CALGARY—A new report by the Carbon Tracker Initiative is throwing some cold water on Canada’s liquefied natural gas ambitions.
It identifies $283 billion in possible projects worldwide that may not be needed, including $82 billion in Canada over the next decade in a low-demand scenario.
The Carbon Tracking Initiative is a London-based, not-for-profit think tank that’s funded by more than a dozen organizations, including the Rockefeller Brothers Fund.
The report factors in a so-called carbon budget that would keep global warming within the two-degree Celsius United Nations target.
While natural gas is often seen as a cleaner burning transition fuel, Carbon Tracker says the emissions from LNG plants—and the shale gas fracking that would feed B.C. projects—have a bigger carbon footprint when gases escape.
Mark Fulton, one of the report’s co-authors, says investors should be warned that the LNG bonanza might not come to pass.
“As far as we can see, from our demand scenario the LNG market is pretty fully built out in terms of supply for the next seven years at least,” he said in an interview from New York. “It wouldn’t be a great bet in our view … to expand further at this time.”
LNG is natural gas that has been chilled into a liquid state so that it can be transported by tanker overseas.
There are 19 projects currently in the works for Canada’s West Coast, but most observers don’t expect more than a few of those to go ahead.
Malaysia’s Petronas aims to invest some $36 billion to develop shale gas in northeastern British Columbia, ship it to the coast by pipeline, liquefy it and ship it across the Pacific.
Last month, a consortium led by Petronas called Pacific North West LNG recently decided it makes economic sense to build its LNG terminal near Prince Rupert, estimated to cost around $11 billion.
The move makes it the first Canadian LNG player to make an official go-ahead decision, though it hinges on an agreement with the B.C. government passing in the provincial legislature and Ottawa issuing an environmental approval.