On Tuesday and Wednesday in Berlin, Prime Minister Mark Carney and Energy and Natural Resources Minister Tim Hodgson launched a major LNG export push, including new port infrastructure under consideration in Churchill, Manitoba, and Montreal, with Hodgson saying that the first shipment could go out in “as little as five years.” Canada and Germany also signed a “joint declaration of intent” to cooperate on critical-mineral supply chains.

The announcement has Canada positioning itself as a key supplier of gas and critical minerals to Europe’s energy transition and resource security, with Carney pledging major investments in infrastructure to allow exports to Germany and beyond, Clean Energy Wire reports. Hodgson said industry proponents are talking about building pipeline and harbour infrastructure in time for a first shipment in “as little as five years” and developing it “in an environmentally responsible way.”

“I think you’re probably talking about five to seven years,” he told Politico EU in an interview Wednesday, adding that he’d been surprised by long-term interest from German industry in LNG supplies that are typically seen as climate-unfriendly. “They believe that there will be more LNG required and for longer as a transition fuel,” he said.

A ‘deeply irresponsible’ bet on European LNG markets

But independent analysts say there’s been little or no change in projections over the last few years that show a global natural gas glut on the horizon and demand going into permanent decline this decade – meaning limited if any export prospects in Germany by the time Canada could get new LNG projects up and running. “We currently see no specific projects on the Atlantic coast that are in the start-up or investment phase,” Andreas Schroeder, head of gas analytics at Independent Commodity Intelligence Services (ICIS) in Düsseldorf, told Clean Energy Wire.

With projects like Goldboro LNG and Atlantic Coast either abandoned or insufficiently advanced, Schroeder adds, it’s “difficult to imagine that Canada will be able to meet Germany’s wishes in the short term, but rather only after 2030. LNG export terminals are technically very complex projects with long lead times and high financial volumes.”

But by then, “in the medium and long term, we’re not anticipating an increase in gas demand, certainly not in Western Europe,” Pawel Czyzak, Europe program director at the Ember energy think tank, told The Energy Mix in an email Wednesday. The continent’s gas demand fell 17% between 2021 and 2024, spurred largely by the energy shock following Vladimir Putin’s invasion of Ukraine, and projections show another 7% drop through 2030 as Europe electrifies its economy. That means the continent “is already heavily oversupplied towards 2030,” Czyzak says, and “that oversupply will get even more severe if the questionable fossil fuel imports from the EU-U.S. trade [and tariff deal] are implemented.”

Czyzak also casts doubt on the widely held view that artificial intelligence will drive up gas demand. In Europe, he says, there are already signs that data centres may be “moving outside of traditional hubs like Frankfurt towards grids that are less congested and more green,” in places like Scandinavia. “So we don’t anticipate Germany needing gas for AI specifically,” especially since heavier reliance on gas “would just ramp up electricity prices and push these data centres away even more.”

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Michael Sambasivam, Toronto-based senior analyst at Investors for Paris Compliance, says it’s “deeply irresponsible” to prioritize federal resources for an LNG terminal to serve the European market. “We’ve already seen European LNG demand drop from its peak, with significant resources targeting the decarbonization of its energy supply,” he tells The Mix, so “the fundamentals that have driven proposed LNG terminals on Canada’s East Coast to fail in the past remain. LNG is not cost-competitive with renewables, and glut projections suggest that any new eastern Canadian project will have a very hard time remaining viable through its lifespan.”

Against those risks, Sambasivam says, public subsidies for new LNG infrastructure “would mean further entrenching our economy in fossil fuels and placing stranded asset risk on the public books.” Hodgson’s office did not answer questions about this long-standing analysis.

Opening the door to LNG infrastructure

On Tuesday, Carney was focused on LNG as an opportunity, Clean Energy Wire writes. “The number one focus of this government is to build [energy] infrastructure, and particularly infrastructure that helps us deepen our partnership with our European partners and particularly Germany,” the prime minister said, during a news conference Tuesday with German Chancellor Friedrich Merz. “There is a huge range of immediate opportunities with respect to critical metals and minerals, and there are medium-term opportunities with respect to all forms of energy, including LNG and hydrogen.”

Asked whether the federal government would help finance any of the projects, Hodgson told media in Berlin there are tools at Ottawa’s disposal, such as the Canada Infrastructure Bank or the $15-billion Canada Growth Fund. Hodgson’s predecessor, Jonathan Wilkinson, had ruled out public support for new East Coast LNG infrastructure in 2022.

“I want to make it abundantly clear that the prime minister and I are not speaking in the abstract,” Hodgson added Wednesday in a speech at the Canadian embassy in Berlin. “This is about delivering real projects that strengthen German industry, create Canadian jobs and build transatlantic security. This is about selling Canadian resources to our allies, sooner rather than later.”

Hodgson placed the recently adopted Build Canada Act, previously Bill C-5, at the centre of the government’s effort to “make Canada investable at scale, to support our own industries and our closest allies,” by getting projects approved in time, keeping rules and regulations stable after investment decisions are made, and scaling supply chains “fast enough to meet the market window” for exports. “Unlike the previous Canadian government, which closed the door to LNG exports, Prime Minister Carney’s government has opened it,” Hodgson declared. “If the demand is here, and the infrastructure is built, Canada will deliver.”

On Tuesday, Carney said his government was “in the process of unleashing half a trillion dollars of investment” in energy, port and intelligence infrastructure. The first round of investments will be formally announced in the next two weeks, he added. Early deals could include “reinforcing the port of Montreal, Contrecoeur [and] a new port, effectively, in Churchill, Manitoba, which would open up enormous LNG plus other opportunities, and other East Coast ports for those critical minerals.”

Mixed signals on LNG markets

This isn’t the first time Canada has considered its options for supplying Europe with LNG. The last round of proposals fell flat, with Spanish oil and gas giant Repsol SA and Calgary-based Pieridae Energy (now Cavvy Energy) abandoning their plans for East Coast export terminals. Those projects fell apart largely on the need for massive new port and pipeline infrastructure to transport the fuel to the coast, liquefy it and ship it to Europe, Clean Energy Wire writes. But as recently as September 2024, the former government of then-chancellor Olaf Scholz was also throwing cold water on the idea that Germany had much need for Canadian gas.

“All studies show that the market is going to shrink,” Jennifer Morgan, the country’s first-ever state secretary and special envoy for international climate action, said at the time, citing projections that showed Europe’s leading economy cutting its gas imports 30% by 2030 and 96% by 2050. “Germany will be driving forward on renewables, and gas demand will decline,” said Morgan, a former executive director of Greenpeace International and global climate director with the World Resources Institute.

Since then, Canada has opened an LNG export terminal on its west coast to deliver gas to Asia, and Hodgson is expressing strong interest in new LNG deals. “I know there are buyers,” he told CTV television host Vassy Kapelos last week. “What I can tell you from the conversations that the prime minister has been having, the minister of foreign affairs has been having, the minister of international trade has been having, the conversations I’ve been having, our allies are very interested in Canadian LNG.”

This week, Hodgson and German Economy Minister Katherina Reiche facilitated talks between businesses from both sides of the Atlantic, Clean Energy Wire says. “We had very good discussions on Germany’s interest in Canadian liquefied natural gas and on continuing the development of ammonia and hydrogen supplies from Canada to Europe,” Hodgson told a media huddle afterwards. “The government is going to use all the tools it has to responsibly develop projects, to do it in a way that’s responsible for Canadian taxpayers and do it in the right environmental way, and in conjunction with First Nations.”

The German Gas and Hydrogen Industry association welcomed Canada’s bid. “In these times, it is a very important offer, which could help us gain another partner for the diversification of our energy supply,” the group’s chair, Timm Kehler, told CLEW. “I hope that our stakeholders will also take advantage of this opportunity,” he said, adding that German industry needs affordable gas and long-term contracts are “the right way.”

Long-term trends diverge from short-term demand

But the uncertainty around how much Canadian gas Germany and the EU will need, and for how long, is old news. Europe sought to find new suppliers following the halt of gas supplies from Russia in the aftermath of the war against Ukraine. Russia was the main supplier of oil and gas to Europe, and Germany received it only through pipelines.

