Faced with soaring costs that rippled across economies, governments around the world embraced the critical need for energy security in 2023, adopting a more pragmatic approach to achieving climate goals. 

The world used more crude oil and coal in 2023 than anytime in human history, while global demand for liquefied natural gas (LNG) continued to grow as a vital fuel source, primarily in Europe and Asia. 

Europe in particular stepped back from some of its more aggressive timelines for reducing its reliance on oil and gas, with some nations striking long-term supply deals for LNG, returning to burning coal, or renewing investment in oil and gas exploration. 

Economic powerhouses China and India increasingly turned to coal to power their developing economies, spurring global growth of the most emissions-intensive fuel, while the U.S. maintained its lead as the world’s largest producer of oil and gas, setting new high water marks for both. 

Canada, meanwhile, saw steady progress on some key energy projects, completing construction of the Coastal GasLink pipeline, achieving major milestones on the LNG Canda export terminal, seeing the Trans Mountain pipeline expansion near completion, and the approval of a new major oil sands project for the first time in five years. 

The following is a recap of some of the key events from 2023, outlining how oil and gas have once again taken centre stage in the aftermath of Russia’s 2022 invasion of Ukraine, and the global energy crisis that it made worse: 

January 

• Japanese Prime Minister Fumio Kishida visits Canada to make a personal appeal for more access to LNG. Like German Chancellor Olaf Scholz just five months earlier, Kishida is essentially rebuffed by Prime Minister Justin Trudeau. 
• The International Energy Agency predicts that global oil demand will reach a record high in 2023, an increase of 1.9 million barrels per day from 2022’s previous peak. 
• With LNG emerging as a critical resource to deal with the lingering global energy crisis, the United States catches up to Qatar as the world’s largest exporter.  

February 

• India’s Prime Minister Narendra Modi projects his country will see demand for natural gas rise by 500 per cent while its share of global oil demand will increase from 5 to 11 per cent over the next 20 years. Meanwhile, India begins the search for long-term suppliers of LNG in an effort to reduce its reliance on coal. 
• The bill for the 2022 energy crisis comes due in Europe, where it’s learned European governments shelled out nearly US$900 billion to shield households and businesses from its impacts. Germany, which was a world leader in transitioning to renewable energy led the way in efforts to blunt the energy crisis’ impact, handing out nearly US$300 billion in subsidies. 
• Recognizing the rising global importance of reliable energy, Canadian oil producer IPC greenlights the first major new oil sands project in five years. The C$1.1 billion Blackrod project, which will be built to produce 30,000 barrels per day, is expected to be in operation by 2026. Meanwhile, Cenovus Energy filed an application to extend production at its Christina Lake oil sands project to 2079. 

March 

• China shows signs of economic resurgence after re-opening from its sweeping “zero-Covid” policies. The IEA projects China will account for nearly half of all projected growth in oil demand in 2023. 
• In the U.S., the Biden Administration approves a massive new oil project in Alaska, expected to produce as much as 180,000 barrels per day of crude oil over the course of 30 years. The project is also estimated to create some $17 billion in revenue for the U.S. federal government. 
• A new report by the UK-based Energy Transitions Commission finds that global investments in green energy would need to increase to $3.5 trillion per year in order to reach global net zero targets by 2050. That would add up to $110 trillion in new spending by 2050, more than the world’s current combined GDP. 

April 

• Indigenous leaders involved in Canada’s energy industry meet with diplomats from several of Canada’s G7 allies to make the case for being at the table when it comes to helping provide the energy the world needs. With Indigenous communities playing crucial roles in developing Canada’s LNG capacity, participants said diplomats showed significant interest in building economic relationships. 
• Leaders of the G7 meet in Hiroshima, Japan and agree that LNG will play an “important role” in helping navigate the global energy crisis and further investment in the industry is crucial. Despite pressure to agree to a full phase out of coal by 2030, the G7 will only agree to “accelerating the phase out of domestic unabated coal.” 
• A global survey that polled over 24,000 people in 28 countries found that Canada was the number one choice for countries that import oil, citing Canada’s strong record of democracy and environmental safety compared to other major producers like Saudi Arabia and Russia. 

May 

• Recognizing the growing need for energy security across Europe and the world, Norway says oil and gas companies have a “social responsibility” to find more oil and natural gas resources in the northern Barents Sea adding they should “leave no stone unturned” in the pursuit of the critical resources. A month later Norway approves $18.5 billion to develop 19 offshore oil and gas projects. 
• Skyrocketing demand for oil, led primarily by China’s economic surge, forces the IEA to recalculate its predictions for the year, upgrading its demand growth estimate to 2.2 million barrels per day to further increase record usage around the world. 
• Canada’s Public Policy Forum estimates phasing out the country’s oil and gas industry in an effort to reduce emissions will lead to the loss of some $100 billion to the nation’s economy by 2050, with Alberta bearing the brunt of the blow. “This essentially amounts to a deep recession without a recovery ever materializing,” the authors wrote. 

June 

• Qatar signs the first of several long-term LNG deals it will sign in 2023. Staring with two 27-year agreements to supply China with LNG, the Middle East supplier then signs another 15-year agreement with energy-starved Bangladesh. 
• Despite Western sanctions, Russian oil companies see gasoline exports jump 37 per cent compared to 2022 thanks to new customers in Africa and Asia. Meanwhile, China’s crude oil imports from Russia soar to a record high. 
• The annual Statistical Review of World Energy shows that record increases in solar and wind installations in 2022 failed to make a dent in the dominance of oil and gas in the global energy mix. Even with a record increase of 266 gigawatts of new renewable capacity, oil,gas and coal continued to represent 82 per cent of global energy consumption. 

