Global energy giant Shell has released its latest outlook for world liquefied natural gas (LNG) supply and demand through 2040. Here are nine key insights about what to expect in the future.

1. LNG is playing an increasingly important role in global gas supply. Total world LNG demand is set to continue growing beyond 2040.

2. Global LNG trade reached 404 million tonnes in 2023, an increase of 7 million tonnes compared to 2022. Over the last five years, LNG demand grew by 45 million tonnes, or 13 per cent.

3. In 2040, the world is expected to consume up to 685 million tonnes of LNG, an increase of nearly 70 per cent compared to 2023.

4. The United States became the world’s largest LNG exporter in 2023, shipping 86 million tonnes, followed by Australia, Qatar, Russia and Malaysia.

5. By 2030, North America will supply about 30 per cent of global LNG demand, led by natural gas from major basins including the Appalachia (Marcellus) play in the eastern United States and the Montney play in Alberta and British Columbia. But the global gas market is increasingly exposed to U.S. risks like the Biden administration’s pause on new LNG approvals.

6. China is likely to dominate LNG demand growth as the country’s industries seek to cut carbon emissions by switching from coal to gas. With China’s coal-based steel sector accounting for more emissions than the total emissions of the UK, Germany and Turkey combined, gas has an essential role to play in tackling one of the world’s biggest sources of carbon emissions and local air pollution. China’s gas demand is expected to rise by more than 50 per cent by 2040.

7. Natural gas, delivered as LNG, provides flexibility to balance intermittent solar and wind power generation. In countries with high levels of renewables in their power generation mix, gas provides short-term flexibility and long-term security of supply. Gas provides grid stability, enabling a higher share of renewables in power grids.

8. LNG continues to play a vital role in European energy security, with European nations importing more than 120 million tonnes in 2023, assisted by new regasification facilities. Europe will continue to rely on LNG to support its energy mix through 2030, even as total European natural gas demand is expected to decline by about 25 per cent.

9. South Asia and Southeast Asia are emerging as major LNG import regions, with Vietnam, and the Philippines starting to import LNG to backfill domestic gas declines. From less than 10 million tonnes in 2020, LNG imports to Thailand, Bangladesh, Vietnam and the Philippines are expected to rise to about 40 million tonnes in 2030 and more than 60 million tonnes in 2040. 

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A new 20-year deal by global energy giant Shell to purchase liquefied natural gas (LNG) from British Columbia is a sign Canada is becoming a player in global LNG markets, says an industry specialist. 

Shell has agreed to buy two million tonnes of LNG per year from the proposed Ksi Lisims LNG project located near the Alaska border, which could start operating in 2028.  

“Canada is on the map now for LNG. This is a signal that the LNG demand is viable beyond 2050,” says Racim Gribaa, president of Calgary-based Global LNG Consulting. 

Gribaa has worked in energy for more than two decades, engaging with governments and industry on LNG developments around the world including Malaysia, the United States, Canada and Qatar. 

Long-term LNG deals like the one struck by Ksi Lisims and Shell are hard to come by, he says, and are a sign that so-called LNG “portfolio players” trust the ability of Canada’s natural gas industry to deliver. 

A portfolio player like Shell buys LNG from various suppliers and distributes it to buyers around the world – versus a buyer that purchases LNG solely for its own use.  

“When portfolio players buy LNG, it’s not necessarily for a specific country. They can sell it anywhere they want,” Gribaa says. 

“Canada’s west coast can enable them to sell cargo to efficiently meet demand in Asia without having to ship it all the way from farther locations. Instead of them shipping cargo from the Middle East, Europe, or from the U.S. thereby avoiding longer journeys around the Cape or going through the Strait of Hormuz or Panama Canal, instead they just send it straight from Canada to where they need it to go. It’s economically and logistically beneficial for them.” 

Driven by expanding economies in Asia, world LNG trade has increased by more than 200 per cent since 2000, reaching 401 million tonnes in 2022, according to the International Gas Union.    

Global natural gas use is rising, driving increased demand for LNG. The U.S. Energy Information Administration’s latest outlook projects natural gas consumption will rise to 197 quadrillion BTU in 2050, up from 153 quadrillion BTU in 2022. 