The war and the resulting energy crisis pushed the EU into a scramble for energy independence that saw Germany build domestic LNG import terminals to help diversify its supply – even after the independent E3G climate think tank warned that the move could double the country’s energy costs and waste €200 billion.

Germany’s first temporary import terminal was inaugurated at the end of 2022, with the United States filling some of the gap through LNG deliveries from its Gulf Coast. Now, countries on both sides of the Atlantic are moving to reduce their reliance on the United States, with Carney committing to cultivate more “reliable” trading partners to secure Canada’s economy and sovereignty.

In his CTV interview last week, Hodsgon touted Canadian gas as “much cleaner than the American in terms of carbon footprint,” a frequent industry claim that rests on the electrification of Canadian LNG terminals but often leaves out or underestimates emissions of climate-busting methane from gas extraction and transport.

Lower-carbon or not, Europe is also aiming to become climate neutral by 2050 – Germany by 2045 – and will have to largely phase out the fossil fuel by then. Overall demand has long been projected to decline over the coming years and especially decades, increasing the risk that new gas pipelines and terminals will ultimately become stranded assets.

Hodgson said German businesses have still signalled interest in new export/import deals. “There seems to be a desire on the part of Germany to buy our natural gas, and we have a desire from proponents, a province, and First Nations to develop that for German customers,” he said. “What we all realize post-Ukraine, post what is happening with AI, is that natural gas is going to be a transition fuel that is in greater demand in Germany and for a longer period of time,” he told media, creating an opportunity for Canada to be a “great partner” to Germany.

But beyond the projected decline in European demand, multiple analyses show the wider world heading for a glut of supply, producing risks for new gas projects in Canada. Over the five- to seven-year frame that Hodgson is suggesting, analysts say the gas glut brought on by a recent wave of new LNG construction could be in full swing. Modelling by the International Energy Agency shows a dawning “Age of Electricity,” with global demand for all fossil fuels peaking this decade before going into permanent decline.

Cooperation on critical minerals, but little relief from tariffs

Canada and Germany also signed a joint declaration of intent on cooperation on critical minerals. The two countries aim to push for the diversification of supplies of critical minerals, which are increasingly important in products needed for defence, the energy transition and clean technologies. A major objective would be to promote and strengthen cooperation and trade in the critical-minerals value chain, with a focus on midstream technologies, including mineral processing, refining and recycling, the declaration said.

“On rare earths, Canada is in a position to develop the only mine-to-magnets, complete supply chain outside of China in the world,” Hodgson said. “It gives us a really great card with our allies, our like-minded allies, and it takes a card out of the hands of people who might have a different perspective in the world,” he added.

Stable and reliable supply chains are of central importance to companies in both countries, German economy minister Reiche said. “The supply of critical raw materials in particular is key to the competitiveness of our economy.”

Jamie Kneen, national program co-lead at Mining Watch Canada, said the joint declaration “would be laudable if it were diversifying Canadian trade and diminishing dependence on U.S. markets. But it’s not. The only specific agreements are for early-stage projects, several years from production if they even get there, so any tariff relief is pretty distant.”

Even as a way of building longer-term trade relationships and value chains, he told The Mix in an email, “it’d make more sense to link to less complex and/or problematic projects.”

There’s also “a very real risk that projects that should never see the light of day are pushed forward and even into production without Indigenous consent and without adequate scrutiny of their impacts, leading to short- and longer-term conflict and potentially grievous environmental and social consequences,” he added.

While the Canadian delegation was in Berlin, companies from the two countries signed three memoranda of understanding to cooperate on raw material extraction and processing, Clean Energy Wire reports – between Montreal-based Torngat Metals and Vacuumschmelze, Toronto-based Rock Tech Lithium and Enetrag, and Toronto-based Troilus Gold and Aurubis.

The original version of this story first appeared on Clean Energy Wire as part of a joint reporting project by The Energy Mix. It has been edited to conform with Corporate Knights style. Republished by permission.

The post Canada plans to sell gas to Europe despite doubt over demand appeared first on Corporate Knights.

The accelerating transition away from fossil fuels and toward electrification and renewable energy presents both risks and opportunity to investors. For those with significant fossil fuel holdings, returns are imperilled by demand risk, as energy consumption trends toward electrification. Investors have an opportunity to take advantage of this realignment by focusing on sectors and assets that are likely to grow as the energy transition accelerates.

The global investment firm Brookfield has established some of the largest private equity funds claiming to do so with its two “Global Transition Funds” and its “Catalytic Transition Fund.” The funds claim to offer investors exposure to climate-transition opportunities by directing capital toward the decarbonization of high-emitting assets, and by investing in clean energy.

Clear guidelines and adherence to best practices would offer stakeholders confidence that their bets into the transition economy are being placed accordingly.

– Michael Sambasivam and Adam Scott

Transition funds are an important investment class, as they can help supply some of the trillions needed to achieve net-zero by 2050 or sooner, while offering savvy investors a venue through which to access transition opportunities. But transition investing also requires rigorous due diligence: not all investments labelled as such legitimately contribute to the transition, and not all assets can be transitioned.

Fuzzy criteria could mislead investors

Brookfield’s funds currently lack the transparent guidelines that are necessary for transition investments to work. Clear definitions of “green” and “transition” investments would ensure that investors – both in the funds and in Brookfield itself – are getting what they were sold. Brookfield has opted instead to rely on vague language that suggests it adheres to external guidances that define credible, science-based transition investments, but without specifying the guidances involved or how they are applied.

Brookfield is not alone in this. Last year, we filed a complaint with the Ontario Securities Commission on the basis that Canada’s banks labelled investments as “sustainable” even though they resulted in increased greenhouse gas emissions. Each of Canada’s “big six” banks were involved in sustainably labelled transactions that financed the expansion of fossil fuel infrastructure.

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As Brookfield deploys transition capital on behalf of pensions and other clients, it is paramount that it ensures that it does not similarly mislead its investors. Comments from Brookfield Infrastructure CEO calling LNG a “leading transition fuel,” paired with Brookfield’s substantial and growing gas portfolio, led us to file a shareholder proposal asking for clarity.

Our proposal asks that Brookfield disclose the criteria used to determine asset eligibility in its transition-labelled funds. Clear guidelines and adherence to best practices would offer stakeholders confidence that their bets into the transition economy are being placed accordingly.

Methane gas has no place in transition investing

The Canadian financial sector’s systemic unwillingness to properly define the terms “transition” and “sustainable” shows the need for Canada’s upcoming green and transition taxonomy to adhere to strict best practices.

A Canadian green and transition taxonomy would serve as a classification system for which activities are aligned with Canada’s climate target of achieving net-zero emissions by 2050. Where Canada’s financial sector lacks the incentives or willingness to regulate itself, investors and the general public alike would benefit from guardrails that ensure that green and transition finance are not simply buzzwords.

We know what is needed to successfully transition the economy toward net-zero and to avoid cementing further transition risk into Canada’s finances. The International Energy Agency’s and the Intergovernmental Panel on Climate Change’s net-zero pathways make clear that financing new development of fossil fuel infrastructure is misaligned with net-zero by 2050. Suggestions that methane gas be labelled as transitional are not rooted in science but rather an attempt by fossil fuel companies to displace capital allotted to transition investments.

The fossil fuel sector’s newest campaign, in which liquefied natural gas is being falsely sold as a “bridge fuel” to allow developing economies to replace one fossil fuel (coal) with another (gas), is unfounded in both economics and climate science. LNG’s high life-cycle emissions make it a marginal emissions-reduction tool at best, while new gas investments of any type would lock in carbon emissions for decades, blocking transition.

LNG is not a transition fuel, and either Brookfield’s transition funds or Canada’s taxonomy would be undermined by pretending that it is.

A science-based and climate-aligned taxonomy would not prevent Canada’s financial institutions from managing capital as they see fit. Instead, it would mandate honesty, prevent greenwashing, create trust and ensure that transition capital is deployed in alignment with its mandate.

If Canada’s financial institutions earnestly stand by their green- and transition-labelled investments and investment vehicles, we should see them asking for the same.

Michael Sambasivam is a senior analyst at Investors for Paris Compliance, a shareholder advocacy organization holding Canadian companies accountable to their net-zero commitments.

Adam Scott is the executive director of Shift Action for Pension Wealth and Planet Health, a charitable project working to align Canada’s financial sector with climate goals.