July 

• The U.K. announces it will grant hundreds of new licences for oil and gas exploration in the North Sea in an effort to ensure energy security. Prime Minister Rishi Sunak says even if the U.K. achieves net zero by 2050, oil and gas will still be used for at least a quarter of its energy needs. 
• Japan, one of the world’s largest energy importers, calls for the creation of a global emergency reserve for natural gas to avoid future shortages and price spikes. 
• With rising global demand for LNG, the CEO of QatarEnergy predicts the tiny Middle Eastern nation will supply some 40 per cent of new LNG coming to market by 2029 as the U.S. works to significantly ramp up its industry.  

August 

• Independent researchers announce that China continues to ramp up coal power use, permitting 52 gigawatts of new capacity over the first six months of 2023. The additional plants would increase China’s coal burning capacity by 23 per cent. 
• Independent analysis by S&P Global finds that Canada’s oil sands emissions remained flat in 2022, despite production growth, a positive sign that measures to reduce emissions  are working. 
• For the second year in a row, Pakistan is forced out of the pricey LNG market, putting the impoverished country at high risk of a national energy crisis. 

September 

• Meeting in India, leaders of the G20 highlight the importance of energy security, and while agreeing to triple renewable capacity by 2030 avoid any language calling for a phase out of fossil fuels. Fault lines emerge between the West and developing nations that want to harness oil, natural gas and coal to grow their economies. 
• The IEA releases its updated road map for reaching net zero, suggesting global demand for fossil fuels will peak before 2030. The stance is blasted by OPEC as one that could lead to global “energy chaos” and ignores the IEA’s own acknowledgement that one the world’s current trajectory, oil, gas and coal will still account for 62 per cent of the world’s energy mix in 2050, compared to 78 per cent in 2021. 
• Saudi Aramco, one of the world’s largest oil producers, announces its intention to enter the burgeoning LNG industry, buying a minority stake in MidOcean Energy, which is looking to obtain stakes in four Australian LNG projects. 

October 

• Qatar officially breaks ground on the world’s largest LNG project, which will expand its production capacity from 77 million tonnes per year to 110 million tonnes per year. The groundbreaking coincides with three new 27-year LNG supply agreements with France, Italy and the Netherlands.  
• In its annual World Oil Outlook, OPEC warns the world will need $14 trillion in new investments in the oil sector by 2045 to ensure market stability and reduce the likelihood of energy shortages and economic chaos. 
• The U.S. eases sanctions on Venezuela’s oil sector in exchange for the promise of free and fair elections for the South American dictatorship. Less than two weeks later, Venezuela’s supreme court suspends the results of an opposition party’s primary ahead of a 2024 national election. 

November 

• Three years after shovels first hit the ground, TC Energy announces it has reached mechanical completion of the Coastal GasLink pipeline. The 670-kilometre will be a critical piece of infrastructure for Canada’s developing LNG industry. 
• Despite its earlier World Energy Outlook suggesting a looming peak for oil demand, the IEA revises its prediction for 2024, estimating global demand for oil will reach a new record high of 102.9 million barrels per day next year. A more bullish OPEC predicts oil demand will reach 104.4 million barrels per day in 2024. 
• The U.K. government says it’s working toward legislation that would make annual oil and gas licensing rounds for the North Sea mandatory if the country is set to import more oil and gas than it produces domestically. 

December 

• World leaders leave COP28 in Dubai agreeing to eventually transition away from fossil fuels, aiming to reach carbon neutrality by 2050. But a key inclusion calls for the acceleration of low- and zero-emission technology like carbon capture and storage, an innovation in which Canada is a global leader. 
• Fresh off the U.S. lifting sanctions on its oil industry, Venezuela claims sovereignty over an oil-rich region of neighbouring Guyana – accounting for about two-thirds of its territory – after ignoring ongoing proceedings in the International Court of Justice to settle the long-standing dispute. 
• Russia says its crude oil exports will be seven per cent higher than in 2021 despite ongoing sanctions from the West. After losing most of its European customers, Russia reports that China and India now account for more than 90 per cent of its crude oil exports.  

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European governments are beginning to sound the retreat on some foundational net zero policies in the wake of “greenlash” from increasingly overburdened citizens.  

Russia’s invasion of Ukraine in 2022 prompted European governments to begin pivoting away from cheap Russian natural gas, which Europe increasingly relied on to backstop a laundry list of ambitious green policies. 

But despite pledges by the European Union to “divest away from Russian gas as quickly as possible,” nearly 15% of overall EU gas imports still came from Russia in the first half of 2023, while the amount of liquefied natural gas (LNG) imported from Russia actually increased by 39.5% compared to the same period in 2021, prior to the Ukraine invasion. 

Energy security and affordability have become central issues for Europeans amid a persistent global energy crisis, and that’s translated into a rethink of what had once seemed like unassailable green policies across Europe. 

Here’s a look at how some countries are dealing with the new global reality: 

Germany 

Nothing is more symbolic of Europe’s retreat from its net zero ambitions than Germany seeing a wind farm dismantled to make room for the expansion of a lignite coal mine just outside of Dusseldorf. 

And no European country has been more affected by the changing energy landscape than Germany, which introduced its multi-billion dollar Energiewende program in 2010, calling for a broad phaseout of fossil fuels and nuclear power, replacing them primarily with wind and solar power. 

Today, without cheap and reliable natural gas backups due to sanctions against Russia, Germany has gone from Europe’s economic powerhouse to the world’s worst performing major developed economy, facing “deindustrialization” due to skyrocketing energy costs. 