In addition to the deal with Ksi Lisims owners including the Nisga’a Nation, Shell is also lead owner of the LNG Canada project, which is nearing completion at Kitimat, B.C.  

The terminal will have capacity of 14 million tonnes per year when it starts up in 2025. The buyers of the exports from LNG Canada are its owners, including Shell and Petronas.  

Shell’s decision to purchase LNG from Ksi Lisims could ensure it has plentiful supply available regardless of the timeline of the second phase of LNG Canada, Gribaa says. 

“For a portfolio player, having options is valuable. We have enough demand globally to meet both Ksi Lisims LNG and LNG Canada phase 2, especially as coal is gradually faded out from Asia’s power mix,” he says.  

“The only viable solution is to replace it with natural gas through LNG, as well as renewables, so the demand is forecast to be strong for several decades to come.”  

Growing Canada’s LNG exports to Asia could reduce emissions by 188 million tonnes per year, or the annual equivalent of taking all internal combustion engine vehicles off Canadian roads, according to a 2022 study by Wood Mackenzie. 

Down the coast from LNG Canada at Squamish, B.C. another major portfolio player is leaning on Canadian LNG.  

BP Gas Marketing is the foundational customer for the Woodfibre LNG project, where early construction is underway.  

Over a 15-year period, BP will purchase 1.95 million tonnes of the project’s 2.1 million tonne per year LNG capacity, and the remaining 0.15 million tonnes per year “on a flexible basis.”  

“When you have such commercial commitments inked, it provides a future perspective on supply and demand, and perhaps most importantly it asserts the importance of Canada’s role in providing the world with a clean, affordable and secure long term LNG supply,” Gribaa says.  

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Introduction

High energy prices, inflation, war, and the ongoing economic recovery from the pandemic has highlighted the general worldwide demand for electricity, particularly in Asia and Europe. The growing demand for electricity on these two continents has led some electricity producing plants to rely increasingly heavily on coal as a power source.

The electricity sector accounts for 34 per cent of the world’s energy-related carbon dioxide (CO2) emissions. In this Fact Sheet, we detail recent trends in electricity production and demand across the globe as well as CO2 emissions from the electricity sector worldwide.

Carbon dioxide emissions from the world’s top ten emitters between 2000 and 2022

A total of 38.2 gigatonnes (Gt) of energy-related CO2 was emitted globally in 2022, an increase of 53 per cent from 2000. However, the increase is not consistent for all countries; between 2000 and 2023, CO2 emissions trends diverged. Emissions from China, India, and Indonesia more than doubled in the last two decades, whereas emissions for other countries remained relatively consistent or even declined.

In 2022, Canada’s total energy-related CO2 emissions were 0.62 Gt, or 1.6 per cent of the global total. That compares to emissions of 0.64 Gt in South Korea, 1.09 Gt in Japan, 2.8 Gt in India, 5.0 Gt in the United States, and 13.0 Gt in China (see Figure 1).

Sources: IEA World Energy Statistics database and Enerdata

Demand for electricity and sources of emissions

Global domestic electricity consumption increased from 13,188 terawatt-hours (TWh) in 2000 to 25,681 TWh in 2022 and estimates are that global demand for electricity will rise to 35,000 TWh by 2040.¹

That is a jump of 94 per cent, or 12,492 TWh, between 2000 and 2022. During the same period, electricity consumption in Asia rose a whopping 280 per cent. In Africa the demand for electricity increased by 90 per cent (see Figure 2). Coal remains the world’s largest source of fuel for electricity generation, with approximately 10,317 terawatt-hours of electricity generated by coal-fired plants in 2022 (see Figure 3).

1. The IEA’s Electricity Market Report 2022 states that nearly all of the increase is attributable to growing electricity consumption in developing countries across southeast Asia and Africa.

Sources: IEA World Energy Statistics database and Enerdata

Sources: IEA World Energy Statistics database and Enerdata

In recent years, electricity generated from the combustion of coal declined in Canada, the United States, Europe, and Africa. However, electricity generated from coal combustion has continued to grow in China, India, and other parts of Asia.