The post What’s in your ‘transition fund’? Poor transparency puts investors at risk appeared first on Corporate Knights.

Wilson and her crew at advocacy non-profit Oilfield Witness are called “methane hunters” – but she simply points her camera at an oil and gas facility and can see a black cloud on-screen as the instrument picks up hydrocarbons absorbing infrared in real time. “The oil and gas industry says, ‘Look, you can see our site – you can’t see anything,’” she said. “Well, yeah, you can with one of those cameras.”

In recent years, a growing number of non-profit organizations and non-governmental initiatives have turned to advancing technologies to document methane emissions on their own. As methane emissions pose an increasing threat to the climate amid the Trump administration’s regulatory rollbacks and attempts to gut federal emissions tracking, those groups are grappling with what their work will mean in the years to come.

Scientists and government bodies say that reining in methane releases from fossil fuel facilities, which make up about a third of global methane emissions from human activity, is crucial to limiting irreversible climate change. Methane is a powerful climate pollutant – more than 80 times more potent at warming the atmosphere than carbon dioxide over the span of 20 years.

Methane emissions long underestimated

Across the United States, methane is emitted from an ever-expanding web of oil and gas projects, including nearly a million active oil and gas wells, along with pipelines, compressor stations, export facilities, and underground storage and transportation lines. One of the biggest sources is abandoned coalmines and oil and gas wells, according to the latest Global Methane Tracker report from the International Energy Agency (IEA).

Although countries and companies have the tools to reduce methane emissions at low or no cost – and many have pledged to do so – the implementation of mitigation measures is “weak,” and record fossil fuel production has kept those emissions high, the IEA found. The agency further noted that “without targeted action on methane, the risks of severe climate damage increase considerably.”

We have to continue to fight back against the industry’s ongoing propaganda about how they have reduced emissions.

– Sharon Wilson, methane hunter, Oilfield Witness

Part of the problem is that methane emissions have long gone undercounted: oil and gas companies may be emitting up to three times the amount of methane estimated in records they provide to federal regulators. Under the Trump administration, those companies could be exempt from having to provide any records at all.

The Environmental Protection Agency is planning to get rid of most reporting requirements under the Greenhouse Gas Reporting Program, which once obtained publicly available data from thousands of polluting facilities across the country. For the first time in nearly three decades, the EPA did not publish its mandatory annual report on national greenhouse gas emissions this year.

Independent methane trackers step up

Now, some of the third parties tracking methane emissions are optimistic that they are well primed to help fill in those gaps and work with companies to change their ways. Other watchdogs are expressing alarm over the implications of evaporating federal standards and oversight, which some say were already inadequate to manage pollution from increasing fossil fuel projects.

As the EPA stops tracking greenhouse gas emissions, state and local regulators may have no choice but to turn to independent emissions databases for information. One example is Climate Trace, a global non-profit coalition that uses satellites and other remote sensing technologies to provide an emissions inventory for states, municipalities, sectors and corporations worldwide. “Climate Trace is increasingly going to be able to continue to provide emissions estimates for every facility in America if other data sources shut down,” said Gavin McCormick, one of the coalition’s founders.

McCormick said his group works with big tech and car companies looking to reduce emissions in their supply chains, and anticipated more interest in his database from private companies across polluting sectors. “There are more and more emissions-reducing opportunities that are actually really good business,” he said, adding that methane leaks in particular are an easy fix. “The ongoing increase in oil and gas has a very different carbon footprint depending on what we do with methane.”

Advanced techniques create new pressure

The technology for pollution tracking is more sophisticated than ever, with new satellite programs like the Environmental Defense Fund’s (EDF) MethaneSAT and Carbon Mapper able to measure methane emissions and leaks from wide regions and specific infrastructure across the globe. At the Society of Environmental Journalists conference in April, scientists from EDF and Rocky Mountain Institute (RMI) spoke to reporters about the advancing ability of those satellites to document companies’ changing methane emissions over time.

“In order to address methane emissions we needed to understand where those emissions were and how much those emissions were, and we had no data – nobody had data,” said Steve Hamburg, the lead scientist for MethaneSAT at EDF. With satellites tracking methane pollution, he explained, “we don’t have to take anyone’s word for it; we can independently validate it. Every major company knows that’s going to be happening whether they want it or not, around the world.”

Deborah Gordon, senior principal in RMI’s Climate Intelligence Program, who began her career at Chevron, said she believed that better methane tracking would lead oil and gas companies to fix their leaks. “Gas is a commodity,” she said. “They don’t want to leak the product that they can sell. There’s real value in these companies understanding what they’re losing and burning up in smoke, and also reputational risk.”

Skepticism that the oil and gas industry will respond

Other groups in the methane-tracking space are more skeptical that documenting emissions alone could lead the fossil fuel industry to adequately police itself. “[Satellite] data is sold to the industry,” Wilson, of Oilfield Witness, wrote in a blog post. “So if they were going to stop methane by using satellite data, methane levels would be going down right now, as the industry has access to the best data available. Unless we stop drilling new holes, satellites are just another delay tactic.”

The companies are “not necessarily bound to social responsibility, and never were,” said Josh Eisenfeld, oil and gas research and accountability manager at Earthworks, a non-profit group that advocates for communities affected by fossil fuel pollution.

Like Oilfield Witness, Earthworks uses optical-gas-imaging cameras to capture methane emissions and other toxic pollutants at oil and gas facilities across the country, then uses its data to submit complaints to the relevant regulatory authority. According to Eisenfeld, state regulators often have limited resources to monitor the complex web of polluting fossil fuel infrastructure in so many communities. On-the-ground monitoring can help them precisely detect a faulty point at a facility where methane is leaking. “We like to think we’re helping them be more efficient,” he said.

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While Earthworks is working to alert state regulators, the group is limited in what it can do without cooperative federal oversight. The Trump administration is undoing Biden’s federal fee on methane emissions and requirements for addressing leaks and phasing out routine flaring, which would have created uniform, stricter standards across the country. “The same companies that said they supported methane rules that were introduced by the Biden administration are now silent as these rules are rolled back and as their requirements to report how much they pollute are nixed,” Eisenfeld said.

The American Petroleum Institute, meanwhile, has reversed its earlier support for the rule – calling it a “punitive tax on American energy production that stifles innovation” after it was repealed by a newly Republican-controlled Congress in February.

More than half of the hundred largest onshore oil and gas producers in the United States have no public commitments to reducing methane pollution, while others have quietly delayed or rescinded those commitments, according to a recently updated database by Earthworks and the advocacy non-profit Gas Leaks. Exxon, for instance, dropped references to absolute methane emission reductions in its latest corporate reporting after claiming two years earlier that it planned to achieve an “absolute reduction in methane emissions by 70%” by 2030. “Even the commitments that they claimed in the past had no real legal requirements attached to them,” said Eisenfeld.

Certification projects seek to incentivize leak reductions

The gap in federal oversight could also be filled by third-party monitoring initiatives with very different motivations from those watchdogs. Oil and gas companies are now working with firms to monitor and “certify” their gas as low on methane emissions, allowing it to be sold by gas utilities at a premium. But their methodologies – which can include continuous-emission-monitoring systems – can vary vastly in effectiveness, depending on connectivity issues and the number and placement of monitors a firm chooses to use on site.

One of those firms is Project Canary, a leading gas certification company whose CEO has stated that “we are going to be able to solve climate change with measurement.” The company sells its own continuous-emission-monitoring systems to the companies it certifies.

According to two reports published by Earthworks and environmental advocacy non-profit Oil Change International, Project Canary’s monitors in Colorado regularly missed methane pollution events from oil and gas operations because of their placement and their tendency to be offline. Project Canary claimed it was not certifying the sites referenced in the reports. Earthworks stands by its findings, and says it is still awaiting data from Project Canary to support that claim. Earthworks also says its report appeared to prompt revisions to air quality rules in the state.

Another gas certification initiative launched in partnership between RMI and developer Systemiq, MiQ, aims to create “a financial incentive” for producers to reduce their methane pollution by generating different price levels for oil and gas based on adherence to MiQ’s standard of methane emissions management. “The future must be powered by 100% clean energy. MiQ’s mission is to reduce the climate impact of methane emissions from the oil and gas sector until we get there,” said Georges Tijbosch, MiQ’s senior adviser, at the time of its launch.