In addition to extending its deadline for shutting down coal plants until 2024, the German government has also scrapped plans for imposing tougher building insulation standards to reduce emissions as well as extending the deadline on controversial legislation to phase out oil and gas heating systems in homes, a decision the government admits will make it impossible to reach the country’s 2030 emissions targets. 

A major car manufacturer, Germany’s opposition to an EU-wide ban on the sale of new combustion vehicles by 2035 softened the legislation to allow exceptions for those that run on e-fuels. 

Germany’s quest for reliable energy exports prompted Chancellor Olaf Scholz to travel to Canada to make a personal appeal for Canadian LNG. He was sent home empty handed, advised there wasn’t a strong business case for the resource. 

Great Britain 

Britons have grown increasingly concerned about the cost of net zero policies, despite being largely supportive of striving for a greener future. 

A YouGov poll in August found while 71% generally favoured Great Britain’s aim to reduce carbon emissions to net zero by 2050, some 55% agreed that policies should only be introduced if they don’t impose any additional costs for citizens. Only 27% agreed reaching the goal was important enough to warrant more spending. 

That shift in public sentiment prompted Prime Minister Rishi Sunak to pump the brakes on some key policies enacted to reach the U.K.’s legally binding target of reaching net zero emissions by 2050. 

In September, the government delayed its looming ban on new gas- and diesel-powered cars by five years to 2035, while also extending its phaseout of gas boilers in homes and suggesting exemptions for certain households and types of property. 

“If we continue down this path, we risk losing the British people and the resulting backlash would not just be against specific policies, but against the wider mission itself,” Sunak said of the potential consequences of maintaining strict net zero policies. 

The U.K. government also gave the green light for hundreds of new North Sea oil and gas licences, citing the need to bolster both energy security and the nation’s economy.  

France 

France’s net zero ambitions enjoy an advantage compared to its European peers due in large part to its significant fleet of nuclear power stations, which provide around 70 per cent of its electricity. 

However, President Emmanuel Macron has often opted for a more pragmatic approach to reaching climate targets, noting any energy transition can’t leave citizens disadvantaged. 

“We want an ecology that is accessible and fair, an ecology that leaves no one without a solution,” Macron said in September after ruling out a total ban on gas boilers, instead offering incentives to those looking to replace them with heat pumps. 

Macron also famously dropped a proposed fuel tax in 2018 that sparked sweeping yellow vest protests across France when it was announced.  

France has also extended the timeframe of its two remaining coal plants to continue operating until 2027, five years later than the plants were originally set to be shuttered. 

Italy 

Feeling the impacts of the global energy crisis, Italy has begun reassessing some of its previous commitments to transition goals. 

Earlier this year, Italy pushed back on EU directives to improve the energy efficiency of buildings, which Italy’s national building association warned would cost some $400 billion euros over the next decade, with another $190 billion euros needed to ensure business properties met the required standards. The Italian government has called for exemptions and longer timelines. 

Italy also warned the European Commission it would only support the EU’s phase out of combustion engine cars if it allows cars running on biofuels to eclipse the deadline, while further questioning a push to slash industrial emissions.  

Paolo Angelini, deputy governor at the Bank of Italy, warned a rapid abandonment of fossil fuel-driven industries could have a devastating impact. 

“If everybody divests from high-emitting sectors there will be a problem because if the economy does not adjust at the same time, things could blow up unless a miracle happens in terms of new technology,” he said. 

Poland 

Like Italy, Poland has dug in its heels against some EU net zero initiatives, and is actually suing the EU with the goal of overturning some of its climate-focused legislation in the courts. 

“Does the EU want to make authoritarian decisions about what kind of vehicles Poles will drive and to increase energy prices in Poland? The Polish Government will not allow Brussels to dictate,” wrote Polish Climate and Environment Minister Anna Moskwa on X, formerly known as Twitter, in July. 

In addition to looking to scrap the EU’s ban on combustion engine cars by 2035, Warsaw is also challenging laws around land use and forestry, updated 2030 emissions reduction targets for EU countries, and a border tariff on carbon-intensive goods entering the European Union. 

With some 70% of its electricity generated by coal, Poland is one of Europe’s largest users of coal. And it has no designs on a rapid retreat from the most polluting fossil fuel, reaching an agreement with trade unions to keep mining coal until 2049. 

Netherlands 

The political consequences of leaning too far in on net zero targets are beginning to be seen in the Netherlands. 

In March, a farmer’s protest party, the BBB or BoerBurgerBeweging (Farmer-Citizen Movement), shook up the political landscape by capturing 16 of 75 seats in the Dutch Senate, more than any other party, including the ruling coalition of the Labor and Green Parties. 

The upstart party was formed in 2019 in response to government plans to significantly reduce nitrogen emissions from livestock by 2030, a move estimated to eliminate 11,200 farms and force another 17,600 farmers to significantly reduce their livestock. 

What followed were nationwide protests that saw supermarket distribution centres blockaded, hay bales in flames and manure dumped on highways. 

In November, Dutch voters will elect a new national government, and while BBB has dropped to fifth in polling, much of that support has been picked up by the fledgling New Social Contract (NSC), which has vowed to oppose further integration with EU policies, a similar stance offered by the BBB. The NSC currently tops the polls ahead of the Nov. 22 election. 

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From prosperity for remote Indigenous communities in northern British Columbia to lowering emissions in Asia to help fight climate change, the benefits of the proposed Ksi Lisims LNG project would extend regionally, nationally, and globally, according to project documents.   

