Canada is on a mission to prove its liquefied natural gas (LNG) exports can help the planet fight the climate crisis, according to government briefing notes obtained by The Narwhal.
Oil and gas industry lobbyists have long pushed a controversial theory that exports of Canadian LNG could actually help lower global greenhouse gas emissions by displacing more carbon-intensive energy sources like coal. The briefing notes, released by Natural Resources Canada through access to information legislation, suggest that at the time they were written the government lacked evidence to back up those industry claims and that Canadian LNG operations would actually increase the domestic carbon footprint. But the briefing notes suggest the government can boost the industry’s reputation if it’s able to prove it is reducing pollution abroad.
“LNG production will create incremental domestic emissions at a time when concerted efforts are being made to reduce emissions economy-wide and achieve ambitious climate targets,” Natural Resources Canada wrote in January in a briefing note crafted for its deputy minister at the time.
“The social license for these activities would be enhanced by demonstrating net global greenhouse gas reductions.”
The LNG tracking program is part of an initiative focused on “advancing LNG within Canada’s climate commitments.” It’s described as: “How industry can track exported Canadian LNG to a destination market and establish whether it leads to overall lower greenhouse gas emissions than would have occurred otherwise.”
Energy and Natural Resources Minister Jonathan Wilkinson, the briefing note added, “has identified the importance of ensuring that Canadian LNG exports displace higher emitting fuels or Russian gas, and traceability will support those imperatives.”
Russia exports its own LNG to countries in Asia, the same market targeted by the $40-billion LNG Canada liquefaction and export facility in Kitimat, B.C., that is expected to begin operations in 2025.
LNG Canada will be fed by TC Energy’s $14.5-billion Coastal GasLink pipeline, now mechanically complete. That pipeline travels across several Indigenous lands, including Wet’suwet’en territory toward the Pacific coast, and has faced years of opposition from Wet’suwet’en Hereditary Chiefs, land defenders and other Indigenous leaders.
The documents show how the government has asked major oil and gas companies to help them gather the information to bolster public support for the industry. But a leading scientist who has been studying the LNG industry is skeptical about whether the numbers sought by the government actually exist.
“LNG is up against the fundamentals of physics: it takes a lot of energy to liquefy and transport the product, and that entails a lot of emissions of both carbon dioxide and methane,” Robert Howarth, an Earth systems scientist and ecology and environmental biology professor at Cornell University, told The Narwhal.
Howarth has conducted new research on emissions from LNG, showing that methane is released during some shipments of LNG from the U.S., as the liquefied gas can evaporate while on tankers.
“While some proponents of LNG have argued it has a climate benefit by replacing coal, the analysis presented here disproves this,” his paper states. His research also notes there is a “need to move away from any use of LNG as a fuel as quickly as possible, and to immediately stop construction of any new LNG infrastructure.”
Methane, a heat-trapping chemical compound, is the main component of natural gas and responsible for more than a quarter of global warming. Howarth’s research is currently under peer review for publication in a journal.
“My research is quite straight-forward, and really not all that complex at all,” he said. “I am not sure why the Canadian government finds this challenging. If I were a cynical person, I might think they just don’t want to know the answer.”
LNG is natural gas that has been supercooled to liquid form in order to prepare it for transport inside cryogenic tanks riding on large ocean vessels. Chilling natural gas to around -162 C shrinks its volume by about 600 times, allowing much more fuel to be packed into one tank. At the other end of the journey, the LNG is warmed back up into a gas and delivered to customers through pipelines.
Natural gas drilling, liquefaction, shipping and regasification is an “energy-intensive process” that generates hundreds of millions of tonnes of carbon pollution globally, including emissions of methane, according to the International Energy Agency. And all of this is in addition to the pollution made when natural gas itself is eventually burned for energy.
In a November report, the agency questioned the long-term viability of new LNG construction in a world that achieves net-zero emissions by 2050 and limits global temperature rise to 1.5 C. In this future scenario, “demand for LNG can be met in aggregate by plants already in operation,” the agency said, and around 70 per cent of LNG export projects currently under construction “would struggle to recover their invested capital.”
“The uncomfortable truth that the industry needs to come to terms with is that successful clean energy transitions require much lower demand for oil and gas, which means scaling back oil and gas operations over time — not expanding them,” the agency’s executive director, Fatih Birol, said.
“There is no way around this.”
The risk of stranded assets, or fossil fuel facilities that are no longer profitable and become liabilities in a low-carbon world, also rises as the net-zero transition accelerates, especially for refineries and LNG facilities, it said.
Other research has shown how some oil and gas companies have not been accurately measuring or reporting their methane emissions from their operations.
