DeSmog

Gas Lobbyists Want LNG Expansion in Canada’s Arctic

Resource Works founder Stewart Muir pitched the idea at an industry conference in Vancouver.
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A cartographer's rendering of the Mackenzie River Delta in Canada's Northwest Territories.
A cartographer's rendering of the Mackenzie River Delta in Canada's Northwest Territories. Credit: Daniel Coe (<a href="https://creativecommons.org/licenses/by-nc-nd/2.0/"CC BY-NC-ND 2.0 DEED)

What might give Canada a competitive edge in the world of gas exports?

Stewart Muir of Resource Works seems to think the Mackenzie River Delta might make a good location for a future LNG (liquified natural gas) terminal.

“The flexibility of gas in Canada, where it’s located, is really an all-coast opportunity,” said Muir at an industry conference in Vancouver on Tuesday. “Including the Arctic, because the Northwest Territories government is at the early stages of studying the opportunity of the Mackenzie Delta LNG project … similar to the Siberia, Russian, LNG projects, of 50 cargoes a year leaving the Mackenzie Delta  with Canadian gas going anywhere in the world.”

Muir didn’t mention that a major Russian LNG project — Novatek’s Arctic LNG 2 — suspended production in April in part due to a shortage of specialized LNG tankers capable of cutting through Arctic sea ice. And while the government of the Northwest Territories has expressed an interest in developing an Arctic LNG export facility in recent years, it is in fact a dream dating back half a century. There have been several proposals for natural gas or LNG development for the Mackenzie Valley and Beaufort Sea area dating back to the 1970s, but they have all remained primarily theoretical due to the severe environmental impacts as much as the considerable infrastructural costs. A parliamentary inquiry at that time recommended against any such project.

Stewart Muir is the founder and CEO of Resource Works, an advocacy group for natural resource development, launched in 2014 by the Business Council of British Columbia. At the time of its launch, the BCBC’s members included major oil and gas development and advocacy groups, as well as energy and pipeline companies.

Muir made the comment while participating in a panel discussion on the first day of the 2024 Canada Gas Exhibition and Conference. The panel was entitled “How can Canada establish its competitive advantage in the global LNG export economy?” Panelists argued that Canada had the potential to be a major exporter of natural gas, but that it had to overcome a variety of problems in order to do so.

What wasn’t discussed was whether exporting LNG was a wise decision in an era of increasingly destructive climate change. Experts agree that LNG development in the Arctic would be particularly risky, given methane — an extremely potent greenhouse gas — is released at every stage of the LNG extraction, refining, and export process. Given the rapid pace of Arctic warming, LNG development there would only serve to speed up already destructive climate changing forces.

Though industry, lobbyists, and politicians have frequently portrayed LNG as a bridge fuel to assist in the energy transformation, mounting evidence suggests quite the opposite: that LNG stands in the way of meaningful decarbonization

Recent reporting from DeSmog indicates experts are concerned two new Canadian LNG projects — LNG Canada and Cedar LNG — have the potential to become the world’s sixth largest ‘carbon bombs’.

Methane leaking from practically every stage of the LNG development process has been described as a ‘planetary superheater’ responsible for roughly a third of the world’s heating so far. LNG proponents — including those present at the Canada Gas conference — characterize LNG as being “low carbon,” and part of industry’s effort to “take action on climate change,” despite evidence that LNG may in fact be worse for the environment than burning coal. Worse still, continued investment in LNG not only locks in fossil fuel dependence, it saps resources away from investments in genuinely renewable energy that could be integral to the energy transition. 

There is reason to believe some politicians are beginning to get the message. In the United States, the Biden administration paused LNG exports in January. On May 7, 75 Democratic lawmakers sent a letter to President Biden supporting a continued pause on LNG exports. While this is encouraging, the American pause presents a potential opportunity for Canada to regain its position as a major global LNG exporter.

Such was the argument made by panelist Racim Gribaa of Global LNG Consulting, Inc., who stated that Canada’s west coast was considerably closer to East Asian markets than the US Gulf Coast. Gribaa further argued that the Asian LNG market could be as large as the current European and North American market, combined, within a decade.

Though panelists agreed with Gribaa, this contrasts sharply with recent research from the Institute for Energy Economics and Financial Analysis (IEEFA). A report issued in late April described global LNG demand as lackluster, with demand in Europe, South Korea, and Japan — accounting for more than half the world’s current global LNG demand — to plummet through 2030. 

At several points, panelists argued a lack of political will was primarily responsible for hamstringing the development of Canada’s LNG sector. This may have been a reference to statements made by federal energy and natural resources minister Jonathan Wilkinson in late March. “The government is opposed to using government money to fund inefficient fossil fuel subsidies… We are not interested in investing in LNG facilities,” said Wilkinson on Canadian television network CTV. The minister did not oppose development of the LNG sector per se, but argued its development was the role of the private sector.

Exporting LNG from Northern Canada wasn’t the only old idea discussed by the panel. Tim McMillan, formerly the president of the Canadian Association of Petroleum Producers, dusted off the old chestnut of “foreign funded anti-pipeline protesters” to explain the apparent lack of political will and public interest in LNG. Claims of an American conspiracy to sabotage Canada’s fossil fuel infrastructure have been repeatedly debunked by DeSmog and many other outlets. 

While environmentalists, Indigenous communities, and a growing number of politicians seem to be lining up on the same page in opposition to LNG expansion, industry is seeking environmental and social acceptability by appealing to Indigenous communities already active in the fossil fuel sector — and speaking of Indigenous self-empowerment. This was a crucial message throughout What has the potential of becoming British Columbia’s second largest LNG project — Ksi Lisims — is being evaluated by the B.C. Environmental Assessment Office. Documents obtained by the Narwhal revealed that the B.C. government intends to use a publicly-funded transmission line to power the facility, which is a proposal of the Nisg̱a’a Nation. In January, Shell indicated it would buy two million metric tons of LNG from the facility per annum.

Throughout the many panels of the Canada Gas Convention, industry representatives were keen to show off the efforts they have made to secure Indigenous involvement and partnerships. Though industry has positioned Indigenous-led projects, and projects that would benefit Indigenous communities — such as the multiple proposals for a Mackenzie Delta Arctic LNG project — as the pivotal component in order to secure social acceptability and environmental accountability, the realities of capital costs and climate change are proving to be far greater challenges the LNG sector is struggling to overcome.

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Taylor C. Noakes is an independent journalist and public historian.

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