The Nisga’a Nation and its partners in the project reached a significant milestone this week with the filing of an application for an environmental certificate, moving it into a critical regulatory phase.  

UPDATE: The Ksi Lisims LNG project received its environmental assessment certificate to proceed from the B.C. government on September 15, 2025.

The Ksi Lisims (pronounced “s’lisims”) floating terminal, located in Nisga’a territory near B.C.’s border with Alaska, would export up to 12 million tonnes of LNG per year. By using electricity and carbon offsets it is designed to be net zero within three years of startup, targeted for 2027.  

The partners estimate that one tonne of LNG exports from B.C. reduces four tonnes of emissions in Asia by reducing reliance on coal-fired power.  

Here’s a look at the benefits of Ksi Lisims, as stated in the environmental certificate application: 

LOCAL: Create economic self-determination for the Nisga’a Nation and improve the quality of life for Nisga’a citizens through the provision of new revenue and royalty streams, training, education, employment and contracting opportunities for Nisga’a citizens, while also providing indirect benefits such as improved community infrastructure and marine emergency response in the vicinity of the site. 

REGIONAL: Create direct and indirect economic benefits for other Indigenous nations in the region, as well as other communities in northwest B.C., Alberta, and Canada, including skills training, local employment, contracting and procurement. 

NATIONAL: Provide tax revenue that will support Indigenous, provincial and federal objectives to improve health, education, transportation infrastructure and other social benefits. 

GLOBAL: Low carbon LNG supports the global transition away from more carbon intensive forms of energy while providing improving energy security and reliability in global markets. 

Filing the environmental certificate application kicks off a 180-day comment period, after which Ksi Lisims will amend its application and file a final version. The B.C. Environmental Assessment Office then has 150 days to consider the application and issue notice on whether the project can proceed.  

Following that timeline, that decision should be issued around September 2024.  

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The Paris-based International Energy Agency (IEA) has released its latest outlook for global energy supply and demand through 2050. 

Oil and gas will continue to be central to energy markets even as the world moves more quickly to reduce emissions, the IEA projects.  

Here are the facts.  

Scenarios 

The IEA models three outlook scenarios: 

• The Stated Policies Scenario (STEPS) shows the current trajectory of the world’s energy systems based on existing government policies and policies that are under development.  
• The Announced Pledges Scenario (APS) includes recent major national announcements as of the end of August 2023, both 2030 targets and longer-term net zero or carbon neutrality pledges, regardless of whether these announcements are legally binding.  
• The Net Zero by 2050 Scenario (NZE) is a “normative” or prescriptive scenario that shows one pathway to reach the goal of net zero emissions. It assumes unprecedented global cooperation, and the IEA acknowledges that the world is not on this trajectory.  

Overall, the world will use much more or about the same amount of energy in 2050 than it did in 2022.  

Driven by emerging economies in Asia, on the current path the IEA projects total world energy consumption will increase by 21 per cent over the next three decades. 

With announced pledges, global energy needs will be about the same in 2050 as they are today, declining by just three per cent.  

The IEA said continued investment in oil, gas and coal is essential in all three of its scenarios.  

“It is needed to meet increases in demand over the period to 2030 in the STEPS and to avoid a precipitous decline in supply that would far outstrip even the rapid declines in demand seen in the NZE Scenario,” the agency said. 

That investment and development should happen in Canada, where responsible, reliable producers and exporters are committed to emissions reduction.  

Oil and gas in world energy markets  

Oil and gas together supplied 53 per cent of global energy needs in 2022.  

In STEPS, as more renewable and alternative energy comes online, by 2030 that share declines slightly to 51 per cent. In 2050, oil and gas will still supply nearly half – or 46 per cent – of world energy needs, the IEA said.  

With announced pledges, oil and gas will supply 50 per cent of global energy needs in 2030, and still nearly one third – 29 per cent – in 2050.  

Oil 

In 2022, countries around the world consumed 96.5 million barrels of oil per day. On the current trajectory that use increases to 101.5 million barrels per day in 2030. By 2050 this declines slightly but is still higher than in 2022, reaching 97.4 million barrels per day.  

With announced pledges, world oil demand dips to 92.5 million barrels per day in 2030. In 2050, demand declines but is still 54.8 million barrels per day.

In STEPS, demand for extra heavy oil and bitumen like what Canada produces rises to 5.5 million barrels per day in 2050, up from 3.7 million barrels per day in 2022. In the announced pledges scenario, this demand reduces but still remains strong, at 2.5 million barrels per day in the middle of this century.  

The use of oil for non-energy purposes (like pavement, which improves in quality when using oil from Canada) increases in both scenarios, rising from five per cent of world energy use today to six per cent in 2050.  

Natural gas 

Last year the world used 4.16 trillion cubic meters of natural gas. On the current pathway, that increases to 4.30 trillion cubic meters in 2030 and settles at 4.17 trillion cubic meters per day in 2050, slightly higher than today.  

With announced pledges, natural gas demand remains strong but reduces to 3.86 trillion cubic meters in 2030 and 2.42 trillion cubic meters per day in 2050.  

Liquefied natural gas (LNG) demand rises in the current trajectory to 611 billion cubic meters in 2030, from 479 billion cubic meters in 2022. Trade continues increasing, reaching 656 billion cubic meters in 2050.  

With announced pledges, LNG demand rises to 588 billion cubic meters in 2030 and remains at 242 billion cubic meters in 2050.  

The IEA noted that LNG has become a base source of energy supply for Europe following Russia’s invasion of Ukraine. Longer-term growth is driven by growing economies in Asia.  

