TC Energy and the Canadian government lobbied Mexico to accept natural gas as an environmental solution, much to the dismay of climate and energy experts who say the position is illogical.
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The lobbying will financially benefit TC Energy — a fossil fuel giant based in Calgary, known for its network of domestic and U.S. pipelines, including Coastal GasLink in British Columbia.
The company is building a US$3.9-billion, 715-kilometre long pipeline in the Gulf of Mexico called Southeast Gateway, jointly with Mexico’s state-owned electric utility, the Comisión Federal de Electricidad.
The pipeline will carry natural gas down the Mexican coast to the country’s southeast. The company expects it to be finished later this year, and it will add to a network of seven existing Mexican pipelines that the company had a hand in building, with two more still in progress.
Southeast Gateway came together over two years ago when the utility struck a deal with the company to hold an equity interest in the pipeline, putting an end to years of commercial disputes in Mexico.
Natural gas is mostly methane, a powerful heat-trapping gas extracted from deep underground using drilling or fracking. Methane is often intentionally released by the oil and gas industry and it can also accidentally leak from equipment. It’s concentrating in the atmosphere, driving climate change, that in turn is making costly and deadly weather events like wildfires worse and more frequent.
But Natural Resources Canada has touted the supposed environmental benefits of Southeast Gateway and its natural gas cargo internally, in meetings with TC Energy, and to Mexican officials, according to departmental briefing notes.
Southeast Gateway would “enable more affordable, cleaner natural gas to displace coal and fuel oil for power generation,” reads one briefing note crafted for the department’s top official at the time, for a 2022 meeting with TC Energy CEO François Poirier where they discussed pipeline “approval challenges.”
The new pipeline is “making a positive contribution to Mexico’s climate change commitments,” continued the briefing note, which was released under access to information law. Some of the access to information documents were obtained by researcher Ken Rubin, who shared them with The Narwhal.
The comments from the department reflect what TC Energy’s Mexican subsidiary, TC Energía, told the Canadian government, records show.
On a branded “TC Energía Fact Sheet” circulated to government officials, the company said Southeast Gateway is “designed” to “allow Mexico’s energy transition” by freeing industrial and petrochemical facilities like power plants and an oil refinery in Mexico from having to rely on other high-polluting energy sources, like coal and fuel oil.
The upshot, the company wrote, is this fossil fuel pipeline would actually be “lowering emissions” along with bringing “industrial growth to some of Mexico’s poorest states.”
The documents call into question whether public servants are providing the government with accurate advice about how to mitigate climate change.
London-based non-profit InfluenceMap, which tracks corporate influence on climate policies, says the idea that natural gas is a clean energy source is an “industry narrative” used to promote the use of gas and disconnect it in the public eye from methane.
Program manager Vivek Parekh said the group’s research found examples of companies deploying “regionally focussed narratives” to convince the public of the benefits of a related fuel, liquefied natural gas (LNG).
In response to The Narwhal’s questions about the department’s environmental claims, a spokesperson responded that “in the context of the pipeline in Mexico referenced in the briefing note, natural gas is ‘cleaner’ than coal,” while natural gas “generates fewer emissions than oil and diesel fuels.”
Asked if the briefing note demonstrates Canada’s support for the pipeline, a spokesperson said the government “supports Canadian businesses abroad.”
Natural Resources Canada also told The Narwhal it considers Southeast Gateway “an interim step that can be taken as we move towards net zero by 2050, and expand non-emitting energy production in Canada and globally.”
Both Canada and Mexico have given themselves a goal of achieving “net-zero emissions” by 2050 — meaning that, 25 years from now, all carbon pollution will have to either be eliminated or somehow balanced out by the use of technology or protected natural areas that pull carbon from the atmosphere.
But pipelines can have lifespans longer than 25 years. Anna Zalik, a York University professor who has researched the Mexican oil industry for two decades, told The Narwhal that locking Mexico’s energy grid into natural gas could stunt clean energy development. Meanwhile, the costs of inaction to combat climate change — including the effects of extreme weather — largely fall on the poor, and far outweigh the price of acting now.
Canada’s claim that “U.S. fracked gas piped to Mexico is ‘cleaner’ than Mexico using its own heavy oil” is “dubious,” Zalik, who focuses on global geography and environmental and urban change, said.
Proving it would require examining all the greenhouse gas pollution from the production, transport and use of the gas, Zalik said, plus the ecological impact of the pipeline, the pollution made from building it, from building and maintaining the other pipelines that feed it, and from the U.S. fracking industry supplying it with fuel.
It’s true that natural gas emits less carbon dioxide per unit of energy, compared with coal, diesel or fuel oil, and burning those fuels also throws off air pollutants like soot, which can lead to poor air quality.
But the gas system also has problems: methane from the energy sector is about 70 per cent higher than official counts, according to the International Energy Agency. Satellite data from the region expected to supply gas to TC Energy’s pipelines in Mexico show huge methane leaks.
Cornell University biogeochemist and ecosystem scientist Robert Howarth, who has studied methane leaks in the U.S. gas system, told The Narwhal that Southeast Gateway doesn’t make sense as a climate solution.
“If we are to seriously address climate disruption, the world’s leading climate scientists are in near unanimous agreement that we need to be free of almost all fossil fuel use by 2050, and we need to cut the use of fossil fuels globally in half within the next 10 years,” said Howarth.
“In that context, a new gas pipeline makes zero sense. Instead, Mexico should be building renewable energy sources — wind, solar, hydro — with some appropriate storage.”
Asked whether Canada considered the probability of the pipeline locking Mexico into fossil fuel use, a departmental spokesperson said it would “not be appropriate for the Government of Canada to comment on Mexico’s energy policy.”
However the briefing notes obtained by The Narwhal, which were prepared for four meetings planned over 2022 and 2023 that centered on the Mexican business of TC Energy, show the government did weigh in on Mexico’s energy policy — in favour of a new pipeline.
They include suggested messaging for civil servants, such as telling one senior official they could inform a Mexican governor they were “pleased” to see “co-operation” between TC Energy and the utility to build the Southeast Gateway pipeline.
“I was excited to see the new investment being made by TC Energy into Mexico’s southeast, which will bring natural gas to the region, helping lower emissions and being a catalyst for industrial development,” read one of the suggested lines in the briefing note.
A departmental spokesperson confirmed that, at the meeting, the civil servant “expressed satisfaction” with the dialogue between Mexican authorities and Canadian energy firms.
But they said the government was “not a party to the negotiations” that resulted in the deal between TC Energy and the utility, and so could not comment.
The meetings were not just about pipeline access; they also included plenty of discussion about proposed changes to Mexico’s domestic electricity market. The department insisted the two issues were “distinct.”
Mexico has committed to cutting its carbon pollution by 35 per cent, black carbon or soot by 51 per cent, and deforestation to net zero by 2030. The Mexican government has also portrayed its move to buy a Texas refinery and open another one among a list of actions it is taking “in the fight against climate change,” along with modernizing hydroelectric plants, installing solar and wind energy, cutting oil and gas methane emissions and producing more electric cars.
The Mexican Embassy acknowledged receipt of questions Jan. 17, but could not provide a response before publication. TC Energy did not respond to two sets of questions sent Dec. 20 and Jan. 14 about the briefing notes and the company’s role in Mexico, or to a voicemail message left on Jan. 30.
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