Declining pressure on the oil and gas industry

Even if methane emissions from the oil and gas sector were drastically reduced – they can’t be eliminated entirely, as methane is the primary component in so-called natural gas – the extraction and burning of fossil fuels creates a host of other public health and environmental hazards. Just this week, a new analysis found that Colorado oil and gas companies have secretly pumped at least 30 million pounds of chemicals into the ground over the past 18 months.

At the moment, there is a decline in pressure on the industry to curb its climate pollution in the United States. The European Union is exploring loopholes for U.S. gas exports to comply with its methane emissions standards in order to avoid trade disputes with Trump. The U.S. Interior Department is planning to fast-track oil-and-gas project permitting procedures that could take multiple years to a maximum of 28 days. Even before the change in administration, oil companies headquartered in and outside the United States were “retiring” their climate commitments while ramping up fossil fuel production.

Eisenfeld warned that while “we need all of the tools in the toolbox to combat climate change, we also need to be honest about what each of those tools can do. Voluntary efforts by the fossil fuel industry, no matter what third party creates them, will always be limited by what the industry is willing to do voluntarily.”

Wilson, a fifth-generation Texan, worked an office job as a contractor with major oil and gas operators for more than a decade before she quit and moved to Wise County, the birthplace of fracking. She began submitting open records requests to the Texas Commission on Environmental Quality (TCEQ) – and eventually bought her own optical-gas-imaging camera to document the pollution coming from oil and gas wells next to homes and schools. Wilson has faced ire from the industry after speaking out on her blog against the impacts of fracking – in one case, hundreds of her private emails were subpoenaed by oil and gas company Range Resources in a high-profile defamation lawsuit against a Texas couple who accused the company of polluting their groundwater.

“I’ve been sitting on the side of the road watching oil and gas make big messes for almost 30 years,” Wilson said. “We have to continue to fight back against the industry’s ongoing propaganda about how they have reduced emissions.”

Wilson estimates having made nearly 500 complaints to the TCEQ, using the footage from her cameras as evidence. But the agency largely stopped responding to her requests, she said, even before the change in administration. The state doesn’t have a specific rule targeting methane releases from oil and gas infrastructure and sued the Biden administration for its methane rule when it was first published.

By documenting invisible pollution, Wilson hopes to expose what she sees as the biggest impediment to action: the industry’s deceit about the harm its operations cause. “I think that most people, if their lover lied to them at this level, their clothes would be out in the front yard on fire, and I think that that’s where we need to get with the American public – they need to break up with the oil and gas industry,” she said. “The best way for them to be empowered to do that is to understand the extent of lying and to actually see the pollution they are breathing, and it’s everywhere.”

This article by ExxonKnews is published here as part of the global journalism collaboration Covering Climate Now. It has been edited to conform with Corporate Knights style. You can read the original here. 

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A new report published by Reclaim Finance on Thursday calculates that, between 2021 and 2023, 400 banks put $213 billion toward LNG expansion and 400 investors funded the buildout with $252 billion as of May 2024.

“Oil and gas companies are betting their future on LNG projects, but every single one of their planned projects puts the future of the Paris agreement in danger,” Reclaim Finance campaigner Justine Duclos-Gonda said in a statement. “Banks and investors claim to be supporting oil and gas companies in the transition, but instead they are investing billions of dollars in future climate bombs.”

The International Energy Agency has concluded since 2022 that no new LNG export developments are required to meet energy demand while limiting global temperatures to 1.5°C above preindustrial levels. Despite this, LNG developers have upped export capacity by 7% and import capacity by 19% in the last two years alone, according to Reclaim Finance. By the end of the decade, they are planning an additional 156 terminals: 93 for imports and 63 for exports.

Those 63 export terminals, if built, could alone release 10 metric gigatons of greenhouse gas emissions – nearly as much as all currently operating coal plants release in a year. What’s more, building more LNG infrastructure undermines the green transition.

Banks still financing LNG export terminals and companies are focused on short-term profits and cashing in on the situation before global LNG oversupply kicks in.

– Henrieke Butijn, researcher at BankTrack

“Each new LNG project is a stumbling block to the Paris agreement and will lock in long-term dependence on fossil fuels, hampering the shift toward low-carbon economies,” the report authors explain.

Many large banks have pledged to reach net-zero emissions, yet they are still financing the LNG boom. U.S. banks are especially responsible, Reclaim Finance found, funding nearly a quarter of the buildout, followed by Japanese banks at around 14%.

The top 10 banks funding LNG expansion are:

1. Mitsubishi UFG Financial Group (Japan)
2. JPMorgan Chase (U.S.)
3. Mizuho (Japan)
4. Gazprombank (Russia)
5. SMBC Group (Japan)
6. Bank of America (U.S.)
7. Citigroup (U.S.)
8. Goldman Sachs (U.S.)
9. Morgan Stanley (U.S.)
10. RBC (Canada)

While 26 of the banks on the report’s list of the top 30 LNG financiers have made 2050 net-zero commitments, none of them have adopted a policy to stop funding LNG projects. None of the top 10 banks have any LNG policy at all, despite the fact that Bank of America and Morgan Stanley helped found the Net-Zero Banking Alliance. Instead of winding down financing, these banks are winding it up, as LNG funding increased by 25% from 2021 to 2023. In 2023 alone, 1,453 transactions were made between banks and LNG developers.

Front-line communities pay a steep cost for LNG projects

All of this funding comes despite not only climate risks, but also the local dangers posed by LNG export terminals to front-line communities. Venture Global’s Calcasieu Pass LNG, for example, has harmed health through excessive air pollution while dredging and tanker traffic has disturbed ecosystems and the livelihoods of fishers.

“Banks still financing LNG export terminals and companies are focused on short-term profits and cashing in on the situation before global LNG oversupply kicks in. On the demand side, financing LNG import terminals delays the much-needed just transition,” said Henrieke Butijn, a climate campaigner and researcher at BankTrack. “While banks will secure their profits, it’s at the expense of front-line communities who often will not be able to get their livelihoods, health or loved ones back. People from the U.S. Gulf South to Mozambique and the Philippines are rising up against LNG, and banks need to listen.”

The report also looked at major investors in the LNG boom. Here too, the United States led the way, contributing 71% of the total backing.

The top 10 LNG investors are:

1. BlackRock
2. Vanguard
3. State Street
4. Fidelity Investments
5. Capital Group
6. GPFG
7. JPMorgan Chase
8. Brookfield Asset Management
9. Blackstone
10. MSBI

Just three of these entities – BlackRock, Vanguard and State Street – contributed 24% of all investments.

Reclaim Finance noted that it is not too late to defuse the LNG carbon bomb. “Nearly three-quarters of future LNG export and import capacity has yet to be constructed,” the report authors write. “This means that banks and investors can still act to put an end to the unrestrained support they offer to the companies responsible for LNG expansion.”

To this end, Reclaim Finance recommended that banks establish policies to end all financial services to new or expanding LNG facilities and to end corporate financing to companies that develop new LNG export infrastructure. Investors, meanwhile, should set an expectation that any developers in their portfolios stop expansion plans and should not make new investments in companies that continue to develop LNG export facilities. Both banks and investors should make clear to LNG import developers that they must have a plan to transition away from fossil fuels consistent with the 1.5°C goal.

“LNG is a fossil fuel, and new projects have no part to play in a sustainable transition,” Duclos-Gonda said. “Banks and investors must take responsibility and stop supporting LNG developers and new terminals immediately.”

Olivia Rosane is a staff writer for Common Dreams.

This article by Common Dreams is published here as part of the global journalism collaboration Covering Climate Now. It has been edited to conform with Corporate Knights style.

The post Banks flout net-zero targets to cash in on the next LNG boom appeared first on Corporate Knights.

Some healthcare leaders point to systemic underinvestment in primary care and pandemic-related burnout as key reasons for these widespread closures. While this is undoubtedly true, in some towns another major factor is at play. The expansion of B.C.’s liquefied natural gas (LNG) industry is fuelling impacts across the province that increase healthcare system costs and reduce access to care – and if we value high-quality healthcare, it must end now.

