The world needs more of Canada’s natural gas to ensure global energy security and reduce GHG emissions

The war in Ukraine has exposed the complexity of the world’s energy interconnections.  As global energy demand increases, new renewable energy generation development is not keeping pace, yet the push to reduce greenhouse gas (GHG) emissions intensifies. While dictators move to solidify their power, Canada remains reluctant to fulfill its unique position to help the globe’s looming energy securities. The world will need 50 per cent more energy by 2050 according to Energy Information Agency projections (Source: Global Energy Forecast to 2100). Canadians shouldn’t be misled by solemn pronouncements that the use of natural gas is almost at an end. We’ve heard a lot of emphatic assertions from extreme environmentalists that the end of natural gas as a fuel is in sight. Some less strident environmentalists will reluctantly admit that natural gas will continue in a limited role as a bridge fuel, as the world races toward using renewable energy exclusively and achieves net-zero. These assertions are magical forecasts and akin to believing in fairy dust. The reasons that the future of natural gas is upbeat, aside from future demand,  include:

1. GHG emissions would quickly be reduced BY HALF by replacing coal consumption with natural gas, a significant fulfillment of many countries’ commitment in Glasgow, Scotland at COP26;
2. The world contains sizeable natural gas reserves;
3. Many countries operate a considerable infrastructure to produce, process, distribute and consume natural gas; and
4. More and more countries are building either LNG export or import terminals.

Producing countries are increasing investment in natural gas production to respond to these trends, except in Canada. Canadians have neglected to showcase how their natural gas technology is mature and low risk, using environmental best practices. Canada is a world leader in environmental practices, yet because of our timidity and defensive position on fossil fuels, this country now lags behind other energy producers in shipping natural gas to where it’s needed. Currently, Canada ranks fifth in the world in natural gas production. World energy consumption is increasing Significant population increases will continue in the third world. As this population moves out of poverty, total and per capita energy consumption will increase significantly. Per capita consumption of energy in the first world is not decreasing much. These citizens keep buying bigger houses and vehicles with excessive horsepower and not driving less. The population increase plus global warming will increase energy consumption for all sectors of the economy and all uses. Natural gas will play a significant role in meeting global energy demand. Renewable energy generation development is not keeping pace The dramatic increase in new renewable energy generation development is not keeping pace with increasing energy demand. This trend will disappoint many countries that are banking on renewable energy generation to meet their climate change commitments. As a result, the need for other energy sources, including natural gas, will continue to grow. Sadly, this forecast shows no reduction in coal consumption. Coal produces about double the amount of GHG emissions compared to natural gas. If major countries, particularly India and China, can reduce their coal consumption, that will also increase the demand for natural gas. That relationship exists because the cheapest way to avoid stranded coal-fired electricity generation assets is to change the fuel to natural gas. Where will the energy come from? Given the world energy consumption forecast, plus the reality that renewable energy generation development is not keeping pace, every possible energy source — including natural gas — will be harnessed to meet demand. Not meeting demand leads to intolerable consequences, including:

• electricity outages affecting homes and businesses;
• reduced agricultural and industrial production;
• transportation system disruptions;
• social and political upheaval.

As the global energy mix evolves, natural gas will be a significant part of the solution because natural gas capacity can be added with lower capital and shorter elapsed times than nuclear and hydro. Source:The changing global energy mix: IEA 2020. The Russian invasion of Ukraine will continue to influence this forecast. As European countries work to reduce their dependence on Russian natural gas, Russia will sell more natural gas to other countries, particularly China, in future years. These additional natural gas supplies may enable China to accelerate its commitment to reduce coal-fired electricity generation. This scenario is yet another example of how the future of natural gas is upbeat. The push to reduce GHG emissions is intensifying The commitments many countries made to reduce GHG emissions at COP26 in Glasgow, Scotland, are not sufficient to achieve the net-zero goal required to keep the global mean temperature rise below 2 degrees Celsius. In fact, the Glasgow agreement has a significant credibility gap between ambition and action. Source: Climate Action Tracker Global update - Glasgow's2030 credibility gap: net zero's lip service to climate action. Countries that are most determined to reduce this gap, including Canada, will find themselves looking for a quick fix. The quick fixes will include: 1) More natural gas electricity generation; and 2) Energy conservation and efficiency initiatives. The future of natural gas can guarantee energy security amid the many changes in energy production and consumption being undertaken to address climate change. Canada is in a unique position to secure that global energy future. Canada can stop playing timid and step into that role. R$ Yogi Schulz is an information technology consultant who works extensively in the Canadian oil and natural gas industry.

For more information:

Global Energy Forecast to 2100

EIA projects nearly 50% increase in world energy usage by 2050.

The changing global energy mix

Glasgow's 2030 credibility gap