Between 2000 and 2022, the share of coal-powered electricity generation in Asia increased from 49.8 to 56. 3 per cent, while in Canada it decreased from 19.4 per cent to less than 5 per cent.

Sources: IEA World Energy Statistics database and Enerdata

Source of emissions in the electricity sector

The electricity sector accounts for 34 per cent of the carbon dioxide emitted across the world. The sector emitted 13.05 gigatonnes of CO2 in 2022, an increase of 5.01 Gt from 2000. In Asia, between 2000 and 2022, CO2 emissions from the electricity sector increased from 2.5 Gt to 8.3 Gt and the sector’s share of carbon dioxide (CO2) emissions increased from just over 32 per cent to well over 40 per cent (see Figure 5).

Sources: IEA World Energy Statistics database and Enerdata

Coal burned to generate electricity accounts for the majority of the CO2 emitted in power generation. In 2022, coal-fired electricity\ generation accounted for 9.89 Gt, or nearly 76 per cent of the worldwide CO2 emissions from the electricity sector. The share was even higher in Asia where 92 per cent of emissions from the electricity sector come from coal combustion. Asian coal-fired plants accounted for 7.62 Gt of the total 8.26 Gt of emissions from the sector on that continent (see Figure 6).

Sources: IEA World Energy Statistics database and Enerdata

Conclusion

The global electricity sector, and particularly the sector in Asia, is a major source of CO2 emissions. Relative to Canada’s existing carbon emissions, emissions from the coal-fired power plants worldwide will make any reductions in Canada’s carbon emissions and resulting job losses, higher taxes, and higher costs for consumers and businesses—meaningless.

As 56 per cent of the electricity in Asia is generated by coal-fired plants, a transition from coal- to gas-fired electricity generation in the region could lead to significant reductions in CO2 emissions, reducing emissions by 50 per cent on average. The corollary is that there is a potential market in Asia for natural gas extracted in and exported from Canada. Canada has an opportunity to play a useful and meaningful role in reducing CO2 emissions from the electricity sector by encouraging and contributing to the global natural gas market.

Notes

This CEC Fact Sheet was compiled by Ven Venkatachalam at the Canadian Energy Centre (www.canadianenergycentre.ca). The author and the Canadian Energy Centre would like to thank and acknowledge the assistance of an anonymous reviewer in reviewing the data and research for this Fact Sheet.

References (live as of November 2, 2023)

Canadian Energy Centre (November 7, 2022), Canadian LNG has massive opportunity in Asia: report <https://tinyurl.com/2p9525j6>; Enerdata (2022), Power Plant Tracker database <https://bit.ly/3xfgOdF>; IEA (2022), Electricity Market Report – January 2022 <https://bit.ly/3M0723j> IEA (Undated), World Energy Statistics Database <https://tinyurl.com/ytz789m4>

Creative Commons Copyright

Research and data from the Canadian Energy Centre (CEC) is available for public usage under Creative Commons copyright terms with attribution to the CEC. Attribution and specific restrictions on usage including non-commercial use only and no changes to material should follow guidelines enunciated by Creative Commons here: Attribution-NonCommercial-NoDerivs CC BY-NC-ND.

Canada’s oil and gas producers are a stone’s throw away from reaching a major emissions reduction target, demonstrating Canadian energy leadership as the world’s reliance on high emissions coal-fired power continues to grow.  

New data reveals producers in Alberta decreased methane emissions by 44 per cent between 2014 and 2021, a 10 per cent drop from 2020. The sector is now expected to surpass the target of reducing methane emissions by 45 per cent by 2025.  

“Technologies are helping Alberta’s oil and gas producers reach their methane reduction targets and develop a robust clean tech industry, which reduces methane emissions on a global scale,” says Soheil Asgarpour, CEO of Petroleum Technology Alliance Canada, a non-profit that focuses on methane emissions reduction.  

The AER report analyzes the performance of nearly 35,000 oil and gas facilities and more than 100,000 wells, primarily producing natural gas. Total methane emissions for 2021 were 15 million tonnes of CO2 equivalent, compared to 27 million tonnes in 2014.  

Reducing methane emissions comes primarily from reducing small leaks from valves, pump seals, and other equipment, as well as reducing flaring and venting.  