In B.C., almost all “natural” gas is extracted via a highly polluting and water-intensive technique called hydraulic fracturing, commonly known as “fracking,” to crack the earth open and access methane gas deposits. Research shows that fracking pollutes the land, water and air with chemicals linked to serious health risks, whether through flaring, gas leaks or leaks of fracking fluid. Comprehensive scientific reviews, including damning studies from Canada, have been published in recent years, overwhelmingly pointing to its myriad health harms, including associations with childhood leukemia, asthma, heart disease and poor pregnancy outcomes. Due to its environmental and health risks, fracking bans or moratoria are currently in place in four other provinces in Canada.

Unsurprisingly, stories I have been told by physicians who live in or have left the Peace Region, where the majority of fracking occurs, reflect this research. At least seven doctors have quietly closed their practices and moved their families away from Dawson Creek – where fracking is rampant – seeking healthier communities. Each one specifically cited their concerns about rare diseases, tumours and deadly cancers diagnosed in their own patients, colleagues, friends and family members, and a school system with low academic standards due to a boom-and-bust economy based on oil and gas.

In a town that typically requires at least 15 family physicians to provide primary care and staff the emergency department, this represents almost half the workforce. This compounds access-to-care issues due to already high turnover in internationally recruited staff, who leave for larger cities after their contracts are up. On account of their fears about social and professional risks should they speak out against the powerful oil and gas industry, most of them remain silent.

On a broader level, our healthcare system is also paying a steep price as the fossil fuel industry grows. Last year’s wildfires blanketed communities with smoke that incurred health costs in Ontario alone of $1.28 billion in only five days. In 2021, the Western Canada heat dome killed 619 people in B.C. – the worst weather-related mass casualty event in Canada’s history.

Meanwhile, 57 fossil fuel companies are releasing 80% of our carbon pollution, and two of the top-10 polluters, Shell and PetroChina, are partners in the $40-billion LNG Canada project in Kitimat. If we continue to approve new LNG infrastructure and fail to lower our emissions, climate change will cost the Canadian healthcare system an estimated additional $110 billion per year within the next 25 years.

RELATED

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Canada’s LNG industry says it will reduce Asian emissions. Prove it.

Research also points to high social costs of the LNG industry. Though proponents emphasize the industry’s economic benefits, they are often overstated and unequally distributed. Influxes of workers can significantly worsen housing affordability, substance abuse, domestic violence and sexually transmitted infections. Broken connections to the land and between neighbours worsen mental health issues and residents’ sense of place and belonging. Mental illness already costs the B.C. economy more than $6 billion annually. Through harmful impacts on local communities, and by driving climate change that worsens the rising epidemic of eco-anxiety, the LNG industry in B.C. is contributing to significant social and mental health costs.

That is why, this month, more than 300 physicians and nurses signed an open letter calling on the provincial government to choose a healthier future, where its climate commitments are met and communities and health systems are protected. The industry must not be allowed to expand until a comprehensive and independent health-impact assessment of LNG and fracking in B.C. is completed, similar to the $12-million Ottawa-funded study of Alberta’s oil sands recently announced. While it continues to operate, regulations and monitoring to reduce air and water pollution must be strengthened. The province must guarantee good and sustainable jobs in the clean-energy economy for workers and Indigenous communities affected by LNG production. Demand for fracked gas must also be curtailed by enacting policy to end natural gas tie-ins and to retrofit existing buildings to phase out fossil fuel heating.

Though the problem is vast, the solutions are many – and when they are enacted, our health and healthcare systems across B.C., and Canada, will be the benefactors.

Melissa Lem is a Vancouver family physician, president of the Canadian Association of Physicians for the Environment and a clinical assistant professor at the University of British Columbia.

The post The untold story of LNG’s impacts on healthcare in B.C. appeared first on Corporate Knights.

The bank executive testimonies were part of a study by the House of Commons’ standing committee on environment and sustainable development about how the Canadian financial system contributes to the climate crisis. Using the findings from this study, parliamentarians hope to identify policies to advance a more sustainable financial system.

So far, the government has been slow to modernize our financial system to address climate change. While there has been general consensus across federal parties to align finance with climate action, the only tangible output has been in the Senate, where Senator Rosa Galvez introduced a proposed legislation called the Climate-Aligned Finance Act. New rules for climate-aligned finance make sense, given how climate risks already harm people across the country.

Parliamentarians summoned executives from Canada’s largest banks, often referred to as the Big Five – the Royal Bank of Canada (RBC), TD Bank, Bank of Montreal (BMO), Bank of Nova Scotia and CIBC – after they declined the original invitation.

During two hours of testimony, parliamentarians pushed the executives on how these banks are globally the largest investors in fossil fuels, and how this makes it harder for Canada to reduce emissions and meet its climate commitments.

Policymakers confronted the banks’ credibility on their stated climate targets. The Big Five all have commitments to reach net-zero by 2050, but none have published plans that show how they’ll reach their goals. According to Bloomberg research, the Canadian banks overinvest in oil and gas, and underinvest in clean climate solutions, relative to global peers.

Parliamentarians highlighted how this chasm between promises and actions misleads the public and creates risks. NDP MP Matthew Green asked RBC CEO Dave McKay, “When will you stop the greenwashing and double speak with climate plans when really you’re the companies pouring fuel on the fire?”

To address this chasm, other jurisdictions, such as the European Union, the United Kingdom, Hong Kong and Singapore, are moving toward introducing rules or guidance for climate transition plans that require banks to show concretely how they are decarbonizing their investments. Canada should follow suit. Currently, our federal regulator that supervises the Big Five banks only requires reporting on current emissions. Its rules reference the potential to require transition-plan reporting in the future.

When will you stop the greenwashing and double speak with climate plans when really you’re the companies pouring fuel on the fire?

–NDP MP Matthew Green

Even within these transition plans for climate action, the treatment of fossil fuels is a main sticking point. Liberal MP Leah Taylor Roy asked if the banks would commit to, when investing in oil and gas, “only invest in projects that reduce emissions.” BMO CEO Darryl White responded that he was “committing to continuing to finance our clients.” This is not terribly reassuring for a claim of financing positive change and climate action.

The Big Five provided $140 billion in financing to fossil fuels last year, which represents more than 13% of all fossil fuel financing by global banks. The International Energy Agency confirmed that any expansion of oil, gas or coal is inconsistent with a scenario of keeping warming to the safer level of below 1.5°C. Climate experts point to the need for a managed yet urgent phaseout of existing fossil fuels, particularly in Canada given our high historical contribution to global emissions.

A framework, known as a taxonomy, to define which investments are aligned with science-based climate action has been contentious, and the Ministry of Finance under Deputy Prime Minister Chrystia Freeland has been working on that for the better part of two years. Rumours have swirled that her department is trying to force fossil fuels, like so-called natural gas, into the climate-aligned label. Given that “natural” gas is composed of methane, whose global warming potential is more than 80 times higher than that of carbon dioxide, this move would be as deceitful as including harpooned whales under Ocean Wise (a sustainable seafood certification).

Earlier this year, more than 70 environmental groups wrote to the government about why fossil fuel investments – “natural” methane gas in particular – must be ineligible for the taxonomy’s sustainability label. The groups, including Environmental Defence Canada and Climate Action Network, emphasized that “there should not be a Canadian taxonomy unless it credibly aligns with” limiting global warming to 1.5°C.

The federal government seems on track to falsely label many kinds of fossil fuels as good for the climate transition despite expert concern. This would be, regrettably, a green thumbs-up for the Canadian banks to continue their harmful business as usual.

During the bankers’ hearing, the link between our financial system and a worsening climate crisis was made clear, and that link must be addressed. Parliamentarians should recommend credible climate transition plans across the economy, and most urgently, that any government sustainable-investment label exclude oil and gas.

Julie Segal is senior program manager of climate finance at Environmental Defence Canada.  Alex Cool-Fergus is national policy manager at Climate Action Network Canada.

The post Parliament grilled Canada’s Big Five banks on their fossil fuel financing – here’s why it matters appeared first on Corporate Knights.

Driving out of Victoria on my way to the airport this spring, a green billboard grabbed my attention: “BC LNGF will reduce global emissions,” the sign declared. Really?

The climate-change argument is central to the LNG debate in Canada.

It is impossible to justify expanding LNG trade if the resulting production and consumption of natural gas would be inconsistent with efforts to mitigate the growing climate crisis. Especially when producers are looking for subsidies and want to benefit from financial instruments that are being offered to projects that contribute to our climate goals.

