Green plans won’t help Russian energy crunch
Next week, the town of Stephenville, N.L., will be the stage for a mirage.
Justin Trudeau will be there, as will German Chancellor Olaf Scholz, ministers from both countries, local mayors and plenty of well-financed corporate types.
They’ll be marvelling at the wind power whipping past the deep-sea port, talking about hydrogen replacing natural gas and freeing Europe from the dependence of Russia, turning Canada into a cleanenergy powerhouse and cutting emissions all at the same time.
It will look like an elegant solution to three intractable problems: energy security in the face of Russian aggression, climate change and Canadian competitiveness.
But while it’s not quite the 21stcentury version of a Potemkin village, the timelines of all those ambitions don’t add up.
For one thing, Germany — and Europe more broadly — needs to end its dependence on Russian energy right now, if the Western world’s resolve to isolate Vladimir Putin and punish him through sanctions for Russia’s invasion of Ukraine is going to have any staying power.
The officials lined up at Stephenville aim to sign on to a memorandum of understanding that will attempt to reflect that urgency. They’ll promote a tight timeline to co-operate on clean energy and give lots of signals about how Canada’s economy can accommodate foreign investment in that sector. Trudeau and Scholz will wax eloquent about critical minerals, electric vehicles and net-zero emissions in the future.
Good intentions will be on full display.
But the reality is, if Europe is to make up for Russian energy shortfalls and if the energy-driven inflation and global stress that we see right now are to be alleviated, lowcarbon hydrogen and other clean energy solutions are only fully viable in the long term — years, not months.
In the shorter term, natural gas is increasingly seen as the compromise, the stopgap fossil fuel that can tide everyone over until the promised land of zero emissions. And even there, Canada needs a lot more work and money to reach its potential.
“A prudent approach to the environment and to the economy would travel down two lanes simultaneously: picking up the pace on energy efficiencies, renewables and hydrogen development, on one side; while on the other, also investing heavily in the decarbonization of proven fuels, like gas,” says a new paper from the Public Policy Forum, the culmination of many, many months of consultations with energy producers, environmentalists, Indigenous communities and bureaucrats.
The report, obtained by the Star, will be published on Thursday.
The goal of all those discussions was to find practical ways to make good on Canada’s emissions goals in a practical way that would also enhance Canada’s economy. But the long-term thinking exercise was severely jostled by the Russian invasion of Ukraine in February — an invasion that has thrown Europe into an energy crisis and provoked inflation around the world.
And while there’s plenty of blueskying these days about how to turn Canada’s mineral reserves into batteries for electric cars, and how to use wind to power hydrogen production and then build infrastructure to send it to Europe, natural gas is far closer to real.
Germany has made no secret about the fact that it urgently needs all the non-Russian natural gas it can get, and is pushing Canada and other exporters hard. German regulators said this week that households and companies in that country will have to reduce their winter consumption by 20 per cent if there is going to be enough to go around.
Canada, one of the world’s top producers of natural gas, has managed to respond by increasing its production — but only by a little bit.
At the same time though, there’s lots of talk about how we can eventually produce even more. The LNG Canada facility in Kitimat, B.C., will be up and running in 2025, feeding into Asian demand. There are four projects in the air in Atlantic Canada, which could one day help directly with European supply.
The case for ramping it up, even with the emissions that come along for the ride, is that natural gas is a heck of a lot less harmful for the environment than coal or oil. The world will be needing 30 per cent more gas in 2050 than it does now. And Canadian natural gas, in particular, is cleaner than elsewhere, and it’s getting cleaner all the time.
All environmentally conscious Canadians have to do is focus on cutting emissions rather than targeting fossil fuels per se, the PPF report argues, and natural gas can buy us time to develop other, more sustainable sources of energy. But it’s not that straightforward. If Canada increases its natural gas production, our domestic emissions risk going up even as we committed to them going down.
Even as Germany is frantically scrounging around for natural gas for this winter, it is just as urgently scrounging around for sustainable energy sources in the future.
“High prices and energy security concerns, combined with climate commitments, suggest that Canada will not be able to get new LNG infrastructure in place in time to help Germany and other allies, and attempts to do so risk stranding assets,” a new policy brief by the International Institute for Sustainable Development concludes.
So investing in expanding natural gas production right now in Canada may not make sense over the long term, either from a policy standpoint or an economic standpoint.
Turning the promise of clean energy into something more than a mirage is going to take a confluence of steadfast policy, big bucks, international negotiations and plenty of private-sector ingenuity — something all those people who will parade in Stephenville next week know all to well behind their smiles.