The natural gas dialogue
An abundant supply of natural gas, combined with historically low prices, holds the key to a bright future for Canada — but only if challenges are overcome and opportunities seized.
While current levels of demand will see Canada’s supply of natural gas last for at least 100 years, it’s not alone in its resource wealth. Because of the abundance of natural gas in North America, it is increasingly difficult for Canadian producers to compete in traditional markets, both in eastern Canada and theUnited States.
Conversely, low prices create an opportunity for an affordable, long-term fuel supply that offers significant benefits to individuals and industry, while presenting alternatives for power generation and transportation.
“There is no question that the emergence of shale gas has been a game-changer for the North American market for natural gas,” says Dave Collyer, president of the Canadian Association of Petroleum Producers (CAPP). “It will be a major contributor to North American selfsufficiency over the next 15-20 years, bringing with it significant economic and geopolitical implications.”
While many Canadians appreciate the benefits that come with abundance and affordability, controversy continues to swirl around the environmental and social impacts of natural gas production.
During 2012, the Canadian Natural Gas Initiative (CNGI) held face-to-face discussions with stakeholders in eight cities across Canada that included Moncton, Halifax, Montreal, Ottawa, Toronto, Red Deer, Vancouver and Fort St. John. Dialogue participants were invited from diverse backgrounds including aboriginal, academic, environment and labour. The objectives were to gain a perspective of how Canadians felt about natural gas development and use, and to identify actions to address issues and concerns to help realize the potential of natural gas for Canada.
Representing the entire natural gas value chain, CNGI is a partnership among CAPP, the Canadian Gas Association (CGA), the Canadian Energy Pipeline Association (CEPA), the Canadian Society for Unconventional Resources (CSUR) and the Canadian Natural Gas Vehicle Alliance (CNGVA).
In its recently released Report of the Dialogues on Canada’s Natural Gas Industry, CNGI found that while perspectives vary across the country, a common thread was the importance of this natural gas abundance to the industry and to Canada as a whole.
Regionally, in provinces such as New Brunswick and Quebec, where there is less familiarity with natural gas development, there are more questions about technologies such as hydraulic fracturing and its environmental impacts. “As producers, we must continue to raise the bar on environmental performance, better engage the public beyond our operating areas and demonstrate how we bring economic benefit to the communities in which we operate,” Mr. Collyer says.
For pipeline operators, safety, reliability of supply and stakeholder engagement are key priorities.
“Our members operate the energy highways of Canada, but we are largely unknown to Canadians,” says Brenda Kenny, president of CEPA. “These Dialogues allowed us to gain a two-way understanding of how we fulfill the duties expected of us. They reaffirmed our priorities and showed that we must do a better job of connecting and building trust with our stakeholders, whether they are landowners, aboriginal communities or consumers.”
According to a study by Informetrica Ltd., Canadian consumers saved $1.9-billion on their natural gas bills in 2011 when measured at 2010 prices. Accounted for in nominal terms in Informetrica’s Maximum case, annual savings could grow to $ 4.8- billion by 2035, depending on prices, according to this study.
Timothy Egan, president of CGA, says, “We deliver natural gas to heat homes and water, run ovens and barbeques, power industry and 6.5 million households, businesses and institutions across Canada. There is a value proposition that people understand — while other energy costs rise, natural gas is an affordable, reliable energy choice with low emissions. The next step is to explain how we can turn that into additional economic and energy benefits for all Canadians.”
Technological innovation is opening the door to expand natural gas use in power generation, in communities and industries in northern communities, and as transportation fuel for heavy vehicles and marine fleets. All offer substantial economic and environmental benefits over existing fuels.
But perhaps the largest opportunity for Canada is liquefied natural gas (LNG) exports, especially to Asia where demand is growing rapidly. With exports to the U.S. down 16% over the past five years, and further reductions expected, access to offshore markets is critical to the success of the Canadian economy.
According to the Conference Board of Canada the natural gas industry will contribute $940-billion to the national economy between now and 2035, and benefit every province. But projections rely on the industry’s ability to broaden its markets both at home and abroad, and secure the trust of its customers and stakeholders.
To realize these opportunities natural gas presents, the natural gas industry recognizes improvements in three areas: impacts on local communities, local and regional environmental performance, and achieving community acceptance by driving better performance across the full value chain; sustaining industry competitiveness; and meeting customer needs.