Canada would benefit from Asia’s demand for natural gas: IEA chief

Canada can no longer depend on the US to absorb excess natural gas supplies.

August 16, 2012   by The Canadian Press

CALGARY: Canada has the potential to become a key energy supplier to Asia, but the executive director of the International Energy Agency (IEA) says it will be crucial to get the public on board.

The days when the US could absorb unlimited supplies of Canadian natural gas are over as relatively new drilling techniques unlock its own vast domestic supplies, Maria van der Hoeven told a Calgary business audience Wednesday.

“In fact, the future of Canadian gas is in Asia,” she said. “Given the uncertain prospects of nuclear power in Japan, the political drive to clean up the Chinese energy system and the acute energy shortages in India, Asia is intensely looking for energy supplies.”

A number of companies plan to pipe gas from northeastern British Columbia plants to the coast, where it would be cooled into a liquid state and shipped across the Pacific by tanker.

Annual gas demand growth in China is five times higher than Canada’s decline in gas exports to the US over the next five years, she said.

And no other major energy suppliers—Russia, East Africa or Australia—are cheap or easy alternatives.

“There is no reason why Canada should not emerge as a major competitive supply point to Asia.”

But there are concerns that must be overcome regarding the drilling methods to extract natural gas from shale gas formations across the continent, van der Hoeven said. Critics of hydraulic fracturing, or fracking, say the practice poses a risk to water sources.

“Let’s not make a mistake. The risk to the industry of losing its social licence to operate is real, and I don’t need to tell you that underestimating public sentiment is simply not good business,” she said. “Let’s be clear—the public concerns about the environmental and social facts of unconventional extraction are legitimate.”

It’s a similar story with oil. Proposals to ship crude off of Canada’s West Coast to Asia via pipelines across BC have met stiff resistance for the environmental damage those they may cause.

The issue has become a major flash point between the premiers of Alberta and BC over how the risks and rewards of the Northern Gateway pipeline ought to be divvied up amongst the provinces, which have jurisdiction over energy development.

Alberta Premier Alison Redford has been pushing for a Canadian energy strategy, but whether or not the provinces can buy into the same vision is another matter.

“I think that governments—federal government, provincial governments—and industry are in it together,” van der Hoeven told reporters after her speech.

“It’s your responsibility as a government to come up with the solution, so the best thing is to take peoples’, take other governments’ concerns, and see what you can do about it and don’t let it go.”

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