More broadly, the debate over one fossil fuel versus another is happening as Earth has been breaking several temperature records this year, as a result of fossil fuel-driven climate change.
Global surface air temperature recently crossed the significant threshold of 2 C above pre-industrial levels for the first time, and the planet is on track for “hellish” warming, United Nations chief António Guterres has warned — unleashing severe flooding, wildfires, droughts, disease, suffering and death — if all fossil fuel use isn’t curbed dramatically.
“Investing in new fossil fuels infrastructure is moral and economic madness,” Guterres said in New York last year.
The work on LNG emissions tracking involves establishing links with producers, liquefaction plants, buyers and users, and looking at “technological solutions” that could ultimately lead to new standards or requirements in contracts.
Another aspect of the plan is assessing different options for cutting domestic LNG emissions, like electrifying operations, installing carbon capture technology and using monitoring equipment to detect leaks.
The federal government believes LNG “has the potential to replace higher emitting fossil fuels,” as well as “reduce global reliance on coal and Russian gas, prevent energy poverty and enhance energy security,” but it “must be pursued in a manner that is aligned with Canada’s and the world’s climate commitments,” a spokesperson for Natural Resources Canada told The Narwhal.
“Any projects that proceed must clearly demonstrate that they will displace more polluting fuels like coal and show economic viability over a timeline that avoids the risk of stranded assets,” the spokesperson wrote in an emailed response to questions about the government’s view of the climate impact of LNG exports.
“For importing countries, there must also be a viable pathway to transition from LNG to low-emission energy sources and fuels in line with an overall goal of achieving net-zero by 2050. We can’t simply say we are building an LNG facility and assume that it is a positive climate action.”
The department did not say if this means LNG Canada and other projects currently proceeding in Canada have already demonstrated they will displace higher polluting fuels.
Natural Resources Canada also wouldn’t elaborate on what may happen to Canadian LNG exports if these conditions are not met. It said work on the LNG tracking program was still underway and it was “not possible to speculate” on future government actions.
And even though the spokesperson reiterated the government is also looking for Canadian LNG to reduce global reliance on Russian gas, the department couldn’t confirm if the government would accept this if there was no associated benefit to the climate.
“Natural Resources Canada is always focused and working on the parallel goals of reducing emissions to fight climate change and meeting net-zero by 2050, as well as bolstering energy security,” the spokesperson said.
On Dec. 4, the federal government proposed new regulations for the oil and gas sector meant to ensure a 75 per cent reduction in the sector’s emissions of methane from 2012 levels by 2030. The government has also proposed to cap emissions from the oil and gas sector, the details of which are expected to be unveiled soon.
Tom Green, senior climate policy advisor at the David Suzuki Foundation, said the complexities of the global natural gas market mean the government’s attempt to track net emissions reductions from LNG will likely prove futile.
“Proposing to track shipments after the fact — and tracking to end-users — to determine whether or not the LNG displaced coal is not credible,” he said. “Supplies often change hands multiple times, making supplier tracking a fraught exercise.”
Natural gas has become a global commodity as more LNG is traded around the world, according to the U.S.-based Institute for Energy Economics & Financial Analysis.
The internal government documents point out that gas has typically not been tracked “from exploration and production to refining” as oil has. It said establishing links between producers, processing facilities, buyers and end-users “may involve a complex series of transactions.”
Greenpeace has accused oil and gas companies of greenwashing LNG purchases by using carbon offsets that were inconsistent and sometimes double counted.
Green said the government and the oil and gas industry’s comparison between LNG and coal misses the “true counterfactual” — comparing the money spent on LNG facilities with investments in renewable energy and other energy transition technologies.
“Measuring any potential benefits against a scenario where coal is displaced with renewable energy will further show that LNG expansion is ill advised,” Green said.
The foundation’s own research has shown how LNG will slow the low-carbon energy transition rather than help it along, he noted.
“Natural gas is anything but natural. It’s a fossil fuel like oil and coal, and it’s exacerbating — not solving — the climate crisis,” Green said.
“The issue here is our global shared responsibility to end the era of fossil fuels as quickly as possible. Canada should rein in its risky bet on LNG and invest in the real long-term winner for climate, communities and the economy: renewable energy.”
Senior public servants have met with executives from at least four oil and gas companies this year about Natural Resources Canada’s LNG “decarbonization” plan, the documents show.
The four companies — Shell, TC Energy, Enbridge and Tourmaline — are each backing large projects to transport, liquefy or export natural gas out of B.C., where there’s been a 40-per-cent boom in gas production over the past five years.
Shell owns 40 per cent of LNG Canada, while Enbridge owns 30 per cent of Woodfibre, a proposed LNG export facility in Squamish, B.C., and is also proposing two new gas pipelines in the province. Meanwhile, Tourmaline is backing a third LNG project, Ksi Lisims, north of Prince Rupert, B.C.