As the IEA’s latest outlook once again shows, the world needs more Canadian energy, not less.  

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An additional $400 billion investment in liquefied natural gas (LNG) projects around the world is needed over the next decade to ensure energy security and achieve emissions reductions, according to a new report by Wood Mackenzie.  

Without increased LNG supply, it said Asian countries in particular will continue to rely on high-emitting coal as they grow power generation. 

“On a global scale, limited supplies of LNG risks stalling progress towards 2050 net zero targets in the near term,” says the report by Wood Mackenzie and Petronas, one of the joint venture owners of the LNG Canada project.  

The fallout from Russia’s invasion of Ukraine rerouted LNG shipments from Asia to Europe, contributing to record coal consumption in 2022, analysts noted.  

“A key pillar of the energy transition is to reduce the consumption of coal. A critical step in that transition is to shift power production from coal to much lower-emissions gas. The shift helps drive immediate decarbonization while renewables, energy storage, and other clean energy technologies scale-up.” 

Power generation from natural gas reduces emissions by half on average, according to the International Energy Agency (IEA). LNG from Canada can deliver an even bigger decrease, reducing emissions by up to 62 per cent, according to a 2020 study published in the Journal for Cleaner Production. 

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.  

“Gas can be used to not only replace coal for power generation, but also to provide fuel for blue hydrogen production, and as an essential source of flexibility as electricity grids incorporate increasingly large amounts of intermittent renewable generation,” Wood Mackenzie said.  

“Gas also plays a critical role in non-power sectors such as commercial and residential heating, as a feedstock for chemicals and fertilizers, and as an energy source for metals, cement, and other manufacturing processes.” 

Canadian LNG has advantages in a lower emission world, the report said.  

“Canada’s western ports are ideally positioned to supply growing Asian demand because its shipping routes aren’t dependent on an uncongested Panama Canal. The country is also poised to produce some of the lowest-emission LNG in the world,” Wood Mackenzie said.  

The low emissions per tonne of LNG in Canada come from shorter shipping distances to customers, a colder climate, the use of hydroelectricity, and methane emissions reduction from upstream natural gas production. 

Once it starts operating in 2025, LNG Canada will have emissions intensity of 0.15 per cent CO2 per tonne, less than half the global average of 0.35 per cent per tonne, according to Oxford Energy Institute.   

Proposed Indigenous-led project Cedar LNG would have emissions intensity of 0.08 per cent, and smaller-scale Woodfibre LNG would have emissions intensity of 0.04 per cent.   

“The gas and LNG supply and demand mismatch that spawned the current energy crisis and stalled energy transition progress can’t be repeated,” Wood Mackenzie said.  

“This will require a long-term commitment to expanding capacity to ensure reliable, increasingly low-emission, and affordable LNG that won’t be upended by future geopolitical and economic disruptions.” 

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Canada’s relationship with the United States as virtually its only customer for oil exports has finally begun to break, according to a leading energy analyst.  

More volumes than ever of Canadian oil are heading overseas, but many of the tankers aren’t leaving from Canada’s shores. The oil is being “re-exported,” that is, sent to the U.S. by pipeline or rail and then loaded for international markets from terminals on the U.S. Gulf Coast.   

“It looks like Canada’s crude oil exports are finally showing off their stuff and stepping out on the town,” wrote Martin King, senior analyst with RBN Energy, in a recent report.  

“This year, much stronger international demand has sent re-export volumes to record highs.” 

Since the 1950s, Canada has been exporting crude oil to overseas markets through the Trans Mountain pipeline, but King notes those volumes have generally been “very modest” at under 100,000 barrels per day.  

That’s expected to change with completion of the Trans Mountain Expansion, adding up to 500,000 barrels per day of additional international export capacity, King said.  

This will give Canadian oil producers something they’ve long been waiting for – options of how to send their crude to growing markets overseas.  

Citing U.S. Census Bureau data, King said that an average 130,000 barrels per day of Canadian heavy oil was re-exported from the U.S. Gulf Coast last year.  

So far this year re-exports averaged 200,000 barrels per day, topping 300,000 barrels per day in March, underlining strong demand from customers outside the U.S. including China, India and Spain.   

The rise in Gulf Coast re-exports is thanks to increased pipeline access following the completion of Enbridge’s Line 3 Replacement Project in 2021, as well as additional access on other Enbridge and TC Energy pipelines, King said.  

The Russia/Ukraine war and OPEC+ crude production cuts have also caused importing countries like China to “look further afield” for oil, he said.  

Total American oil exports have surged amid the shifting oil flows, according to data from the U.S. Energy Information Administration (EIA).  

In 2021, the United States exported an average 2.9 million barrels of oil per day. In 2022 this increased to 3.6 million barrels per day, and so far this year has averaged nearly 4 million barrels per day.  

Despite increased investment in renewable energy sources, world oil consumption this year is at a record 102 million barrels per day, according to the International Energy Agency.  

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The Nisga’a Nation and its partners in northwest B.C. have taken another step towards developing the proposed $10 billion Ksi Lisims LNG facility near Prince Rupert, adding to an emerging global trend of floating liquefied natural gas (FLNG) export facilities that can come online faster than land-based projects.   

Like Cedar LNG, another proposed FLNG project in B.C., the facility would be one the most significant Indigenous-led infrastructure projects in Canadian history.  

“The project will be the heartbeat of our Nation’s economy,” Eva Clayton, president of the Nisga’a Lisims government, said in a statement. “It’s our best chance to build prosperity and a positive future for our people.”  