Canada’s natural gas sector is recognized as a leader in methane emissions reduction. For example, the permit for the Tacoma LNG project in Washington state requires its natural gas supply to come from B.C. or Alberta.    

The regulator found that comparative methane emissions from natural gas in the U.S. “may be as much as five times higher than those from Canada.”  

World LNG demand is booming, driven primarily by growing Asian economies looking to reduce reliance on coal. The latest industry outlook projects LNG requirements will reach 700 million tonnes by 2040, a 75 per cent increase from 2022.  

Meanwhile, global coal use continues to rise. Last year set a new record for coal consumption, according to the International Energy Agency (IEA). Led by China, enough new coal plants were built last year to power about 15 million homes, according to a report by Global Energy Monitor. 

In part due to lower methane emissions from natural gas production, researchers expect LNG from Canada to have among the world’s lowest emissions per tonne.  

According to Wood Mackenzie, LNG from Canada could reduce Asia’s net emissions by 188 million tonnes of CO2 equivalent per year through 2050 – or the annual impact of taking 41 million cars off the road.   

Canada’s first exports are targeted to commence in 2025, following completion of the LNG Canada terminal at Kitimat, B.C. 

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The world needs more liquefied natural gas (LNG) projects to meet rising demand as Europe emerges as a key import region, according to the latest industry outlook.  

Europe’s LNG imports increased by 60 per cent last year to replace pipeline gas from Russia, Shell reported this week. Analysts expect Europe’s LNG requirements to nearly double by 2030, reaching 140 million tonnes compared to about 73 million tonnes in 2021.  

“More investment in supply will be needed to meet future LNG demand,” Shell said in its LNG Outlook 2023.  

“Gas will be needed in the long term to balance energy systems as the world transitions to a lower-emission future.” 

Total world LNG demand reached 397 million tonnes in 2022, an increase of 16 million tonnes from 2021. France, the U.K., Netherlands, Spain, Belgium and Italy led growth in LNG imports. 

In a move Shell called “the power of effective policy making,” last year Europe was able to set up two new LNG import terminals in just six months. 

In Germany alone, six new floating LNG storage and regasification terminals are expected to come online by the end of 2023. Germany recently received its first ever LNG shipment from the Middle East, according to industry reports.  

The U.S., Norway, Malaysia, Qatar and Russia drove LNG supply growth in 2022, Shell said.  

The first LNG project to export Canada’s vast available quantities of natural gas is expected to start operating in 2025. Expansion of the LNG Canada project also has potential to proceed, with pipeline operator TC Energy recently reporting it has been asked to start evaluating Phase 2.  

Meanwhile, construction is expected to begin this year on the long-awaited smaller scale Woodfibre LNG project, with the first exports planned for 2027. The proposed Cedar LNG project, owned 50 per cent by the Haisla Nation, is awaiting a decision on whether it can proceed by provincial and federal regulators.  

“Cedar LNG is at a critical point with what’s happening globally in the energy sector,” Haisla chief councillor Crystal Smith told CEC earlier this year.  

While LNG from Canada’s west coast is expected to be mainly destined for Asia, it could help meet demand in Europe by diverting other world shipments, according to analysts with Wood Mackenzie.    

“More western Canadian LNG would allow a lot of the other sources to go to Europe. It’s like a domino,” said Matthias Bloennigen, Wood Mackenzie’s director of Americas consulting. 

Total world LNG demand is expected to reach 700 million tonnes by 2040, a more than 75 per cent increase from 2022, Shell said.  

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It seems like just the other day the wrath of the world was coming down on oil sands and coal.

To protect the atmosphere, Canada has been reducing coal-fired power generation for years. It started in Ontario then moved to Alberta. Saskatchewan is next. New Brunswick is supposed to stop by 2030, but that province claims it can’t be done.

Global coal consumption is rising again because it meets the cost and availability requirement created by energy shortages and rising prices. On December 16, the International Energy Agency reported, “The world’s coal consumption is set to reach a new high in 2022 as the energy crisis shakes markets.”

For energy, the biggest single change in 2022 is the remarkable shift in public attitudes towards fossil fuels.

