020, largely due to coal-to-gas switching. ^[25]
U.S. power sector CO2 emissions are at generational lows, thanks to switching from coal to natural gas; coal-to-gas accounts for more than 60% of the CO2 emissions reductions in the power sector. ^[26]

Switching from coal to natural gas for power and heat generation is a clear win for the global environment, with examples in Canada, the U.S. and elsewhere globally showing just how tangible these emissions reductions are.

#6 – Global LNG is Growing Rapidly, With or Without Canada

The reality is that with or without Canada’s low-emission supply, global LNG is projected to grow by up to 70% by 2040 according to the latest industry outlook. ^[15] As shown above, compared to other suppliers abroad, Canada’s environmental performance outdoes the rest, meaning it is the best choice to supply Asia’s future natural gas needs.

B.C. Premier David Eby believes that B.C. LNG’s environmental and economic opportunities can and should be balanced with one another.

“The choice between protecting the environment and creating good jobs is a false one. We see a better way. One that helps us continue building a green economy, one that works better for people and the climate while respecting Indigenous people, and one that provides predictability for industry and a path for responsible development of our natural resources,” Eby said, after his government approved Cedar LNG, the largest infrastructure project owned by First Nations in Canadian history. ^[27]

Cedar LNG is the world’s first majority-owned LNG project, and will have the cleanest environmental profiles amongst similar facilities in the world. ^[28]

#7 – Natural Gas Emits Less Emissions than Coal

Important background knowledge referenced many times in this document is that natural gas emits less emissions than coal when used for energy generation. According to the United Nations Environment Programme, natural gas will produce less CO2 per unit of energy – about 50% less compared to the best coal technology – and by this measure, it’s a much better option from a climate perspective. ^[29]

Fatih Birol, Executive Director of the International Energy Agency (IEA), sums up the need for natural gas for the foreseeable future.

“Natural gas is one of the mainstays of global energy. Where it replaces more polluting fuels, it improves air quality and limits emissions of carbon dioxide,” Birol said, in one of his organization’s flagship reports. ^[23]

The World Needs B.C. LNG

The evidence above makes it clear that B.C. LNG will reduce global emissions by being made available to global buyers – without the need to displace coal. Just by having access to global markets, B.C. LNG will positively affect the global climate by displacing more GHG-intensive supplies from elsewhere, often from producers with little to no environmental oversight and regulatory transparency, or with longer shipping distances and, therefore, higher transportation-related emissions.

However, even greater net global emissions reductions will be achieved by displacing coal plants abroad. B.C. LNG can be utilized by major coal producers like China, India, and Indonesia to reduce their power sector emissions, as discussed and supported by the facts in the sections above.

B.C. LNG is already contracted by buyers in Asia including South Korea and Japan, with talks continuing about the acquisition of new potential supply to come to market from projects like Ksi Lisims LNG. ^[30]

Canada should do everything it can to build out its LNG export capacity not only to supplement the world with the low-emission energy it needs, but also to give a much-needed boost to our ailing economy here at home.

SOURCES:

_{1 – https://asia.nikkei.com/Business/Energy/Vietnam-turns-to-LNG-power-plants-seeking-to-shake-coal-dependence}

_{2 – https://www.reuters.com/business/energy/philippines-greenlights-seventh-lng-project-gears-up-gas-imports-2023-01-27/}

_{3 – https://www.offshore-energy.biz/empowering-asian-energy-industry-with-philippines-first-integrated-lng-facility/}

_{4 – https://www.barrons.com/news/cambodia-scraps-1-5-billion-coal-project-a23a4a7c}

_{5 – https://www.instituteforenergyresearch.org/fossil-fuels/china-and-india-are-building-coal-generating-capacity-for-energy-security/}

_{6 – https://energy.economictimes.indiatimes.com/news/coal/global-co2-emissions-hit-record-high-coal-use-accounts-for-over-65-of-increase/108601414}

_{7 – https://phys.org/news/2023-12-coal-earth-hottest-year.html}

_{8 – https://www.sciencedirect.com/science/article/abs/pii/S0959652620307484}

_{9 – https://nsadvocate.org/wp-content/uploads/2021/04/LifeCycle-LNG-Env-Sci-Tech-524-1735-1746-for-Ken.pdf}

_{10 – https://chamber.ca/wp-content/uploads/2023/04/Canada_and_Global_Energy_Security_March_2023.pdf}

_{11 – https://www.biv.com/news/economy-law-politics/displace-indian-coal-power-with-canadian-natural-gas-report-8360416}