We’re assured by industry and its defenders that upping Canadian gas exports would displace the use of coal or more emissions-intensive LNG in Asia, thereby lowering global GHGs even if the resulting emissions are higher here in Canada.

They argue that this country could actually take credit for some of those Asian GHG reductions under Article 6 of the 2015 Paris climate treaty, which allows for bilateral emissions trading.

Essentially, Article 6 has become a green fig leaf to greenwash LNG exports.

The Paris Agreement article is a complex, highly conditional mechanism that, in theory, could provide a measure of environmental credibility to the sale of gas to countries that currently rely heavily on coal for their power and heat. That’s the theory; in reality, it’s highly improbable that LNG exports would qualify.

To use Article 6, governments in buyer and seller countries would have to agree on a wide-ranging climate strategy that lays out precisely how the specific quantities of additional gas production, liquefaction, transportation and consumption would contribute to lower overall emissions in the two countries combined, says a recent Public Policy Forum paper authored by a trio of Canadian experts in climate-change trade.

The Missing Article paper was released last November and is a key touchstone in the growing debate over federal LNG policy. It was written by veteran Toronto lawyer Lisa DeMarco of Resilient LLP; Katie Sullivan, managing partner of the IETA, an emissions-trading organization; and Steve MacDonald, a former chief executive of Emissions Reduction Alberta (ERA), an Alberta-based not-for-profit corporation with a mandate to reduce GHGs.

The climate-change argument is central to the LNG debate in Canada.

The paper provides an excellent guide to Article 6 and a description and analysis of the broad array of opportunities in which Canada could take advantage of it. The market-based approach provides the kind of economic advantage that is at the heart of cap-and-trade systems, as well as offset strategies available under industrial carbon pricing.

The Public Policy Forum (PPF), a business-based, non-profit think tank, has itself called for expanding LNG exports, arguing that such an approach would be a climate-friendly strategy. In the introduction of The Missing Article, PPF president Edward Greenspan still holds out the promise of Article 6 to provide environmental credibility for enhanced gas trade.

However, in the body of the paper, the trio of experts conclude that LNG trade would face enormous challenges in order to generate the “internationally transferred mitigation outcomes” (ITMOs) that are at the heart of Article 6. “Article 6 is not, as is sometimes asserted in Canada, a panacea,” they write.

For one thing, both buyer and seller governments must be in compliance with core Paris Agreement obligations to participate in the Article 6 mechanism. As well, the parties must provide clear assurances that any emission reductions would be additional to those that would be achieved without the Article 6 trade.

Environmental groups in South Korea and Japan have warned that the flood of LNG supply from the Middle East, the United States, Australia and Canada aimed for Asia could squeeze out investment in zero-emission renewable energy.

And there must be no “leakage” of unreported emissions. That’s a particularly difficult challenge for a system that currently experiences considerable methane leakage in upstream gas production, as well as from the pipelines, large liquefaction plants and ocean-crossing tanker ships. “Liquified natural gas (LNG) exports from Canada, despite the relatively low carbon intensity of our gas, will be challenged to meet the criteria of additionally and ‘leakage avoidance’ . . . unless they are part of more complex and comprehensive arrangements,” The Missing Article says.

Essentially, Article 6 could be used for LNG trade only with the kind of government-centred energy and environmental planning that is anathema to the oil and gas corporations and conservative politicians in Alberta and at the federal level. It’s no surprise that Alberta Premier Danielle Smith is calling for a renegotiation of its rules, despite the fact it took seven years of contentious international negotiations to complete the current rulebook.

Industry has invested billions of dollars in vast reserves of gas in Western Canada, especially in the Montney fields in northwestern Alberta and northeastern British Columbia. Expanded LNG exports from B.C. would provide a key market to realize returns on that investment.

Given the enormous challenges of Article 6, the industry is likely to walk away from the Paris Agreement mechanism and pursue LNG exports with less credible claims about environmental benefits.

Currently, there are several West Coast LNG projects that have received environmental approvals and are awaiting investment decisions. They include LNG Canada’s phase 2, Cedar LNG and Woodfibre LNG.

Despite misgivings raised in The Missing Article, a PPF paper released in January argued that Canada can “have it all – LNG, a green economy and reconciliation” with Indigenous Peoples. To make it happen, industry needs subsidies for clean electricity and access to preferential tax incentives and lending under Canada’s clean energy policies to undertake the billion-dollar investments in new LNG plants, says the paper from PPF’s Energy Future Forum.

“It needs to be a strict molecule-by-molecule accounting.”
– Lisa DeMarco, lawyer with Resilient LLP

Rather than a strict accounting of emission reductions, the How to Have It All paper suggests that LNG producers would merely need to satisfy a “balance of probabilities” test that their exports would reduce overall global emissions. However, that approach would not satisfy Article 6 requirements, Missing Article author DeMarco tells Corporate Knights: “It needs to be a strict molecule-by-molecule accounting.”

The burden of proof on LNG sustainability must lie with the would-be exporters who are demanding a range of preferential government policies in order to commit to the massive investment required.

Clearly, we need more than greenwashed assurances from an industry whose record includes thousands of orphaned oil and gas wells across Western Canada and enormous tailings ponds in the oil sands that will never be reclaimed.

We risk seeing billions of dollars in investment – some of it backed by the federal government and undertaken by First Nations – going into an unsustainable fossil fuel business that fails to deliver its touted benefits.

Its owners could be left with dead-end investments as the countries accelerate the transition off fossil fuels to avert the increasingly costly impacts of climate change.

The post Canada’s LNG industry says it will reduce Asian emissions. Prove it. appeared first on Corporate Knights.

But an impending flood of liquefied natural gas exports from western Canada to Asia could make it harder for countries there to achieve their national climate targets and contribute to tens of thousands of additional deaths due to air pollution.

That’s the assessment of major environmental organizations based in South Korea and Japan, whose representatives told DeSmog that rather than increasing east and southeast Asia’s dependance on an economically volatile and planet-warming energy source it would be much better for the region to shift from coal directly into renewables.

“The argument that liquefied natural gas is helpful for climate action is way outdated,” Dongjae Oh, head of the oil and gas finance program at the Seoul-based non-profit Solutions for Our Climate, told DeSmog. “We need to think about not just stopping the expansion of LNG but how to phase it out as soon as possible.”

Ayumi Fukakusa agrees. She is deputy executive director at the Tokyo-based environmental organization Friends of the Earth Japan. “I don’t believe gas is a climate solution,” she told DeSmog.

23,000 premature deaths

These Asia-based energy and climate experts point to the landmark 2021 report from the International Energy Agency which concluded that the only way to stabilize atmospheric warming at the relatively safe threshold of 1.5°C is to stop building new fossil fuel projects.

South Korea is currently the world’s third largest LNG importer and plans to expand its gas capacity 50 percent by 2036. But to reduce South Korea’s emissions in line with the 1.5°C temperature limit, the country must fully phase out gas from its electricity sector over the same time period, Solutions for Our Climate calculates.

If Canada begins shipping huge amounts of LNG to South Korea and other Asian countries, as companies including Shell and Petronas intend to do starting next year, it will impede the shift to truly clean sources of energy. That’s because current market dynamics in the country “motivate the fossil fuel generators to continuously construct new plants and delay the phaseout of those that contribute little to the power grid,” Gyuri Cho of Solutions for Our Climate said last year.

This could have dire health impacts. Because many gas plants in South Korea are located in or near densely populated urban areas, the air pollution caused by expanding LNG could result in 23,000 premature deaths across East Asia by 2064, the organization calculates.

Climate impacts downplayed

Nevertheless, a $40 billion export facility called LNG Canada led by Shell (and including partners such as Malaysia’s Petronas and the Korea Gas Corporation) could begin shipping LNG from British Columbia to Asian markets including South Korea in 2025. Another west coast facility, Cedar LNG, received environmental approval from the B.C. government last year. There are six additional Canadian LNG export projects in development.

The gas for these projects is projected to largely come from fracking operations in the Montney play, a gas field straddling the Alberta-B.C. border that contains as much as 449 trillion cubic feet of gas. Burning all that gas could release 13.7 billion tonnes of planet-warming emissions into the atmosphere, leading international climate researchers to deem Montney the world’s sixth-largest “carbon bomb.”