Ksi Lisims took a step forward in July with the award of a front-end engineering and design contract to a collaboration of Kansas-based Black & Veatch and Samsung Heavy Industries of South Korea.   

Black & Veatch and Samsung are also conducting front end engineering and design for Cedar LNG, owned 50 per cent by the Haisla Nation.   

FLNG terminals are liquefaction, storage, and offloading facilities built on barges or ships stationed near shore. The projects are “in vogue” amid booming investment in LNG to help address the world’s energy crisis, analysts with Wood Mackenzie said during a recent presentation in Vancouver.   

FLNG facilities can be more cost effective to build than land-based terminals because they can be constructed in global shipyards then towed to project sites, says Dulles Wang, an LNG researcher with Wood Mackenzie.  

“The technology is becoming more mature as we see more floating LNG projects,” he says, noting there are five FLNG export facilities in service worldwide – two of which are in Mozambique and Cameroon.   

Less onshore development and fewer worker camps can also mean less environmental impact – only pipeline connections and associated infrastructure are needed, further lowering costs, says Wang.   

Ksi Lisims is planning a modular design that’s capable of being expanded. The project is expected to produce 12 million tonnes of LNG per year, processing 1.7 to 2.0 billion cubic feet of natural gas per day.  

To proceed, the project must clear numerous regulatory and technical hurdles, which are complicated by B.C.’s 2030 net zero plans, says Wang. Ksi Lisims LNG will require significant amounts of hydroelectric power to approach net zero, he says. A new natural gas pipeline from northeast B.C. is also needed.  

“The B.C. government has an emissions reduction target by 2030. How to implement the new Energy Action Framework for new LNG projects to reach net zero by 2030 could create regulatory uncertainty for the project,” says Wang.   

Canada’s emerging LNG industry, which includes the $18 billion, 14 million tonne per year LNG Canada project under construction in Kitimat, has significant capacity to reduce global emissions by offsetting coal-fired power generation in Asia, says Wang.  

As a result, Canada should work with its allies and potential customers to receive credit for the global emissions reduction benefits of exporting LNG, says Shannon Joseph, chair of Energy for a Secure Future.  

The equivalent of all Canadian GHG emissions could be eliminated by helping Asia switch 20 per cent of its coal-fired power stations to natural gas, according to a recent report published by the Canadian Chamber of Commerce  

“Canada could help deliver 680 megatonnes of emissions reductions, and that’s more than our whole country,” Joseph says.  

Through connections to hydropower on B.C.’s electrical grid, emissions from Ksi Lisims LNG could reach net zero by 2030, say developers, aided by strong monitoring and measurement, energy efficiency, purchase of carbon offsets and potential carbon capture and storage.   

“We have worked very hard to ensure our project was capable of achieving net zero performance,” says Clayton.  

Ksi Lisims LNG is undergoing environmental assessment and could start operating in late 2027 or 2028.  

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Canada should work with its allies and potential customers to receive credit for the global emissions reduction benefits of exporting liquefied natural gas (LNG), says a prominent Canadian energy advocate.  

The equivalent of all Canadian GHG emissions could be eliminated by helping Asia switch 20 per cent of its coal fired power stations to natural gas, says Shannon Joseph, chair of Energy for a Secure Future, citing a recent report published by the Canadian Chamber of Commerce.  

“Canada could help deliver 680 megatonnes of emissions reductions, and that’s more than our whole country,” she says.  

“We should do it and shout it from the rooftops. We should move forward with LNG as an energy and emission solution.” 

Receiving credit for lowering emissions with LNG could come through what’s known as Article 6 of the Paris Agreement, but Joseph says Canada need not wait for these carbon accounting rules to be settled before pressing forward.  

“We need to assert, confidently, the environmental value we would be delivering to the world,” she says.  

Shannon Joseph, chair of Energy for a Secure Future. Photo by Dave Chidley for the Canadian Energy Centre

Article 6 conceptually allows countries to collaborate with each other on emissions reduction goals by trading carbon credits. In theory, for example that could allow Canada receive credit for emissions reductions achieved in China by using Canadian LNG to displace coal.   

The Paris Agreement signatories have not yet agreed on the rules to make Article 6 a reality. Meanwhile, driven by Asia, last year the world consumed more coal – and produced more emissions from that coal – than ever before, according to the International Energy Agency (IEA).   

The IEA says switching from coal to natural gas for electricity generation reduces emissions by half on average. LNG from Canada can deliver an even bigger decrease, reducing emissions by up to 62 per cent, according to a June 2020 study published in the Journal for Cleaner Production.   

Even before Russia’s invasion of Ukraine, world LNG demand was expected to nearly double by 2040. The market has become even tighter as countries work to exclude Russian energy, says a report by Energy for a Secure Future.   

Japan and South Korea, as well as Germany have asked Canada to step up LNG development to help mitigate the energy crisis.   

With or without Article 6, Energy for a Secure Future is calling on Canada to work with its potential customers in Europe and Asia to recognize and credit the environmental benefits of Canadian LNG displacing higher emitting energy.   

“Canada’s allies have come here asking for energy, and we should work directly with them to find a way to have our environmental contributions recognized,” says Joseph, adding the U.S. has moved ahead without credits, more than doubling LNG exports since 2019.  

Canada has yet to export significant volumes of LNG after years of regulatory delay and cancelled projects – but things are changing.  

LNG Canada in Kitimat B.C. will be the first major export facility to operate, starting in 2025. Woodfibre LNG near Squamish begins construction this fall with the aim to start operating in 2027. Other proposed projects include the Indigenous-led Cedar LNG facility in Kitimat and Ksi Lisims LNG near Prince Rupert.  