The global energy complex is under assault by Russia’s invasion of Ukraine, the exposed shortcomings of wind and solar, years of underinvestment in fossil fuels, and rising inflation and interest rates.

But for the past ten years, there has been an all-out crusade against fossil fuels. Oil company CEOs were branded climate criminals. It was morally reprehensible to own fossil fuel company shares or loan money to oil, gas or coal producers. Elections were won in Canada, the US and in Europe on pledges to replace fossil fuels.

No cost was too great, because the cost of doing nothing thus permitting unchecked climate damage was greater.

What happened? How did the channel change to rapidly? Why after years of public and political attacks on the source of over 80 per cent of the world primary energy, has affordable energy on demand now become more important than where it comes from?

Price, the most fundamental driver of economics and human behavior.

The November 2022 global survey from public opinion research firm IPSOS titled “What Worries The World” tells the story.

IPSOS explains, “This 29-country Global Advisor survey was conducted…among 20,466 adults aged 18-74 in Canada, Israel, Malaysia, South Africa, Turkey and the United States, 20-74 in Indonesia and Thailand, and 16-74 in all 21 other countries.”

IPSOS charts the top six issues for the past two years. Poverty, crime, unemployment and corruption have always been important, and consistently ranked among the top five.

But in November 2020, inflation only registered among eight per cent of respondents. Two years later it is 42 per cent. Coronavirus and the unemployment that accompanied the lockdowns were the top two issues. The others remain in a consistent range.

Two years ago was the peak of the “oil is dead” mantra, and when many bright ideas for a fossil fuel free future were concocted. In a post-pandemic world, multiple voices claimed we must Build Back Better, ensure a Resilient Recovery, engineer the Great Reset.

The plan was to use government policy and borrowed money to create jobs through the large-scale replacement of fossil fuels.

Coined the “energy transition,” it was achievable and inevitable thanks to incredible advances in renewable energy cost and supply. Canada – the world’s fifth largest combined oil and gas producer – could lead the charge with minimal disruption thanks to a new federally-funded retraining program for displaced oil workers. This was called a Just Transition.

What happened?

The invisible hand of Adam Smith punched the world in the nose.

The only part of the demise of fossil fuels that was successful was reduced supply. As the economy recovered, consumers learned the hard way that low carbon energy sources were terribly oversold in terms of reliability, and demand for fossil fuels outstripped supply.

Prices for fossil fuels rose at the same time that inflation and interest rates reduced disposal income.

As demand grew, fossil fuel shortages were reflected in the price. When Russia – one of the world’s largest oil, gas and coal suppliers – invaded Ukraine, the gravity of the situation escalated immediately.

What the IPSOS survey dramatically illustrates is the number one concern for the world as 2022 ends is the rising cost of everything.

We’ve been told repeatedly that continued fossil fuel consumption will cause serious climate disruptions. No expense today will exceed the cost of future damages.

However, the more pressing issue today is still being alive in 2050 because of the rising cost of everything, including energy. Worrying about what the temperature, storm intensity or chemical composition of the atmosphere may be in 28 years has become an unaffordable luxury.

So fossil fuels are once again what they have always been – reliable and affordable sources of energy.

Happy New Year.

David Yager is an oilfield service executive, oil and gas writer, and energy policy analyst. He is author of  From Miracle to Menace – Alberta, A Carbon Story.  

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As European countries like Germany race to build new liquefied natural gas (LNG) import terminals to keep the lights on and the heat running, analysts say LNG from western Canada could help. 

Mainly destined for Asia, LNG shipped from B.C. could help divert other world shipments to Europe.   

“More western Canadian LNG would allow a lot of the other sources to go to Europe. It’s like a domino,” said Matthias Bloennigen, director of Americas consulting with Wood Mackenzie. 

Europe is “by no means out of the woods” despite having met natural gas storage targets that could help avoid a painful deepening of the energy crisis this winter, according to the International Energy Agency.  

Natural gas storage sites in the European Union are now 95 per cent full, in part thanks to a surge in LNG imports.  

But Europe needs to take immediate action to avoid the risk of natural gas shortage next year, the IEA said in early November.  

