World’s largest LNG exporter formalizes 20-year vision for reliable natural gas supply
Australia’s government is leaning into the world’s soaring demand for natural gas, hot on the heels of Australian giant Woodside Petroleum giving the go-ahead to a new US$12-billion liquefied natural gas (LNG) export project.
Meanwhile, despite its vast resources, Canada remains well behind the world’s largest LNG suppliers. And unlike Australia, Canada’s government has no national strategy for natural gas, a critical energy commodity that is expected to only become more important in the future.
“Gas is growing aggressively, and Canada needs to be on the forefront of that more,” Rafi Tahmazian, senior energy portfolio manager with Canoe Financial, told a recent webinar hosted by the Macdonald-Laurier Institute.
“We need to be building out infrastructure to provide this cleaner fuel.”
In November, Australia’s government laid out its 20-year strategy to keep low-cost natural gas reliably flowing to its citizens while maintaining the country’s position as one of the world’s top LNG exporters.
“The United Kingdom and Europe have experienced price increases over 400 per cent in recent months due to gas shortages. The government cannot sit back and allow that to happen here,” Angus Taylor, Australia’s minister for industry, energy and emissions reduction said in a statement.
“[The government] is serious about gas and acknowledges the important role it plays supporting jobs, food production, manufacturing, industry, exports, and energy supply.”
Global pandemic lockdowns that shut down mobility in 2020 had little impact on demand for natural gas in Australia or around the world, according to the U.S. Energy Information Administration.
Global trade of natural gas as LNG in fact grew in 2020, to 360 million tonnes from 358 million tonnes in 2019, according to the latest report by Shell.
The International Energy Agency projects that world natural gas demand will grow by nearly 30 per cent through 2050.
Emerging Asian nations – Australia’s main LNG customers – are expected to drive the increase as their populations and economies expand while reducing reliance on coal.
Australia’s government says the country needs to develop new natural gas fields and pipelines to keep up with global LNG customers and satisfy energy requirements at home, including providing “firming” for intermittent renewable energy sources like wind and solar.
National leaders have put up $58.6 million to encourage natural gas and pipeline development. State and territory governments can help, with the opportunity to “revisit” actions that impede natural gas development, the strategy says.
This includes moratoriums and bans on fracking in Victoria, South Australia and Tasmania, and regulatory restrictions in New South Wales that dramatically reduce the area available for natural gas exploration.
In Canada, substantial potential for natural gas and LNG projects has been lost due to regulatory uncertainty, Tim McMillan, CEO of the Canadian Association of Petroleum Producers, told Macdonald-Laurier.
“At one point we had 16 LNG facilities that could be supplying China with more natural gas today so that they aren’t producing record coal, but we didn’t allow them to move through the regulatory process in a way that got them under construction and built,” he said.
“Canada can and should be a major supplier of choice and a solution on both climate and energy security. And at this point, our hands are somewhat tied.”