Asked if Natural Resources Canada had spoken with any other companies or organizations about the LNG “decarbonization” plan, the departmental spokesperson said Wilkinson and the department “use every opportunity to discuss decarbonization and meeting net-zero by 2050 with various companies, organizations and individuals, in recognition of the urgency of the climate crisis.”
Shell Canada president Susannah Pierce, Enbridge CEO Greg Ebel and Tourmaline CEO Mike Rose all met on Jan. 11, 2023, with John Hannaford, who was Natural Resources Canada’s deputy minister at the time, as well as two other senior officials. Last June, Hannaford was promoted to head up the public service as Clerk of the Privy Council. A spokesperson for the Privy Council Office directed The Narwhal’s questions for Hannaford to Natural Resources Canada.
Dave Forestell, vice-president of external relations at TC Energy, met with Hannaford and another department official in a separate meeting on March 20, 2023.
The briefing notes show departmental officials were prompted to ask Pierce, Ebel and Rose “what work has occurred to date to understand whether commodity tracing, or ‘tagging and tracking’ gas across the value chain, is possible” and what methods “hold the most promise.”
The department also expected to speak with Forestell about emissions from LNG Canada and the Coastal GasLink pipeline.
The first phase of LNG Canada will burn some of the 2.1 billion cubic feet of gas it will get each day from the pipeline, The Narwhal has reported. Coastal GasLink’s compressor stations appear to be powered by natural gas.
Government officials anticipated Forestell would raise “the potential for electrifying [Coastal GasLink’s] compressor stations to reduce related emissions,” the documents show.
The briefing note also mentions “fully electrifying” the natural gas liquefaction process for LNG Canada’s Phase 2.
LNG Canada has eyed a proposal to replace its gas turbines with electric motors powered by non-emitting energy, although this electrification is far from certain.
The province has said the massive Site C hydroelectric dam being built in B.C.’s Peace region is necessary to meet increasing demand for electricity. But critics have argued it could also be a new source of power for the LNG industry.
Shell spokesperson Stephen Doolan said the company shares “net-zero 2050 commitments with the government, and we have regular conversations with them to provide updates on our businesses and interests. We continually explore ways we can work together to competitively decarbonize our operations, while continuing to grow Canada’s economy.”
The multinational oil and gas company has committed to net-zero emissions by 2050 for the emissions it generates from producing its petroleum products. This target also includes the emissions from using its products, but only partially, according to the Net Zero Tracker, a collaboration between two universities and two non-profits.
Shell said this year it was refocusing on its oil and gas business. CEO Wael Sawan has reassured employees he “believes in urgent climate action.”
“Liquefied natural gas will play an important role in the energy system of the future and in a balanced energy transition. LNG can be easily transported where it’s needed most and helps with energy security and affordability. In addition, on average, natural gas emits fewer emissions than coal when used to generate electricity,” Doolan said.
A spokesperson for TC Energy noted the company recently announced the mechanical completion of Coastal GasLink. They said the project “will help unlock low carbon Canadian LNG to help meet Asia Pacific’s demand for secure, reliable and affordable energy.”
“As a company, we engage with Indigenous communities, all levels of government and stakeholders across our North American footprint on a diverse range of topics,” the spokesperson said.
Enbridge spokesperson Gina Sutherland said Canada produces LNG “cleaner and more sustainably than anywhere else in the world,” and “Canadian LNG can play an important role in emissions reduction through global fuel switching.”
Sutherland said Woodfibre LNG “will be powered entirely by electricity from BC Hydro” and will be the “first LNG export facility in the world to achieve net-zero emissions,” through both the facility’s construction stage and during operations.
She said the company’s two proposed gas pipelines, Westcoast Connector Gas Transmission and Pacific Trails Pipeline, are still in early stages and final investment decisions have not been made. The company is currently talking to communities and Indigenous groups and could potentially electrify its compressor stations, she said.
“As a global energy infrastructure leader, we believe it’s important to keep governments at all levels informed of our business and operations. We engage regularly with government officials on a variety of topics, including how government and industry can work together to lower greenhouse gas emissions and achieve our collective climate goals,” Sutherland said.
Tourmaline did not respond to requests for comment sent over email on Nov. 22 and Nov. 27, and by phone on Nov. 29.
Natural Resources Canada said it is currently reviewing submissions from the working group on the LNG tracking program and is determining next steps. An official deadline for when the minister wants to see results from the LNG tracking program “has not been set,” the department spokesperson said.
In the meantime, LNG projects in Canada are still being built and planned. A public comment period for Ksi Lisims, the project backed by Tourmaline, for example, just closed on Dec. 2.
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