The voyage of a tanker loaded with liquefied natural gas (LNG) from British Columbia to South Korea marks a significant milestone in Canadian trade, according to government officials. This shipment represents the first natural gas export from a major Canadian facility to Asia, as Canada seeks to diversify its export markets following recent trade tensions.
The tanker, Gaslog Glasgow, set sail a decade after the approval of a gas line project in Kitimat, British Columbia. Prime Minister Mark Carney has highlighted the LNG Canada project, which includes a plant, pipeline, gas fields, and other assets valued at approximately 48 billion Canadian dollars (about $35 billion). “Canada has what the world needs,” he stated, emphasizing the country's potential to become a leading energy superpower.
While the Canadian gas shipment to Asia represents progress, it occurs amid ongoing domestic disputes regarding energy production. Alberta, a landlocked province rich in oil, is advocating for more ports and pipelines through British Columbia to enhance its oil and gas market. However, this has faced pushback from British Columbians concerned about increased tanker traffic and pipeline construction. Environmental groups argue that exporting natural gas contradicts Canada’s climate change commitments, and many Indigenous communities are contesting new federal laws that expedite pipeline approvals on their lands.
Historically, a significant portion of Canada’s oil and gas has been exported to the United States, with Canadian natural gas sales reaching approximately $6 billion last year. However, rising U.S. gas production has led to a decline in Canadian exports since 2010, with the U.S. now being the largest global supplier of liquefied gas.
For Canadian companies, exporting to Asia presents an opportunity to escape the low prices prevalent in the saturated North American market. The potential for increased exports was bolstered by geopolitical shifts, such as Russia's invasion of Ukraine, which has isolated Moscow in global trade. Experts suggest that U.S. trade policies have also caused countries to question the stability of long-term trading relationships with the U.S.
The Kitimat plant is supplied by the Coastal GasLink pipeline, which spans over 400 miles. Shell, the largest stakeholder in LNG Canada, has framed the project as a means to reduce carbon emissions, positing that Canadian natural gas could replace coal in electricity generation, thus aiding Asian countries in transitioning away from coal.
Despite these claims, analysts caution that predicting the extent to which Canadian natural gas will replace coal is challenging, with estimates ranging widely. Demand for energy in markets like China suggests that Canadian natural gas may simply augment existing supplies rather than displace other energy sources.
Concerns also arise regarding the environmental impact of replacing coal with natural gas, particularly due to methane emissions associated with natural gas production and transportation. The Coastal GasLink project has faced scrutiny, having been fined nearly 1.4 million Canadian dollars (about $1 million) by British Columbia’s Environmental Assessment Office for various infractions related to erosion and sediment control.
While some Indigenous communities support the project, partnerships have been formed with LNG Canada, including a joint venture for tugboat services. However, the pipeline’s construction has caused divisions within Indigenous communities, leading to protests and clashes with law enforcement. Tensions were particularly evident within the Wet’suwet’en First Nation, where some members opposed the pipeline's construction on their ancestral lands.
In response to these challenges, Prime Minister Carney has advanced legislation to expedite federal approval for major infrastructure projects and established a fund to finance initiatives aimed at reducing reliance on U.S. trade. LNG Canada is expected to double the capacity of the Kitimat plant, with at least six additional natural gas facilities currently in development.