Gas gaining ground in global reliability debate

North American natural gas, on the back of the European energy crisis and concerns about reliance on Russian energy supplies, is gaining ground as a clean, reliable and affordable energy source, industry conferences in the US and Canada heard this week.

At the Financial Times’ Energy Source Live conference in Houston on April 7, and at the virtual Scotiabank CAPP Energy Symposium in Canada on April 6, a common theme across several sessions was the ability of LNG from the US and Canada to meet global energy needs while still contributing to the world’s emission reduction challenges by displacing coal in European and Asian power generation.

Toby Rice, CEO of EQT, the largest natural gas producer in the US, told the Houston conference reliable and affordable energy has always been a priority of politicians and the industry. In the last five or 10 years, clean energy has been added to that list, while more recently, politicians and environmentalists have focused mainly on clean energy, at the expense of reliability and affordability.

The European energy crisis and Russia’s invasion of Ukraine, with energy security a fallout of that, have refocused attention on the reliability and affordability of natural gas, alongside its environmental benefits when compared to coal, Rice said.

“The good news is when you look at energy through that lens – cheap, reliable, clean – natural gas is the best option hands down,” he said, noting that the challenge facing Europe, and the rest of the world, is at the root an energy shortage.

“The good news is the US has the resources to be able to meet that energy shortage and the climate ambitions that people have; the good news is US natural gas can address the biggest threat on climate issues, which is foreign coal, we can replace coal with US LNG.”

At the Scotiabank CAPP symposium, Enbridge CEO Al Monaco had much the same thing to say about Canadian LNG, which he called “a jewel” because of its low cost and the abundant reserves of Canadian natural gas to support the build out of the country’s nascent LNG industry, still comprised of only the Shell-led LNG Canada project on BC’s northern coast, although three smaller projects are making headway.

“Any way you look at it, gas and LNG is going to be key to global energy,” Monaco said, noting its affordability and reliability. “The biggest revelation has been around coal displacement globally but equally importantly you need gas to support renewables growth.”

EQT’s Rice took LNG’s relationship to renewable energy in a different direction, telling his Houston audience that “unleashing US LNG” could have implications far more profound for the global climate than merely supporting wind and solar.

“Unleashing US LNG to displace coal internationally is going to have the same environmental impact as electrifying every vehicle in the US, putting solar on every house in America and adding 54,000 industrial scale windmills,” he said. “All three of those mainstream green initiatives that the administration shares can be accomplished by unleashing US LNG.”

Back in Canada at the Scotiabank CAPP event, Jeff Tonken, CEO of Birchcliff Energy and a member of the Rockies LNG partnership advancing the 12mn mt/yr Ksi Lisims LNG project on BC’s northern coast, just south of Alaska, said Canadian gas producers hold similar views on what Canadian LNG can accomplish in global LNG markets and how it can help meet global climate ambitions.

“We believe that our natural gas is the most responsibly produced natural gas in the world, and we believe we should be selling western Canadian natural gas in the LNG market,” he said. “We believe that Canada has an obligation to meet world demands to sell our responsibly produced natural gas in the world to protect the environment by replacing coal-fired plants with natural gas power plants.”