LNG flows to the highest bidder 

More LNG will be part of the answer, as tankers re-route to meet the highest bidders. In the past, that has been in Asia. Following Russia’s invasion of Ukraine, it’s in Europe.  

“A significant volume [of LNG] that was previously going to other markets, such as Asia or Latin America, is now being consumed by Europeans,” S&P Global LNG director Ciaran Roe wrote on Oct. 26. 

Between 2018 and 2021, Asian LNG price benchmark Japan Korea Marker (JKM) averaged US$6.52 per mmbtu, compared to US$5.27 per mmbtu for European benchmark Dutch TTF, according to GLJ. 

But TTF has traded above JKM since February 2022, averaging US$40.66 compared to US$34.07 so far this year. This includes a spike in August when the price for the Dutch benchmark hit US$70.70 compared to US$52.23 in Asia. 

Huge growth expected for Asian LNG imports 

Asia represents 67 per cent of world LNG demand today, and that share is expected to grow as demand doubles to reach 700 million tonnes per year by 2040. 

Over the coming decades Canada has a massive opportunity to ship LNG from the British Columbia coast to supply customers in northeast Asia, according to a new report by Wood Mackenzie.  

“For Asian buyers, Canadian LNG is quite cost competitive due to its relatively low shipping and liquefaction costs compared to other global exporters,” it said. 

Read the full report 

Wood Mackenzie estimates the delivered full cycle cost of LNG from western Canada to northeast Asia to be US$9.10 per mmbtu, in line with US$9.20 from the United States, the world’s largest LNG exporter.  

A meaningful reduction in emissions 

But competitive costs are not the only benefit for Canadian LNG in Asia, the report said.  

Canadian LNG can do more to reduce emissions than other sources of natural gas as growing Asian economies reduce reliance on coal.  

If Canada increases its LNG export capacity to Asia, net emissions could decline by 188 million tonnes of CO2 equivalent per year through 2050 – or the impact every year of taking 41 million cars off the road.  

“If Canada does not export as much LNG as anticipated to northeast Asia, the region would need to rely on LNG from elsewhere that has a higher emissions intensity,” Wood Mackenzie said. 

The consultancy’s report didn’t examine economic impacts of Canada’s LNG industry, including from LNG Canada, the one project that is under construction.  

A 2020 assessment by the Conference Board of Canada found that adding more projects in B.C. could support 96,550 direct, indirect and induced jobs annually across the country between 2020 and 2064. 

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Canada’s potential to supply natural gas to Europe as LNG has gone from an afterthought to a critical part of the discussion on how to replace gas from Russia, according to analysts with Oslo, Norway-based Rystad Energy.  

European countries are facing emergency measures to reduce energy use to make sure there is enough natural gas in storage for the winter amid Russia’s war in Ukraine.  

“From a European perspective, Canadian LNG was always kind of an afterthought. It has been quite a reversal that we’ve seen in the last few months with some of those east coast projects being lifted to the highest policymaking levels,” says Rystad vice-president Thomas Liles. 

“We’re going from Russia accounting for around 40 per cent of Europe’s gas imports to a situation where policymakers and utilities are really scrambling to source any gas they can get from anywhere.” 

The European Commission is working to reduce its use of Russian gas by two-thirds this year and eliminate it entirely “well before” 2030.  

But the reality is that gas is still needed today, and Russia has reduced supply to Europe to dangerously low levels.   

Scrambling for LNG 

The challenge is most pronounced in Germany, where governments are turning down lights, restricting heat and limiting warm water in public spaces.  

Vonovia SE, Germany’s largest landlord, is reportedly reducing night-time temperatures in its properties to a maximum of 17 degrees Celsius.  

Germany has no LNG import infrastructure today to help ease the energy shortfall. But since Russia’s invasion of Ukraine, the country has started building at least seven new LNG import terminals.  

Long-term challenge 

Even before the war in Ukraine, analysts with Shell forecast a global shortage of LNG by the mid-2020s. Total world LNG demand is expected to nearly double in the next two decades, reaching 700 million tonnes in 2040. 

Russia, the world’s second-largest natural gas producer in 2021, was expected to be a big supplier in the increasingly tight market, Liles says. 