LNG Canada CEO Jason Klein stands atop a receiving platform overlooking LNG processing units called trains that are used to convert natural gas into liquefied natural gas at the LNG Canada export terminal under construction, in Kitimat, B.C., on Wednesday, September 28, 2022. CP Images photo

Meanwhile, India, China and Japan remain consumers of Russian oil and gas, according to the 2023 Statistical Review of World Energy.  

“We are trying to help our allies meet the challenges they are facing. One of these is ensuring that their populations – sometimes of over a billion people – can even access modern forms of energy,” Joseph says.  

“If Canada wants to be relevant and to lead, we have to come to the table with solutions to this question, alongside the environmental one. LNG is our biggest card.”  

India will have the world’s largest population by 2028 – climbing to 1.45 billion and rising to 1.67 billion people by 2040, according to the United Nations Population Fund.  

“Currently India is the fourth largest importer of LNG [in the world] and demand is expected to grow massively as 270 million people move up the socioeconomic ladder,” says Victor Thomas, CEO of the Canada-India Business Council. 

Canada’s potential to deliver LNG to India “just makes good sense when you look at the geopolitical fractures that have occurred since 2022,” he says, noting the U.S. has recognized the opportunity and is taking action to form new business relationships in India.  

Burning wood and other biomass for heat and cooking is still common in the South Asian country, while coal produces around three quarters of India’s electricity. According to the IEA, by 2040 India’s total energy demand will be 70 per cent higher than it was in 2019.    

“Transitioning from wood burning to LNG is a massive emissions reduction,” says Thomas. “It’s a safe and reliable opportunity. People are looking for a country like Canada to be able to provide that.”  

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The United States continues its massive build out of LNG export capacity as a second major project looks to move to 24/7 construction.  

Meanwhile, analysts say Canada is a “dark horse” with an uncertain LNG future due to challenges getting projects built. 

“The outlook for LNG is bullish, with another 100 million tonnes per annum of capacity required to meet demand growth by the mid-2030s,” consultancy Wood Mackenzie said in a July research note. That’s about 25 per cent more LNG needed on top of projects already going ahead, analysts said.  

Global LNG trade hit a new record last year, driven in part by European nations buying up supplies to replace pipeline imports from Russia, according to the U.S. Energy Information Administration (EIA).  

The U.S. is expanding its LNG exports faster than anywhere else in the world – growing by 16 per cent in 2022 alone, the EIA reported.  

America’s seven operating terminals exported 76 million tonnes of LNG to global markets last year, according to with Wood Mackenzie. There are five new terminals under construction.  

One of them, Exxon Mobil’s US$10 billion Golden Pass LNG project on the Texas coast, received regulatory approval to increase its workforce by nearly 5,000 people and move construction to 24 hours a day, seven days week, to meet its target in-service date in the second half of 2024.  

Now Venture Global has asked FERC to allow it to also work 24/7 at the Plaquemines LNG project in Louisiana, increasing its workforce to 6,000 from 3,600 under the current approval. This will help it start exports by the end of 2024, the company said.  

Wood Mackenzie analysts report the U.S. and its main competitor, Qatar, are likely to see the most growth in LNG exports in the coming years. It is unclear how much Canada will fit in.  

“West Canada is a dark horse. The challenges for building out new capacity are clear. Construction costs are high in Canada, not least for new pipelines across the Rockies. Support from Canadian First Nations is critical to secure social licenses. But Canada also has much in its favour,” Wood Mackenzie said.  

This includes huge resources of “responsibly sourced gas,” or natural gas that has been certified by independent third parties as having a lower environmental footprint; multiple producers including Asian companies eager to sell LNG; lower cost of supply; and closer proximity to Asian markets than projects on the U.S. Gulf Coast.  

Canada is coming closer to entering the global LNG market. The first project, LNG Canada, is now 85 per cent complete and expected to start running in 2025. Smaller Woodfibre LNG is slated to start construction in September, and the Indigenous-led Cedar LNG project targets a go-ahead decision before winter. 

Removal of policy and regulatory impediments could see Canada become the world’s fifth-largest LNG exporter by 2035, according to CEC Research.  

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Federal Environment and Climate Change Minister Steven Guilbeault is continuing to plot a painful course toward a short-sighted phase out of Canada’s world class oil and gas sector based on an unrealistic view of world’s future energy mix. 

In an interview with Euractiv, Guilbeault said he supports the phase out of unabated fossil fuels, those without the technology to minimize emissions, by 2050 to align with the International Energy Agency’s Net Zero Scenario, a path that is largely out of touch with the current global reality. 

Based on that increasingly unlikely scenario, the minister said he anticipates Canada’s oil and gas sector will follow suit with a 50% to 75% reduction in the production of oil and gas by 2050, which would be devastating for our economy, hurt our economic allies, and make little to no progress towards reducing global emissions. 

Here are the facts. 

Fact: The IEA’s Net Zero Scenario is largely aspirational, not practical 

Guilbeault’s vision of a massive global reduction of fossil fuel usage is growing even less likely amid a lingering energy crisis prompted by several years of declining investment in oil and gas followed by Russia’s invasion of Ukraine. 

The fact is, this year the world will use more oil and more coal than any time in human history. 

According to the IEA’s latest short-term outlook, global oil use will hit a record high of 102 million barrels per day this year and is expected to grow to 106 million barrels per day by 2028. Last week, OPEC forecasted that by 2045, global oil demand will reach 110 million barrels per day.  