Yet this is still being presented by gas advocates as global progress on climate change. “Canadian LNG can help Asia switch from coal to gas, a huge win for the climate,” declared the conservative political advocacy group Canada Action, which received $100,000 in 2019 from the gas producer ARC Resources, a report in The Narwhal revealed.

That message is echoed by the Canadian Association of Petroleum Producers, major business interests such as the Canadian Chamber of Commerce, conservative think tanks like the Macdonald Laurier Institute and rightwing advocacy groups including Fairness Alberta. A report commissioned in 2022 by an Alberta government organization called the Canadian Energy Centre concluded that “Canadian LNG would ultimately help to lower emissions in Asia.”

The argument that liquefied natural gas is helpful for climate action is way outdated.

 

– Dongjae Oh, Seoul-based non-profit Solutions for Our Climate

Channeling this industry marketing push, federal Conservative Party leader Pierre Poilievre said in a speech last September that “we will grant permits for natural gas plants to safely ship it off to replace dirty coal in Asia.” Even ostensibly progressive politicians are on board, with B.C.’s NDP premier David Eby recently defending LNG exports as being consistent with a “clean economy.”

As in South Korea, however, gas expansion in other Asian countries brings only uncertain climate benefits at best, while ultimately stalling the shift towards truly low-carbon energy sources, Fukakusa argues. “If we build new LNG projects we lock in massive amounts of greenhouse gas emissions,” she said.

China, currently the world’s largest importer of LNG, is attempting to meet its ambitious climate goals in part by shifting from coal power plants to gas plants. Gas releases less emissions when burned than coal. But if you include in the accounting methane leaks during fracking and transportation, this “introduces uncertainties in the climate benefit comparison between gas and coal,” a team of Chinese and international researchers noted in a 2020 Nature paper. According to researchers such as Cornell University’s Robert Howarth, gas might even have a climate footprint worse than coal.

That’s why some environmental campaigners in China are wary about the fuel source, as well as recent claims by oil and gas companies such as Shell that LNG can be “carbon neutral” if paired with carbon offsets. “These companies are either walking back previous climate commitments or remain wholly uncommitted to take action on climate,” the Beijing-based Greenpeace East Asia said in a report last fall.

A shaky business case

The price of wind, solar and other renewables is falling so quickly that they are now cheaper to install and maintain as electricity sources than gas and coal, meaning that it makes more sense economically for Asian countries to go straight to renewables, Oh said. “Increasing reliance on gas plants is bad economically,” he said.

Japan, the world’s second largest LNG importer, is currently planning to reduce gas in its power sector from 37 percent in 2019 to 20 percent in 2030 while expanding renewables like solar and wind, as well as nuclear power. This means that Canada will have to compete against other gas suppliers like Qatar, the United States and Australia for control of an increasingly shrinking Japanese market.

“I’m not sure it still makes economic sense,” Fukakusa says of proposals to greatly expand Canada’s gas exports.

Climate trackers worry that vast volumes of gas could end up being shipped to Southeast Asian countries like Vietnam, the Philippines and Thailand, stalling their clean energy transitions. But with a wind-down of international fossil fuel financing and strong support for industries like solar and offshore wind, countries across the region wouldn’t require Canadian LNG at all — they could skip the fossil fuel altogether.

“There is a lot of positive potential for renewables across Southeast Asia,” Oh said, “rather than sticking to the risky business of LNG expansion.”

The story first appeared in DeSmog. Read the original article here.

The post How Canada’s LNG could hurt – not help – Asia’s green transition appeared first on Corporate Knights.

The announcement came as many countries (Canada included) are looking to build new LNG export terminals and expand natural gas exports all while pledging to reduce emissions from the sector.

Natural gas is often billed as a bridge or transition fuel for economies looking to shift away from polluting coal. But hundreds of studies have found that methane emissions from the oil and gas sector are up to 70% higher than the levels reported. Leaks from the well to the burner tip remain elusive. Here are five ways methane escapes en route.

1. Oil and gas wells

There are nearly one million active oil and gas wells in the U.S. and more than 460,000 in Alberta alone, including 90,000 abandoned wells. Methane is leaked during drilling and hydraulic fracturing, escaping from both active and orphaned oil and gas wells. More escapes from pneumatic pumps and other equipment. It’s also routinely vented and flared in oil fields where producers have no access to gas pipelines.

2. Processing

After natural gas is extracted, it’s processed to remove liquids such as propane and butane. Thanks to faulty seals, methane often leaks from holding tanks and processing equipment. Producers have great incentive to reduce leaks to minimize loss of product; the amount of leakage varies greatly among companies and jurisdictions. The same is true for LNG plants.

3. Transportation

Methane escapes from the pipelines that carry the gas from production fields to processors to distributors and finally consumers. The U.S. EPA estimates losses of close to 1% from transportation and distribution systems. Losses also occur in ocean tankers when LNG evaporates or “boils off” from storage tanks, particularly on older ships.

4. Power plants and factories

Roughly half of natural gas is sold to large power plants and factories in the U.S. (in Canada, a third), where methane escapes from leaky processing equipment. Gas-fired power accounts for 3% of total global methane emissions, according to gas-fuelled turbine maker GE.

5. Residential end use

Buildings account for 25% of natural gas demand, and in homes methane leaks from every natural-gas-fired appliance: furnaces, water heaters, stoves and fireplaces. Natural gas stoves emit up to 1.3% of the gas they use as unburned methane. Even when they are not running, gas stoves in the U.S. put out an amount of methane equivalent to 2.4 million tonnes of carbon dioxide each year, according to one study.

The post Five ways the natural gas supply chain is leaking globe-heating methane appeared first on Corporate Knights.

On one stretch of the Douglas Channel shoreline is the site of LNG Canada, a partnership of international corporations including Shell PLC and PetroChina. The LNG Canada project currently under construction and the TC Energy pipeline that will supply it with gas were jointly billed as the largest private-sector investment in Canadian history – made possible with $5.4 billion in subsidies from British Columbia and $275 million in support from Ottawa.

Further along the shore is the planned home of Cedar LNG, a smaller yet-to-be-green-lit project that is majority owned by the Haisla with a minority stake held by Calgary-based Pembina Pipeline Corp. Privately owned Woodfibre LNG is also under construction at Squamish.

All told, 24 would-be LNG developers have received natural-gas export permits from the federal energy regulator, though many of those will not proceed. Canada is well behind competitors like the United States and Australia in the race to supply a fossil fuel market that has limited growth prospects over the medium term. Advocates of Canadian LNG exports say that sending gas to Asian markets will help them reduce reliance on coal, and thereby decrease global carbon emissions.

It is a much-disputed argument. Several recent studies challenge the industry position. Researchers suggest that the leakage of methane throughout the LNG life cycle can eliminate any greenhouse-gas (GHG) advantage gas has over coal at the point of final combustion. And some question whether growing reliance on LNG could slow the deployment of less carbon-intensive alternatives.

Still, producers want the federal government to include exported LNG as part of its climate change strategy, including policies for preferential financing. Ottawa is currently developing a transition taxonomy – essentially a guideline as to which types of investments are appropriate in the transition to a net-zero economy. In a report last March, the federally appointed Sustainable Finance Action Council (SFAC) said that only projects that are aligned with a net-zero pathway should be included in the taxonomy, without clarifying whether natural gas falls into that group. The government now faces a concerted lobbying effort to green-light expanded LNG capacity. Sources tell Corporate Knights that the minister’s office has delayed commenting on SFAC’s recommendations because of concerns over LNG.

West Coast dreams of LNG-fuelled prosperity rest on a shaky foundation of questionable assumptions.

Methane leakage

Numerous recent studies suggest that a major expansion of LNG exports from Canada would contribute to the growing climate crisis, rather than mitigate it as proponents claim. Both the International Energy Agency (IEA) and the United Nations Environment Programme warned this past fall against expansion of fossil fuel infrastructure that could lock in carbon emissions for decades.