“Before the invasion, Russia was always in our base case slated to be a very important supply player for European natural gas,” he says.  

“It is a longer-term problem, and we’re going to be tight LNG for the foreseeable future.” 

Even as more renewable energy comes online, oil and gas will continue to play a vital role in global energy markets through 2050, according to the International Energy Agency (IEA).  

In 2021, oil and gas supplied 53 per cent of world energy compared to 12 per cent from renewables, the IEA says. In 2050, renewables are projected to grow to 26 per cent, while 50 per cent is still supplied by oil and gas.  

Russia adds to coal challenge 

While the most immediate threat may be energy supply to Europe this winter, the overall challenge is broader and not going away any time soon.  

That includes getting the world off high emitting coal-fired power. But coal consumption is now back to record levels, in part because of the natural gas supply disruption from Russia.  

According to the International Energy Agency (IEA), global coal use will reach 8 billion tonnes this year – the highest level since 2013.  

“Coal is increasingly being used to replace gas, which is in short supply and has experienced huge price spikes following Russia’s invasion of Ukraine,” the IEA said in July. 

Canada’s LNG prospects 

Liles says the change in market conditions could kick off a new investment cycle in natural gas globally.  

Some of that could be in Canada, both on the east coast and the west coast, where the country’s first LNG export terminal is under construction. 

A key Atlantic Canada project closer to Europe is at the forefront of discussion, Liles says: a proposal to retrofit Spain-based Repsol SA’s LNG import terminal in Saint John, New Brunswick to exports. There is also interest in the Goldboro LNG project, a proposed floating export terminal in Nova Scotia.  

The governments of Canada and Germany have reportedly been discussing both opportunities but any timeline for development remains unclear, he says.  

“If we saw a concerted effort to make Goldboro go through, or the Saint John’s LNG reversal, we could potentially see something mid-decade, if not a little bit later.”  

Canada’s LNG developers have strengths in the global LNG market like low emissions intensity, strong environmental, social and governance (ESG) performance, plentiful low-cost natural gas supply, and strong relationships with Indigenous communities, Liles says.  

But he says building LNG infrastructure in Canada like long-haul pipelines is a challenging prospect.  

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Big wins could be found in the fight against climate change by focusing on the world’s “super polluters” instead of sweeping measures across countries and industries, according to researchers with the University of Colorado Boulder.

An August study published in the journal Environmental Research Letters found that the highest polluting power plants in the world are responsible for 73 per cent of all CO2 emissions from electricity generation.

Switching just these plants from coal to natural gas could reduce global CO2 emissions from electricity by as much as 30 per cent, researchers found. Natural gas, they said, is “the most available and efficient mitigation option.”

Canada is building its first liquefied natural gas (LNG) export terminal, where the product is expected to be used primarily to displace coal in Asian markets.

If used to replace coal in China, natural gas from LNG Canada alone is expected to reduce emissions by 60 to 90 million tonnes per year. That’s more than the 50 million tonnes emitted from Canada’s entire natural gas production sector in 2018, according to federal emissions data.

Natural gas exported from B.C. is expected to be cleaner than other sources, with emissions intensity that is less than half of the global average, according to a report by Oxford Energy Institute.

Top 10 “super polluters” compared to Canada

Using a newly constructed global database, researchers at the University of Colorado Boulder identified the world’s top 10 emitting power plants in 2018. All coal-fired, there are two in Europe, two in India, three in South Korea, and one each in Japan, Taiwan and northern China.

It takes just more than the top five of these plants to exceed the emissions of Canada’s entire oil and gas production sector, according to Canada’s national emissions inventory.

The industry in Canada supports more than 500,000 jobs and provides the United States with more than 95 per cent of its natural gas imports and half of its imported oil.

Emissions from Canada’s natural gas production are less than half the emissions of the top two plants combined.

Meanwhile, emissions from the approximately 100 operating projects of different sizes and technologies in Canada’s oil sands are less than the pollution of just the top three coal plants together.

There were 2,445 coal plants operating around the world as of July 2021, as well as 195 under construction and 324 in “pre-construction,” according to Global Energy Monitor.

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