Big LNG investment should get Sask. thinking about ditching coal

This has been an incredible week for the natural gas industry.

Tuesday’s news of the $40-billion Coastal Gaslink liquefied natural gas (LNG) export project is great news in the wake of Prime Minister Justin Trudeau’s government’s botched handling of the Trans Mountain pipeline.

The 670-kilometre pipeline ending in an LNG Canada facility in Kitimat, B.C., will be a boon for the Canadian economy, feeding China and the rest of the Asian market by 2025.

But the fact the major investors include Malaysia’s Petroliam Nasional Bhd, Petrochina Co. Ltd., Korea Gas Corp. (KOGAS) and Japan’s Mitsubishi Corp. says much about the desire to get Asia off the dirty coal kick.

While Saskatchewan doesn’t have a direct stake in this energy investment, it should be great news for this province as well.

As with the argument that the Trans Mountain pipeline more directly benefited Alberta but helped Saskatchewan with indirect increased demand for Saskatchewan heavy oil, LNG Canada’s project should also be good for the province’s bountiful natural-gas resources.

However, of potentially even more value is that it should get some of our politicians thinking about following Asia’s lead and re-engaging in serious conversation about how natural gas could be used to reduce our coaldependency problem when it comes to electrical generation. Or maybe not … Former premier Brad Wall — still seen by many as the province’s de facto leader — was busy this week tweeting out how the coal market around the world is booming. While in the context of his ongoing desire/lobbying efforts to stop Trudeau’s carbon pricing, it was all very telling. What little we heard on LNG from current Saskatchewan Party Premier Scott Moe was of the same theme.

Is this really adding much to the conversation?

Is it really a productive contribution to the global-warming conversation to suggest, as Wall did, that because our greenhouse gas (GHG) emissions are infinitesimally small compared with growing coal emissions from China, India and the United States that we don’t have a problem burning coal to create electricity?

Is now the time for our leadership to look at opportunities natural gas presents? Or do we carry on with our own coal-burning addiction?

Admittedly, Environment Minister Dustin Duncan announced Wednesday that Saskpower would be adding additional energy sources with the goal of reducing greenhouse gas emissions by 40 per cent by 2030.

The new Power Generation Partner Program (PGPP) will replace the Small Power Producers program and the Flare Gas Power Generation program, making it easier to sell power back to the grid, maybe reducing carbon emissions a little.

However, selling 70 and 105 megawatts back to the grid is a modest initiative that mostly delays the more serious and needed conversation about converting from burning coal to produce electricity.

That needed conversation came one step closer to reality this summer after Saskpower announced it isn’t extending carbon capture and sequestration (CCS) past Boundary Dam 3, which has already cost taxpayers $1.5 billion.

The Sask. Party government’s CCS is under increasing fire.

Last year, Gordon Hughes, a former adviser to the World Bank and economics professor at the University of Edinburgh, questioned the efficiency of the Boundary Dam project in a Global Warming Policy Foundation (GWPF) report.

While then-premier Wall’s office took umbrage on the amount of downtime of Boundary Dam 3 cited in the report that inspired letters flowing back and forth, what might have been most interesting is Hughes’s suggestion that replacing the coal-fired plant with natural gas would have cut CO2 emissions for five to 10 per cent of the CCS investment.

“This is really the key lesson from the Boundary Dam project. It was simply an application of the wrong technology in the wrong circumstances,” Hughes wrote.

Maybe now is a wonderful opportunity to consider other options. Perhaps natural gas is that option.