PA Environment Digest Blog: Bloomberg TV: Canada’s Energy Minister: Period Of Using Natural Gas As Transition Fuel Should Be Short; Gas Should Not Replace Renewables; Canada Has Adopted Controls On LNG Exports The US Has Not

On February 14, 2024, Jonathan Wilkinson, Canada Minister of Energy and Natural Resources, shared comments with Bloomberg TV on use of natural gas as a transition fuel and the Biden Administration's pause on new permits for LNG natural gas export facilities.

Wilkinson said the use of natural gas as a transition fuel should be for a “relatively short” time because you can’t be serious about achieving global climate goals by burning gas “in power plants in Japan and South Korea, et cetera.”

Wilkinson also said Biden's action to pause new permits for LNG natural gas export facilities was welcome because the US is looking at LNG permitting policies Canada has already adopted as part of its commitment to addressing global climate change.

He noted the risk of overbuilding and having stranded LNG export facilities is real.

Here are a portion of his comments--

"I actually welcome the pause that the Biden administration has put on liquid natural gas projects for the purpose of actually ensuring that they're looking at it in the context of the commitments that the United States has made to fighting climate change alongside other countries around the world.

“We have actually done that in Canada over the last number of years. We've put in place measures to ensure that any LNG approvals actually must be consistent with Canada's domestic climate plan and must fit in the context of an overarching view about how we're actually displacing heavier hydrocarbons in other jurisdictions.

“So, I think what they're doing is the right thing, but I would say we sort of applaud it because they actually are following in the footsteps that Canada has actually tried.

“We're the only country in the world that has put in place regulations that actually require 75% methane reductions in the upstream in terms of the production of natural gas.

“We are one of the only countries in the world that actually effectively requires the liquefaction of natural gas using clean electricity and not natural gas, which eliminates much of the emissions.

What's The LNG Being Used For?

“And we actually look externally in the context of what is the LNG going to be used for.

“If it's not being used to displace coal, then it's being used to potentially displace future renewables, which doesn't help us at all from a climate perspective.

“So, we have been looking at it in that context.”

Stranded LNG Facilities

“I think the other thing I would say is if you look at the work of the IEA [International Energy Agency], and that includes the communique that came out today, increasingly there is a lot of skepticism about how many more LNG facilities are going to be required, and the risk of stranded assets is a real one.

“And I think it's incumbent on the United States to have a hard look at that."

Asked if the pause presents an opportunity for Canada, Wilkinson said-

“Well, I would say there is some opportunity. I know Lisa [Baiton, Canadian Association of Petroleum Producers] very well, but I would say that you've got to bound the opportunity.

“So, the American pause to look at things in the same way that Canada has already been looking at them, does create some opportunities for Canada.

“But part of that is about opportunities for countries that have taken action to decarbonize the production of oil and gas.

“And Canada actually has led in that regard.

Use Of Natural Gas In Transition To Renewables Has To Be Short

“At the end of the day, in the transition, those fuels that are actually produced with very low carbon emissions are going to be valuable.

“But one has to be very clear, the transition has to be a relatively short one.

“I mean, if people truly believe that we are going to achieve net-zero by 2050, which is what we have all committed to under the Paris Agreement, you actually can't have unabated combustion of natural gas in power plants in Japan and South Korea, et cetera.

“So, we have to be thoughtful about the timeframes here, and it is not good enough for people to wave their hands and say somehow natural gas contributes to fighting climate change without thinking about the time at which it actually has to stop emitting."

[Editor’s Note: Perhaps it is the gas industry's fear of adopting export controls on LNG like Canada and other countries have that is the real reason behind their opposition to the Biden pause? Questioning how the gas will be used? What energy powers liquefaction? Requiring 75% methane reductions in the gas infrastructure? Something to think about.]

Upcoming Event:

February 16-- PA Utility Law Project, Public Citizen Webinar Exploring The Impact Of LNG Natural Gas Exports On PA Families. 11:00 a.m. to Noon.

NewsClips - LNG:

-- Bloomberg TV: Canada’s Energy Minister: Risk Of Stranded LNG Natural Gas Export Facilities Is Real; US Pause Looks At Policies Canada Already Adopted [Video]

-- Natural Gas Intelligence: 76% Increase In LNG Natural Gas Export Capacity Already Under Construction; US Group Fears Buildout Will Hurt American Businesses Urge ‘US Consumers First’ Policy [PaEN]

-- Reuters: European Union Says Biden’s Pause On Approvals Of New LNG Natural Gas Export Facilities Will Have No Effect On US LNG Supplies To Europe Over Next 2 or 3 Years [LNG Exports Are Expected To Double By 2030 On Already-Approved Projects]

-- Environmental Integrity Project: Biden’s Pause In New Permits For LNG Natural Gas Facilities Won’t Slow The Flow Of US Natural Gas Abroad

-- The Hill: European Union Lawmakers To Biden: We Don’t Need More US Natural Gas

-- Forbes Guest Essay: US Natural Gas Prices Could Spike 14% Without Biden’s Pause On New LNG Export Terminal Permits Costing Consumers $18 Billion

-- Forbes: US Natural Gas Production Set New Record, But Don’t Expect Relief On Your Heating Bills [LNG Exports Link US To High Prices] [Did We Forget?]

-- Financial Times: Household Energy Costs Factor Into Biden’s Pause On New LNG Natural Gas Export Facilities [Industrial Energy Consumers: “More Exports Equal More Reliability And Price Risk”]

-- Markets Insider: New Study Questions LNG Natural Gas As A ‘Bridge Fuel’ In Decarbonization