The world should get natural gas and oil from Canada: Here’s why

More energy coming from Canada means a cleaner environment and a safer world

By Tim McMillan
Natural gas operations in northeast B.C. Photo courtesy Pan Canbriam Energy

The Russian invasion of Ukraine has exposed real and dangerous risks to global peace and security, not only from geopolitical ambitions but also due to energy shortages arising from misguided energy policies.

Only weeks ago, the White House asked Saudi Arabia, Russia and other countries that make up OPEC+ to pump more oil into global markets to help bring down prices at American gas pumps. Their answer: “Pump your own oil.”

Recently, President Joe Biden issued a call to Qatar (next to the U.S., it’s the world’s second-largest exporter of liquefied natural gas – LNG) – to step up supplies to Europe. The U.S. itself has increased LNG shipments to Europe.

Biden also called for a globally coordinated release of oil from storage to ramp up supply and damper oil price (and the associated price of transportation fuels including gasoline, diesel and jet fuel) – but China has ignored these requests, choosing instead to put even more oil into storage.

Russia provides about one-third of Europe’s total energy supply, including up to 50 per cent of its natural gas. On February 23, Russian troops invaded Ukraine, further complicating an already deeply integrated energy supply chain.

Meanwhile, Europe grapples with an energy crisis of its own making, characterized by volatile natural gas supply and price spikes. This crisis is the unintended consequence of rushing ahead with ill-informed policy to shift energy systems away from natural gas. In the United Kingdom and Europe, energy policy has discouraged investment in natural gas development and infrastructure.

Energy scarcity caused by the inability of intermittent renewable sources to generate at expected capacity, combined with natural gas supply shortfalls, has led to record-shattering natural gas prices in Europe. These shortages and high prices have caused factories to shut down which has contributed to supply chain issues while raising the cost of food, power and home heating.

It seems the only relief from high natural gas prices might come in the form of increased coal usage in an attempt to provide people with the energy they need to live and work. This is the exact opposite of what policy makers intended.

Not investing in natural gas infrastructure and development – while increasing reliance on Russian supply – puts Europe in a very difficult place. When that supply is interrupted, economic and human catastrophes are possible, such as businesses shutting down, energy costs rising even more, and leaving people with no heat or power.

What does this mean for Canadians? It means this country has missed an enormous opportunity to supply responsibly produced, low-emissions natural gas – in the form of LNG – to growing global markets. This doesn’t mean Canada could capitalize on other peoples’ hardship. It means Canada could have been supplying LNG to Europe from developments in Quebec and Atlantic Canada. If we’d built those projects when we had the chance, today Canada could be helping alleviate natural gas shortfalls and bolstering energy security in Europe.

At one time, 13 LNG facilities were proposed in B.C., and five in Central and Atlantic Canada. Unfortunately, our opaque regulatory process and lengthy timelines for project assessment and approval have become roadblocks to international investment that would have funded Canadian LNG development. Today Canada only has one small operational LNG facility and another one under construction. For comparison: between 2014 and 2020 the U.S. built seven LNG facilities, currently has five more under construction and an additional 15 projects approved.

If Canada had followed a similar path to the U.S., we could be stepping up right now to send desperately needed natural gas supplies to our allies and trading partners.

Countries around the world are in need of a stable source of affordable energy provided by a trusted partner. With tremendous natural gas and oil reserves, Canada has the potential to be an energy superpower. Bringing our responsibly developed resources to international markets on a grand scale would increase Canada’s geopolitical influence and help lower net global greenhouse gas emissions.

However, Canada is creating energy policy that acts as a deterrent to greater investment into Canadian energy. Instead of growing Canada’s global market share, we’re handing the balance of energy power to countries that do not share our high environmental or human rights standards.

Canada needs to step up and become a haven for responsible natural gas and oil investment. More energy coming from Canada means a cleaner environment and a safer world.

Canada’s lack of international export capacity for natural gas and oil is weakening our international influence. By not being a reliable provider of energy to our allies around the world, we are weakening their geopolitical power as well.

Tim McMillan is president and CEO of the Canadian Association of Petroleum Producers.

The unaltered reproduction of this content is free of charge with attribution to Canadian Energy Centre Ltd.