Cornell University ecosystem scientist Robert Howarth recently concluded that LNG exported from the U.S. to Asia or Europe has higher carbon intensity than local coal use due to the leakage of methane – a powerful warming agent – throughout the LNG supply chain, but particularly during shipping. To address the urgency of the climate crisis, the world must “move away from any use of LNG as a fuel as quickly as possible, and immediately stop construction of any new LNG infrastructure,” Howarth wrote in a paper released in November. He’s been an outspoken critic of natural gas for more than a decade, facing years of harassment for his stance. But he’s not alone in his critiques. Researchers at RMI – the Rocky Mountain Institute – published a paper last July in which they concluded that methane leakage rates as low as 0.2% can eliminate any carbon advantage natural gas would have over coal-fired energy. 

Hundreds of studies using an array of measurement techniques have concluded that the industry’s methane emissions are often wildly underestimated. Methane can leak from a number of points in the natural gas cycle, from extraction and processing to transportation and power generation facilities – and there are no reliable government systems in place to comprehensively track the leaks. 

Globally, the IEA has estimated that methane emissions are 70% higher than industry reports. Carleton University’s Energy and Emissions Research Lab recently completed a census of methane emissions from upstream oil and gas production. Led by engineering professor Matthew Johnson, the researchers measured emissions at 3,500 oil and gas facilities and 5,600 wells. As Carleton reported, “Johnson and his team discovered that the actual quantity of methane produced by Canada’s oil and gas sector in the provinces of British Columbia, Saskatchewan and Alberta is consistently far higher than what was previously reported.” Alberta’s facilities, in particular, were found to be underreporting by nearly 50%.

At the COP28 climate summit in early December, the federal government announced new draft regulations that it says would result in a 75% reduction in methane emissions in the oil and gas sector from 2012 levels by 2030 while acknowledging that further work is required to accurately quantify methane emissions. Slashing methane emissions – along with better tracking – would help Canadian gas producers make the environmental case versus coal. However, natural gas still produces CO2 emissions and expanding supply and demand is inconsistent with net-zero plans. 

A paper co-authored by University of Calgary professor Sara Hastings-Simon suggests that newly built natural gas assets would become white elephants if the world succeeds in reducing its demand for fossil fuels as governments have pledged to do. At the same time, growing LNG imports in Asia could slow the adoption of lower-carbon alternatives, including renewable energy, the researchers concluded.

LNG at best represents a short-term opportunity, Hastings-Simon and her colleagues say. By the 2030s, the costly new LNG export terminals will either become stranded assets or lock in emission growth that takes us in the wrong direction on climate change.

In a special report released ahead of the United Nations climate summit in November, the IEA forecast that global demand for natural gas will peak by 2030 and could decline precipitously over the following two decades if countries rise to the challenge of global warming. The Paris-based agency – which advises wealthy countries on energy policy – urged against a major expansion of any fossil fuel infrastructure, noting that the world would need to reduce natural gas demand by 20% by 2030 and 75% by 2050 if we’re to limit warming to 1.5°C. “The ‘Golden Age of Gas,’ a term coined by the IEA in 2011, is nearing an end,” said the IEA report.

“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,” Fatih Birol, the agency’s executive director, says in the report. Rapid expansion in LNG supply over the past 10 years will be sufficient to supply the market and compete against pipeline gas in Asian markets, the agency says.

Essentially, building LNG infrastructure represents a bet against climate success.

Industry optimism

Still, backers of LNG Canada, Woodfibre and Cedar LNG remain optimistic. TC Energy’s $14.5-billion 670-kilometre Coastal GasLink pipeline that will ship supply from the gas fields of northeastern B.C. to the coast is 98% complete, according to the company. Construction at Woodfibre and the LNG Canada site is well underway; LNG Canada expects the first LNG shipments in 2025. Cedar’s owners – the Haisla and Pembina Pipeline Corp. – are aiming to make a final investment decision in the coming months.

Canadian LNG producers maintain that they have the lowest carbon intensity of any facilities in the world. LNG Canada says its phase-one facility will have a life-cycle GHG footprint 65% lower than the global average for the industry and 28% below the best performers. That figure is based on carbon intensity in the Montney gas field of northeastern B.C., as well as “highly efficient processes” and use of renewable power from B.C. Hydro. Carleton’s Energy and Emissions Research Lab also concluded that stronger regulation and monitoring in B.C. has meant that methane intensities are approximately four times lower on average than neighbouring facilities in Alberta, though there are variations between facilities.

LNG Canada’s partners are considering plans to fully electrify phase two of the project, should they decide to proceed. Though that would require completion of a $3-billion transmission project to bring additional power to Kitimat for commercial and residential use. B.C. reportedly wants Ottawa to cover half the cost of the line.

First Nations’ support

Many First Nations leaders in B.C. support the expansion of the LNG industry, seeing it as a path to economic development. That support remains, despite the much-publicized battles over the Coastal GasLink pipeline that will feed LNG Canada and Cedar. Land defenders led by hereditary chiefs of the Wet’suwet’en First Nation have blocked construction on the pipeline right-of-way, prompting a series of arrests by the RCMP. Still, elected First Nations leaders continue to support LNG expansion and, in some cases, have equity positions in projects.

I think [ownership of LNG development] is one of the solutions to helping our people to get out of poverty.

 

Karen Ogen, First Nations LNG Alliance

Karen Ogen – who served as elected chief of the Wet’suwet’en for six years – leads the First Nations LNG Alliance and travelled this fall to Beijing. In a telephone interview, Ogen says Asian nations have communicated their desire for LNG supply from Canada to replace coal, and alliance members are eager to benefit. “For 150 years, we were not included when major projects went through our territories and have not benefited from them,” Ogen says. “I think [ownership of LNG development] is one of the solutions to helping our people to get out of poverty.”

The First Nations communities are looking for loan guarantees from Ottawa to help finance their equity participation in resource projects, including LNG facilities and fossil fuel pipelines. In her fall economic statement in November, Finance Minister Chrystia Freeland announced that the federal government would develop a loan guarantee program but provided no details. In a release, the First Nations Major Projects Coalition said Ottawa should not exclude fossil fuel projects from the financing plan, but rather allow First Nations governments to pursue the projects they deem appropriate.

That approach could leave Canadian taxpayers on the hook for massive loans to finance risky fossil fuel projects that are designed to last 30 years. “There is no justification for the Government of Canada to be subsidizing any new oil or gas production, including LNG, no matter the project’s owner,” says Julia Levin, associate director of national climate policy at Environmental Defence.

There is no justification for the Government of Canada to be subsidizing any new oil or gas production, including LNG, no matter the project’s owner.

 

–Julia Levin, associate director of national climate policy at Environmental Defence.

Meanwhile, advocates on both sides of the LNG debate are waiting with bated breath to see where the federal government lands on LNG in its transition taxonomy – will it make the cut or not. Behind the scenes, insiders have told Corporate Knights off the record that the finance minister’s office has been holding up the taxonomy’s release until LNG gets the green light.

In an email, SFAC chair Kathy Bardswick says that individual projects will have to be assessed on their own merits. Individual LNG projects could qualify “if there is a credible link to transition,” she says. “But there is no scenario that will pass scrutiny related to ‘new exploration.’”

In a report for the First Nations Climate Initiative, economist Robert Johnston concludes that Canadian LNG could qualify for the transition taxonomy if methane emissions are minimized and the result tracked and verified. But that’s a lot of ifs, which, as of yet, remain unresolved.

 Back at the COP28 climate summit, 50 companies (including LNG Canada partners Shell and Petronas) signed on to an agreement that commits them to “near zero” methane emissions from their oil and gas production operations. Notably, the commitment covers production but not processing at liquefaction plants or transportation in pipelines or ships. 

Given all the uncertainties, it’s unclear whether Canadian-based producers will be able to benefit in the marketplace from any carbon advantage they claim. Will buyers opt for supplies from a producer that can certify its low GHG intensity? Will they be willing to pay a premium? Would they sell credits from reducing any coal use that the additional LNG supply might allow? To date, there has been little evidence of that type of energy trading.

At most, Canada may add another LNG plant or perhaps two. Investment decisions are looming on Cedar LNG and LNG Canada’s phase two. They will depend on a host of political, environmental and market-based factors.

One thing is clear, however: a major expansion of Canadian LNG production runs counter to climate goals and entails a significant risk of big financial losses down the road for the producer, their First Nations partners and, potentially, for Canadian taxpayers.

Shawn McCarthy is an independent writer focused on energy and climate change. He is also a senior counsel at Sussex Strategy Group.

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