Meanwhile, demand for natural gas, particularly liquefied natural gas (LNG) is soaring. 

By 2040, global LNG demand – driven primarily by growing Asian economies – is expected to reach 700 million tonnes, a more than 75 per cent increase from 2022. Demand for LNG is expected to outpace supply by the middle of this decade. 

Relying on the IEA’s Net Zero scenario, Guilbeault said he believes oil use will decline to between 25-30 million barrels per day, a 75 per cent reduction. Rapid deployment of renewables, he said, would fill that void despite some significant hurdles that could hinder a sweeping transition.  

The bottom line is pretty clear. In the IEA’s most likely scenario, oil and gas will still account for 47 per cent of the global energy mix in 2050, a reduction of 5 per cent from 2021. While the share of renewables will more than double, it is still expected only to account for 29 per cent of the world’s energy mix in 2050. 

Fact: A rapid phase out of oil and gas would hurt Canada and its allies 

Canada’s oil and gas sector is a critical part of our economy, supporting hundreds of thousands of jobs from coast-to-coast, including thousands of jobs in manufacturing, environmental, and financial services tied to the industry, especially in Ontario and Quebec. 

A recent analysis by commodity data firm S&P Global focused specifically on the oil sands suggests that efforts to meet federal emissions targets for 2030 would likely force the industry to slash production by up to 1.3 million barrels per day. 

According to the analysis, that could result in the elimination of between 5,400 and 9,500 jobs. With just over 54,000 oil and gas extraction jobs in Canada, that would mean the elimination of as much as 17% of the workforce. 

In addition to jobs, the industry is also an economic bulwark, generating $168 billion in GDP in 2021, about 7.2 per cent of Canada’s economic activity. Oil and gas also accounted for nearly a third of Canada’s exports in 2021, injecting $140 billon into the economy. 

Amid the ongoing global energy crisis, some of Canada’s international allies have turned to Canada to be a potential key supplier as they look for stable and responsible suppliers to replace Russian oil and gas. 

The leaders of Germany and Japan made direct appeals to Canada to supply more LNG to help meet their energy needs. 

Yamanouchi Kanji, Japan’s ambassador to Canada, made it clear that some of our Asian allies see Canada as a key player in the world’s future energy, particularly when it comes to LNG. 

“The world is waiting for Canada,” he said earlier this year. “Canada can and should play a very important role to support the energy situation not only in Japan and South Korea, but the world.” 

Fact: Reducing global emissions starts with Canadian natural gas 

If Canada is truly serious about tackling global greenhouse gas emissions, we could make a much bigger impact by supplying energy-hungry Asian countries with some of the cleanest LNG on the planet to replace coal. 

Climate change is a global issue, not a local one. 

Despite being one of the world’s largest energy producers, Canada is still only responsible for about 1.6 per cent of total global emissions.  

Developing Asian counties, particularly China, have turned to coal to help power their growing economies. A switch to natural gas to generate power reduces emissions by 50 per cent on average, according to the IEA. Canadian natural gas shipped as LNG could perform even better, reducing emissions from coal by about 65 per cent, according to Energy for a Secure Future. 

With analysts expecting world LNG demand to double over the next two decades, Canada could make a real measurable impact on lowering global emissions by unlocking its LNG potential. 

A recent study by Wood Mackenzie found that Canadian LNG exports could reduce net emissions in Asia by 188 million tonnes per year through 2050. Put another way, that would be the annual equivalent of removing the emissions of all vehicles on Canadian roads, or wiping out nearly three time’s B.C.’s total emissions. 

Meanwhile, a coalition of six companies representing 95 per cent of Canada’s oil sand production have jointly committed to achieve net zero emissions by 2050. The Pathways Alliance is looking to harness emerging technology like carbon capture and storage as well as small modular nuclear reactors to reach that target. 

The reality is that if Canada significantly curtails its oil and gas industry, other national producers, some of which lack Canada’s commitment to democratic ideals and the environment, will fill that void. This could see bad actors like Russia continue to maintain a strategic and economic advantage over Europe by maintaining European reliance on its energy. 

Fact: Phasing out oil and gas would hurt Indigenous communities 

Over the last decade, Indigenous communities have emerged as key players in Canada’s energy sector, allowing First Nations in many cases to create intergenerational opportunity for their people. 

From pipelines to LNG terminals, dozens of Indigenous communities have entered into ownership agreements on major oil and gas projects. 

In B.C., 16 First Nations will acquire a 10 per cent stake in the Coastal GasLink pipeline once it’s completed later this year. In Alberta, another 23 First Nation and and Métis communities are now approximately 12 per cent owners of seven operating Enbridge oil sands pipelines, the largest Indigenous energy transaction ever in North America. 

And in northwest B.C., the Haisla Nation is 50 per cent owner of the proposed Cedar LNG project, which would be the first Indigenous-owned LNG terminal in the world. 

“When Europeans, Asians and Americans think of Canada’s Indigenous peoples, they often think we oppose all energy development. We aren’t victims of development. Increasingly we are partners and even owners in major projects,” Haisla Nation Chief Councillor Crystal Smith said during an April press conference after leading a delegation of Indigenous leaders to meet key international diplomats. 

Indigenous employment in Canada’s oil and gas sector has continued to grow, rising by more than 20 per cent since 2014 to reach an estimated 10,400 jobs in 2020. 

Indigenous-owned businesses also benefit from the industry, with three major projects – the Trans Mountain Expansion, Coastal GasLink, and LNG Canada – spending some $9 billion with Indigenous- and locally-owned businesses.   

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